Document:

Exhibit 4.1
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                          IMPAC CMB TRUST SERIES 2005-3

                                     Issuer

                                       and

                             WELLS FARGO BANK, N.A.

                                Indenture Trustee

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

                                    INDENTURE

                            Dated as of April 6, 2005

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

                        COLLATERALIZED ASSET-BACKED BONDS

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

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<TABLE>
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                                TABLE OF CONTENTS

                                                                                                           PAGE

<S>            <C>                                                                                          <C>
ARTICLE I      Definitions...................................................................................2

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

ARTICLE II     Original Issuance of Bonds....................................................................4

    Section 2.01        Form.................................................................................4
    Section 2.02        Execution, Authentication and Delivery...............................................4
    Section 2.03        Acceptance of Mortgage Loans by Indenture Trustee....................................5
    Section 2.04        Acceptance of Derivative Contracts and Special Certificate Cap
                        Contract by Indenture Trustee........................................................6
    Section 2.05        [Reserved]...........................................................................6

ARTICLE III    Covenants.....................................................................................7

    Section 3.01        Collection of Payments with respect to the Mortgage Loans............................7
    Section 3.02        Maintenance of Office or Agency......................................................7
    Section 3.03        Money for Payments To Be Held in Trust; Paying Agent.................................7
    Section 3.04        Existence............................................................................8
    Section 3.05        Payment of Principal and Interest....................................................9
    Section 3.06        Protection of Trust Estate..........................................................11
    Section 3.07        Opinions as to Trust Estate.........................................................12
    Section 3.08        Performance of Obligations..........................................................13
    Section 3.09        Negative Covenants..................................................................13
    Section 3.10        Annual Statement as to Compliance...................................................14
    Section 3.11        [Reserved]..........................................................................14
    Section 3.12        Representations and Warranties Concerning the Mortgage Loans........................14
    Section 3.13        Amendments to Servicing Agreement...................................................14
    Section 3.14        Master Servicer as Agent and Bailee of the Indenture Trustee........................14
    Section 3.15        Investment Company Act..............................................................15
    Section 3.16        Issuer May Consolidate, etc.........................................................15
    Section 3.17        Successor or Transferee.............................................................17
    Section 3.18        No Other Business...................................................................17
    Section 3.19        No Borrowing........................................................................17
    Section 3.20        Guarantees, Loans, Advances and Other Liabilities...................................17
    Section 3.21        Capital Expenditures................................................................18
    Section 3.22        Determination of Bond Interest Rate.................................................18
    Section 3.23        Restricted Payments.................................................................18
    Section 3.24        Notice of Events of Default.........................................................18
    Section 3.25        Further Instruments and Acts........................................................18
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                                       i
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<S>                     <C>                                                                                 <C>
    Section 3.26        Statements to Bondholders...........................................................18
    Section 3.27        [Reserved]..........................................................................18
    Section 3.28        Certain Representations Regarding the Trust Estate..................................18
    Section 3.29        Payments Under the Bond Insurance Policy............................................20
    Section 3.30        Replacement Bond Insurance Policy...................................................20
    Section 3.31        Replacement Derivative Contracts....................................................21
    Section 3.32        [Reserved]..........................................................................21
    Section 3.33        Allocation of Realized Losses.......................................................21
    Section 3.34        [Reserved]..........................................................................22

ARTICLE IV          The Bonds; Satisfaction and Discharge of Indenture......................................23

    Section 4.01        The Bonds...........................................................................23
    Section 4.02        Registration of and Limitations on Transfer and Exchange of Bonds; Appointment
                        of Bond Registrar and Certificate Registrar.........................................23
    Section 4.03        Mutilated, Destroyed, Lost or Stolen Bonds..........................................24
    Section 4.04        Persons Deemed Owners...............................................................25
    Section 4.05        Cancellation........................................................................25
    Section 4.06        Book-Entry Bonds....................................................................25
    Section 4.07        Notices to Depository...............................................................26
    Section 4.08        Definitive Bonds....................................................................26
    Section 4.09        Tax Treatment.......................................................................27
    Section 4.10        Satisfaction and Discharge of Indenture.............................................27
    Section 4.11        Application of Trust Money..........................................................28
    Section 4.12        Subrogation and Cooperation.........................................................28
    Section 4.13        Repayment of Monies Held by Paying Agent............................................29
    Section 4.14        Temporary Bonds.....................................................................29
    Section 4.15        Representation Regarding ERISA......................................................30

ARTICLE V           Default and Remedies....................................................................31

    Section 5.01        Events of Default...................................................................31
    Section 5.02        Acceleration of Maturity; Rescission and Annulment..................................31
    Section 5.03        Collection of Indebtedness and Suits for Enforcement by Indenture Trustee...........32
    Section 5.04        Remedies; Priorities................................................................34
    Section 5.05        Optional Preservation of the Trust Estate...........................................36
    Section 5.06        Limitation of Suits.................................................................36
    Section 5.07        Unconditional Rights of Bondholders To Receive Principal and Interest...............37
    Section 5.08        Restoration of Rights and Remedies..................................................37
    Section 5.09        Rights and Remedies Cumulative......................................................38
    Section 5.10        Delay or Omission Not a Waiver......................................................38
    Section 5.11        Control By Bond Insurer.............................................................38
    Section 5.12        Waiver of Past Defaults.............................................................39
    Section 5.13        Undertaking for Costs...............................................................39
    Section 5.14        Waiver of Stay or Extension Laws....................................................39
    Section 5.15        Sale of Trust Estate................................................................39

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    Section 5.16        Action on Bonds.....................................................................41
    Section 5.17        Performance and Enforcement of Certain Obligations..................................41

ARTICLE VI          The Indenture Trustee...................................................................42

    Section 6.01        Duties of Indenture Trustee.........................................................42
    Section 6.02        Rights of Indenture Trustee.........................................................43
    Section 6.03        Individual Rights of Indenture Trustee..............................................44
    Section 6.04        Indenture Trustee's Disclaimer......................................................44
    Section 6.05        Notice of Event of Default..........................................................45
    Section 6.06        Reports by Indenture Trustee to Bondholders and Tax Administration..................45
    Section 6.07        Compensation and Indemnity..........................................................45
    Section 6.08        Replacement of Indenture Trustee....................................................46
    Section 6.09        Successor Indenture Trustee by Merger...............................................46
    Section 6.10        Appointment of Co-Indenture Trustee or Separate Indenture Trustee...................47
    Section 6.11        Eligibility; Disqualification.......................................................48
    Section 6.12        Preferential Collection of Claims Against Issuer....................................48
    Section 6.13        Representations and Warranties......................................................48
    Section 6.14        Directions to Indenture Trustee.....................................................49
    Section 6.15        The Agents..........................................................................49
    Section 6.16        Execution of Derivative Contracts...................................................49

ARTICLE VII         Bondholders' Lists and Reports..........................................................50

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

ARTICLE VIII        Accounts, Disbursements and Releases....................................................54

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

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

    Section 9.01        Supplemental Indentures Without Consent of Bondholders..............................57
    Section 9.02        Supplemental Indentures With Consent of Bondholders.................................58
    Section 9.03        Execution of Supplemental Indentures................................................60
    Section 9.04        Effect of Supplemental Indenture....................................................60
    Section 9.05        Conformity with Trust Indenture Act.................................................60

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    Section 9.06        Reference in Bonds to Supplemental Indentures.......................................60

ARTICLE X           Miscellaneous...........................................................................61

    Section 10.01       Compliance Certificates and Opinions, etc...........................................61
    Section 10.02       Form of Documents Delivered to Indenture Trustee....................................62
    Section 10.03       Acts of Bondholders.................................................................63
    Section 10.04       Notices etc., to Indenture Trustee, Issuer, Bond Insurer, Seller and Rating
                        Agencies............................................................................63
    Section 10.05       Notices to Bondholders; Waiver......................................................64
    Section 10.06       Conflict with Trust Indenture Act...................................................65
    Section 10.07       Effect of Headings..................................................................65
    Section 10.08       Successors and Assigns..............................................................65
    Section 10.09       Separability........................................................................65
    Section 10.10       Benefits of Indenture...............................................................65
    Section 10.11       Legal Holidays......................................................................66
    Section 10.12       GOVERNING LAW.......................................................................66
    Section 10.13       Counterparts........................................................................66
    Section 10.14       Recording of Indenture..............................................................66
    Section 10.15       Issuer Obligation...................................................................66
    Section 10.16       No Petition.........................................................................66
    Section 10.17       Inspection..........................................................................67
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                                    EXHIBITS

Exhibit A-1      -  Form of Class [_]-A-[_] Bonds
Exhibit A-2      -  Form of Class [_]-M-[_] Bonds
Exhibit A-3      -  Form of Class B Bonds
Exhibit B        -  Mortgage Loan Schedule
Exhibit C        -  Form of Initial Certification
Exhibit D        -  Form of Final Certification
Exhibit E        -  Derivative Contracts
Exhibit F        -  Special Certificate Cap Contract
Exhibit G        -  Form of Bond Insurance Policy
Appendix A       -  Definitions

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                  This Indenture, dated as of April 6, 2005, is entered into
between Impac CMB Trust Series 2005-3, a Delaware statutory trust, as Issuer
(the "Issuer"), and Wells Fargo Bank, N.A., a national banking association, as
Indenture Trustee (the "Indenture Trustee").

                                WITNESSETH THAT:

                  Each party hereto agrees as follows for the benefit of the
other party and for the equal and ratable benefit of the Bondholders of the
Issuer's Collateralized Asset-Backed Bonds, Series 2005-3 (the "Bonds") .

                                 GRANTING CLAUSE

                  The Issuer hereby Grants to the Indenture Trustee at the
Closing Date, as trustee for the benefit of the Holders of the Bonds and the
Bond Insurer, all of the Issuer's right, title and interest in and to whether
now existing or hereafter created by (a) the Mortgage Loans, Eligible Substitute
Mortgage Loans and the proceeds thereof and all rights under the Related
Documents; (b) all funds on deposit from time to time in the Collection Account
allocable to the Mortgage Loans excluding any investment income from such funds;
(c) all funds on deposit from time to time in the Payment Account and in all
proceeds thereof; (d) all rights under (i) the Mortgage Loan Purchase Agreement
as assigned to the Issuer, (ii) the Servicing Agreement and any Subservicing
Agreements, (iii) any title, hazard and primary insurance policies with respect
to the Mortgaged Properties, (iv) the Custodial Agreement and (v) the rights
with respect to the Derivative Contracts and the Special Certificate Cap
Contract as assigned to the Issuer; (e) with respect to the Holders of the Class
A-3 Bonds, the Bond Insurance Policy; and (f) all present and future claims,
demands, causes and choses in action in respect of any or all of the foregoing
and all payments on or under, and all proceeds of every kind and nature
whatsoever in respect of, any or all of the foregoing and all payments on or
under, and all proceeds of every kind and nature whatsoever in the conversion
thereof, voluntary or involuntary, into cash or other liquid property, all cash
proceeds, accounts, accounts receivable, notes, drafts, acceptances, checks,
deposit accounts, rights to payment of any and every kind, and other forms of
obligations and receivables, instruments and other property which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing (collectively, the "Trust Estate" or the "Collateral").

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

                  The Indenture Trustee, as trustee on behalf of the Holders of
the Bonds, and the Bond Insurer acknowledge such Grant, accept the trust under
this Indenture in accordance with the provisions hereof. The Indenture Trustee
agrees to perform its duties as Indenture Trustee as required herein. The
Indenture Trustee agrees that it will hold the Bond Insurance Policy in trust
and that it will hold any proceeds of any claim made upon the Bond Insurance
Policy solely for the use and benefit of the Holders of the Class A-3 Bonds in
accordance with the terms hereof and the terms of the Bond Insurance Policy.

                                       1
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                                    ARTICLE I

                                   Definitions

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

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

                  "Commission" means the Securities and Exchange Commission.

                  "indenture securities" means the Bonds.

                  "indenture security holder" means a Bondholder.

                  "indenture to be qualified" means this Indenture.

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

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

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

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

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

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

                  (iii)    "or" is not exclusive;

                  (iv)     "including" means including without limitation;

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

                  (vi)     any agreement, instrument or statute defined or
         referred to herein or in any instrument or certificate delivered in
         connection herewith means such agreement, instrument or statute as from
         time to time amended, modified or supplemented and

                                       2
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         includes (in the case of agreements or instruments) references to all
         attachments thereto and instruments incorporated therein; references to
         a Person are also to its permitted successors and assigns.

                                       3
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                                   ARTICLE II

                           Original Issuance of Bonds

         Section 2.01 FORM. The Class A, Class M and Class B Bonds, together
with the Indenture Trustee's certificate of authentication, shall be in
substantially the form set forth in Exhibits A-1, A-2 and A-3 to this Indenture,
respectively, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture.

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

         The terms of the Bonds set forth in Exhibits A-1, A-2 and A-3 to this
Indenture are part of the terms of this Indenture.

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

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

         The Indenture Trustee shall upon Issuer Request authenticate and
deliver the Class A-1, Class A-2, Class A-3, Class A-IO, Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6, and Class B Bonds for original issue
in an aggregate initial Bond Principal Balance of $1,000,000,000. The Class A-1
Bonds shall be issued in an aggregate initial Bond Principal Balance of
$567,000,000, the Class A-2 Bonds shall be issued in an aggregate initial Bond
Principal Balance of $63,000,000 the Class A-IO Bonds shall be issued in an
aggregate initial Bond Principal Balance of $0, the Class A-3 Bonds shall be
issued in an aggregate initial Bond Principal Balance of $150,000,000, the Class
M-1 Bonds shall be issued in an aggregate initial Bond Principal Balance of
$95,000,000, the Class M-2 Bonds shall be issued in an aggregate initial Bond
Principal Balance of $45,000,000, the Class M-3 Bonds shall be issued in an
aggregate initial Bond Principal Balance of $24,000,000, the Class M-4 Bonds
shall be issued in an aggregate initial Bond Principal Balance of $16,000,000,
the Class M-5 Bonds shall be issued in an aggregate initial Bond Principal
Balance of $17,500,000, the Class M-6 Bonds shall be issued in an aggregate
initial Bond Principal Balance of $10,000,000, and the Class B Bonds shall be
issued in an aggregate initial Bond Principal Balance of $12,500,000.

         The Class A-IO Bonds will not have a Bond Principal Balance and will
not be entitled to payments of principal. The Class A-IO Bonds will accrue
interest on their Notional Amount. For the April 2005 Payment Date, the Notional
Amount of the Class A-IO Bonds will be approximately $1,000,000,000, for the May
2005 Payment Date, approximately $941,840,272, for the June 2005 Payment Date,
approximately $862,724,294, for the July 2005 Payment Date, approximately
$790,253,002, for the August 2005 Payment Date, approximately $723,868,448, for
the September 2005 Payment Date, approximately $663,059,493, for the October
2005

                                       4
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Payment Date, approximately $607,358,095, for the November 2005 Payment Date,
approximately $556,335,300, for the December 2005 Payment Date, approximately
$509,598,034, for the January 2006 Payment Date, approximately $466,786,407, for
the February 2006 Payment Date, approximately $427,570,746, for the March 2006
Payment Date, approximately $391,649,098, for the April 2006 Payment Date and
for each Payment Date thereafter, $0.

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

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

         Section 2.03 ACCEPTANCE OF MORTGAGE LOANS BY INDENTURE TRUSTEE. (a) The
Custodian as agent for the Indenture Trustee acknowledges receipt of, subject to
the exceptions it notes pursuant to the procedures described below, the
documents (or certified copies thereof) referred to in Section 2.1(b) of the
Mortgage Loan Purchase Agreement and declares that it holds and will continue to
hold those documents and any amendments, replacements or supplements thereto and
all other assets of the Trust Estate as Indenture Trustee in trust for the use
and benefit of all present and future Holders of the Bonds and the Bond Insurer.
No later than 45 days after the Closing Date with respect to the Mortgage Loans,
(or, with respect to any Eligible Substitute Mortgage Loan, within 5 days after
the receipt by the Custodian as agent for the Indenture Trustee thereof and,
with respect to any documents received beyond 45 days after the Closing Date,
promptly thereafter), the Custodian as agent for the Indenture Trustee agrees,
for the benefit of the Bondholders and the Bond Insurer, to review each Mortgage
File delivered to it and to execute and deliver, or cause to be executed and
delivered, to the Seller, the Indenture Trustee, the Bond Insurer and the Master
Servicer an Initial Certification in the form annexed to the Custodial Agreement
as Exhibit One. In conducting such review, the Indenture Trustee will ascertain
whether all required documents described in Section 2.1(b) of the Mortgage Loan
Purchase Agreement have been executed and received and whether those documents
relate, determined on the basis of the Mortgagor name, original principal
balance and loan number, to the Mortgage Loans it has received, as identified in
Exhibit B to this Indenture, as supplemented (PROVIDED, HOWEVER, that with
respect to those documents described in subclause (b)(vii) of such section, the
Custodian's obligations shall extend only to documents actually delivered
pursuant to such subclause). In performing any such review, the Custodian may
conclusively rely on the purported due execution and genuineness of any such
document and on the purported genuineness of any signature thereon. If the
Custodian as agent for the Indenture Trustee finds any document constituting
part of the Mortgage File not to have been executed or received, or to be
unrelated to the Mortgage Loans identified in Exhibit B to this Indenture or to
appear to be defective on its face, the Custodian as agent for the Indenture
Trustee shall promptly notify the Seller and the Bond Insurer of such finding
and the Seller's obligation to cure such defect or repurchase or substitute for
the related Mortgage Loan. To the extent the Custodian as agent for

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

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

         (c)      Upon deposit of the Repurchase Price in the Payment Account,
the Custodian as agent for the Indenture Trustee shall release to the Seller the
related Mortgage File and shall execute and deliver all instruments of transfer
or assignment, without recourse, furnished to it by the Seller as are necessary
to vest in the Seller title to and rights under the related Mortgage Loan. Such
purchase shall be deemed to have occurred on the date on which certification of
the deposit of the Repurchase Price in the Payment Account was received by the
Indenture Trustee. The Custodian as agent for the Indenture Trustee shall amend
the applicable Mortgage Loan Schedule to reflect such repurchase and shall
promptly notify the Master Servicer, the Indenture Trustee, the Bond Insurer and
the Rating Agencies of such amendment.

         Section 2.04 ACCEPTANCE OF DERIVATIVE CONTRACTS AND SPECIAL CERTIFICATE
CAP CONTRACT BY INDENTURE TRUSTEE. The Indenture Trustee acknowledges receipt of
the Derivative Contracts and the Special Certificate Cap Contract and declares
that it holds and will continue to hold these documents and any amendments,
replacements or supplements thereto and all other assets of the Trust Estate as
Indenture Trustee in trust for the use and benefit of all present and future
Holders of the Bonds and the Bond Insurer. The Indenture Trustee shall enforce
the Derivative Contracts and the Special Certificate Cap Contract in accordance
with their terms. The Issuer hereby directs the Indenture Trustee to execute,
not in its individual capacity, but solely as Indenture Trustee on behalf of the
Trust, and deliver the Derivative Contracts and the Special Certificate Cap
Contract.

Section 2.05      [RESERVED].

                                       6
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                                   ARTICLE III

                                    Covenants

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

         Section 3.02 MAINTENANCE OF OFFICE OR AGENCY. The Issuer will maintain
an office or agency where, subject to satisfaction of conditions set forth
herein, Bonds may be surrendered for registration of transfer or exchange, and
where notices and demands to or upon the Issuer in respect of the Bonds and this
Indenture may be served. The Issuer hereby initially appoints the Indenture
Trustee to serve as its agent for the foregoing purposes. If at any time the
Issuer shall fail to maintain any such office or agency or shall fail to furnish
the Indenture Trustee with the address thereof, such surrenders may be made at
the office of the Indenture Trustee located at Sixth and Marquette, Minneapolis,
Minnesota 55479-0113, Attention: Corporate Trust Services IMH Assets Corp.,
Series 2005-3, and notices and demands may be made or served at the Corporate
Trust Office, and the Issuer hereby appoints the Indenture Trustee as its agent
to receive all such surrenders, notices and demands.

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

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

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

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

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

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

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

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

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

         Subject to applicable laws with respect to escheat of funds, any money
held by the Indenture Trustee or any Paying Agent in trust for the payment of
any amount due with respect to any Bond (other than amounts paid under the Bond
Insurance Policy) and remaining unclaimed for one year after such amount has
become due and payable shall be discharged from such trust and be paid to the
Issuer on Issuer Request; and the Holder of such Bond shall thereafter, as an
unsecured general creditor, look only to the Issuer for payment thereof (but
only to the extent of the amounts so paid to the Issuer), and all liability of
the Indenture Trustee or such Paying Agent with respect to such trust money
shall thereupon cease; PROVIDED, HOWEVER, that the Indenture Trustee or such
Paying Agent, before being required to make any such repayment, shall at the
expense and direction of the Issuer cause to be published once, in an Authorized
Newspaper published in the English language, notice that such money remains
unclaimed and that, after a date specified therein which shall not be less than
30 days from the date of such publication, any unclaimed balance of such money
then remaining will be repaid to the Issuer. The Indenture Trustee, with the
written consent of the Bond Insurer, so long as no Bond Insurer Default exists,
may also adopt and employ, at the expense and direction of the Issuer, any other
reasonable means of notification of such repayment (including, but not limited
to, mailing notice of such repayment to Holders whose Bonds have been called but
have not been surrendered for redemption or whose right to or interest in monies
due and payable but not claimed is determinable from the records of the
Indenture Trustee or of any Paying Agent, at the last address of record for each
such Bondholder).

         Section 3.04 EXISTENCE. The Issuer will keep in full effect its
existence, rights and franchises as a statutory trust under the laws of the
State of Delaware (unless it becomes, or any successor Issuer hereunder is or
becomes, organized under the laws of any other state or of the

                                       8
<PAGE>

United States of America, in which case the Issuer will keep in full effect its
existence, rights and franchises under the laws of such other jurisdiction) and
will obtain and preserve its qualification to do business in each jurisdiction
in which such qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Bonds, the Mortgage Loans and each other
instrument or agreement included in the Trust Estate.

         Section 3.05 PAYMENT OF PRINCIPAL AND INTEREST. (a) On each Payment
Date from amounts on deposit in the Payment Account in accordance with Section
8.02 hereof, the Indenture Trustee shall pay to the Persons specified below, to
the extent provided therein, the Available Funds and any Insured Amount for such
Payment Date; PROVIDED, HOWEVER, that any amounts representing payments from the
Bond Insurer shall only be used to pay interest and principal to the Class A-3
Bondholders pursuant to clauses (b), (c), (d) and (i) below.

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

                  (i) first, to the Holders of the Class A-1, Class A-2, Class
         A-3 and Class A-IO Bonds, on a pro rata basis, the related Accrued Bond
         Interest for such Class for such Payment Date; and

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

         (c)      On each Payment Date, the Holders of the Class A-1, Class A-2,
Class A-3, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6 and
Class B Bonds shall be entitled to receive payments in respect of principal, on
a pro rata basis, equal to the related Principal Distribution Amount for that
Payment Date, allocated on a pro rata basis, in reduction of the Bond Principal
Balances thereof until reduced to zero.

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

                  (i)      to the Bond Insurer, the aggregate of all payments,
         if any, made by the Bond Insurer under the Bond Insurance Policy with
         respect to the Class A-3 Bonds, including interest thereon, and any
         other amounts due to the Bond Insurer pursuant to the Insurance
         Agreement, to the extent not previously paid or reimbursed;

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

                  (iii)    sequentially, (i) first, concurrently, on a pro rata
         basis to the Holders of the Class A-1, Class A-2, Class A-3 Bonds;
         provided that any amounts payable to the Class A-2 Bonds will first be
         used to reduce unpaid Allocated Realized Loss Amounts to the

                                       9
<PAGE>

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

                  (iv)     sequentially, (i) first, concurrently, on a pro rata
         basis to the Holders of the Class A-1, Class A-2 and Class A-3 Bonds,
         and (ii) second, sequentially, to the holders of the Class M-1, Class
         M-2, Class M-3, Class M-4, Class M-5, Class M-6, and Class B Bonds, any
         Unpaid Interest Shortfall for such Bonds on such Payment Date, to the
         extent not previously reimbursed;

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

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

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

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

                  (i)      to the Holders of the Class A-1, Class A-2 and Class
         A-3 Bonds, pro rata, any related Basis Risk Shortfall Carry-Forward
         Amount for such Payment Date;

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

                  (iii)    on or after the Payment Date in May 2006, any
         remaining amounts, shall be included in the Net Monthly Excess Cashflow
         for the Bonds and shall be used in Section 3.05(d) above; and

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

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

         (g)      Each distribution with respect to a Book-Entry Bond shall be
paid to the Depository, as Holder thereof, and the Depository shall be
responsible for crediting the amount of such distribution to the accounts of its
Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible for disbursing such distribution to

                                       10
<PAGE>

the Bond Owners that it represents and to each indirect participating brokerage
firm (a "brokerage firm" or "indirect participating firm") for which it acts as
agent. Each brokerage firm shall be responsible for disbursing funds to the Bond
Owners that it represents. None of the Indenture Trustee, the Bond Registrar,
the Bond Insurer, the Paying Agent, the Depositor or the Master Servicer shall
have any responsibility therefor except as otherwise provided by this Indenture
or applicable law.

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

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

         (j)      The principal of each Bond shall be due and payable in full on
the Final Scheduled Payment Date for such Bond as provided in the forms of Bond
set forth in Exhibits A-1, A-2 and A-3 to this Indenture. All principal payments
on the Bonds shall be made to the Bondholders entitled thereto in accordance
with the Percentage Interests represented by such Bonds. Upon notice to the
Indenture Trustee by the Issuer, the Indenture Trustee shall notify the Person
in whose name a Bond is registered at the close of business on the Record Date
preceding the Final Scheduled Payment Date or other final Payment Date
(including any final Payment Date resulting from any redemption pursuant to
Section 8.07 hereof). Such notice shall to the extent practicable be mailed no
later than five Business Days prior to such Final Scheduled Payment Date or
other final Payment Date and shall specify that payment of the principal amount
and any interest due with respect to such Bond at the Final Scheduled Payment
Date or other final Payment Date will be payable only upon presentation and
surrender of such Bond and shall specify the place where such Bond may be
presented and surrendered for such final payment. No interest shall accrue on
the Bonds on or after the Final Scheduled Payment Date or any such other final
Payment Date.

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

         Section 3.06 PROTECTION OF TRUST ESTATE. (a) The Issuer will from time
to time prepare, execute and deliver all such supplements and amendments hereto
and all such financing

                                       11
<PAGE>

statements, continuation statements, instruments of further assurance and other
instruments, and will take such other action necessary or advisable to:

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

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

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

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

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

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

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

         (b)      On or before April 15 in each calendar year, beginning in
2006, the Issuer shall furnish to the Indenture Trustee and the Bond Insurer an
Opinion of Counsel at the expense of the Issuer either stating that, in the
opinion of such counsel, such action has been taken with respect to the
recording, filing, re-recording and refiling of this Indenture, any indentures
supplemental hereto and any other requisite documents and with respect to the
execution and filing of any financing statements and continuation statements as
is necessary to maintain the lien and first priority security interest in the
Collateral and reciting the details of such action or

                                       12
<PAGE>

stating that in the opinion of such counsel no such action is necessary to
maintain such lien and security interest. Such Opinion of Counsel shall also
describe the recording, filing, re-recording and refiling of this Indenture, any
indentures supplemental hereto and any other requisite documents and the
execution and filing of any financing statements and continuation statements
that will, in the opinion of such counsel, be required to maintain the lien and
security interest in the Collateral until December 31 in the following calendar
year.

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

         (b)      The Issuer, with the consent of the Bond Insurer so long as no
Bond Insurer Default exists, may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee in an Officer's Certificate of
the Issuer shall be deemed to be action taken by the Issuer.

         (c)      The Issuer will not take any action or permit any action to be
taken by others which would release any Person from any of such Person's
covenants or obligations under any of the documents relating to the Mortgage
Loans or under any instrument included in the Trust Estate, or which would
result in the amendment, hypothecation, subordination, termination or discharge
of, or impair the validity or effectiveness of, any of the documents relating to
the Mortgage Loans or any such instrument, except such actions as the Master
Servicer is expressly permitted to take in the Servicing Agreement. The
Indenture Trustee, as pledgee of the Mortgage Loans, shall, with the consent of,
or at the direction of, the Bond Insurer, so long as no Bond Insurer Default
exists, be able to exercise the rights of the Issuer to direct the actions of
the Master Servicer pursuant to the Servicing Agreement.

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

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

                  (i)      except as expressly permitted by this Indenture,
         sell, transfer, exchange or otherwise dispose of the Trust Estate,
         unless directed to do so by the Bond Insurer or the Indenture Trustee
         with the consent of the Bond Insurer, so long as no Bond Insurer
         Default exists;

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

                  (iii)    (A) permit the validity or effectiveness of this
         Indenture to be impaired, or permit the lien of this Indenture to be
         amended, hypothecated, subordinated, terminated

                                       13
<PAGE>

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

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

         Section 3.10 ANNUAL STATEMENT AS TO COMPLIANCE. The Issuer will deliver
to the Indenture Trustee and the Bond Insurer, by March 1 of each year
commencing with the calendar year 2006, an Officer's Certificate stating, as to
the Authorized Officer signing such Officer's Certificate, that:

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

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

         Section 3.11 [RESERVED].

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

         Section 3.13 AMENDMENTS TO SERVICING AGREEMENT. The Issuer covenants
with the Indenture Trustee and the Bond Insurer that it will not enter into any
amendment or supplement to the Servicing Agreement without the prior written
consent of the Indenture Trustee and, so long as no Bond Insurer Default exists,
the Bond Insurer.

         Section 3.14 MASTER SERVICER AS AGENT AND BAILEE OF THE INDENTURE
TRUSTEE. Solely for purposes of perfection under Section 9-305 of the Uniform
Commercial Code or other similar applicable law, rule or regulation of the state
in which such property is held by the Master

                                       14
<PAGE>

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

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

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

                  (i)      the Person (if other than the Issuer) formed by or
         surviving such consolidation or merger shall be a Person organized and
         existing under the laws of the United States of America or any state or
         the District of Columbia and shall expressly assume, by an indenture
         supplemental hereto, executed and delivered to the Indenture Trustee,
         in form reasonably satisfactory to the Indenture Trustee and the Bond
         Insurer, the due and punctual payment of the principal of and interest
         on all Bonds, and the payment of the Bond Insurance Premium and all
         other amounts payable to the Bond Insurer, the Indenture Trustee and
         the Derivative Contract Counterparty, the payment to the Certificate
         Paying Agent of all amounts due to the Certificateholders, and the
         performance or observance of every agreement and covenant of this
         Indenture on the part of the Issuer to be performed or observed, all as
         provided herein;

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

                  (iii)    the Rating Agencies shall have notified the Issuer
         and the Bond Insurer that such transaction shall not cause the rating
         of the Bonds (with respect to the Bonds, without regard to the Bond
         Insurance Policy) to be reduced, suspended or withdrawn or to be
         considered by either Rating Agency to be below investment grade;

                  (iv)     the Issuer and the Bond Insurer shall have received
         an Opinion of Counsel (and shall have delivered a copy thereof to the
         Indenture Trustee) to the effect that such transaction will not (A)
         result in a "substantial modification" of the Bonds under Treasury
         Regulation section 1.1001-3, or adversely affect the status of the
         Bonds as

                                       15
<PAGE>

         indebtedness for federal income tax purposes, or (B) if 100% of the
         Certificates are not owned by IMH Assets Corp., cause the Trust to be
         subject to an entity level tax for federal income tax purposes;

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

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

                  (vii)    the Bond Insurer, so long as no Bond Insurer Default
         exists, shall have given its prior written consent.

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

                  (i)      the Person that acquires by conveyance or transfer
         the properties and assets of the Issuer, the conveyance or transfer of
         which is hereby restricted, shall (A) be a United States citizen or a
         Person organized and existing under the laws of the United States of
         America or any state thereof, (B) expressly assume, by an indenture
         supplemental hereto, executed and delivered to the Indenture Trustee,
         in form satisfactory to the Indenture Trustee, the due and punctual
         payment of the principal of and interest on all Bonds and the payment
         of the Bond Insurance Premium and all other amounts payable to the Bond
         Insurer, the Derivative Contract Counterparty and the performance or
         observance of every agreement and covenant of this Indenture on the
         part of the Issuer to be performed or observed, all as provided herein,
         (C) expressly agree by means of such supplemental indenture that all
         right, title and interest so conveyed or transferred shall be subject
         and subordinate to the rights of the holders of the Bonds and the Bond
         Insurer, (D) unless otherwise provided in such supplemental indenture,
         expressly agree to indemnify, defend and hold harmless the Issuer, the
         Indenture Trustee and the Bond Insurer against and from any loss,
         liability or expense arising under or related to this Indenture and the
         Bonds and (E) expressly agree by means of such supplemental indenture
         that such Person (or if a group of Persons, then one specified Person)
         shall make all filings with the Commission (and any other appropriate
         Person) required by the Exchange Act in connection with the Bonds;

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

                  (iii)    the Rating Agencies shall have notified the Issuer
         and the Bond Insurer that such transaction shall not cause the rating
         of the Bonds (with respect to the Class A-3 Bonds without regard to the
         Bond Insurance Policy) to be reduced, suspended or withdrawn;

                                       16
<PAGE>

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

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

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

                  (vii)    the Bond Insurer, so long as no Bond Insurer Default
         exists, shall have given its prior written consent.

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

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

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

         Section 3.19 NO BORROWING. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Bonds and amounts due to the Bond Insurer under this
Indenture and the Insurance Agreement.

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

                                       17
<PAGE>

contingently to do so) any stock, obligations, assets or securities of, or any
other interest in, or make any capital contribution to, any other Person.

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

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

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

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

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

         Section 3.26 STATEMENTS TO BONDHOLDERS. On each Payment Date, the
Indenture Trustee and the Certificate Registrar shall make available on the
Indenture Trustee's website, www.ctslink.com, to the Bond Insurer and to each
Bondholder and Certificateholder the most recent statement prepared by the
Master Servicer pursuant to Section 4.01 of the Servicing Agreement.

         Section 3.27 [RESERVED].

         Section 3.28 CERTAIN REPRESENTATIONS REGARDING THE TRUST ESTATE.

                                       18
<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

         (c)      With respect to any Collateral in which a security interest
may be perfected by filing, the Issuer has not authorized the filing of, and is
not aware of any financing statements against, the Issuer, that include a
description of collateral covering such Collateral, other than any financing
statement relating to the security interest granted to the Indenture Trustee

                                       19
<PAGE>

hereunder or that has been terminated. The Issuer is not aware of any judgment
or tax lien filings against the Issuer.

         (d)      The Issuer has caused or will have caused, within ten days,
the filing of all appropriate financing statements in the proper filing office
in the appropriate jurisdictions under applicable law in order to perfect the
security interest in all Collateral granted to the Indenture Trustee hereunder
in which a security interest may be perfected by filing. Any financing statement
that is filed in connection with this Section 3.28 shall contain a statement
that a purchase or security interest in any collateral described therein will
violate the rights of the secured party named in such financing statement.

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

         Section 3.29 PAYMENTS UNDER THE BOND INSURANCE POLICY. (a) (1) By 12:00
noon (New York Time) on the later of (i) the second Business Day following the
Business Day on which the Bond Insurer shall have received Notice (as defined in
the Bond Insurance Policy) that a Deficiency Amount is due in respect of the
Insured Bonds and (ii) the Payment Date on which the related Deficiency Amount
is payable to the Bondholders and (2) at such time as the Indenture Trustee
shall deliver an acceleration notice to the Bondholders pursuant to Section
5.02, the Indenture Trustee on behalf of the Class A-3 Bondholders, shall make a
draw on the Bond Insurance Policy in an amount, if any, equal to the Deficiency
Amount.

         (b)      If the Indenture Trustee determines that a Deficiency Amount
will exist for the following Payment Date, then the Indenture Trustee shall
submit a Notice (as defined in the Bond Insurance Policy) for payment in the
amount of the Deficiency Amount to the Bond Insurer no later than 12:00 Noon,
New York City time, on the second Business Day prior to the applicable Payment
Date. Upon receipt of such Deficiency Amount in accordance with the terms of the
Bond Insurance Policy, the Indenture Trustee shall deposit such Deficiency
Amount in the Payment Account for distribution to the Class A-3 Bondholders
pursuant to Section 3.05 hereof or with respect to an acceleration pursuant to
Section 5.02 hereof.

         In addition, according to the terms of the Bond Insurance Policy (in
the form attached hereto as Exhibit F), a draw may be made under the Bond
Insurance Policy in respect of any Preference Amount applicable to any of the
Class A-3 Bondholders (as defined in and pursuant to the terms and conditions of
the such Bond Insurance Policy) and the Indenture Trustee shall submit a Notice
(as defined in such Bond Insurance Policy) for payment with respect thereto
together with the other documents required to be delivered to the Bond Insurer
pursuant to the Bond Insurance Policy in connection with a draw in respect of
any Preference Amount.

         Section 3.30 REPLACEMENT BOND INSURANCE POLICY. In the event of a Bond
Insurer Default (a "Replacement Event"), the Issuer, at its expense, in
accordance with and upon satisfaction of the conditions set forth in the Bond
Insurance Policy, including, without limitation, payment in full of all amounts
owed to the Bond Insurer, may, but shall not be required to, substitute a new
surety bond or surety bonds for the existing Bond Insurance Policy or may
arrange for any other form of credit enhancement; PROVIDED, HOWEVER, that in
each case after giving effect to such substitute or other form of credit
enhancement the each class of Bonds

                                       20
<PAGE>

shall be rated no lower than the rating assigned by each Rating Agency to each
class of Bonds, immediately prior to such Replacement Event and the timing and
mechanism for drawing on such new credit enhancement shall be reasonably
acceptable to the Indenture Trustee and provided further that the premiums under
the proposed credit enhancement shall not exceed such premiums under the
existing Bond Insurance Policy. It shall be a condition to substitution of any
new credit enhancement that there be delivered to the Indenture Trustee (i) an
Opinion of Counsel, acceptable in form to the Indenture Trustee and the Rating
Agencies, from counsel to the provider of such new credit enhancement with
respect to the enforceability thereof and such other matters as the Indenture
Trustee and the Rating Agencies may require and (ii) an Opinion of Counsel to
the effect that such substitution would not (a) result in a "substantial
modification" of the Bonds under Treasury Regulation section 1.1001-3, or
adversely affect the status of the Bonds as indebtedness for federal income tax
purposes, or (b) if 100% of the Certificates are not owned by IMH Assets Corp.,
cause the Trust to be subject to an entity level tax for federal income tax
purposes. Upon receipt of the items referred to above and payment of all amounts
owing to the Bond Insurer and the taking of physical possession of the new
credit enhancement, the Indenture Trustee shall, within five Business Days
following receipt of such items and such taking of physical possession, deliver
the replaced Bond Insurance Policy to the Bond Insurer. In the event of any such
replacement the Issuer shall give written notice thereof to the Rating Agencies.

         Section 3.31 REPLACEMENT DERIVATIVE CONTRACTS. In the event of a
default by a Derivative Contract Counterparty with respect to the related
Derivative Contracts (a "Derivative Contract Default"), the Issuer, at its
expense, may, but shall not be required to, substitute a new derivative contract
for the existing Derivative Contracts or any other form of similar coverage for
basis risk shortfalls; PROVIDED, HOWEVER, that the timing and mechanism for
receiving payments under such new derivative contracts shall be reasonably
acceptable to the Indenture Trustee and the Bond Insurer. It shall be a
condition to substitution of any new derivative contracts that there be
delivered to the Indenture Trustee and the Bond Insurer an Opinion of Counsel to
the effect that such substitution would not (a) result in a "substantial
modification" of the Bonds under Treasury Regulation section 1.1001-3, or
adversely affect the status of the Bonds as indebtedness for federal income tax
purposes, or (b) if 100% of the Certificates are not owned by IMH Assets Corp.,
cause the Trust to be subject to an entity level tax for federal income tax
purposes.

         Section 3.32 [RESERVED].

         Section 3.33 ALLOCATION OF REALIZED LOSSES. (a) Prior to each Payment
Date, the Master Servicer shall determine the total amount of Realized Losses
that occurred during the related Prepayment Period. The amount of each Realized
Loss shall be evidenced by an Officer's Certificate delivered to the Indenture
Trustee and the Bond Insurer with the related Remittance Report.

         (b)      On each Payment Date following the application of all amounts
distributable on such date, to the extent the aggregate Stated Principal Balance
of the Loans is less than the aggregate Bond Principal Balances of the Bonds due
to Realized Losses on the Loans, the Bond Principal Balances of the Class B,
Class M-6, Class M-5, Class M-4, Class M-3, Class M-2, Class M-1 Bonds, in that
order, and thereafter to the Class A-1, Class A-2 and Class A-3 Bonds (on a pro
rata basis, provided, however, that any such Realized Losses allocated to the
Class A-3

                                       21
<PAGE>

Bonds will be covered by the Bond Insurance Policy; and provided that any
amounts payable to the Class A-2 Bonds will first be used to reduce unpaid
Allocated Realized Loss Amounts to the Class A-1 Bonds), shall be reduced
sequentially, until the Bond Principal Balance of each such Class has been
reduced to zero.

         Section 3.34 [RESERVED].

                                       22
<PAGE>

                                   ARTICLE IV

               The Bonds; Satisfaction and Discharge of Indenture

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

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

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

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

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

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

                                       23
<PAGE>

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

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

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

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

                                       24
<PAGE>

any loss, damage, cost or expense incurred by the Issuer, the Bond Insurer or
the Indenture Trustee in connection therewith.

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

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

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

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

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

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

                                       25
<PAGE>

such Bonds, unless and until definitive, fully registered Bonds (the "Definitive
Bonds") have been issued to Beneficial Owners pursuant to Section 4.08:

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

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

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

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

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

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

         Section 4.08 DEFINITIVE BONDS. If (i) the Indenture Trustee determines
that the Depository is no longer willing or able to properly discharge its
responsibilities with respect to the Bonds and the Indenture Trustee is unable
to locate a qualified successor, (ii) the Indenture Trustee elects to terminate
the book-entry system through the Depository or (iii) after the occurrence of an
Event of Default, Beneficial Owners of Bonds representing beneficial interests
aggregating at least a majority of the Bond Principal Balances of the Bonds
advise the Depository in writing that the continuation of a book-entry system
through the Depository is no longer in the best interests of the Beneficial
Owners, then the Depository shall notify all Beneficial Owners and the Indenture
Trustee of the occurrence of any such event and of the availability of
Definitive Bonds to Beneficial Owners requesting the same. Upon surrender to the
Indenture Trustee of the typewritten Bonds representing the Book-Entry Bonds by
the Depository, accompanied by registration instructions, the Issuer shall
execute and the Indenture

                                       26
<PAGE>

Trustee shall authenticate the Definitive Bonds in accordance with the
instructions of the Depository. None of the Issuer, the Bond Registrar or the
Indenture Trustee shall be liable for any delay in delivery of such instructions
and may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Bonds, the Indenture Trustee shall
recognize the Holders of the Definitive Bonds as Bondholders.

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

         Section 4.10 SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture
shall cease to be of further effect with respect to the Bonds except as to (i)
rights of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Bonds, (iii) rights of Bondholders (and the Bond
Insurer, as subrogee of the Class A-3 Bondholders) to receive payments of
principal thereof and interest thereon, (iv) Sections 3.03, 3.04, 3.06, 3.09,
3.17, 3.19 and 3.20, (v) the rights, obligations and immunities of the Indenture
Trustee hereunder (including the rights of the Indenture Trustee under Section
6.07 and the obligations of the Indenture Trustee under Section 4.11), (vi) the
right of the Derivative Contract Counterparty to receive the related Net
Derivative Fee and (vii) the rights of Bondholders and the Bond Insurer as
beneficiaries hereof with respect to the property so deposited with the
Indenture Trustee payable to all or any of them, and the Indenture Trustee, on
demand of and at the expense of the Issuer, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture with respect to the
Bonds and shall release and deliver the Collateral to or upon the order of the
Issuer, when

                           (A)      either

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

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

                                    a.       have become due and payable,

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

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

                                       27
<PAGE>

and the Issuer, in the case of a. or b. above, has irrevocably deposited or
caused to be irrevocably deposited with the Indenture Trustee cash or direct
obligations of or obligations guaranteed by the United States of America (which
will mature prior to the date such amounts are payable), in trust for such
purpose, in an amount sufficient to pay and discharge the entire indebtedness on
such Bonds then outstanding not theretofore delivered to the Indenture Trustee
for cancellation when due on the Final Scheduled Payment Date or other final
Payment Date and has delivered to the Indenture Trustee and the Bond Insurer a
verification report from a nationally recognized accounting firm certifying that
the amounts deposited with the Indenture Trustee are sufficient to pay and
discharge the entire indebtedness of such Bonds, or, in the case of c. above,
the Issuer shall have complied with all requirements of Section 8.07 hereof,

                           (B)      the Issuer has paid or caused to be paid all
                  other sums payable hereunder and under the Insurance Agreement
                  by the Issuer as evidenced by the written consent of the Bond
                  Insurer; and

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

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

         Section 4.12 SUBROGATION AND COOPERATION. (a) The Issuer and the
Indenture Trustee acknowledge that (i) to the extent the Bond Insurer makes
payments under the Bond Insurance Policy on account of principal of or interest
on the Class A-3 Bonds, the Bond Insurer will be fully subrogated to the rights
of such Holders to receive such principal and interest from the Issuer, and (ii)
the Bond Insurer shall be paid such principal and interest but only from the
sources and in the manner provided herein and in the Insurance Agreement for the
payment of such principal and interest.

         The Indenture Trustee shall, so long as it is indemnified to its
satisfaction, cooperate in all respects with any reasonable written request by
the Bond Insurer (unless a Bond Insurer Default exists) for action to preserve
or enforce the Bond Insurer's rights or interest under this Indenture or the
Insurance Agreement, consistent with this Indenture and without limiting the

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<PAGE>

rights of the Bondholders as otherwise set forth in the Indenture, including,
without limitation, upon the occurrence and continuance of a default under the
Insurance Agreement, a request to take any one or more of the following actions:

                  (i)      institute Proceedings for the collection of all
         amounts then payable on the Class A-3 Bonds, or under this Indenture in
         respect of the Class A-3 Bonds and all amounts payable under the
         Insurance Agreement, enforce any judgment obtained and collect from the
         Issuer monies adjudged due;

                  (ii)     sell or cause to be sold the Trust Estate or any
         portion thereof or rights or interest therein, at one or more public or
         private Sales (as defined in Section 5.15 (a) hereof) called and
         conducted in any manner permitted by law;

                  (iii)    institute Proceedings from time to time for the
         complete or partial foreclosure of this Indenture; and

                  (iv)     exercise any remedies of a secured party under the
         UCC and take any other appropriate action to protect and enforce the
         rights and remedies of the Bond Insurer hereunder;

provided, however, action shall be taken pursuant to this Section 4.12 by the
Indenture Trustee to preserve the Bond Insurer's rights or interest under this
Agreement or the Insurance Agreement only to the extent such action is available
to the Class A-3 Bondholders or the Bond Insurer under other provisions of this
Indenture.

         Notwithstanding any provision of this Indenture to the contrary, so
long as no Bond Insurer Default exists, the Bond Insurer shall at all times be
treated as if it were the exclusive owner of all Class A-3 Bonds Outstanding for
the purposes of all approvals, consents, waivers and the institution of any
action and the written direction of all remedies, and the Indenture Trustee
shall act in accordance with the written directions of the Bond Insurer so long
as it is indemnified therefor to its reasonable satisfaction.

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

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

                                       29
<PAGE>

         If temporary Bonds are issued, the Issuer will cause Definitive Bonds
to be prepared without unreasonable delay. After the preparation of the
Definitive Bonds, the temporary Bonds shall be exchangeable for Definitive Bonds
upon surrender of the temporary Bonds at the office of the Indenture Trustee
located at Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479,
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Bonds, the Issuer shall execute and the Indenture Trustee shall
authenticate and make available for delivery, in exchange therefor, Definitive
Bonds of authorized denominations and of like tenor, class and aggregate
principal amount. Until so exchanged, such temporary Bonds shall in all respects
be entitled to the same benefits under this Indenture as Definitive Bonds.

         Section 4.15 REPRESENTATION REGARDING ERISA. By acquiring a Bond or
interest therein, each Holder of such Bond or Beneficial Owner of any such
interest will be deemed to represent that either (1) it is not acquiring the
Bond with Plan Assets or (2) (A) the acquisition, holding and transfer of such
Bond will not give rise to a non-exempt prohibited transaction under Section 406
of ERISA or Section 4975 of the Code as a result of the Issuer, the Seller, the
Depositor, any Underwriter, the Owner Trustee, the Indenture Trustee, the Master
Servicer, any Subservicer, any other servicer, any administrator, any provider
of credit support, including the Derivative Contract Counterparty, any owner of
the Certificates, or any of their Affiliates being a "Party in Interest" (within
the meaning of ERISA) or Disqualified Person (within the meaning of the Code)
with respect to such holder or Beneficial Owner that is a Plan and (B) the Bonds
are rated investment grade or better and such Person believes that the Bonds are
properly treated as indebtedness without substantial equity features for
purposes of the Department of Labor regulation 29 C.F.R. ss. 2510.3-101, and
agrees to so treat the Bonds. Alternatively, regardless of the rating of the
Bonds, such Person may provide the Indenture Trustee and the Owner Trustee with
an opinion of counsel, which opinion of counsel will not be at the expense of
the Issuer, the Seller, any Underwriter, the Owner Trustee, the Indenture
Trustee, the Master Servicer or any successor servicer which opines that the
acquisition, holding and transfer of such Bond or interest therein is
permissible under applicable law, will not constitute or result in a non-exempt
prohibited transaction under ERISA or Section 4975 of the Code and will not
subject the Issuer, the Seller, the Depositor, any Underwriter, the Owner
Trustee, the Indenture Trustee, the Master Servicer or any successor servicer to
any obligation in addition to those undertaken in the Indenture.

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<PAGE>

                                   ARTICLE V

                              Default and Remedies

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

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

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

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

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

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

                           (C)      all amounts owed to the Bond Insurer; and

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

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

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<PAGE>

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

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

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

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

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

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

                                       32
<PAGE>

Indenture Trustee shall have made any demand pursuant to the provisions of this
Section, shall be entitled and empowered, by intervention in such Proceedings or
otherwise:

                  (i)      to file and prove a claim or claims for the whole
         amount of principal and interest owing and unpaid in respect of the
         Bonds and to file such other papers or documents as may be necessary or
         advisable in order to have the claims of the Indenture Trustee
         (including any claim for reasonable compensation to the Indenture
         Trustee and each predecessor Indenture Trustee, and their respective
         agents, attorneys and counsel, and for reimbursement of all expenses
         and liabilities incurred, and all advances made, by the Indenture
         Trustee and each predecessor Indenture Trustee, except as a result of
         negligence or bad faith) and of the Bondholders allowed in such
         Proceedings;

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

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

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

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

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

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

                                       33
<PAGE>

and their respective agents and attorneys, shall be for the ratable benefit of
the Holders of the Bonds, subject to Section 5.05 hereof.

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

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

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

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

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

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

PROVIDED, HOWEVER, that the Indenture Trustee may not sell or otherwise
liquidate the Trust Estate following an Event of Default, unless (A) the
Indenture Trustee obtains the consent of the Bond Insurer and the Holders of
100% of the aggregate Bond Principal Balance of the Bonds and 50% of the
aggregate Notional Amount of the Class A-IO Bonds, (B) the proceeds of such sale
or liquidation distributable to the Holders of the Bonds are sufficient to
discharge in full all amounts then due and unpaid upon such Bonds for principal
and interest or (C) the Indenture Trustee determines that the Mortgage Loans
will not continue to provide sufficient funds for the payment of principal of
and interest on the applicable Bonds as they would have become due if the Bonds
had not been declared due and payable, and the Indenture Trustee obtains the
consent of the Bond Insurer and the Holders of a majority of the aggregate Bond
Principal Balance of the Bonds and a majority of the aggregate Notional Amount
of the Class A-IO Bonds. In determining such sufficiency or insufficiency with
respect to clause (B) and (C), the Indenture Trustee may, but need not, obtain
and rely upon an opinion (obtained at the expense of the Trust) of an
Independent investment banking or accounting firm of national reputation as to
the feasibility of such proposed action and as to the sufficiency of the Trust
Estate for such purpose. Notwithstanding the foregoing, so long as an Event of
Servicer Termination has not occurred,

                                       34
<PAGE>

any Sale of the Trust Estate shall be made subject to the continued servicing of
the Mortgage Loans by the Master Servicer as provided in the Servicing
Agreement.

         (b)      If the Indenture Trustee collects any money or property with
respect to the Loans pursuant to this Article V, it shall pay out the money or
property in the following order; PROVIDED, HOWEVER, that any amounts
representing payments from the Bond Insurer shall only be used to pay interest
and principal to the Class A-3 Bondholders pursuant to clauses FOURTH and FIFTH
below:

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

                  SECOND: to the Derivative Contract Counterparty, any amounts
         owed under the Derivative Contracts, other than any Additional
         Derivative Counterparty Payment;

                  THIRD: to the Bond Insurer, provided no Bond Insurer Default
         exists, with respect to any Premium Amount then due to the extent
         unpaid pursuant to the Servicing Agreement;

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

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

                  SIXTH: to the Bondholders, first, concurrently, on a pro rata
         basis, to the Class A-1, Class A-2 and Class A-3 Bondholders; second,
         sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class
         M-5, and Class M-6 Bondholders, and third, to the Class B Bondholders,
         the amount of any related Allocated Realized Loss Amount not previously
         paid;

                  SEVENTH: to the payment of all amounts due and owing to the
         Bond Insurer under the Insurance Agreement (including any Premium
         Amount not paid pursuant to clause THIRD above);

                  EIGHTH: to the Bondholders for amounts due and unpaid on the
         Bonds with respect to any related Unpaid Interest Shortfalls, first,
         concurrently, on a pro rata basis, to the Class A-1, Class A-2 and
         Class A-3 Bondholders; second, sequentially, to the Class M-1, Class
         M-2, Class M-3, Class M-4, Class M-5, and Class M-6 Bondholders, and
         third, to the Class B Bondholders, according to the amounts due and
         payable on the

                                       35
<PAGE>

         Bonds with respect thereto, from amounts available in the Trust Estate
         for the Bondholders;

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

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

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

         The Indenture Trustee may fix a record date and Payment Date for any
payment to Bondholders pursuant to this Section 5.04. With respect to any
acceleration at the direction of the Bond Insurer, the first Payment Date after
the acceleration shall be the first Payment Date after the acceleration. At
least 15 days before such record date, the Indenture Trustee shall mail to each
Bondholder a notice that states the record date, the Payment Date and the amount
to be paid.

         Section 5.05 OPTIONAL PRESERVATION OF THE TRUST ESTATE. If the Bonds
have been declared to be due and payable under Section 5.02 following an Event
of Default and such declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee may , with the consent of the Bond Insurer
(which consent shall not be required if a Bond Insurer Default exists), and
shall, at the direction of the Bond Insurer so long as no Bond Insurer Default
exists, elect to take and maintain possession of the Trust Estate. It is the
desire of the parties hereto and the Bondholders that there be at all times
sufficient funds for the payment of principal of and interest on the Bonds and
other obligations of the Issuer the Bond Insurer, and the Indenture Trustee,
unless directed otherwise by the Bond Insurer, shall take such desire into
account when determining whether or not to take and maintain possession of the
Trust Estate. In determining whether to take and maintain possession of the
Trust Estate, the Indenture Trustee may, but need not, obtain and rely upon an
opinion of an Independent investment banking or accounting firm of national
reputation as to the feasibility of such proposed action and as to the
sufficiency of the Trust Estate for such purpose.

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

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

                                       36
<PAGE>

                  (ii)     the Holders of not less than 25% of the aggregate
         Bond Principal Balances of the Bonds (for which purpose the Class A-IO
         Bonds will be deemed to have an aggregate Bond Principal Balance equal
         to 5% of the aggregate Bond Principal Balance of the other Classes of
         Bonds) have made a written request to the Indenture Trustee to
         institute such Proceeding in respect of such Event of Default in its
         own name as Indenture Trustee hereunder;

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

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

                  (v)      no direction inconsistent with such written request
         has been given to the Indenture Trustee during such 60-day period by
         the Holders of a majority of the Bond Principal Balances of the Bonds
         and a majority of the aggregate Notional Amount of the Class A-IO
         Bonds; and

                  (vi)     such Holder or Holders have the written consent of
         the Bond Insurer, unless a Bond Insurer Default exists.

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

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

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

         Section 5.08 RESTORATION OF RIGHTS AND REMEDIES. If the Indenture
Trustee or any Bondholder has instituted any Proceeding to enforce any right or
remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Indenture
Trustee, the Bond Insurer or to such Bondholder, then and in every such case the
Issuer, the Indenture Trustee, the Bond Insurer and the Bondholders shall,
subject to any determination in such Proceeding, be restored severally and
respectively to their former

                                       37
<PAGE>

positions hereunder, and thereafter all rights and remedies of the Indenture
Trustee, the Bond Insurer and the Bondholders shall continue as though no such
Proceeding had been instituted.

         Section 5.09 RIGHTS AND REMEDIES CUMULATIVE. No right or remedy herein
conferred upon or reserved to the Indenture Trustee, to the Bond Insurer or to
the Bondholders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.

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

         Section 5.11 CONTROL BY BOND INSURER. The Bond Insurer, unless a Bond
Insurer Default exists, or the Holders of a majority of the aggregate Bond
Principal Balances of the Class A-3 Bonds, if a Bond Insurer Default exists,
shall have the right to direct the time, method and place of conducting any
Proceeding for any remedy available to the Indenture Trustee with respect to the
Class A-3 Bonds or exercising any trust or power conferred on the Indenture
Trustee with respect to the Class A-3 Bonds; provided that:

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

                  (ii)     if a Bond Insurer Default exists, any direction to
         the Indenture Trustee to sell or liquidate the portion of the Trust
         Estate related to the Class A-3 Bonds shall be by Holders of the Class
         A-3 Bonds representing not less than 100% of the Bond Principal
         Balances of such Bonds;

                  (iii)    if the conditions set forth in Section 5.05 hereof
         have been satisfied and the Indenture Trustee, with the consent of the
         Bond Insurer (which consent shall not be required if a Bond Insurer
         Default exists), elects to retain the Trust Estate pursuant to such
         Section, then any direction to the Indenture Trustee by Holders of
         Bonds representing less than 100% of the Bond Principal Balances of the
         Class A-3 Bonds to sell or liquidate the related portion of the Trust
         Estate shall be of no force and effect; and

                  (iv)     if a Bond Insurer Default exists, the Indenture
         Trustee may take any other action deemed proper by the Indenture
         Trustee that is not inconsistent with such direction of the Holders of
         the Class A-3 Bonds representing a majority of the Bond Principal
         Balances of the Bonds.

Notwithstanding the rights of Bondholders set forth in this Section, subject to
Section 6.01, the Indenture Trustee need not take any action that it determines
might involve it in liability.

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<PAGE>

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

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

         Section 5.13 UNDERTAKING FOR COSTS. All parties to this Indenture
agree, and each Holder of any Bond and each Beneficial Owner of any interest
therein by such Holder's or Beneficial Owner's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.13 shall not apply to (a) any suit instituted by
the Indenture Trustee, (b) any suit instituted by any Bondholder, or group of
Bondholders, in each case holding in the aggregate more than 10% of the Bond
Principal Balances of the Bonds (for which purpose the Class A-IO Bonds will be
deemed to have a Bond Principal Balance equal to 5% of the aggregate Bond
Principal Balance of the other Classes of Bonds) or (c) any suit instituted by
any Bondholder for the enforcement of the payment of principal of or interest on
any Bond on or after the respective due dates expressed in such Bond and in this
Indenture.

         Section 5.14 WAIVER OF STAY OR EXTENSION LAWS. The Issuer covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead or in any manner whatsoever, claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of this Indenture; and
the Issuer (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it shall not
hinder, delay or impede the execution of any power herein granted to the
Indenture Trustee, but will suffer and permit the execution of every such power
as though no such law had been enacted.

         Section 5.15 SALE OF TRUST ESTATE. (a) The power to effect any sale or
other disposition (a "Sale") of any portion of the Trust Estate pursuant to
Section 5.04 hereof is expressly subject to the provisions of Section 5.05
hereof and this Section 5.15. The power to effect any such Sale shall not be
exhausted by any one or more Sales as to any portion of the Trust Estate
remaining unsold, but shall continue unimpaired until the entire Trust Estate
shall have been sold or all

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<PAGE>

amounts payable on the Bonds and under this Indenture shall have been paid. The
Indenture Trustee, with the consent of the Bond Insurer (which consent shall not
be required if a Bond Insurer Default exists), may from time to time postpone
any public Sale by public announcement made at the time and place of such Sale.
The Indenture Trustee hereby expressly waives its right to any amount fixed by
law as compensation for any Sale.

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

                  (1)      the Bond Insurer, unless a Bond Insurer Default
         exists, or the Holders of all Bonds if a Bond Insurer Default exists,
         consent to or direct the Indenture Trustee to make, such Sale, or

                  (2)      the proceeds of such Sale would be not less than the
         entire amount which would be payable to the Bondholders under the Bonds
         and the Bond Insurer in respect of amounts drawn under the Bond
         Insurance Policy and any other amounts due to the Bond Insurer under
         the Insurance Agreement, in full payment thereof in accordance with
         Section 5.02 hereof, on the Payment Date next succeeding the date of
         such Sale, or

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

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

         (c)      Unless the Bond Insurer, or if a Bond Insurer Default exists,
the Holders representing at least 66-2/3% of the Bond Principal Balances of the
Bonds (for which purpose the Class A-IO Bonds will be deemed to have a Bond
Principal Balance equal to 5% of the aggregate Bond Principal Balance of the
other Classes of Bonds) have otherwise consented or directed the Indenture
Trustee, at any public Sale of all or any portion of the Trust Estate at which a
minimum bid equal to or greater than the amount described in paragraph (2) of
subsection (b) of this Section 5.15 has not been established by the Indenture
Trustee and no Person bids an amount equal to or greater than such amount, the
Indenture Trustee, as trustee for the benefit of the Holders of the Bonds, shall
bid an amount at least $1.00 more than the highest other bid.

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

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

                                       40
<PAGE>

         up to the amount which shall, upon distribution of the net proceeds of
         such sale, be payable thereon, and such Bonds, in case the amounts so
         payable thereon shall be less than the amount due thereon, shall be
         returned to the Holders thereof after being appropriately stamped to
         show such partial payment;

                  (2)      the Indenture Trustee, with the consent of the Bond
         Insurer so long as no Bond Insurer Default exists, may bid for and
         acquire the property offered for Sale in connection with any Sale
         thereof, and, subject to any requirements of, and to the extent
         permitted by, applicable law in connection therewith, may purchase all
         or any portion of the Trust Estate in a private sale, and, in lieu of
         paying cash therefor, may make settlement for the purchase price by
         crediting the gross Sale price against the sum of (A) the amount which
         would be distributable to the Holders of the Bonds and Holders of
         Certificates and amounts distributable to the Bond Insurer as a result
         of such Sale in accordance with Section 5.04(b) hereof on the Payment
         Date next succeeding the date of such Sale and (B) the expenses of the
         Sale and of any Proceedings in connection therewith which are
         reimbursable to it, without being required to produce the Bonds in
         order to complete any such Sale or in order for the net Sale price to
         be credited against such Bonds, and any property so acquired by the
         Indenture Trustee shall be held and dealt with by it in accordance with
         the provisions of this Indenture;

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

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

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

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

         Section 5.17 PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS. (a)
Promptly following a request from the Indenture Trustee to do so, the Issuer in
its capacity as Holder of the Mortgage Loans, shall take all such lawful action
as the Indenture Trustee or the Bond Insurer may request to cause the Issuer to
compel or secure the performance and observance by the

                                       41
<PAGE>

Seller and the Master Servicer, as applicable, of each of their obligations to
the Issuer under or in connection with the Mortgage Loan Purchase Agreement and
the Servicing Agreement, and to exercise any and all rights, remedies, powers
and privileges lawfully available to the Issuer under or in connection with the
Mortgage Loan Purchase Agreement and the Servicing Agreement to the extent and
in the manner directed by the Indenture Trustee, with the consent of the Bond
Insurer so long as no Bond Insurer Default exists, as pledgee of the Mortgage
Loans, including the transmission of notices of default on the part of the
Seller or the Master Servicer thereunder and the institution of legal or
administrative actions or proceedings to compel or secure performance by the
Seller or the Master Servicer of each of their obligations under the Mortgage
Loan Purchase Agreement and the Servicing Agreement. So long as no Bond Insurer
Default exists, the Bond Insurer shall have the right to approve or reject any
proposed successor to the Master Servicer (other than the Indenture Trustee)
under the Servicing Agreement.

         (b)      The Indenture Trustee, as pledgee of the Mortgage Loans,
subject to the rights of the Bond Insurer under this Agreement and the Servicing
Agreement, may, and at the direction (which direction shall be in writing or by
telephone (confirmed in writing promptly thereafter)) of the Bond Insurer or if
a Bond Insurer Default exists, of the Holders of 66-2/3% of the Bond Principal
Balances of the Bonds (for which purpose the Class A-IO Bonds will be deemed to
have a Bond Principal Balance equal to 5% of the aggregate Bond Principal
Balance of the other Classes of Bonds), shall exercise all rights, remedies,
powers, privileges and claims of the Issuer against the Seller or the Master
Servicer under or in connection with the Mortgage Loan Purchase Agreement and
the Servicing Agreement, including the right or power to take any action to
compel or secure performance or observance by the Seller or the Master Servicer,
as the case may be, of each of their obligations to the Issuer thereunder and to
give any consent, request, notice, direction, approval, extension or waiver
under the Mortgage Loan Purchase Agreement and the Servicing Agreement, as the
case may be, and any right of the Issuer to take such action shall not be
suspended.

                                   ARTICLE VI

                              The Indenture Trustee

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

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

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

                  (ii)     in the absence of bad faith on its part, the
         Indenture Trustee may conclusively rely, as to the truth of the
         statements and the correctness of the opinions expressed therein, upon
         certificates or opinions furnished to the Indenture Trustee and
         conforming to the requirements of this Indenture; however, the
         Indenture Trustee shall

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<PAGE>

         examine the certificates and opinions to determine whether or not they
         conform to the requirements of this Indenture.

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

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

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

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

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

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

         (f)      No provision of this Indenture shall require the Indenture
Trustee to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties hereunder or in the exercise of any of
its rights or powers, if it shall have reasonable grounds to believe that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.

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

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

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

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

                                       43
<PAGE>

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

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

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

         (f)      For the limited purpose of effecting any action to be
undertaken by the Indenture Trustee, but not specifically as a duty of the
Indenture Trustee in the Indenture, the Indenture Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder, either directly or
by or through agents, attorneys, custodians or nominees appointed with due care,
and shall not be responsible for any willful misconduct or negligence on the
part of any agent, attorney, custodian or nominee so appointed.

         (g)      The Indenture Trustee or its Affiliates are permitted to
receive additional compensation that could be deemed to be in the Indenture
Trustee's economic self-interest for (i) serving as investment adviser,
administrator, shareholder servicing agent, custodian or sub-custodian with
respect to certain of the Eligible Investments, (ii) using Affiliates to effect
transactions in certain Eligible Investments and (iii) effecting transactions in
certain Eligible Investments. Such compensation shall not be considered an
amount that is reimbursable or payable to the Indenture Trustee (i) pursuant to
Sections 3.05(d), 5.04(b), 6.07 or 8.02(c) hereunder or (ii) out of Available
Funds.

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

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

         Section 6.04 INDENTURE TRUSTEE'S DISCLAIMER. The Indenture Trustee
shall not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Bonds, it shall not be accountable for the
Issuer's use of the proceeds from the Bonds, and it

                                       44
<PAGE>

shall not be responsible for any statement of the Issuer in the Indenture or in
any document issued in connection with the sale of the Bonds or in the Bonds
other than the Indenture Trustee's certificate of authentication.

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

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

         The Indenture Trustee shall prepare and file (or cause to be prepared
and filed), on behalf of the Owner Trustee, all tax returns (if any) and
information reports, tax elections and such annual or other reports of the
Issuer as are necessary for preparation of tax returns and information reports
as provided in Section 5.03 of the Trust Agreement, including without limitation
Form 1099. All tax returns and information reports shall be signed by the Owner
Trustee as provided in Section 5.03 of the Trust Agreement.
Section 6.07 COMPENSATION AND INDEMNITY. The Issuer shall pay to the Indenture
Trustee on each Payment Date reasonable compensation for its services. On each
Payment Date, the Indenture Trustee shall pay itself from amounts available
therefore on deposit in the Payment Account for such Payment Date all amounts
owing to the Indenture Trustee hereunder (including amounts owing from the
Issuer for indemnification and otherwise) as provided in Section 3.05(d)(vi),
Section 5.04(b) and Section 8.02(c) hereof and Appendix A hereto. The Indenture
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Issuer shall reimburse the Indenture Trustee
for all reasonable out-of-pocket expenses incurred or made by it, including
costs of collection, in addition to compensation for its services. Such expenses
shall include reasonable compensation and expenses, disbursements and advances
of the Indenture Trustee's agents, counsel, accountants and experts. The Issuer
shall indemnify the Indenture Trustee and the Bond Insurer against any and all
loss, liability or expense (including attorneys' fees) incurred by it in
connection with the administration of this Trust and the performance of its
duties hereunder. The Indenture Trustee shall notify the Issuer promptly of any
claim for which it may seek indemnity. Failure by the Indenture Trustee or the
Bond Insurer to so notify the Issuer shall not relieve the Issuer of its
obligations hereunder. The Issuer shall defend any such claim, and the Indenture
Trustee and the Bond Insurer may have separate counsel and the Issuer shall pay
the fees and expenses of such counsel. The Issuer is not obligated to reimburse
any expense or indemnify against any loss, liability or expense incurred by the
Indenture Trustee or the Bond Insurer through the Indenture Trustee's or the
Bond Insurer's own willful misconduct, negligence or bad faith.

         The Issuer's payment obligations to the Indenture Trustee and the Bond
Insurer pursuant to this Section 6.07 shall survive the discharge of this
Indenture and the termination or

                                       45
<PAGE>

resignation of the Indenture Trustee or the Bond Insurer. When the Indenture
Trustee or the Bond Insurer incurs expenses after the occurrence of an Event of
Default with respect to the Issuer, the expenses are intended to constitute
expenses of administration under Title 11 of the United States Code or any other
applicable federal or state bankruptcy, insolvency or similar law.

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

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

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

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

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

         If the Indenture Trustee resigns or is removed or if a vacancy exists
in the office of the Indenture Trustee for any reason (the Indenture Trustee in
such event being referred to herein as the retiring Indenture Trustee), the
Issuer, with the consent of the Bond Insurer so long as no Bond Insurer Default
exists, shall promptly appoint a successor Indenture Trustee.

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

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

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

         Section 6.09 SUCCESSOR INDENTURE TRUSTEE BY MERGER. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all of its corporate

                                       46
<PAGE>

trust business or assets to, another corporation or banking association, the
resulting, surviving or transferee corporation, without any further act, shall
be the successor Indenture Trustee; provided, that such corporation or banking
association shall be otherwise qualified and eligible under Section 6.11 hereof.
The Indenture Trustee shall provide the Rating Agencies and the Bond Insurer
with prior written notice of any such transaction.

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

         Section 6.10 APPOINTMENT OF CO-INDENTURE TRUSTEE OR SEPARATE INDENTURE
TRUSTEE. (a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust Estate may at the time be located, the Indenture
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Trust Estate, and to
vest in such Person or Persons, in such capacity and for the benefit of the
Bondholders and the Bond Insurer, such title to the Trust Estate, or any part
hereof, and, subject to the other provisions of this Section, such powers,
duties, obligations, rights and trusts as the Indenture Trustee or the Bond
Insurer may consider necessary or desirable. No co-trustee or separate trustee
hereunder shall be required to meet the terms of eligibility as a successor
trustee under Section 6.11 hereof and notice to the Bond Insurer but not to the
Bondholders (unless a Bond Insurer Default exists, in which case notice will be
sent to the Bondholders) of the appointment of any co-trustee or separate
trustee shall be required under Section 6.08 hereof.

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

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

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<PAGE>

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

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

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

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

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

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

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

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

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<PAGE>

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

                  (iii)    The consummation of the transactions contemplated by
         this Indenture and the fulfillment of the terms hereof do not conflict
         with, result in any breach of any of the terms and provisions of, or
         constitute (with or without notice or lapse of time) a default under,
         the articles of incorporation or bylaws of the Indenture Trustee or any
         agreement or other instrument to which the Indenture Trustee is a party
         or by which it is bound; and

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

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

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

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

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

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

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

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                                  ARTICLE VII

                         Bondholders' Lists and Reports

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

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

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

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

         Section 7.03 REPORTS OF ISSUER. (a) Subject to Section 4.06 of the
Servicing Agreement (i) The Indenture Trustee shall file with the Commission on
behalf of the Issuer, with a copy to the Issuer and the Bond Insurer within 15
days before the Issuer is required to file the same with the Commission, the
annual reports and the information, documents and other reports (or such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) that the Issuer may be required to file with
the Commission pursuant to Section 13 or 15(d) of the Exchange Act;

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

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

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<PAGE>

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

         Section 7.04 REPORTS BY INDENTURE TRUSTEE. If required by TIA ss.
313(a), within 60 days after each January 30 beginning with March 31, 2005, the
Indenture Trustee shall mail to each Bondholder as required by TIA ss. 313(c)
and the Bond Insurer a brief report dated as of such date that complies with TIA
ss. 313(a). The Indenture Trustee also shall comply with TIA ss. 313(b).

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

         Section 7.05 STATEMENTS TO BONDHOLDERS. (a) With respect to each
Payment Date, the Indenture Trustee shall make available via the Indenture
Trustee's website https://www.ctslink.com or deliver at the recipient's option
to each Bondholder and each Certificateholder, the Bond Insurer, the Derivative
Contract Counterparty, the Depositor, the Owner Trustee, the Certificate Paying
Agent and each Rating Agency, a statement setting forth the following
information as to the Bonds, to the extent applicable:

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

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

                  (iii)    (a) the amount of such distribution to each Class
         A-1, Class A-2, Class A-3, Class M-1, Class M-2, Class M-3, Class M-4,
         Class M-5, Class M-6 and Class B Bonds applied to reduce the Bond
         Principal Balance thereof, and (b) the aggregate amount included
         therein representing Principal Prepayments;

                  (iv)     the Insured Amount, if any, paid by the Bond Insurer
         under the Bond Insurance Policy for such Payment Date and the aggregate
         Insured Amounts for all prior Payment Dates paid by the Bond Insurer
         under the Bond Insurance Policy and not yet reimbursed;

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

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

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

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<PAGE>

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

                  (ix)     the aggregate Bond Principal Balance of each Class of
         Bonds (other than the Class A-IO Bonds), after giving effect to the
         amounts distributed on such Payment Date, separately identifying any
         reduction thereof due to Realized Losses other than pursuant to an
         actual distribution of principal and the aggregate Bond Principal
         Balance of all of the Class A-1, Class A-2, Class A-3, Class M-1, Class
         M-2, Class M-3, Class M-4, Class M-5, Class M-6 and Class B Bonds after
         giving effect to the distribution of principal on such Payment Date;

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

                  (xi)     the Net Derivative Contract Payment Amount;

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

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

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

                  (xv)     the number and aggregate Stated Principal Balance of
         Mortgage Loans repurchased pursuant to the Mortgage Loan Purchase
         Agreement for the related Payment Date and cumulatively since the
         Closing Date;

                  (xvi)    the book value of any REO Property;

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

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

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

         The Indenture Trustee may conclusively rely upon the Remittance Report
provided by the Master Servicer pursuant to Section 4.01 of the Servicing
Agreement and on the amount of the

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<PAGE>

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

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

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                                  ARTICLE VIII

                      Accounts, Disbursements and Releases

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

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

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

         (c)      On each Payment Date, the Indenture Trustee shall pay itself
from amounts on deposit in the Payment Account the Indenture Trustee's Fee for
such Payment Date and any other amounts payable to it hereunder and then shall
pay the Derivative Contract Counterparty the Net Derivative Contract Payment
Amount, in each case excluding any Additional Derivative Contract Counterparty
Payment, and then shall pay the Owner Trustee the Owner Trustee's Fee, and then
the Indenture Trustee shall distribute all remaining amounts on deposit in the
Payment Account to the Bondholders in respect of the Bonds and to such other
Persons in the order of priority set forth in Section 3.05 hereof (except as
otherwise provided in Section 5.04(b) hereof).

         (d)      The Indenture Trustee shall invest any funds in the Payment
Account, but only in Eligible Investments, as directed by the Master Servicer,
maturing no later than the Business Day preceding each Payment Date and such
Eligible Investments shall not be sold or disposed of prior to their maturity.
From the Business Day prior to the Payment Date until distributed, such funds
shall be held uninvested and any income, gain or other benefit with respect
thereto shall be for the benefit of the Indenture Trustee.

         Section 8.03 OFFICER'S CERTIFICATE. The Indenture Trustee shall receive
at least seven Business Days' notice when requested by the Issuer to take any
action pursuant to Section

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<PAGE>

8.05(a) hereof, accompanied by copies of any instruments to be executed, and the
Indenture Trustee shall also require, as a condition to such action, an
Officer's Certificate, in form and substance satisfactory to the Indenture
Trustee, stating the legal effect of any such action, outlining the steps
required to complete the same, and concluding that all conditions precedent to
the taking of such action have been complied with.

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

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

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

         (c)      The Indenture Trustee shall release property from the lien of
this Indenture pursuant to this Section 8.05 only upon receipt of a request from
the Issuer accompanied by an Officers' Certificate and an Opinion of Counsel
stating that all applicable requirements have been satisfied, and a letter from
the Bond Insurer stating that the Bond Insurer has no objection to such request
from the Issuer, except as otherwise provided in clause (a).

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

         Section 8.07 OPTIONAL REDEMPTION OF THE BONDS. (a) The Majority
Certificateholder shall have the option to redeem the Bonds in whole, but not in
part, on any Payment Date on or after the earlier of (i) the Payment Date on
which the aggregate Stated Principal Balance of the Mortgage Loans is less than
or equal to 20% of the aggregate of the Cut-off Date Balance and (ii) the
Payment Date occurring in March 2015; provided, that if the Majority
Certificateholder fails to exercise such option, the Bond Insurer will have the
right to purchase the Class A-3 Bonds at the same price and in the same manner
as effected by the Majority Certificateholder.

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<PAGE>

The aggregate redemption price for the Bonds will be equal to the unpaid Bond
Principal Balance of such Bonds as of the Payment Date on which the proposed
redemption will take place in accordance with the foregoing, together with
accrued and unpaid interest thereon at the applicable Bond Interest Rate through
such Payment Date (including any related Unpaid Interest Shortfall and Basis
Risk Shortfall Carry-Forward Amount), plus an amount sufficient to pay in full
all amounts owing to the Bond Insurer and the Indenture Trustee under this
Indenture and the Insurance Agreement (which amounts shall be specified in
writing upon request of the Issuer by the Indenture Trustee and the Bond
Insurer) and plus an amount equal to any amounts owing to the Derivative
Contract Counterparty under the Derivative Contracts.

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

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                                   ARTICLE IX

                             Supplemental Indentures

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

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

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

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

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

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

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

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

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

                                       57
<PAGE>

PROVIDED, HOWEVER, that no such indenture supplements shall be entered into
unless the Indenture Trustee shall have received an Opinion of Counsel as to the
enforceability of any such indenture supplement and to the effect that (i) such
indenture supplement is permitted hereunder and (ii) entering into such
indenture supplement will not result in a "substantial modification" of the
Bonds under Treasury Regulation Section 1.1001-3 or adversely affect the status
of the Bonds as indebtedness for federal income tax purposes.

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

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

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

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

                  (ii)     reduce the percentage of the Bond Principal Balances
         of the Bonds, the consent of the Holders of which is required for any
         such supplemental indenture, or the consent of the Holders of which is
         required for any waiver of compliance with certain

                                       58
<PAGE>

         provisions of this Indenture or certain defaults hereunder and their
         consequences provided for in this Indenture;

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

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

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

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

                  (vii)    permit the creation of any lien ranking prior to or
         on a parity with the lien of this Indenture with respect to any part of
         the Trust Estate or, except as otherwise permitted or contemplated
         herein, terminate the lien of this Indenture on any property at any
         time subject hereto or deprive the Holder of any Bond of the security
         provided by the lien of this Indenture;

and PROVIDED, FURTHER, that such action shall not, as evidenced by an Opinion of
Counsel, cause the Issuer (if 100% of the Certificates are not owned by IMH
Assets Corp.) to be subject to an entity level tax.

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

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

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

         Promptly after the execution by the Issuer and the Indenture Trustee of
any supplemental indenture pursuant to this Section 9.02, the Indenture Trustee
shall mail to the Holders of the Bonds to which such amendment or supplemental
indenture relates a notice setting forth in general terms the substance of such
supplemental indenture. Any failure of the Indenture Trustee

                                       59
<PAGE>

to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.

         Section 9.03 EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.01 and 6.02 hereof, shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Indenture Trustee
may, but shall not be obligated to, enter into any such supplemental indenture
that affects the Indenture Trustee's own rights, duties, liabilities or
immunities under this Indenture or otherwise.

         Section 9.04 EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and shall be deemed to be modified and amended in accordance therewith
with respect to the Bonds affected thereby, and the respective rights,
limitations of rights, obligations, duties, liabilities and immunities under
this Indenture of the Indenture Trustee, the Issuer and the Holders of the Bonds
shall thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.

         Section 9.05 CONFORMITY WITH TRUST INDENTURE ACT. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as then
in effect so long as this Indenture shall then be qualified under the Trust
Indenture Act.

         Section 9.06 REFERENCE IN BONDS TO SUPPLEMENTAL INDENTURES. Bonds
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new Bonds so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Bonds.

                                       60
<PAGE>

                                   ARTICLE X

                                  Miscellaneous

         Section 10.01 COMPLIANCE CERTIFICATES AND OPINIONS, ETC. (a) Upon any
application or request by the Issuer to the Indenture Trustee to take any action
under any provision of this Indenture, the Issuer shall furnish to the Indenture
Trustee and to the Bond Insurer (i) an Officer's Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with and (ii) an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent, if any, have
been complied with, except that, in the case of any such application or request
as to which the furnishing of such documents is specifically required by any
provision of this Indenture, no additional certificate or opinion need be
furnished.

         Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:

                  (1)      a statement that each signatory of such certificate
         or opinion has read or has caused to be read such covenant or condition
         and the definitions herein relating thereto;

                  (2)      a brief statement as to the nature and scope of the
         examination or investigation upon which the statements or opinions
         contained in such certificate or opinion are based;

                  (3)      a statement that, in the opinion of each such
         signatory, such signatory has made such examination or investigation as
         is necessary to enable such signatory to express an informed opinion as
         to whether or not such covenant or condition has been complied with;

                  (4)      a statement as to whether, in the opinion of each
         such signatory, such condition or covenant has been complied with; and

                  (5)      if the signatory of such certificate or opinion is
         required to be Independent, the statement required by the definition of
         the term "Independent Certificate".

         (b)      (i) Prior to the deposit of any Collateral or other property
or securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture, the
Issuer shall, in addition to any obligation imposed in Section 10.01 (a) or
elsewhere in this Indenture, furnish to the Indenture Trustee and the Bond
Insurer an Officer's Certificate certifying or stating the opinion of each
person signing such certificate as to the fair value (within 90 days prior to
such deposit) to the Issuer of the Collateral or other property or securities to
be so deposited and a report from a nationally recognized accounting firm
verifying such value.

                  (ii)     Whenever the Issuer is required to furnish to the
         Indenture Trustee and the Bond Insurer an Officer's Certificate
         certifying or stating the opinion of any signer

                                       61
<PAGE>

         thereof as to the matters described in clause (i) above, the Issuer
         shall also deliver to the Indenture Trustee and the Bond Insurer an
         Independent Certificate from a nationally recognized accounting firm as
         to the same matters, if the fair value of the securities to be so
         deposited and of all other such securities made the basis of any such
         withdrawal or release since the commencement of the then current fiscal
         year of the Issuer, as set forth in the certificates delivered pursuant
         to clause (i) above and this clause (ii), is 10% or more of the Bond
         Principal Balances or Notional Amounts of the Bonds, but such a
         certificate need not be furnished with respect to any securities so
         deposited, if the fair value thereof as set forth in the related
         Officer's Certificate is less than $25,000 or less than one percent of
         the Bond Principal Balances or Notional Amounts of the Bonds.

                  (iii)    Whenever any property or securities are to be
         released from the lien of this Indenture, the Issuer shall also furnish
         to the Indenture Trustee and the Bond Insurer an Officer's Certificate
         certifying or stating the opinion of each person signing such
         certificate as to the fair value (within 90 days prior to such release)
         of the property or securities proposed to be released and stating that
         in the opinion of such person the proposed release will not impair the
         security under this Indenture in contravention of the provisions
         hereof.

                  (iv)     Whenever the Issuer is required to furnish to the
         Indenture Trustee and the Bond Insurer an Officer's Certificate
         certifying or stating the opinion of any signer thereof as to the
         matters described in clause (iii) above, the Issuer shall also furnish
         to the Indenture Trustee and the Bond Insurer an Independent
         Certificate as to the same matters if the fair value of the property or
         securities and of all other property or securities released from the
         lien of this Indenture since the commencement of the then-current
         calendar year, as set forth in the certificates required by clause
         (iii) above and this clause (iv), equals 10% or more of the Bond
         Principal Balances or Notional Amounts of the Bonds, but such
         certificate need not be furnished in the case of any release of
         property or securities if the fair value thereof as set forth in the
         related Officer's Certificate is less than $25,000 or less than one
         percent of the then Bond Principal Balances or Notional Amounts of the
         Bonds.

         Section 10.02 FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.

         Any certificate or opinion of an Authorized Officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Seller or the Issuer, stating that the information

                                       62
<PAGE>

with respect to such factual matters is in the possession of the Seller or the
Issuer, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.

         Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.

         Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.

         Section 10.03 ACTS OF BONDHOLDERS. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Bondholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Bondholders in person or by agents duly appointed in writing; and except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Indenture Trustee, and,
where it is hereby expressly required, to the Issuer. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Bondholders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 6.01 hereof) conclusive in favor of the Indenture
Trustee and the Issuer, if made in the manner provided in this Section 10.03
hereof.

         (b)      The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.

         (c)      The ownership of Bonds shall be proved by the Bond Registrar.

         (d)      Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Bonds shall bind the Holder
of every Bond issued upon the registration thereof or in exchange therefor or in
lieu thereof, in respect of anything done, omitted or suffered to be done by the
Indenture Trustee or the Issuer in reliance thereon, whether or not notation of
such action is made upon such Bond.

         Section 10.04 NOTICES ETC., TO INDENTURE TRUSTEE, ISSUER, BOND INSURER,
SELLER AND RATING AGENCIES. Any request, demand, authorization, direction,
notice, consent, waiver or Act of Bondholders or other documents provided or
permitted by this Indenture shall be in writing and if such request, demand,
authorization, direction, notice, consent, waiver or act of Bondholders is to be
made upon, given or furnished to or filed with:

                                       63
<PAGE>

                  (i)      the Indenture Trustee by any Bondholder or by the
         Issuer shall be sufficient for every purpose hereunder if made, given,
         furnished or filed in writing to or with the Indenture Trustee at the
         Corporate Trust Office. The Indenture Trustee shall promptly transmit
         any notice received by it from the Bondholders to the Issuer; or

                  (ii)     the Issuer by the Indenture Trustee or by any
         Bondholder shall be sufficient for every purpose hereunder if in
         writing and mailed first-class, postage prepaid to the Issuer addressed
         to: Impac CMB Trust Series 2005-3, in care of Wilmington Trust Company,
         Rodney Square North, 1100 North Market Street, Wilmington, Delaware
         19990-0001, Attention: Corporate Trust Administration, or at any other
         address previously furnished in writing to the Indenture Trustee by the
         Issuer. The Issuer shall promptly transmit any notice received by it
         from the Bondholders to the Indenture Trustee; or

                  (iii)    the Bond Insurer by the Issuer, the Indenture Trustee
         or by any Bondholders shall be sufficient for every purpose hereunder
         if in writing and mailed, first-class postage pre-paid, or personally
         delivered or telecopied to: Financial Guaranty Insurance Corporation,
         125 Park Avenue, New York, New York 10017, Attention: Research and Risk
         Management. The Bond Insurer shall promptly transmit any notice
         received by it from the Issuer, the Indenture Trustee or the
         Bondholders to the Issuer or Indenture Trustee, as the case may be; or

                  (iv)     the Seller by the Indenture Trustee shall be
         sufficient for every purpose hereunder if in writing and mailed,
         first-class postage pre-paid, or personally delivered or telecopied to:
         Impac Mortgage Holdings, Inc., 1401 Dove Street, Newport Beach,
         California 92660, Attention: General Counsel. The Seller shall promptly
         transmit any notice received by it from the Indenture Trustee to the
         Bond Insurer.

         Notices required to be given to the Rating Agencies by the Issuer, the
Indenture Trustee or the Owner Trustee shall be in writing, mailed first-class
postage pre-paid, to (i) in the case of Moody's, at the following address:
Moody's Investors Service, Inc., Residential Mortgage Monitoring Department, 99
Church Street, New York, New York 10007; (ii) in the case of Standard & Poor's,
at the following address: Standard & Poor's, 55 Water Street, 41st Floor, New
York, New York 10041, Attention of Asset Backed Surveillance Department and
(iii) in the case of DBRS, at the following address: Dominion Bond Rating
Service, Inc., 55 Broadway, New York NY 10006; or as to each of the foregoing,
at such other address as shall be designated by written notice to the other
parties.

         Section 10.05 NOTICES TO BONDHOLDERS; WAIVER. Where this Indenture
provides for notice to Bondholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Bondholder affected by such
event, at such Person's address as it appears on the Bond Register, not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Bondholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Bondholder shall affect the sufficiency of such notice with
respect to other Bondholders, and any notice that is mailed in the

                                       64
<PAGE>

manner herein provided shall conclusively be presumed to have been duly given
regardless of whether such notice is in fact actually received.

         Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Bondholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.

         In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Bondholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed to
be a sufficient giving of such notice.

         Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute an Event of
Default.

Section 10.06 CONFLICT WITH TRUST INDENTURE ACT. If any provision hereof limits,
qualifies or conflicts with another provision hereof that is required to be
included in this Indenture by any of the provisions of the Trust Indenture Act,
such required provision shall control.

         The provisions of TIA ss.ss. 310 through 317 that impose duties on any
Person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.

         Section 10.07 EFFECT OF HEADINGS. The Article and Section headings
herein are for convenience only and shall not affect the construction hereof.

         Section 10.08 SUCCESSORS AND ASSIGNS. All covenants and agreements in
this Indenture and the Bonds by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture Trustee in
this Indenture shall bind its successors, co-trustees and agents.

         Section 10.09 SEPARABILITY. In case any provision in this Indenture or
in the Bonds shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby. Section 10.10 BENEFITS OF INDENTURE. The Bond Insurer and
its successors and assigns shall be a third-party beneficiary to the provisions
of this Indenture. To the extent that this Indenture confers upon or gives or
grants to the Bond Insurer any right, remedy or claim under or by reason of this
Indenture, the Bond Insurer may enforce any such right, remedy or claim
conferred, given or granted hereunder. Nothing in this Indenture or in the
Bonds, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, and the Bondholders and the Bond Insurer,
any benefit or any legal or equitable right, remedy or claim under this
Indenture.

                                       65
<PAGE>

         Section 10.11 LEGAL HOLIDAYS. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Bonds or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.

         Section 10.12 GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

         Section 10.13 COUNTERPARTS. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.

         Section 10.14 RECORDING OF INDENTURE. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
at its expense (which may be counsel to the Indenture Trustee or any other
counsel reasonably acceptable to the Indenture Trustee) to the effect that such
recording is necessary either for the protection of the Bondholders or any other
Person secured hereunder or for the enforcement of any right or remedy granted
to the Indenture Trustee under this Indenture.

         Section 10.15 ISSUER OBLIGATION. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Bonds or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or
of any successor or assign of the Indenture Trustee or the Owner Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity. For all purposes of
this Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Article VI, VII and VIII of the Trust Agreement.

         Section 10.16 NO PETITION. The Indenture Trustee, by entering into this
Indenture, and each Bondholder, by accepting a Bond, hereby covenant and agree
that they will not at any time prior to one year from the date of termination
hereof, institute against the Depositor or the Issuer, or join in any
institution against the Depositor or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United

                                       66
<PAGE>

States federal or state bankruptcy or similar law in connection with any
obligations relating to the Bonds, this Indenture or any of the Basic Documents.

         Section 10.17 INSPECTION. The Issuer agrees that, at its expense, on
reasonable prior notice, it shall permit any representative of the Indenture
Trustee and the Bond Insurer, during the Issuer's normal business hours, to
examine all the books of account, records, reports and other papers of the
Issuer, to make copies and extracts therefrom, to cause such books to be audited
by Independent certified public accountants, and to discuss the Issuer's
affairs, finances and accounts with the Issuer's officers, employees, and
Independent certified public accountants, all at such reasonable times and as
often as may be reasonably requested. The Indenture Trustee and the Bond Insurer
shall cause its representatives to hold in confidence all such information
except to the extent disclosure may be required by law (and all reasonable
applications for confidential treatment are unavailing) and except to the extent
that the Indenture Trustee or the Bond Insurer may reasonably determine that
such disclosure is consistent with its obligations hereunder.

                                       67
<PAGE>

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

                                        IMPAC CMB TRUST SERIES 2005-3, as Issuer

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

                                        By: /s/ Janel R. Havrilla
                                            ------------------------------------
                                        Name:   Janel R. Havrilla
                                        Title:  Financial Services Officer

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

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

<PAGE>

Acknowledged and agreed with respect to Section 2.07 hereof:

IMPAC MORTGAGE HOLDINGS, INC.,
as Seller

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

<PAGE>

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

         On this _____ day of April, 2005, before me personally appeared
______________________ to me known, who being by me duly sworn, did depose and
say, that he is the ____________________ of the Indenture Trustee, one of the
corporations described in and which executed the above instrument; and that he
signed his name thereto by like order.

                                        Notary Public

                                        --------------------------------
                                        NOTARY PUBLIC

 [NOTARIAL SEAL]

<PAGE>

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

         On this ____ day of April, 2005, before me personally appeared
_______________________ to me known, who being by me duly sworn, did depose and
say, that she is a ____________________________ of the Owner Trustee, one of the
entities described in and which executed the above instrument; and that she
signed her name thereto by like order.

                                        Notary Public

                                        --------------------------------
                                        NOTARY PUBLIC

[NOTARIAL SEAL]

<PAGE>

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

         On this ____ day of April, 2005, before me personally appeared
_______________________ to me known, who being by me duly sworn, did depose and
say, that she is a ____________________________ of the Seller, one of the
entities described in and which executed the above instrument; and that she
signed her name thereto by like order.

                                        Notary Public

                                        --------------------------------
                                        NOTARY PUBLIC

[NOTARIAL SEAL]

<PAGE>

                                   EXHIBIT A-1

                           FORM OF CLASS [_-A-_] BONDS

UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE INDENTURE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY BOND ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

THE HOLDER OF THIS BOND OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE
DEEMED TO REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF
THE INDENTURE.

THIS BOND IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF
PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST [AND THE BOND INSURANCE POLICY] AS
PROVIDED IN THE INDENTURE REFERRED TO BELOW. THE ISSUER IS NOT OTHERWISE
PERSONALLY LIABLE FOR PAYMENTS ON THIS BOND.

PRINCIPAL OF THIS BOND IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL OF THIS BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.

                                     A-1-1
<PAGE>

                          IMPAC CMB TRUST SERIES 2005-3
                        COLLATERALIZED ASSET-BACKED BONDS
                                  CLASS [_-A-_]

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

         Impac CMB Trust Series 2005-3 (the "Issuer"), a Delaware statutory
trust, for value received, hereby promises to pay to Cede & Co. or registered
assigns, the principal sum of ($_________________) in monthly installments on
the twenty-fifth day of each month or, if such day is not a Business Day, the
next succeeding Business Day (each a "Payment Date"), commencing in [________]
and ending on or before the Payment Date occurring in [_________] (the "Final
Scheduled Payment Date") and to pay interest on the Bond Principal Balance of
this Bond (this "Bond") outstanding from time to time as provided below.

         This Bond is one of a duly authorized issue of the Issuer's
Collateralized Asset-Backed Bonds, Series 2005-3 (the "Bonds"), issued under an
Indenture dated as of April 6, 2005 (the "Indenture"), between the Issuer and
Wells Fargo Bank, N.A. as indenture trustee (the "Indenture Trustee", which term
includes any successor Indenture Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights thereunder of the Issuer, the Indenture
Trustee, and the Holders of the Bonds and the terms upon which the Bonds are to
be authenticated and delivered. All terms used in this Bond which are defined in
the Indenture shall have the meanings assigned to them in the Indenture.

         Financial Guaranty Insurance Company (the "Bond Insurer"), in
consideration of the payment of the premium and subject to the terms of the bond
insurance policy (the "Bond Insurance Policy") issued thereby, has
unconditionally and irrevocably guaranteed the payment of the Insured Amount
with respect to the Class A-3 Bonds with respect to each Payment Date. Such Bond
Insurance Policy will not cover any Prepayment Interest Shortfalls, Relief Act
Shortfalls, Basis Risk Shortfalls or Basis Risk Shortfall Carry- Forward
Amounts.

         Payments of principal and interest on this Bond will be made on each
Payment Date to the Bondholder of record as of the related Record Date. The
"Bond Principal Balance" of a Bond as of any date of determination is equal to
the initial Bond Principal Balance thereof, reduced by the aggregate of all
amounts previously paid with respect to such Bond on account of principal and
the aggregate amount of cumulative Realized Losses allocated to such Bond on all
prior Payment Dates.

                                     A-1-2
<PAGE>

         The principal of, and interest on, this Bond are due and payable as
described in the Indenture, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. All payments made by the Issuer with respect to this Bond shall
be equal to this Bond's pro rata share of the aggregate payments on all Class
[_-A-_] Bonds as described above, and shall be applied as between interest and
principal as provided in the Indenture.

         All principal and interest accrued on the Bonds, if not previously
paid, will become finally due and payable at the Final Scheduled Payment Date.

         The majority Holder of the Certificates may purchase the Bonds from the
trust, effecting an early retirement of the Bonds, on or after the earlier of
(i) the Payment Date on which the aggregate Stated Principal Balance of the
Mortgage Loans have been reduced to less than or equal to 20% of the aggregate
of the Cut-off Date Balance and (ii) the Payment Date occurring in March 2015;
provided further that if the majority Holder of the Certificates fails to
exercise such option, the Bond Insurer will have the right to exercise such
option with respect to the Class A-3 Bonds only.

         The Issuer shall not be liable upon the indebtedness evidenced by the
Bonds except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Bonds. The assets included in the
Trust Estate will be the sole source of payments on the Class [_-A-_] Bonds, and
each Holder hereof, by its acceptance of this Bond, agrees that (i) such Bond
will be limited in right of payment to amounts available from the Trust Estate
as provided in the Indenture and (ii) such Holder shall have no recourse to the
Issuer, the Owner Trustee, the Indenture Trustee, IMH Assets Corp., Impac
Mortgage Holdings, Inc., the Master Servicer or any of their respective
affiliates, or to the assets of any of the foregoing entities, except the assets
of the Issuer pledged to secure the Class [_-A-_] Bonds pursuant to the
Indenture and the rights conveyed to the Issuer under the Indenture.

         Any payment of principal or interest payable on this Bond which is
punctually paid on the applicable Payment Date shall be paid to the Person in
whose name such Bond is registered at the close of business on the Record Date
for such Payment Date by check mailed to such Person's address as it appears in
the Bond Register on such Record Date, except for the final installment of
principal and interest payable with respect to such Bond, which shall be payable
as provided below. Notwithstanding the foregoing, upon written request with
appropriate instructions by the Holder of this Bond delivered to the Indenture
Trustee at least five Business Days prior to the Record Date, any payment of
principal or interest, other than the final installment of principal or
interest, shall be made by wire transfer to an account in the United States
designated by such Holder. All scheduled reductions in the principal amount of a
Bond (or one or more predecessor Bonds) effected by payments of principal made
on any Payment Date shall be binding upon all Holders of this Bond and of any
bond issued upon the registration of transfer thereof or in exchange therefor or
in lieu thereof, whether or not such payment is noted on such Bond. The final
payment of this Bond shall be payable upon presentation and surrender thereof on
or after the Payment Date thereof at the Corporate Trust Office or the office or
agency of the Issuer maintained by it for such purpose pursuant to Section 3.02
of the Indenture.

                                     A-1-3
<PAGE>

         Subject to the foregoing provisions, each Bond delivered under the
Indenture, upon registration of transfer of or in exchange for or in lieu of any
other Bond shall carry the right to unpaid principal and interest that were
carried by such other Bond.

         If an Event of Default as defined in the Indenture shall occur and be
continuing with respect to the Bonds, the Bonds may become or be declared due
and payable in the manner and with the effect provided in the Indenture. If any
such acceleration of maturity occurs prior to the payment of the entire unpaid
Bond Principal Balance of the Bonds, the amount payable to the Holder of this
Bond will be equal to the sum of the unpaid Bond Principal Balance of the Bonds,
together with accrued and unpaid interest thereon as described in the Indenture.
The Indenture provides that, notwithstanding the acceleration of the maturity of
the Bonds, under certain circumstances specified therein, all amounts collected
as proceeds of the Trust Estate securing the Bonds or otherwise shall continue
to be applied to payments of principal of and interest on the Bonds as if they
had not been declared due and payable.

         The failure to pay any Unpaid Interest Shortfall at any time when funds
are not available to make such payment as provided in the Indenture shall not
constitute an Event of Default under the Indenture.

         The Holder of this Bond or Beneficial Owner of any interest herein is
deemed to represent that either (1) it is not acquiring the Bond with Plan
Assets or (2) (A) the acquisition, holding and transfer of a Bond will not give
rise to a non-exempt prohibited transaction under Section 406 of ERISA or
Section 4975 of the Code as a result of the Issuer, the Seller, the Depositor,
the Underwriters, the Owner Trustee, the Indenture Trustee, the Master Servicer,
any Subservicer, any other servicer, any administrator, any provider of credit
support, any owner of the Certificates, or any of their Affiliates being a
"Party in Interest" (within the meaning of ERISA) or Disqualified Person (within
the meaning of the Code) with respect to such Holder or Beneficial Owner that is
a Plan and (B) the Bonds are rated investment grade or better and such person
believes that the Bonds are properly treated as indebtedness without substantial
equity features for purposes of the DOL Regulations, and agrees to so treat the
Bonds. Alternatively, regardless of the rating of the Bonds, such person may
provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
which opinion of counsel will not be at the expense of the Issuer, the Seller,
any Underwriter, the Owner Trustee, the Indenture Trustee, the Master Servicer
or any successor servicer which opines that the acquisition, holding and
transfer of such Bond or interest therein is permissible under applicable law,
will not constitute or result in a non-exempt prohibited transaction under ERISA
or Section 4975 of the Code and will not subject the Issuer, the Seller, the
Depositor, any Underwriter, the Owner Trustee, the Indenture Trustee, the Master
Servicer or any successor servicer to any obligation in addition to those
undertaken in the Indenture.

         [Pursuant to the Indenture, unless a Bond Insurer Default (as defined
in the Indenture) exists (i) the Bond Insurer shall be deemed to be the Holder
of the Class [_-A-_] Bonds for certain purposes specified in the Indenture
(other than with respect to payment on the Class [_-A-_] Bonds), and will be
entitled to exercise all rights of the Bondholders thereunder, including the
rights of Bondholders relating to the occurrence of, and the remedies with
respect to, an Event of Default, without the consent of such Bondholders, and
(ii) the Trustee may take actions which would otherwise be at its option or
within its discretion, including actions relating to the

                                     A-1-4
<PAGE>

occurrence of, and the remedies with respect to, an Event of Default, only at
the direction, or with the consent, of the Bond Insurer.]

         As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Bond may be registered on the Bond Register of
the Issuer. Upon surrender for registration of transfer of, or presentation of a
written instrument of transfer for, this Bond at the office or agency designated
by the Issuer pursuant to the Indenture, accompanied by proper instruments of
assignment in form satisfactory to the Indenture Trustee, one or more new Bonds
of any authorized denominations and of a like aggregate initial Bond Principal
Balance, will be issued to the designated transferee or transferees.

         Prior to the due presentment for registration of transfer of this Bond,
the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Bond is registered as the owner
of such Bond (i) on the applicable Record Date for the purpose of making
payments and interest of such Bond, and (ii) on any other date for all other
purposes whatsoever, as the owner hereof, whether or not this Bond be overdue,
and neither the Issuer, the Indenture Trustee nor any such agent of the Issuer
or the Indenture Trustee shall be affected by notice to the contrary.

         The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Bonds under the Indenture at any
time by the Issuer with the consent of the Bond Insurer and the Holders of a
majority of all Bonds at the time outstanding. The Indenture also contains
provisions permitting (i) the Bond Insurer or (ii) if the Bond Insurer defaults,
the Holders of Bonds representing specified percentages of the aggregate Bond
Principal Balance of the Bonds on behalf of the Holders of all the Bonds, to
waive any past Default under the Indenture and its consequences. Any such waiver
by the Holder, at the time of the giving thereof, of this Bond (or any one or
more predecessor Bonds) shall bind the Holder of every Bond issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not notation of such consent or waiver is made upon such Bond. The Indenture
also permits the Issuer and the Indenture Trustee to amend or waive certain
terms and conditions set forth in the Indenture without the consent of the
Holders of the Bonds issued thereunder.

         Initially, the Bonds will be registered in the name of Cede & Co. as
nominee of DTC, acting in its capacity as the Depository for the Bonds. The
Bonds will be delivered by the clearing agency in denominations as provided in
the Indenture and subject to certain limitations therein set forth. The Bonds
are exchangeable for a like aggregate initial Bond Principal Balance of Bonds of
different authorized denominations, as requested by the Holder surrendering
same.

         Unless the Certificate of Authentication hereon has been executed by
the Indenture Trustee by manual signature, this Bond shall not be entitled to
any benefit under the Indenture, or be valid or obligatory for any purpose.

         AS PROVIDED IN THE INDENTURE, THIS BOND AND THE INDENTURE CREATING THIS
BOND SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.

                                     A-1-5
<PAGE>

         IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.

Dated: April 6, 2005

                                        IMPAC CMB TRUST SERIES 2005-3

                                        BY: WILMINGTON TRUST COMPANY, not in its
                                        individual capacity but solely in its
                                        capacity as Owner Trustee

                                        By:_____________________________________
                                              Authorized Signatory

                INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Bonds referred to in the within-mentioned Indenture.

WELLS FARGO BANK, N.A. as Indenture Trustee

By: ____________________________________
      Authorized Signatory

                                     A-1-6
<PAGE>

                                  ABBREVIATIONS

         The following abbreviations, when used in the inscription on the face
of the Bond, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<CAPTION>
<S>                                 <C>     <C>
               TEN COM              --      as tenants in common
               TEN ENT              --      as tenants by the entireties
               JT TEN               --      as  joint  tenants  with  right  of  survivorship  and  not as
                                            tenants in common
      UNIF GIFT MIN ACT             --      __________ Custodian ______________________________
                                                 (Cust)                           (Minor)

                                            under Uniform Gifts to Minor Act _____________________
                                                                                        (State)
</TABLE>

    Additional abbreviations may also be used though not in the above list.

                                     A-1-7
<PAGE>

                                   ASSIGNMENT

  FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto

          PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF
                                    ASSIGNEE:

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

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

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

  (Please print or typewrite name and address, including zip code, of assignee)

--------------------------------------------------------------------------------
the within Bond and all rights thereunder, and hereby irrevocably constitutes
and appoints attorney to transfer said Bond on the books kept for registration
thereof, with full power of substitution in the premises.

Dated:
       ----------------         ------------------------------------------------

Signature Guaranteed by
                        --------------------------------------------------------

         NOTICE: The signature(s) to this assignment must correspond with the
name as it appears upon the face of the within Bond in every particular, without
alteration or enlargement or any change whatsoever. Signature(s) must be
guaranteed by a commercial bank or by a member firm of the New York Stock
Exchange or another national securities exchange. Notarized or witnessed
signatures are not acceptable.

                                     A-1-8
<PAGE>

                                   EXHIBIT A-2

                          FORM OF CLASS [_]-M-[_] BONDS

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

UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE INDENTURE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY BOND ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

THE HOLDER OF THIS BOND OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE
DEEMED TO REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF
THE INDENTURE.

THIS BOND IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF
PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST ESTATE AS PROVIDED IN THE INDENTURE
REFERRED TO BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON
THIS BOND.

PRINCIPAL OF THIS BOND IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL OF THIS BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.

                                     A-2-1
<PAGE>

                          IMPAC CMB TRUST SERIES 2005-3
                        COLLATERALIZED ASSET-BACKED BONDS
                                 CLASS [_]-M-[_]

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

         Impac CMB Trust Series 2005-3 (the "Issuer"), a Delaware statutory
trust, for value received, hereby promises to pay to Cede & Co. or registered
assigns, the principal sum of ______________________________ ($___________) in
monthly installments on the twenty-fifth day of each month or, if such day is
not a Business Day, the next succeeding Business Day (each a "Payment Date"),
commencing in [__________] and ending on or before the Payment Date occurring in
[__________] (the "Final Scheduled Payment Date") and to pay interest on the
Bond Principal Balance of this Bond (this "Bond") outstanding from time to time
as provided below.

         This Bond is one of a duly authorized issue of the Issuer's
Collateralized Asset-Backed Bonds, Series 2005-3 (the "Bonds"), issued under an
Indenture dated as of April 6, 2005 (the "Indenture"), between the Issuer and
Wells Fargo Bank, N.A. as indenture trustee (the "Indenture Trustee", which term
includes any successor Indenture Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights thereunder of the Issuer, the Indenture
Trustee, and the Holders of the Bonds and the terms upon which the Bonds are to
be authenticated and delivered. All terms used in this Bond which are defined in
the Indenture shall have the meanings assigned to them in the Indenture.

         Payments of principal and interest on this Bond will be made on each
Payment Date to the Bondholder of record as of the related Record Date. The
"Bond Principal Balance" of a Bond as of any date of determination is equal to
the initial Bond Principal Balance thereof, reduced by the aggregate of all
amounts previously paid with respect to such Bond on account of principal and
the aggregate amount of cumulative Realized Losses allocated to such Bond on all
prior Payment Dates.

         The principal of, and interest on, this Bond are due and payable as
described in the Indenture, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. All payments made by the Issuer with respect to this Bond shall
be equal to this Bond's pro rata share of the aggregate payments on all Class
[_]-M-[_] Bonds as described above, and shall be applied as between interest and
principal as provided in the Indenture.

                                     A-2-2
<PAGE>

         All principal and interest accrued on the Bonds, if not previously
paid, will become finally due and payable at the Final Scheduled Payment Date.

         The majority Holder of the Certificates may purchase the Bonds from the
trust, effecting an early retirement of the Bonds, on or after the earlier of
(i) the Payment Date on which the aggregate Stated Principal Balance of the
Mortgage Loans have been reduced to less than or equal to 20% of the aggregate
of the Cut-off Date Balance and (ii) the Payment Date occurring in March 2015;
provided further that if the majority Holder of the Certificates fails to
exercise such option, the Bond Insurer will have the right to exercise such
option with respect to the Class A-3 Bonds only.

         The Issuer shall not be liable upon the indebtedness evidenced by the
Bonds except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Bonds. The assets included in the
Trust Estate will be the sole source of payments on the Class [_]-M-[_] Bonds,
and each Holder hereof, by its acceptance of this Bond, agrees that (i) such
Bond will be limited in right of payment to amounts available from the Trust
Estate as provided in the Indenture and (ii) such Holder shall have no recourse
to the Issuer, the Owner Trustee, the Indenture Trustee, IMH Assets Corp., Impac
Mortgage Holdings, Inc., the Master Servicer or any of their respective
affiliates, or to the assets of any of the foregoing entities, except the assets
of the Issuer pledged to secure the Class [_]-M-[_] Bonds pursuant to the
Indenture and the rights conveyed to the Issuer under the Indenture.

         Any payment of principal or interest payable on this Bond which is
punctually paid on the applicable Payment Date shall be paid to the Person in
whose name such Bond is registered at the close of business on the Record Date
for such Payment Date by check mailed to such Person's address as it appears in
the Bond Register on such Record Date, except for the final installment of
principal and interest payable with respect to such Bond, which shall be payable
as provided below. Notwithstanding the foregoing, upon written request with
appropriate instructions by the Holder of this Bond delivered to the Indenture
Trustee at least five Business Days prior to the Record Date, any payment of
principal or interest, other than the final installment of principal or
interest, shall be made by wire transfer to an account in the United States
designated by such Holder. All reductions in the principal amount of a Bond (or
one or more predecessor Bonds) effected by payments of principal made on any
Payment Date shall be binding upon all Holders of this Bond and of any bond
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof, whether or not such payment is noted on such Bond. The final
payment of this Bond shall be payable upon presentation and surrender thereof on
or after the Payment Date thereof at the Corporate Trust Office or the office or
agency of the Issuer maintained by it for such purpose pursuant to Section 3.02
of the Indenture.

         Subject to the foregoing provisions, each Bond delivered under the
Indenture, upon registration of transfer of or in exchange for or in lieu of any
other Bond shall carry the right to unpaid principal and interest that were
carried by such other Bond.

         If an Event of Default as defined in the Indenture shall occur and be
continuing with respect to the Bonds, the Bonds may become or be declared due
and payable in the manner and with the effect provided in the Indenture. If any
such acceleration of maturity occurs prior to the payment of the entire unpaid
Bond Principal Balance of the Bonds, the amount payable to the

                                     A-2-3
<PAGE>

Holder of this Bond will be equal to the sum of the unpaid Bond Principal
Balance of the Bonds, together with accrued and unpaid interest thereon as
described in the Indenture. The Indenture provides that, notwithstanding the
acceleration of the maturity of the Bonds, under certain circumstances specified
therein, all amounts collected as proceeds of the Trust Estate securing the
Bonds or otherwise shall continue to be applied to payments of principal of and
interest on the Bonds as if they had not been declared due and payable.

         The failure to pay any Unpaid Interest Shortfall at any time when funds
are not available to make such payment as provided in the Indenture shall not
constitute an Event of Default under the Indenture.

         The Holder of this Bond or Beneficial Owner of any interest herein is
deemed to represent that either (1) it is not acquiring the Bond with Plan
Assets or (2) (A) the acquisition, holding and transfer of a Bond will not give
rise to a non-exempt prohibited transaction under Section 406 of ERISA or
Section 4975 of the Code as a result of the Issuer, the Seller, the Depositor,
the Underwriters, the Owner Trustee, the Indenture Trustee, the Master Servicer,
any Subservicer, any other servicer, any administrator, any provider of credit
support, any owner of the Certificates, or any of their Affiliates being a
"Party in Interest" (within the meaning of ERISA) or Disqualified Person (within
the meaning of the Code) with respect to such Holder or Beneficial Owner that is
a Plan and (B) the Bonds are rated investment grade or better and such person
believes that the Bonds are properly treated as indebtedness without substantial
equity features for purposes of the DOL Regulations, and agrees to so treat the
Bonds. Alternatively, regardless of the rating of the Bonds, such person may
provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
which opinion of counsel will not be at the expense of the Issuer, the Seller,
any Underwriter, the Owner Trustee, the Indenture Trustee, the Master Servicer
or any successor servicer which opines that the acquisition, holding and
transfer of such Bond or interest therein is permissible under applicable law,
will not constitute or result in a non-exempt prohibited transaction under ERISA
or Section 4975 of the Code and will not subject the Issuer, the Seller, the
Depositor, any Underwriter, the Owner Trustee, the Indenture Trustee, the Master
Servicer or any successor servicer to any obligation in addition to those
undertaken in the Indenture.

         As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Bond may be registered on the Bond Register of
the Issuer. Upon surrender for registration of transfer of, or presentation of a
written instrument of transfer for, this Bond at the office or agency designated
by the Issuer pursuant to the Indenture, accompanied by proper instruments of
assignment in form satisfactory to the Indenture Trustee, one or more new Bonds
of any authorized denominations and of a like aggregate initial Bond Principal
Balance, will be issued to the designated transferee or transferees.

         Prior to the due presentment for registration of transfer of this Bond,
the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Bond is registered as the owner
of such Bond (i) on the applicable Record Date for the purpose of making
payments and interest of such Bond, and (ii) on any other date for all other
purposes whatsoever, as the owner hereof, whether or not this Bond be overdue,
and neither the Issuer, the Indenture Trustee nor any such agent of the Issuer
or the Indenture Trustee shall be affected by notice to the contrary.

                                     A-2-4
<PAGE>

         The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Bonds under the Indenture at any
time by the Issuer with the consent of the Bond Insurer and the Holders of a
majority of all Bonds at the time outstanding. The Indenture also contains
provisions permitting the Holders of Bonds representing specified percentages of
the aggregate Bond Principal Balance of the Bonds on behalf of the Holders of
all the Bonds, to waive any past Default under the Indenture and its
consequences. Any such waiver by the Holder, at the time of the giving thereof,
of this Bond (or any one or more predecessor Bonds) shall bind the Holder of
every Bond issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof, whether or not notation of such consent or waiver is made
upon such Bond. The Indenture also permits the Issuer and the Indenture Trustee
to amend or waive certain terms and conditions set forth in the Indenture
without the consent of the Holders of the Bonds issued thereunder.

         Initially, the Bonds will be registered in the name of Cede & Co. as
nominee of DTC, acting in its capacity as the Depository for the Bonds. The
Bonds will be delivered by the clearing agency in denominations as provided in
the Indenture and subject to certain limitations therein set forth. The Bonds
are exchangeable for a like aggregate initial Bond Principal Balance of Bonds of
different authorized denominations, as requested by the Holder surrendering
same.

         Unless the Certificate of Authentication hereon has been executed by
the Indenture Trustee by manual signature, this Bond shall not be entitled to
any benefit under the Indenture, or be valid or obligatory for any purpose.

         AS PROVIDED IN THE INDENTURE, THIS BOND AND THE INDENTURE CREATING THIS
BOND SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.

                                     A-2-5
<PAGE>

         IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.

Dated: April 6, 2005

                                        IMPAC CMB TRUST SERIES 2005-3

                                        BY:    WILMINGTON TRUST COMPANY, not in
                                               its individual capacity but
                                               solely in its capacity as Owner
                                               Trustee

                                        By:
                                               ---------------------------------
                                               Authorized Signatory

                INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Bonds referred to in the within-mentioned Indenture.

WELLS FARGO BANK, N.A. as Indenture Trustee

By:
      ----------------------------------
      Authorized Signatory

                                     A-2-6
<PAGE>

                                  ABBREVIATIONS

         The following abbreviations, when used in the inscription on the face
of the Bond, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<CAPTION>
<S>                                 <C>     <C>
               TEN COM              --      as tenants in common
               TEN ENT              --      as tenants by the entireties
               JT TEN               --      as  joint  tenants  with  right  of  survivorship  and  not as
                                            tenants in common
      UNIF GIFT MIN ACT             --      __________ Custodian ______________________________
                                                 (Cust)                           (Minor)

                                            under Uniform Gifts to Minor Act _____________________
                                                                                        (State)
</TABLE>

    Additional abbreviations may also be used though not in the above list.

                                     A-2-7
<PAGE>

                                   ASSIGNMENT

  FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto

     PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE:

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

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

   ---------------------------------------------------------------------------
  (Please print or typewrite name and address, including zip code, of assignee)

--------------------------------------------------------------------------------
the within Bond and all rights thereunder, and hereby irrevocably constitutes
and appoints ________________________ attorney to transfer said Bond on the
books kept for registration thereof, with full power of substitution in the
premises.

Dated:
         ---------------------------    ----------------------------------------

Signature Guaranteed by
                        --------------------------------------------------------

         NOTICE: The signature(s) to this assignment must correspond with the
name as it appears upon the face of the within Bond in every particular, without
alteration or enlargement or any change whatsoever. Signature(s) must be
guaranteed by a commercial bank or by a member firm of the New York Stock
Exchange or another national securities exchange. Notarized or witnessed
signatures are not acceptable.

                                      A-2-8
<PAGE>

                                   EXHIBIT A-3

                              FORM OF CLASS B BONDS

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

UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE INDENTURE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY BOND ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

THE HOLDER OF THIS BOND OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE
DEEMED TO REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF
THE INDENTURE.

THIS BOND IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF
PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST ESTATE AS PROVIDED IN THE INDENTURE
REFERRED TO BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON
THIS BOND.

PRINCIPAL OF THIS BOND IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL OF THIS BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.

                                     A-3-1
<PAGE>

                          IMPAC CMB TRUST SERIES 2005-3
                        COLLATERALIZED ASSET-BACKED BONDS
                                     CLASS B

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

         Impac CMB Trust Series 2005-3 (the "Issuer"), a Delaware statutory
trust, for value received, hereby promises to pay to Cede & Co. or registered
assigns, the principal sum of ______________________________ ($___________) in
monthly installments on the twenty-fifth day of each month or, if such day is
not a Business Day, the next succeeding Business Day (each a "Payment Date"),
commencing in [__________] and ending on or before the Payment Date occurring in
[__________] (the "Final Scheduled Payment Date") and to pay interest on the
Bond Principal Balance of this Bond (this "Bond") outstanding from time to time
as provided below.

         This Bond is one of a duly authorized issue of the Issuer's
Collateralized Asset-Backed Bonds, Series 2005-3 (the "Bonds"), issued under an
Indenture dated as of April 6, 2005 (the "Indenture"), between the Issuer and
Wells Fargo Bank, N.A. as indenture trustee (the "Indenture Trustee", which term
includes any successor Indenture Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights thereunder of the Issuer, the Indenture
Trustee, and the Holders of the Bonds and the terms upon which the Bonds are to
be authenticated and delivered. All terms used in this Bond which are defined in
the Indenture shall have the meanings assigned to them in the Indenture.

         Payments of principal and interest on this Bond will be made on each
Payment Date to the Bondholder of record as of the related Record Date. The
"Bond Principal Balance" of a Bond as of any date of determination is equal to
the initial Bond Principal Balance thereof, reduced by the aggregate of all
amounts previously paid with respect to such Bond on account of principal and
the aggregate amount of cumulative Realized Losses allocated to such Bond on all
prior Payment Dates.

         The principal of, and interest on, this Bond are due and payable as
described in the Indenture, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. All payments made by the Issuer with respect to this Bond shall
be equal to this Bond's pro rata share of the aggregate payments on all Class
2-B Bonds as described above, and shall be applied as between interest and
principal as provided in the Indenture.

                                     A-3-2
<PAGE>

         All principal and interest accrued on the Bonds, if not previously
paid, will become finally due and payable at the Final Scheduled Payment Date.

         The majority Holder of the Certificates may purchase the Bonds from the
trust, effecting an early retirement of the Bonds, on or after the earlier of
(i) the Payment Date on which the aggregate Stated Principal Balance of the
Mortgage Loans have been reduced to less than or equal to 20% of the aggregate
of the Cut-off Date Balance Cut-off Date Balance and (ii) the Payment Date
occurring in March 2015; provided further that if the majority Holder of the
Certificates fails to exercise such option, the Bond Insurer will have the right
to exercise such option with respect to the Class A-3 Bonds only.

         The Issuer shall not be liable upon the indebtedness evidenced by the
Bonds except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Bonds. The assets included in the
Trust Estate will be the sole source of payments on the Class B Bonds, and each
Holder hereof, by its acceptance of this Bond, agrees that (i) such Bond will be
limited in right of payment to amounts available from the Trust Estate as
provided in the Indenture and (ii) such Holder shall have no recourse to the
Issuer, the Owner Trustee, the Indenture Trustee, IMH Assets Corp., Impac
Mortgage Holdings, Inc., the Master Servicer or any of their respective
affiliates, or to the assets of any of the foregoing entities, except the assets
of the Issuer pledged to secure the Class B Bonds pursuant to the Indenture and
the rights conveyed to the Issuer under the Indenture.

         Any payment of principal or interest payable on this Bond which is
punctually paid on the applicable Payment Date shall be paid to the Person in
whose name such Bond is registered at the close of business on the Record Date
for such Payment Date by check mailed to such Person's address as it appears in
the Bond Register on such Record Date, except for the final installment of
principal and interest payable with respect to such Bond, which shall be payable
as provided below. Notwithstanding the foregoing, upon written request with
appropriate instructions by the Holder of this Bond delivered to the Indenture
Trustee at least five Business Days prior to the Record Date, any payment of
principal or interest, other than the final installment of principal or
interest, shall be made by wire transfer to an account in the United States
designated by such Holder. All reductions in the principal amount of a Bond (or
one or more predecessor Bonds) effected by payments of principal made on any
Payment Date shall be binding upon all Holders of this Bond and of any bond
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof, whether or not such payment is noted on such Bond. The final
payment of this Bond shall be payable upon presentation and surrender thereof on
or after the Payment Date thereof at the Corporate Trust Office or the office or
agency of the Issuer maintained by it for such purpose pursuant to Section 3.02
of the Indenture.

         Subject to the foregoing provisions, each Bond delivered under the
Indenture, upon registration of transfer of or in exchange for or in lieu of any
other Bond shall carry the right to unpaid principal and interest that were
carried by such other Bond.

         If an Event of Default as defined in the Indenture shall occur and be
continuing with respect to the Bonds, the Bonds may become or be declared due
and payable in the manner and with the effect provided in the Indenture. If any
such acceleration of maturity occurs prior to the payment of the entire unpaid
Bond Principal Balance of the Bonds, the amount payable to the

                                     A-3-3
<PAGE>

Holder of this Bond will be equal to the sum of the unpaid Bond Principal
Balance of the Bonds, together with accrued and unpaid interest thereon as
described in the Indenture. The Indenture provides that, notwithstanding the
acceleration of the maturity of the Bonds, under certain circumstances specified
therein, all amounts collected as proceeds of the Trust Estate securing the
Bonds or otherwise shall continue to be applied to payments of principal of and
interest on the Bonds as if they had not been declared due and payable.

         The failure to pay any Unpaid Interest Shortfall at any time when funds
are not available to make such payment as provided in the Indenture shall not
constitute an Event of Default under the Indenture.

         The Holder of this Bond or Beneficial Owner of any interest herein is
deemed to represent that either (1) it is not acquiring the Bond with Plan
Assets or (2) (A) the acquisition, holding and transfer of a Bond will not give
rise to a non-exempt prohibited transaction under Section 406 of ERISA or
Section 4975 of the Code as a result of the Issuer, the Seller, the Depositor,
the Underwriters, the Owner Trustee, the Indenture Trustee, the Master Servicer,
any Subservicer, any other servicer, any administrator, any provider of credit
support, any owner of the Certificates, or any of their Affiliates being a
"Party in Interest" (within the meaning of ERISA) or Disqualified Person (within
the meaning of the Code) with respect to such Holder or Beneficial Owner that is
a Plan and (B) the Bonds are rated investment grade or better and such person
believes that the Bonds are properly treated as indebtedness without substantial
equity features for purposes of the DOL Regulations, and agrees to so treat the
Bonds. Alternatively, regardless of the rating of the Bonds, such person may
provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
which opinion of counsel will not be at the expense of the Issuer, the Seller,
any Underwriter, the Owner Trustee, the Indenture Trustee, the Master Servicer
or any successor servicer which opines that the acquisition, holding and
transfer of such Bond or interest therein is permissible under applicable law,
will not constitute or result in a non-exempt prohibited transaction under ERISA
or Section 4975 of the Code and will not subject the Issuer, the Seller, the
Depositor, any Underwriter, the Owner Trustee, the Indenture Trustee, the Master
Servicer or any successor servicer to any obligation in addition to those
undertaken in the Indenture.

         As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Bond may be registered on the Bond Register of
the Issuer. Upon surrender for registration of transfer of, or presentation of a
written instrument of transfer for, this Bond at the office or agency designated
by the Issuer pursuant to the Indenture, accompanied by proper instruments of
assignment in form satisfactory to the Indenture Trustee, one or more new Bonds
of any authorized denominations and of a like aggregate initial Bond Principal
Balance, will be issued to the designated transferee or transferees.

         Prior to the due presentment for registration of transfer of this Bond,
the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Bond is registered as the owner
of such Bond (i) on the applicable Record Date for the purpose of making
payments and interest of such Bond, and (ii) on any other date for all other
purposes whatsoever, as the owner hereof, whether or not this Bond be overdue,
and neither the Issuer, the Indenture Trustee nor any such agent of the Issuer
or the Indenture Trustee shall be affected by notice to the contrary.

                                     A-3-4
<PAGE>

         The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Bonds under the Indenture at any
time by the Issuer with the consent of the Bond Insurer and the Holders of a
majority of all Bonds at the time outstanding. The Indenture also contains
provisions permitting the Holders of Bonds representing specified percentages of
the aggregate Bond Principal Balance of the Bonds on behalf of the Holders of
all the Bonds, to waive any past Default under the Indenture and its
consequences. Any such waiver by the Holder, at the time of the giving thereof,
of this Bond (or any one or more predecessor Bonds) shall bind the Holder of
every Bond issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof, whether or not notation of such consent or waiver is made
upon such Bond. The Indenture also permits the Issuer and the Indenture Trustee
to amend or waive certain terms and conditions set forth in the Indenture
without the consent of the Holders of the Bonds issued thereunder.

         Initially, the Bonds will be registered in the name of Cede & Co. as
nominee of DTC, acting in its capacity as the Depository for the Bonds. The
Bonds will be delivered by the clearing agency in denominations as provided in
the Indenture and subject to certain limitations therein set forth. The Bonds
are exchangeable for a like aggregate initial Bond Principal Balance of Bonds of
different authorized denominations, as requested by the Holder surrendering
same.

         Unless the Certificate of Authentication hereon has been executed by
the Indenture Trustee by manual signature, this Bond shall not be entitled to
any benefit under the Indenture, or be valid or obligatory for any purpose.

         AS PROVIDED IN THE INDENTURE, THIS BOND AND THE INDENTURE CREATING THIS
BOND SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.

                                     A-3-5
<PAGE>

         IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.

Dated: April 6, 2005

                                        IMPAC CMB TRUST SERIES 2005-3

                                        BY:    WILMINGTON TRUST COMPANY, not in
                                               its individual capacity but
                                               solely in its capacity as Owner
                                               Trustee

                                        By:
                                               ---------------------------------
                                               Authorized Signatory

                INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Bonds referred to in the within-mentioned Indenture.

WELLS FARGO BANK, N.A. as Indenture Trustee

By:
      ----------------------------------
      Authorized Signatory

                                     A-3-6
<PAGE>

                                  ABBREVIATIONS

         The following abbreviations, when used in the inscription on the face
of the Bond, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<CAPTION>
<S>                                     <C>     <C>
               TEN COM                  --      as tenants in common
               TEN ENT                  --      as tenants by the entireties
               JT TEN                   --      as  joint  tenants  with  right  of  survivorship  and  not as
                                                tenants in common
      UNIF GIFT MIN ACT                 --      __________ Custodian ______________________________
                                                     (Cust)                           (Minor)

                                                under Uniform Gifts to Minor Act _____________________
                                                                                        (State)
</TABLE>

    Additional abbreviations may also be used though not in the above list.

                                     A-3-7
<PAGE>

                                   ASSIGNMENT

  FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto

     PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE:

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

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

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

  (Please print or typewrite name and address, including zip code, of assignee)

--------------------------------------------------------------------------------
the within Bond and all rights thereunder, and hereby irrevocably constitutes
and appoints ________________________ attorney to transfer said Bond on the
books kept for registration thereof, with full power of substitution in the
premises.

Dated:
         ---------------------------    ----------------------------------------

Signature Guaranteed by
                        --------------------------------------------------------

         NOTICE: The signature(s) to this assignment must correspond with the
name as it appears upon the face of the within Bond in every particular, without
alteration or enlargement or any change whatsoever. Signature(s) must be
guaranteed by a commercial bank or by a member firm of the New York Stock
Exchange or another national securities exchange. Notarized or witnessed
signatures are not acceptable.

                                     A-3-8
<PAGE>

                                    EXHIBIT B

                             MORTGAGE LOAN SCHEDULE

                                (Filed Manually)

                                      B-1
<PAGE>

                                    EXHIBIT C

                          FORM OF INITIAL CERTIFICATION

                                                                      , 200_

[Issuer]

[Bond Insurer]

[Master Servicer]

Attention:  Impac CMB Trust Series 2005-3

                  Re:      Indenture dated as of April 6, 2005, between Impac
                           CMB Trust Series 2005-3 and Wells Fargo Bank, N.A.
                           --------------------------------------------------

Ladies and Gentlemen:

                  In accordance with Section 2.03(a) of the above-captioned
Indenture, and Section 2.1(b)(i)-(v) of the Mortgage Loan Purchase Agreement,
dated as of April 6, 2005 between Impac Mortgage Holdings, Inc. and Impac
Funding Corporation (the "MLPA"; and together with the Indenture, the
"Agreements"), the undersigned, as Indenture Trustee, hereby certifies that as
to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or listed on the exception report attached hereto) it
has reviewed the Mortgage File and the Mortgage Loan Schedule and has determined
that: (i) all documents required to be included in the Mortgage File are in its
possession; (ii) such documents have been reviewed by it and appear regular on
their face and relate to such Mortgage Loan; and (iii) based on examination by
it, and only as to such documents, the information set forth in items (iii) and
(v) of the definition or description of "Mortgage Loan Schedule" is correct.

                  The Indenture Trustee has made no independent examination of
any documents contained in each Mortgage File beyond the review specifically
required in the above-referenced Agreements. The Indenture Trustee makes no
representation that any documents specified in clause (v) of Section 2.1 (b) of
the MLPA should be included in any Mortgage File. The Indenture Trustee makes no
representations as to and shall not be responsible to verify: (i) the validity,
legality, sufficiency, enforceability, due authorization, recordability or
genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule, (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan, or (iii) the existence of any assumption, modification, written assurance
or substitution agreement with respect to any Mortgage File if no such documents
appear in the Mortgage File delivered to the Indenture Trustee.

                                      C-1
<PAGE>

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

                                        WELLS FARGO BANK, N.A.
                                        as Indenture Trustee

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

                                      C-2
<PAGE>

                                    EXHIBIT D

                           FORM OF FINAL CERTIFICATION

                                                                   , 200__

[Issuer]

[Bond Insurer]

[Master Servicer]

Attention:  Impac CMB Trust Series 2005-3

                  Re:      Indenture, dated as of April 6, 2005, between Impac
                           CMB Trust SERIES 2005-3 And Wells Fargo Bank, N.A.
                           --------------------------------------------------

Ladies and Gentlemen:

                  In accordance with Section 2.03(b) of the above-captioned
Indenture, and Section 2.1(b) of the Mortgage Loan Purchase Agreement, dated as
of April 6, 2005, between Impac Mortgage Holdings, Inc. (formerly known as
Imperial Credit Mortgage Holdings, Inc.) and Impac Funding Corporation (formerly
known as ICI Funding Corporation) (the "MLPA"; and together with the Indenture,
the "Agreements"), the undersigned, as Indenture Trustee, hereby certifies that
as to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or listed on the exception report attached hereto) it
has received the documents set forth in Section 2.1(b) of the MLPA.

                  The Indenture Trustee has made no independent examination of
any documents contained in each Mortgage File beyond the review specifically
required in the Agreements. The Indenture Trustee makes no representation that
any documents specified in clause (v) of Section 2.1 (b) should be included in
any Mortgage File. The Indenture Trustee makes no representations as to and
shall not be responsible to verify: (i) the validity, legality, sufficiency,
enforceability, due authorization, recordability or genuineness of any of the
documents contained in each Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, (ii) the collectability, insurability,
effectiveness or suitability of any such Mortgage Loan or (iii) the existence of
any assumption, modification, written assurance or substitution agreement with
respect to any Mortgage File if no such documents appear in the Mortgage File
delivered to the Indenture Trustee.

                                      D-1
<PAGE>

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

                                        WELLS FARGO BANK, N.A.
                                        as Indenture Trustee

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

                                      D-2
<PAGE>

                                    EXHIBIT E

                              DERIVATIVE CONTRACTS

                             (Provided Upon Request)

                                      E-1
<PAGE>

                                    EXHIBIT F

                        SPECIAL CERTIFICATE CAP CONTRACT

                             (Provided Upon Request)

                                      F-1
<PAGE>

                                    EXHIBIT G

                          FORM OF BOND INSURANCE POLICY

                                      G-1
<PAGE>

                                   APPENDIX A
                                   DEFINITIONS

                  60+ DAY DELINQUENT MORTGAGE LOAN: Each Mortgage Loan with
respect to which any portion of a Monthly Payment is, as of the last day of the
prior Due Period, two months or more past due (without giving effect to any
grace period), each Mortgage Loan in foreclosure, all REO Property and each
Mortgage Loan for which the Mortgagor has filed for bankruptcy.

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

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

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

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

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

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

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

<PAGE>

thereunder, the term "Allocated Realized Loss Amount" shall have the meaning set
forth in the Bond Insurance Policy.

                  APPRAISED VALUE: The appraised value of a Mortgaged Property
based upon the lesser of (i) the appraisal made at the time of the origination
of the related Mortgage Loan, or (ii) the sale price of such Mortgaged Property
at such time of origination. With respect to a Mortgage Loan, the proceeds of
which were used to refinance an existing Mortgage Loan, the appraised value of
the Mortgaged Property based upon the appraisal obtained at the time of
refinancing.

                  ASSIGNMENT OF MORTGAGE: An assignment of Mortgage, notice of
transfer or equivalent instrument, in recordable form, which is sufficient under
the laws of the jurisdiction wherein the related Mortgaged Property is located
to reflect of record the sale of the Mortgage, which assignment, notice of
transfer or equivalent instrument may be in the form of one or more blanket
assignments covering Mortgages secured by Mortgaged Properties located in the
same county, if permitted by law.

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

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

                  AVAILABLE FUNDS: For any Payment Date, an amount equal to the
amount received by the Indenture Trustee and available in the Payment Account on
that Payment Date in respect of the Mortgage Loans. The Available Funds will
generally be equal to (a) the sum of (1) the aggregate amount of scheduled
payments on the Mortgage Loans received or advanced that were due during the Due
Period, (2) any unscheduled payments and receipts on the Mortgage Loans,
including mortgagor prepayments on such Mortgage Loans, the proceeds of any
repurchase of the Mortgage Loans by the Master Servicer or Seller, Insurance
Proceeds, Subsequent Recoveries and Liquidation Proceeds, received during the
related Prepayment Period, in each case net of amounts reimbursable therefrom to
the Indenture Trustee, the Master Servicer and any Subservicer, and (3) any
Compensating Interest paid by the Master Servicer in respect of the Mortgage
Loans, and reduced by (b) the sum of (1) Master Servicing Fees, the Subservicing
Fees, the Indenture Trustee's Fees, the Owner Trustee's Fee, the Net Derivative
Fee, if any, the premium on the Bond Insurance Policy in respect of the Class
A-3 Bonds, any amounts in respect of the premiums payable to Radian under the
PMI Insurer Policies in respect of the Mortgage Loans and (2) certain amounts
owed to the Master Servicer, the Depositor, the Indenture Trustee and the Owner
Trustee in respect of the Mortgage Loans, as provided in the Agreements.

                  AVAILABLE FUNDS RATE: On any Payment Date and for the Class
A-1, Class A-2, Class A-3, Class M-1, Class M-2, Class M-3, Class M-4, Class
M-5, Class M-6 and Class B Bonds, the per annum rate equal to the product of:

         (i)      (A) the product of:

                           (1)  the Net Mortgage Rate and

                           (2) a fraction equal to

                                       2
<PAGE>

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

                                    (y) the aggregate Bond Principal Balance of
                           the Class A-1, Class A-2, Class A-3, Class M-1, Class
                           M-2, Class M-3, Class M-4, Class M-5, Class M-6 and
                           Class B Bonds immediately prior to such Payment Date;
                           minus

                  (B) the product of:

                           (1)  the Policy Premium Rate; and

                           (2)  a fraction equal to

                                    (x) the Bond Principal Balance of the Class
                           A-3 Bonds as of the end of the prior Due Period
                           divided by

                                    (y) the aggregate Bond Principal Balance of
                           the Class A-1, Class A-2, Class A-3, Class M-1, Class
                           M-2, Class M-3, Class M-4, Class M-5, Class M-6 and
                           Class B Bonds immediately prior to such Payment Date;
                           and minus

                  (C) the product of:

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

                           (2)  a fraction equal to

                  (x) the applicable Notional Amount divided by

                                    (y) the aggregate Bond Principal Balance of
                           the Class A-1, Class A-2, Class A-3, Class M-1, Class
                           M-2, Class M-3, Class M-4, Class M-5, Class M-6 and
                           Class B Bonds immediately prior to such Payment Date;
                           and

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

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

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

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

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

                                       3
<PAGE>

definition of Bond Interest Rate over (y) interest accrued on the Mortgage Loans
at the Available Funds Rate.

                  BASIS RISK SHORTFALL CARRY-FORWARD AMOUNT: With respect to
each Class of Bonds (other than the Class A-IO Bonds) and any Payment Date, as
determined separately for each Class of Bonds, an amount equal to the aggregate
amount of Basis Risk Shortfall for such Bonds on such Payment Date, plus any
unpaid Basis Risk Shortfall for such Class of Bonds from prior Payment Dates,
plus interest thereon at the Bond Interest Rate for such Payment Date, to the
extent previously unreimbursed by the Derivative Contracts or by the Net Monthly
Excess Cash Flow.

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

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

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

                  BOND INSURANCE POLICY: The surety bond issued by the Bond
Insurer for the benefit of the Class A-3 Bondholders.

                  BOND INSURER: Financial Guaranty Insurance Company, a New
York-domiciled stock insurance corporation, any successor thereto or any
replacement bond insurer substituted pursuant to Section 3.30 of the Indenture.

                  BOND INSURER DEFAULT: The existence and continuance of any of
the following: (a) a failure by the Bond Insurer to make a payment required
under the Bond Insurance Policy in accordance with its terms; or (b)(i) the Bond
Insurer (A) files any petition or commences any case or proceeding under any
provision or chapter of the Bankruptcy Code or any other similar federal or
state law relating to insolvency, bankruptcy, rehabilitation, liquidation or
reorganization, (B) makes a general assignment for the benefit of its creditors,
or (C) has an order for relief entered against it under the Bankruptcy Code or
any other similar federal or state law relating to insolvency, bankruptcy,
rehabilitation, liquidation or reorganization which is final and nonappealable;
or (ii) a court of competent jurisdiction, the New York Department of Insurance
or other competent regulatory authority enters a final and nonappealable order,
judgment or decree (A) appointing a custodian, trustee, agent or receiver for
the Bond Insurer or for all or any material portion of its property or (B)
authorizing the taking of possession by a custodian, trustee,

                                       4
<PAGE>

agent or receiver of the Bond Insurer (or the taking of possession of all or any
material portion of the property of the Bond Insurer).

                  BOND INTEREST RATE: With respect to each Payment Date and (a)
each class of Bonds (other than the Class A-IO Bonds), a floating rate equal to
the least of (i) One-Month LIBOR plus the related Bond Margin, (ii) the related
Maximum Bond Interest Rate and (iii) the Available Funds Rate with respect to
such Payment Date and (b) the Class A-IO Bonds, (i) for the April 2005 Payment
Date through the September 2005 Payment Date, 1.45% per annum, (ii) for each
Payment Date from October 2005 through the March 2006 Payment Date, 0.85% per
annum, and (iii) for each Payment Date thereafter, 0.00% per annum.

                  BOND MARGIN: With respect to the Class A-1 Bonds, on any
Payment Date prior to the Step-Up Date, 0.240% per annum, and on any Payment
Date on and after the Step-Up Date, 0.480% per annum. With respect to the Class
A-2 Bonds, on any Payment Date prior to the Step-Up Date, 0.300% per annum, and
on any Payment Date on and after the Step-Up Date, 0.600% per annum. With
respect to the Class A-3 Bonds, on any Payment Date prior to the Step-Up Date,
0.180% per annum, and on any Payment Date on and after the Step-Up Date, 0.360%
per annum. With respect to the Class M-1 Bonds, on any Payment Date prior to the
Step-Up Date, 0.420% per annum, and on any Payment Date on and after the Step-Up
Date, 0.630% per annum. With respect to the Class M-2 Bonds, on any Payment Date
prior to the Step-Up Date, 0.450% per annum, and on any Payment Date on and
after the Step-Up Date, 0.675% per annum. With respect to the Class M-3 Bonds,
on any Payment Date prior to the Step-Up Date, 0.500% per annum, and on any
Payment Date on and after the Step-Up Date, 0.750% per annum. With respect to
the Class M-4 Bonds, on any Payment Date prior to the Step-Up Date, 0.650% per
annum, and on any Payment Date on and after the Step-Up Date, 0.975% per annum.
With respect to the Class M-5 Bonds, on any Payment Date prior to the Step-Up
Date, 0.700% per annum, and on any Payment Date on and after the Step-Up Date,
1.050% per annum. With respect to the Class M-6 Bonds, on any Payment Date prior
to the Step-Up Date, 0.750% per annum, and on any Payment Date on and after the
Step-Up Date, 1.125% per annum. With respect to the Class B Bonds, on any
Payment Date prior to the Step-Up Date, 1.350% per annum, and on any Payment
Date on and after the Step-Up Date, 2.025% per annum.

                  BOND OWNER: The Beneficial Owner of a Bond.

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

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

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

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

                                       5
<PAGE>

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

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

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

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

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

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

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

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

                  CERTIFICATES OR TRUST CERTIFICATES: The Impac CMB Trust Series
2005-3 Trust Certificates, Series 2005-3, evidencing the beneficial ownership
interest in the Issuer and executed by the Owner Trustee in substantially the
form set forth in Exhibit A to the Trust Agreement.

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

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

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

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

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

                  CLOSING DATE: April 6, 2005.

                                       6
<PAGE>

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

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

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

                  COMMISSION: The Securities and Exchange Commission.

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

                  CORPORATE TRUST OFFICE: With respect to the Indenture Trustee,
Certificate Registrar, Certificate Paying Agent and Paying Agent, the principal
corporate trust office of the Indenture Trustee and Bond Registrar at which at
any particular time its corporate trust business shall be administered, which
office at the date of the execution of this instrument is located at, (A) for
bond transfer and surrender purposes, Wells Fargo Bank, N.A. Sixth Street and
Marquette Avenue, Minneapolis, Minnesota 55479, Attention: Corporate Trust
Services IMH 2005-3, and for all other purposes, (B) 9062 Old Annapolis Road,
Columbia, Maryland 21045, Attention: Client Manager, IMH Asset Corp., 2005-3.
With respect to the Owner Trustee, the principal corporate trust office of the
Owner Trustee at which at any particular time its corporate trust business shall
be administered, which office at the date of the execution of this Trust
Agreement is located at Wilmington Trust Company, Rodney Square North, 1100
North Market Street, Wilmington, Delaware 19801, Attention: Impac CMB Trust
Series 2005-3 (IM0503).

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

                  CUSTODIAL AGREEMENT: The custodial agreement dated as of April
6, 2005, among the Indenture Trustee, the Depositor, the Master Servicer and the
Custodian.

                  CUSTODIAN: Deutsche Bank National Trust Company.

                  CUT-OFF DATE: March 1, 2005.

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

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

                  DBRS: Dominion Bond Rating Service, Inc. or its successor in
interest.

                  DEBT SERVICE REDUCTION: With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding

                                       7
<PAGE>

under the Bankruptcy Code, except such a reduction constituting a Deficient
Valuation or any reduction that results in a permanent forgiveness of principal.

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

                  DEFICIENCY AMOUNT: With respect to any Payment Date and the
Insured Bonds, an amount, if any, equal to the sum of:

         (1) the amount by which the aggregate amount of Accrued Bond Interest
on the related Insured Bonds on that Payment Date exceeds the portion of
Available Funds otherwise allocable to the Class A-3 Bonds; and

         (2) (i) with respect to any Payment Date that is not the Final
Scheduled Payment Date, any Allocated Realized Loss Amount for that Payment Date
(without giving effect to any payments in respect of such Allocated Realized
Loss Amounts from the Bond Insurance Policy) to the extent not applied to reduce
the Net Monthly Excess Cashflow on such Payment Date or not otherwise previously
reimbursed from payments under the Bond Insurance Policy or otherwise; or

                  (ii) on the final scheduled Payment Date, the aggregate
outstanding Bond Principal Balance of the Insured Bonds to the extent otherwise
not paid on that date.

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

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

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

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

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

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

                  DERIVATIVE CONTRACTS: The Confirmation together with the
associated ISDA Master Agreement with respect to the five Derivative Contracts
between the Seller and the Derivative Contract Counterparty for the benefit of
the Bonds and the Certificates, set forth in Exhibit E of the Indenture.

                  DERIVATIVE CONTRACT COUNTERPARTY: Lehman Brothers Special
Financing Inc.

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

                                       8
<PAGE>

                  DTC: The Depository Trust Company.

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

                  DUE PERIOD: With respect to any Payment Date and the Mortgage
Loans, the period commencing on the second day of the month immediately
preceding the month of such Payment Date (or, with respect to the first Due
Period, the day following the Cut-off Date) and ending on the first day of the
month of such Payment Date.

                  ELIGIBLE ACCOUNT: An account that is any of the following: (i)
a segregated account maintained with a federal or state chartered depository
institution (A) the short-term obligations of which are rated A-1+ or better by
Standard & Poor's and P-1 by Moody's at the time of any deposit therein or (B)
fully insured to the limits established by the FDIC, PROVIDED that any deposits
not so insured shall, to the extent acceptable to the Bond Insurer and each
Rating Agency, as evidenced in writing, be maintained such that (as evidenced by
an Opinion of Counsel delivered to the Indenture Trustee, the Bond Insurer and
each Rating Agency) the Indenture Trustee has a claim with respect to the funds
in such account or a perfected first security interest against any collateral
(which shall be limited to Eligible Investments) securing such funds that is
superior to claims of any other depositors or creditors of the depository
institution with which such account is maintained, (ii) a segregated trust
account or accounts maintained with a federal or state chartered depository
institution or trust company subject to regulations regarding fiduciary funds on
deposit similar to Title 12 of the Code of Federal Regulations Section 9.10(b),
which, in either case, has corporate trust powers, acting in its fiduciary
capacity, or (iii) in the case of the Collection Account or Servicing Account,
either (A) a trust account or accounts maintained at the corporate trust
department of the Indenture Trustee or (B) an account or accounts maintained at
the corporate trust department of the Indenture Trustee or the Subservicer (or
an affiliate thereof), as long as their short term debt obligations are rated
P-1 by Moody's and A-1+ by Standard & Poor's or better and their long term debt
obligations are rated A2 by Moody's and AA- by Standard & Poor's or better, (iv)
in the case of the Collection Account and the Payment Account, a trust account
or accounts maintained in the corporate trust division of the Indenture Trustee,
or (v) an account or accounts of a depository institution acceptable to each
Rating Agency as evidenced in writing by each Rating Agency that use of any such
account as the Collection Account or the Payment Account will not reduce the
rating assigned to any of the Securities by such Rating Agency below investment
grade without taking into account the Bond Insurance Policy and acceptable to
the Bond Insurer as evidenced in writing.

                  ELIGIBLE INVESTMENTS: One or more of the following:

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

                           (ii) (A) demand and time deposits in, certificates of
                  deposit of, banker's acceptances issued by or federal funds
                  sold by any depository institution or trust company (including
                  the Indenture Trustee or its agent acting in their respective
                  commercial capacities) incorporated under the laws of the
                  United States of America or any State thereof and subject to
                  supervision and examination by federal and/or state
                  authorities, so long as at the time of such investment or
                  contractual commitment providing for such investment, such
                  depository institution or trust company has a short term
                  unsecured debt rating in the highest available rating category
                  of each of the Rating

                                       9
<PAGE>

                  Agencies and provided that each such investment has an
                  original maturity of no more than 365 days, and (B) any other
                  demand or time deposit or deposit which is fully insured by
                  the FDIC;

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

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

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

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

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

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

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

PROVIDED, HOWEVER, that each such instrument shall be acquired in an arm's
length transaction and no such instrument shall be an Eligible Investment if it
represents, either (1) the right to receive only interest payments with respect
to the underlying debt instrument or (2) the right to receive both principal and
interest payments derived from obligations underlying such instrument and the
principal and interest payments with respect to such instrument provide a yield
to maturity greater than 120% of the yield to maturity at par of such underlying
obligations; PROVIDED FURTHER, HOWEVER, that each such instrument acquired shall
not be acquired at a price in excess of par.

                                       10
<PAGE>

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

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

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

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

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

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

                                       11
<PAGE>

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

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

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

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

                  EXPENSE FEE RATE: With respect to each Mortgage Loan, the sum
of (1) the Master Servicing Fee Rate, (2) the Subservicing Fee Rate, (3) the
Indenture Trustee's Fee Rate, (4) the Owner Trustee's Fee Rate, (5) the Net
Derivative Fee Rate (if any), and (6) the related PMI Insurer Fee Rate, if such
Mortgage Loan is a PMI Mortgage Loan.

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

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

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

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

                  FINAL SCHEDULED PAYMENT DATE: With respect to each Class of
Bonds, the Payment Date in August 2035.

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

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

                                       12
<PAGE>

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

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

                  HAZARDOUS MATERIALS: Any dangerous, toxic or hazardous
pollutants, chemicals, wastes, or substances, including, without limitation,
those so identified pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601 et seq., or any other
environmental laws now existing, and specifically including, without limitation,
asbestos and asbestos-containing materials, polychlorinated biphenyls, radon
gas, petroleum and petroleum products, urea formaldehyde and any substances
classified as being "in inventory", "usable work in progress" or similar
classification which would, if classified unusable, be included in the foregoing
definition.

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

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

                  INDENTURE: The indenture dated as of April 6, 2005, between
the Issuer and the Indenture Trustee, relating to the Impac CMB Trust Series
2005-3 Bonds.

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

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

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

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

                  INDEPENDENT CERTIFICATE: A certificate or opinion to be
delivered to the Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of

                                       13
<PAGE>

Section 10.01 of the Indenture, made by an independent appraiser or other expert
appointed by an Issuer Request and approved by the Indenture Trustee in the
exercise of reasonable care, and such opinion or certificate shall state that
the signer has read the definition of "Independent" in this Indenture and that
the signer is Independent within the meaning thereof.

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

                  INITIAL BOND PRINCIPAL BALANCE: With respect to the Class A-1
Bonds, $567,000,000, with respect to the Class A-2 Bonds, $63,000,000, with
respect to the Class A-3 Bonds, $150,000,000, with respect to the Class M-1
Bonds, $95,000,000, with respect to the Class M-2 Bonds, $45,000,000, with
respect to the Class M-3 Bonds, $24,000,000, with respect to the Class M-4
Bonds, $16,000,000, with respect to the Class M-5 Bonds, $17,500,000, with
respect to the Class M-6 Bonds, $10,000,000, and with respect to the Class B
Bonds, $12,500,000.

                  INITIAL CERTIFICATION: The initial certification delivered by
the Custodian pursuant to Section 2.03(a) of the Indenture in the form attached
to the Custodial Agreement.

                  INITIAL SUBSERVICER: With respect to substantially all of the
Mortgage Loans, Countrywide Home Loans Servicing, LP.

                  INSURANCE AGREEMENT: The Insurance and Indemnity Agreement
dated as of April 6, 2005, among the Master Servicer, the Depositor, the Issuer,
Impac Holdings, the Indenture Trustee and the Bond Insurer, including any
amendments and supplements thereto.

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

                  INSURED AMOUNT: With respect to any Payment Date and each
Class of Insured Bonds, (a) any Deficiency Amount and (b) any Preference Amount.

                  INSURED BOND:  Any of the Class A-3 Bonds.

                  INTEREST DETERMINATION DATE: With respect to the first Accrual
Period, the second LIBOR Business Day preceding the Closing Date, and with
respect to each Accrual Period thereafter, the second LIBOR Business Day
preceding the related Payment Date on which such Accrual Period commences.

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

                  IRS: The Internal Revenue Service.

                  ISSUER: Impac CMB Trust Series 2005-3, a Delaware statutory
trust, or its successor in interest.

                  ISSUER REQUEST: A written order or request signed in the name
of the Issuer by any one of its Authorized Officers and approved in writing by
the Bond Insurer, so long as no Bond Insurer Default exists, and delivered to
the Indenture Trustee.

                                       14
<PAGE>

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

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

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

                  LIQUIDATED MORTGAGE LOAN: With respect to any Payment Date,
any Mortgage Loan in respect of which the Master Servicer has determined, in
accordance with the servicing procedures specified in the Servicing Agreement,
as of the end of the related Due Period that substantially all Liquidation
Proceeds which it reasonably expects to recover with respect to the disposition
of the related Mortgaged Property or REO Property have been recovered.

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

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

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

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

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

                                       15
<PAGE>

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

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

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

                  MASTER SERVICING FEE RATE: With respect to any Mortgage Loan,
0.030% per annum.

                  MAXIMUM BOND INTEREST RATE: With respect to each class of
Bonds, 11.25% per annum.

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

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

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

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

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

                  MONTHLY PAYMENT: With respect to any Mortgage Loan (including
any REO Property) and any Due Date, the payment of principal and interest due
thereon in accordance with the amortization schedule at the time applicable
thereto (after adjustment, if any, for partial Principal Prepayments and for
Deficient Valuations occurring prior to such Due Date but before any adjustment
to such amortization schedule by reason of any bankruptcy, other than a
Deficient Valuation, or similar proceeding or any moratorium or similar waiver
or grace period).

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

                  MORTGAGE: The mortgage, deed of trust or other instrument
creating a first lien on an estate in fee simple interest in real property
securing a Mortgage Loan.

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

                  MORTGAGE LOANS: The Mortgage Loans that will be transferred
and assigned to the Trust pursuant to Section 2.03(a) of the Indenture, each
Mortgage Loan so held being identified in the Mortgage Loan Schedule. The
aggregate Cut-off Date Principal Balance is equal to $1,000,003,225.

                                       16
<PAGE>

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

                  MORTGAGE LOAN SCHEDULE: With respect to any date, the schedule
of Mortgage Loans held by the Issuer on such date. The schedule of Mortgage
Loans as of the Cut-off Date is the schedule set forth in Exhibit B of the
Indenture, which schedule sets forth as to each Mortgage Loan:

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

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

                  (iii) the original Mortgage Rate and current Mortgage Rate;

                  (iv) the maturity date;

                  (v) the original principal balance;

                  (vi) the first Payment Date;

                  (vii) the type of Mortgaged Property;

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

                  (ix) the Cut-off Date Principal Balance;

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

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

                  (xii) the occupancy status;

                  (xiii) the purpose of the Mortgage Loan;

                  (xiv) the Appraised Value of the Mortgaged Property;

                  (xv) the original term to maturity;

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

                  (xvii) the Loan-to-Value Ratio;

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

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

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

                                       17
<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 and any date
of determination, the annual rate at which interest accrues on such Mortgage
Loan.

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

                  MORTGAGOR: The obligor or obligors under a Mortgage Note.

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

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

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

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

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

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

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

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

                  NONRECOVERABLE ADVANCE: Any advance (i) which was previously
made or is proposed to be made by the Master Servicer; and (ii) which, in the
good faith judgment of the Master Servicer, will not or, in the case of a
proposed advance, would not, be ultimately recoverable by the Master Servicer

                                       18
<PAGE>

from Liquidation Proceeds, Insurance Proceeds or future payments on any Mortgage
Loan. The Indenture Trustee may conclusively rely on any determination of
nonrecoverability made by the Master Servicer.

                  NON-SEASONED MORTGAGE LOANS: Mortgage Loans other than the
Seasoned Mortgage Loans.

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

                 PAYMENT DATE               NOTIONAL BALANCES ($)
                  April 2005                   $1,000,000,000
                   May 2005                     $941,840,272
                  June 2005                     $862,724,294
                  July 2005                     $790,253,002
                 August 2005                    $723,868,448
                September 2005                  $663,059,493
                 October 2005                   $607,358,095
                November 2005                   $556,335,300
                December 2005                   $509,598,034
                 January 2006                   $466,786,407
                February 2006                   $427,570,746
                  March 2006                    $391,649,098

                  OFFICER'S CERTIFICATE: With respect to the Master Servicer, a
certificate signed by the President, Managing Director, a Director, a Vice
President or an Assistant Vice President, of the Master Servicer and delivered
to the Indenture Trustee. With respect to the Issuer, a certificate signed by
any Authorized Officer of the Issuer, under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 10.01 of the
Indenture, and delivered to the Indenture Trustee. Unless otherwise specified,
any reference in the Indenture to an Officer's Certificate shall be to an
Officer's Certificate of any Authorized Officer of the Issuer.

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

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

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

                           (ii) If on such Interest Determination Date fewer
                  than two Reference Banks provide such offered quotations,
                  One-Month LIBOR for the related Accrual Period shall

                                       19
<PAGE>

                  be the higher of (i) One-Month LIBOR as determined on the
                  previous Interest Determination Date and (ii) the Reserve
                  Interest Rate.

                  The establishment of One-Month LIBOR on each Interest
Determination Date by the Indenture Trustee and the Indenture Trustee's
calculation of the rate of interest applicable for the related Accrual Period
shall (in the absence of manifest error) be final and binding.

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

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

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

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

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

all Bonds that have been paid with funds provided under the Bond Insurance
Policy shall be deemed to be Outstanding until the Bond Insurer has been
reimbursed with respect thereto.

                  OUTSTANDING MORTGAGE LOAN: As to any Due Date, a Mortgage Loan
(including an REO Property) which was not the subject of a Principal Prepayment
in Full, Cash Liquidation or REO Disposition and which was not purchased,
deleted or substituted for prior to such Due Date pursuant to the Servicing
Agreement.

                  OVERCOLLATERALIZATION INCREASE AMOUNT: With respect to any
Payment Date, the lesser of (i) the Net Monthly Excess Cashflow for such Payment
Date but, with respect to the Class A-3 Bonds, after payments to the Bond
Insurer in respect of clause (i) of Section 3.05(d) of the Indenture and (ii)
the excess, if any, of (a) the Overcollateralization Target Amount over (b) the
Overcollateralized Amount on such Payment Date (after taking into account
payments to the related Bonds of the related Basic Principal Distribution Amount
on such Payment Date).

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

                                       20
<PAGE>

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

                  OVERCOLLATERALIZED AMOUNT: For any Payment Date, the amount,
if any, by which (i) the aggregate 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, unscheduled collections of
principal received during the related Prepayment Period and Realized Losses on
the Mortgage Loans incurred during the related Prepayment Period), exceeds (ii)
the aggregate Bond Principal Balance of the Bonds as of such Payment Date
(assuming that 100% of the Principal Remittance Amount is applied as a principal
payment on the Bonds on such Payment Date).

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

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

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

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

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

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

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

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

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

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

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

                  PLAN: Any employee benefit plan or certain other retirement
plans and arrangements, including individual retirement accounts and annuities,
Keogh plans and bank collective investment funds

                                       21
<PAGE>

and insurance company general or separate accounts in which such plans, accounts
or arrangements are invested, that are subject to ERISA or Section 4975 of the
Code.

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

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

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

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

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

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

                  POLICY PREMIUM RATE: With respect to any Payment Date, the
rate per annum at which the Premium Amount for the Bond Insurance Policy
accrues, as specified in the Insurance Agreement.

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

                  PREFERENCE AMOUNT: With respect to the Class A Bonds, any
amount previously distributed to a Class A Bondholder that is recoverable and
sought to be recovered as a voidable preference by a trustee in bankruptcy
pursuant to the United States Bankruptcy Code, as amended from time to time, in
accordance with a final non-appealable order of a court having competent
jurisdiction.

                  PREMIUM AMOUNT: The amount of premium due to the Bond Insurer
in accordance with the terms of the Insurance Agreement.

                  PREPAYMENT ASSUMPTION: (i) With respect to the
adjustable-rate, first lien and fixed-rate, second lien Mortgage Loans, 30% CPR
and (ii) with respect to the fixed-rate first lien Mortgage Loans, 100% PPC,
which assumes 10.00% CPR in month one, an additional 1/11th of 15.00% CPR for
each month thereafter, building to 25% CPR in month 12 and remaining constant at
25% CPR thereafter.

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

                                       22
<PAGE>

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

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

                  PRINCIPAL DISTRIBUTION AMOUNT: For any Payment Date, the sum
of (a) the Basic Principal Distribution Amount and (b) the Overcollateralization
Increase Amount (to the extent available from the Net Monthly Excess Cashflow)
as provided in Sections 3.05(d)(ii) and (v) and Sections 3.05(h)(i) and (v), as
applicable, of the Indenture.

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

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

                  PRINCIPAL REMITTANCE AMOUNT: With respect to any Payment Date,
the sum of the following:

                           (i) the principal portion of each previously
                  undistributed Monthly Payment due after the Cut-off Date
                  received on or prior to the related Determination Date or
                  advanced prior to such Payment Date (other than Monthly
                  Payments due after the related Due Period, which shall be
                  treated as if received during the Due Period they were due) on
                  each Outstanding Mortgage Loan;

                           (ii) the principal portion of all proceeds of any
                  Mortgage Loan repurchased during the related Prepayment Period
                  (or deemed to have been so repurchased in accordance with the
                  Servicing Agreement) pursuant to the Servicing Agreement and
                  the amount of any shortfall deposited in the Collection
                  Account in connection with the substitution of a Deleted
                  Mortgage Loan pursuant to the Mortgage Loan Purchase Agreement
                  during the related Prepayment Period; and

                           (iii) the principal portion of all other unscheduled
                  collections received during the related Prepayment Period
                  (including, without limitation, Principal Prepayments,
                  Insurance Proceeds, Liquidation Proceeds, Subsequent
                  Recoveries and REO Proceeds) to the extent applied by the
                  Master Servicer as recoveries of principal of the related
                  Mortgage Loan pursuant to the Servicing Agreement.

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

                  PROSPECTUS: The Prospectus Supplement, dated March 30, 2005,
together with the attached Prospectus, dated September 28, 2004.

                  PURCHASE PRICE: The meaning specified in Section 2.2(a) of the
Mortgage Loan Purchase Agreement.

                                       23
<PAGE>

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

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

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

                  REALIZED LOSS: With respect to each Mortgage Loan (or REO
Property) as to which a Cash Liquidation or REO Disposition has occurred, an
amount (not less than zero) equal to (i) the Stated Principal Balance of the
Mortgage Loan (or REO Property) as of the date of Cash Liquidation or REO
Disposition, plus (ii) interest (and REO Imputed Interest, if any) at the Net
Mortgage Rate from the Due Date as to which interest was last paid or advanced
to Bondholders up to the last day of the month in which the Cash Liquidation (or
REO Disposition) occurred on the Stated Principal Balance of such Mortgage Loan
(or REO Property) outstanding during each Due Period that such interest was not
paid or advanced, minus (iii) the proceeds, if any, received during the month in
which such Cash Liquidation (or REO Disposition) occurred, to the extent applied
as recoveries of interest at the Net Mortgage Rate and to principal of the
Mortgage Loan, net of the portion thereof reimbursable to the Master Servicer or
any Subservicer with respect to related Advances or expenses as to which the
Master Servicer or any Subservicer is entitled to reimbursement thereunder but
which have not been previously reimbursed. With respect to each Mortgage Loan
which has become the subject of a Deficient Valuation, the difference between
the principal balance of the Mortgage Loan outstanding immediately prior to such
Deficient Valuation and the principal balance of the Mortgage Loan as reduced by
the Deficient Valuation. With respect to each Mortgage Loan which has become the
object of a Debt Service Reduction, the amount of such Debt Service Reduction.

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

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

                                       24
<PAGE>

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

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

                  RELIEF ACT: The Servicemembers Civil Relief Act.

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

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

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

                  REO DISPOSITION: As to any REO Property, a determination by
the Master Servicer that it has received substantially all Insurance Proceeds,
Liquidation Proceeds, REO Proceeds and other payments and recoveries (including
proceeds of a final sale) which the Master Servicer expects to be finally
recoverable from the sale or other disposition of the REO Property.

                  REO IMPUTED INTEREST: As to any REO Property, for any period,
an amount equivalent to interest (at the Net Mortgage Rate that would have been
applicable to the related Mortgage Loan had it been Outstanding) on the unpaid
principal balance of the Mortgage Loan as of the date of acquisition thereof for
such period as such balance is reduced pursuant to Section 3.13 of the Servicing
Agreement by any income from the REO Property treated as a recovery of
principal.

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

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

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

                                       25
<PAGE>

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

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

                  RESPONSIBLE OFFICER: With respect to the Indenture Trustee,
any officer of the Indenture Trustee with direct responsibility for the
administration of the Indenture and also, with respect to a particular matter,
any other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.

                  SEASONED MORTGAGE LOANS: Any Mortgage Loan which was
originated more than twelve months prior to the Cut-off Date, that may have been
acquired by the Depositor in connection with the termination of prior
securitizations of Mortgage Loans originated or acquired by the Seller.

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

                  SECURITY: Any of the Certificates or Bonds.

                  SECURITYHOLDER or HOLDER: Any Bondholder or a
Certificateholder.

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

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

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

                  SERVICING ADVANCES: All customary, reasonable and necessary
"out of pocket"costs and expenses incurred in connection with a default,
delinquency or other unanticipated event in the

                                       26
<PAGE>

performance by the Master Servicer or any Subservicer of its servicing
obligations, including, without duplication, but not limited to, the cost of (i)
the preservation, restoration and protection of a Mortgaged Property, (ii) any
enforcement or judicial proceedings, including foreclosures and any expenses
incurred in relation to any such proceedings that result from the Mortgage Loan
being registered on the MERS System, (iii) the management and liquidation of any
REO Property and (iv) compliance with the obligations under Sections 3.10, 3.11,
3.13 of the Servicing Agreement.

                  SERVICING AGREEMENT: The Servicing Agreement dated as of April
6, 2005, among the Master Servicer, the Issuer and the Indenture Trustee.

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

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

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

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

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

                  SPECIAL CERTIFICATE CAP CONTRACT: The Confirmation together
with the associated ISDA Master Agreement, delivered to the Indenture Trustee on
the Closing Date and attached to the Indenture as Exhibit F, for which amounts
payable shall be distributed in accordance with Section 3.05(f) of the
Indenture.

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

                  STATED PRINCIPAL BALANCE: With respect to any Mortgage Loan or
related REO Property as of any date of determination, (i) the principal balance
of the Mortgage Loan outstanding as of the Cut-off Date, after application of
all scheduled Monthly Payments due on or before such date, whether or not
received, minus (ii) the sum of (a) the principal portion of the Monthly
Payments due with respect to such Mortgage Loan or REO Property during each Due
Period ending prior to the most recent Payment Date which were received or with
respect to which a P&I Advance was made, (b) all Principal Prepayments with
respect to such Mortgage Loan or REO Property, and all Insurance Proceeds,
Liquidation Proceeds and REO Proceeds to the extent applied by the Master
Servicer as recoveries of principal in accordance with Section 3.13 of the
Servicing Agreement with respect to such Mortgage Loan or REO Property, which
were distributed pursuant to Section 3.05 of the Indenture on any previous
Payment Date, and (c) the principal portion of any Realized Loss with respect
thereto allocated pursuant to Section 3.33 of the Indenture for any previous
Payment Date.

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

                  STEP-UP DATE: With respect to the Bonds, the first Payment
Date following the earlier of (i) the first Payment Date for which the aggregate
Stated Principal Balance of the Mortgage Loans and as

                                       27
<PAGE>

of the end of the related Due Period have been reduced to 20% or less of the
Cut-off Date Balance and (ii) the Payment Date occurring in March 2015.

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

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

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

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

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

                  SUBSERVICING FEE RATE: On each adjustable-rate Mortgage Loan,
a rate equal to 0.375% per annum. On each fixed-rate first lien Mortgage Loan, a
rate equal to 0.250% per annum. On each fixed-rate second lien Mortgage Loan, a
rate equal to 0.750% per annum.

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

                  SWAP AGREEMENT FIXED RATE: With respect to each Derivative
Contract, the fixed-rate set forth in the related Derivative Contract used to
determine payments to the Issuer or to the Derivative Contract Counterparty.

                  TELERATE SCREEN PAGE 3750: The display designated as page 3750
on the Telerate Service (or such other page as may replace page 3750 on that
service for the purpose of displaying London interbank offered rates of major
banks).

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

                  TRUST: The Impac CMB Trust Series 2005-3 to be created
pursuant to the Trust Agreement.

                  TRUST AGREEMENT: The Amended and Restated Trust Agreement
dated as of April 6, 2005, among the Owner Trustee, the Depositor and Wells
Fargo Bank, N.A., as Certificate Registrar and Certificate Paying Agent,
relating to the Trust.

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

                                       28
<PAGE>

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

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

                  UNDERWRITERS: Countrywide Securities Corporation, Merrill
Lynch, Pierce, Fenner & Smith Incorporated and UBS Securities LLC.

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

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

                                       29<PAGE>

                                                                     EXHIBIT 4.1

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

                       ADVANTA BUSINESS CARD MASTER TRUST

                                    as Issuer

                                       and

                      DEUTSCHE BANK TRUST COMPANY AMERICAS

                              as Indenture Trustee

                         CLASS B(2005-B1) TERMS DOCUMENT

                           dated as of April 21, 2005

                                       to

                       ADVANTASERIES INDENTURE SUPPLEMENT

                          dated as of November 1, 2004

                                       to

                                    INDENTURE

                           dated as of August 1, 2000

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

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                              PAGE
<S>                                                                                           <C>
                                            ARTICLE I
                     Definitions and Other Provisions of General Application

Section 1.01 Definitions...................................................................     3

Section 1.02 Governing Law.................................................................     6

Section 1.03 Counterparts..................................................................     6

Section 1.04 Ratification of Indenture and AdvantaSeries Indenture Supplement..............     6

                                            ARTICLE II
                                    The Class B(2005-B1) Notes

Section 2.01 Creation and Designation......................................................     7

Section 2.02 Interest Payment..............................................................     7

Section 2.03 Determination of One-Month LIBOR..............................................     7

Section 2.04 Required Deposits of Available Principal Collections to the
             Principal Funding Account; Payment of Principal...............................     8

Section 2.05 Holders' Rights to Payments of Interest and Principal.........................     8

Section 2.06 Cash Collateral Account.......................................................     9

Section 2.07 Spread Account................................................................     9

Section 2.08 Delivery and Payment for the Class B(2005-B1) Notes;
             Form and Denomination.........................................................     9

Section 2.09 Manner of Payment of Class B(2005-B1) Notes...................................     9

Section 2.10 Monthly Servicing Fee.........................................................    10
</TABLE>

                                      - 2 -
<PAGE>

      CLASS B(2005-B1) TERMS DOCUMENT, dated as of April 21,2005 (the "TERMS
DOCUMENT"), between WILMINGTON TRUST COMPANY, as Owner Trustee of ADVANTA
BUSINESS CARD MASTER TRUST, a common law trust organized and existing under the
laws of the State of Delaware (herein, the "ISSUER" or the "TRUST"), and
DEUTSCHE BANK TRUST COMPANY AMERICAS (formerly known as Bankers Trust Company),
a banking corporation organized and existing under the laws of the State of New
York, not in its individual capacity, but solely as indenture trustee (herein,
together with its successors in the trusts thereunder as provided in the Master
Indenture, the "INDENTURE TRUSTEE") under the Master Indenture, dated as of
August 1, 2000 (the "INDENTURE") between the Issuer and the Indenture Trustee.
This Terms Document supplements the AdvantaSeries Indenture Supplement, dated as
of November 1, 2004 (the "ADVANTASERIES INDENTURE SUPPLEMENT") between the
Issuer and the Indenture Trustee, which supplements the Indenture.

      Pursuant to this Terms Document, the Issuer shall create a new tranche of
Class B Notes and shall specify the principal terms thereof.

                                   ARTICLE I
             Definitions and Other Provisions of General Application

      Section 1.01 Definitions. For all purposes of this Terms Document, except
as otherwise expressly provided or unless the context otherwise requires:

            (1) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;

            (2) all other terms used herein which are defined in the
AdvantaSeries Indenture Supplement or the Indenture, either directly or by
reference therein, have the meanings assigned to them therein;

            (3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder means such accounting principles as are
generally accepted in the United States of America at the date of such
computation;

            (4) all references in this Terms Document to designated "Articles,"
"Sections" and other subdivisions are to the designated Articles, Sections and
other subdivisions of this Terms Document;

            (5) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Terms Document as a whole and not to any particular
Article, Section or other subdivision;

            (6) in the event that any term or provision contained herein shall
conflict with or be inconsistent with any term or provision contained in the
AdvantaSeries Indenture Supplement, the Indenture or the Transfer and Servicing
Agreement, the terms and provisions of this Terms Document shall be controlling;

                                      - 3 -
<PAGE>

            (7) each capitalized term defined herein shall relate only to the
Class B(2005-B1) Notes and no other Tranche of Notes issued by the Issuer; and

            (8) "including" and words of similar import will be deemed to be
followed by "without limitation."

      "Accumulation Amount" shall mean, for any Payment Date occurring during
the Accumulation Period, $12,500,000; provided, however, that if the
Accumulation Period Length is determined to be less than 8 months pursuant to
Section 2.04(b), the Accumulation Amount for each Payment Date with respect to
the Accumulation Period will be equal to (i) the Outstanding Principal Balance
of the Class B(2005-B1) Notes divided by (ii) the Accumulation Period Length.

      "Accumulation Deposit Amount" means, for any Payment Date occurring during
the Accumulation Period, an amount equal to the sum of the Accumulation Amount
for such Payment Date and any existing Accumulation Shortfall.

      "Accumulation Period" shall mean, unless a Pay Out Event shall have
occurred prior thereto, the period commencing at the close of business on June
30, 2009, or such later date as is determined in accordance with Section
2.04(b), and ending on the first to occur of (a) the commencement of the Early
Amortization Period, (b) the payment in full of the Outstanding Principal
Balance of the Class B(2005-B1) Notes and (c) the Class B(2005-B1) Final
Maturity Date.

      "Accumulation Period Factor" shall mean, for the purpose of calculating
the Accumulation Period Length for the Class B(2005-B1) Notes, with respect to
any Monthly Period, a fraction, the numerator of which is equal to the sum of
the initial invested amounts (or, if no initial invested amount is defined in
the applicable Indenture Supplement, then the initial principal balance) of all
outstanding Series, and the denominator of which is equal to the sum of (a) the
Initial Principal Balance of Class B(2005-B1) Notes, (b) the initial invested
amounts (or, if no initial invested amount is defined in the applicable
Indenture Supplement, then the initial principal balance) of all other
Outstanding Classes and Tranches (without duplication) (other than the
AdvantaSeries Class B(2005-B1) Notes) which are not expected to be in their
revolving periods, and (c) the initial invested amounts (or, if no initial
invested amount is defined in the applicable Indenture Supplement, then the
initial principal balance) of all other Outstanding Classes and Tranches
(without duplication) (other than the AdvantaSeries Class B(2005-B1) Notes)
which are not allocating Shared Principal Collections to other Series and are in
their revolving periods; provided, however, that this definition may be changed
at any time if the Rating Agency Condition is satisfied.

      "Accumulation Period Length" means the number of whole months such that
the sum of the Accumulation Period Factors for each month during such period
will be equal to or greater than the Required Accumulation Factor Number;
provided, however, that the Accumulation Period Length will not be determined to
be less than one month; provided further, however, that the determination of the
Accumulation Period Length may be changed at any time if the Rating Agency
Condition is satisfied.

                                      - 4 -
<PAGE>

      "Accumulation Shortfall" shall mean (a) on the first Payment Date during
the Accumulation Period, zero and (b) on each subsequent Payment Date during the
Accumulation Period, the excess, if any, of the Accumulation Deposit Amount for
the previous Payment Date over the amount deposited into the Principal Funding
Account pursuant to Section 2.04(b) for the previous Payment Date.

      "AdvantaSeries Indenture Supplement" means the AdvantaSeries Indenture
Supplement dated as of November 1, 2004, by and between the Issuer and the
Indenture Trustee, as amended and supplemented from time to time.

      "Class B(2005-B1) Final Maturity Date" means February 20, 2014.

      "Class B(2005-B1) Note" means any Note substantially in the form set forth
in Exhibit A-2 to the AdvantaSeries Indenture Supplement, designated therein as
a Class B(2005-B1) Note and duly executed and authenticated in accordance with
the Indenture.

      "Class B(2005-B1) Noteholder" means a Person in whose name a Class
B(2005-B1) Note is registered in the Note Register.

      "Class B(2005-B1) Termination Date" means the earliest to occur of (a) the
Principal Payment Date on which the Outstanding Principal Balance of the Class
B(2005-B1) Notes is paid in full, (b) the Class B(2005-B1) Final Maturity Date
and (c) the date on which the Indenture is discharged and satisfied pursuant to
Article XI thereof.

      "Closing Date" means April 21, 2005.

      "Expected Final Principal Payment Date" means March 22, 2010.

      "Initial Principal Balance" means $100,000,000.

      "Indenture" means the Indenture dated as of August 1, 2000, by and between
the Issuer and the Indenture Trustee, as amended and supplemented from time to
time.

      "Interest Payment Date" means the scheduled due date of any payment of
interest on the Class B(2005-B1) Notes, which shall be each Payment Date. The
first Interest Payment Date shall be May 20, 2005.

      "LIBOR Determination Date" shall mean (a) with respect to the first
Interest Payment Date, (i) April 19, 2005 for the period from and including the
Closing Date through and including May 19, 2005 and (b) with respect to any
Interest Payment Date after the first Interest Payment Date, the second London
Business Day prior to the commencement of the second and each subsequent
Interest Period.

      "London Business Day" means any Business Day on which dealings in deposits
in United States Dollars are transacted in the London interbank market.

                                      - 5 -
<PAGE>

      "Note Interest Rate" means a rate per annum equal to 0.38% in excess of
One-Month LIBOR as determined by the Indenture Trustee on the related LIBOR
Determination Date with respect to each Interest Period.

      "One-Month Index Maturity" means a maturity of one month commencing on the
related LIBOR Determination Date.

      "One-Month LIBOR" means, for any Interest Period, the London interbank
offered rate for one month United States dollar deposits determined by the
Indenture Trustee on the LIBOR Determination Date for such Interest Period in
accordance with the provisions of Section 2.03.

      "Paying Agent" means Deutsche Bank Trust Company Americas.

      "Reference Banks" means three major banks in the London interbank market
selected by the Servicer.

      "Required Accumulation Factor Number" shall be equal to a fraction,
rounded upwards to the nearest whole number, the numerator of which is one and
the denominator of which is equal to the lowest monthly principal payment rate
on the Accounts, expressed as a decimal, for the twelve months preceding the
date of such calculation; provided, however, that this definition may be changed
at any time if the Rating Agency Condition is satisfied.

      "Telerate Page 3750" means the display page currently so designated on the
Moneyline Telerate Service (or such other page as may replace that page on that
service for the purpose of displaying comparable rates or prices).

      Section 1.02 Governing Law. THIS TERMS DOCUMENT WILL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, INCLUDING
SECTION 5-1401 OF THE GENERAL OBLIGATION LAW, WITHOUT REFERENCE TO ITS CONFLICT
OF LAW PROVISIONS AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

      Section 1.03 Counterparts. This Terms Document may be executed in any
number of counterparts, each of which so executed will be deemed to be an
original, but all such counterparts will together constitute but one and the
same instrument.

      Section 1.04 Ratification of Indenture and AdvantaSeries Indenture
Supplement. As supplemented by this Terms Document, each of the Indenture and
the AdvantaSeries Indenture Supplement is in all respects ratified and confirmed
and the Indenture as so supplemented by the AdvantaSeries Indenture Supplement
and this Terms Document shall be read, taken and construed as one and the same
instrument.

                               [END OF ARTICLE I]

                                      - 6 -
<PAGE>

                                   ARTICLE II
                           The Class B(2005-B1) Notes

      Section 2.01 Creation and Designation. There is hereby created a tranche
of Class B Notes to be issued pursuant to the Indenture and the AdvantaSeries
Indenture Supplement to be known as the "AdvantaSeries Class B(2005-B1) Notes."

      Section 2.02 Interest Payment. For each Interest Payment Date, the amount
of interest due and payable with respect to the Class B(2005-B1) Notes shall be
an amount equal to the product of (i) (A) a fraction, the numerator of which is
the actual number of days in the related Interest Period and the denominator of
which is 360, multiplied by (B) the Note Interest Rate in effect with respect to
the related Interest Period, multiplied by (ii) the Outstanding Principal
Balance of the Class B(2005-B1) Notes determined as of the Record Date preceding
the related Interest Payment Date. Any interest on the Class B(2005-B1) Notes
will be calculated on the basis of the actual number of days in the related
Interest Period and a 360-day year.

      Section 2.03 Determination of One-Month LIBOR.

      (a) On each LIBOR Determination Date, the Indenture Trustee shall
determine One-Month LIBOR on the basis of the rate for deposits in United States
dollars having a One-Month Index Maturity which appears on Telerate Page 3750 as
of 11:00 a.m., London time, on such date. If such rate does not appear on
Telerate Page 3750, One-Month LIBOR for that LIBOR Determination Date shall be
determined on the basis of the rates at which deposits in United States dollars,
having a One-Month Index Maturity and in an amount of not less than $1,000,000,
are offered by the Reference Banks at approximately 11:00 a.m., London time, on
that day to prime banks in the London interbank market. The Indenture Trustee
shall request the principal London office of each of the Reference Banks to
provide a quotation of its rate. If at least two (2) such quotations are
provided, One-Month LIBOR for that LIBOR Determination Date shall be the
arithmetic mean of the quotations. If fewer than two (2) quotations are provided
as requested, One-Month LIBOR for that LIBOR Determination Date will be the
arithmetic mean of the rates quoted by major banks in New York City, selected by
the Servicer, at approximately 11:00 a.m., New York City time, on that day for
loans in United States dollars to leading European banks having a One-Month
Index Maturity and in an amount of not less than U.S. $1,000,000; provided,
that, if the banks selected by the Servicer are not quoting such rates,
One-Month LIBOR in effect for the applicable Interest Period will be the same as
One-Month LIBOR for the immediately preceding Interest Period.

      (b) The Note Interest Rate applicable to the then current and the
immediately preceding Interest Periods may be obtained by telephoning the
Indenture Trustee at its corporate trust office at (800) 735-7777 or such other
telephone number as shall be designated by the Indenture Trustee for such
purpose by prior written notice by the Indenture Trustee to each Noteholder from
time to time.

      (c) On each LIBOR Determination Date, the Indenture Trustee shall send to
the Transferor, by facsimile or electronic transmission, notification of
One-Month LIBOR for the following Interest Period.

                                      - 7 -
<PAGE>

      Section 2.04 Required Deposits of Available Principal Collections to the
Principal Funding Account; Payment of Principal. With respect to any Payment
Date, the amount to be deposited in the Principal Funding Sub-Account pursuant
to Section 4.16 of the AdvantaSeries Indenture Supplement will be the amount
determined pursuant to clause (a), (b), (c) or (d) below for such Payment Date,
as applicable, or if more than one such clause is applicable, the highest amount
determined pursuant to any one of such clauses; provided, however, in no case
shall the amount required to be deposited exceed the Class B(2005-B1) Adjusted
Invested Amount (calculated immediately before giving effect to such deposit but
after giving effect to any Investor Charge-Offs and any reallocations of
principal on such date).

      (a) Revolving Period. On each Payment Date during the Revolving Period,
the required deposit to the Principal Funding Sub-Account for the Class
B(2005-B1) Notes will be zero.

      (b) Accumulation Period. On each Payment Date during the Accumulation
Period, the required deposit to the Principal Funding Sub-Account for the Class
B(2005-B1) Notes will be the Accumulation Deposit Amount for such Payment Date.
The Accumulation Period is scheduled to commence at the close of business on
June 30, 2009; provided, however, that, if the Accumulation Period Length is
less than 8 months, the date on which the Accumulation Period actually commences
will be delayed to the first Business Day of the month that is the number of
whole months prior to the Expected Final Principal Payment Date which is at
least equal to the Accumulation Period Length and, as a result, the number of
Monthly Periods in the Accumulation Period will at least equal the Accumulation
Period Length. On the Determination Date twelve (12) months prior to the
Expected Final Principal Payment Date and each Determination Date thereafter
until the Accumulation Period begins, the Servicer shall determine the
Accumulation Period Length.

      (c) Early Amortization Period. On each Payment Date during an Early
Amortization Period, the required deposit to the Principal Funding Sub-Account
for the Class B(2005-B1) Notes will be the Adjusted Invested Amount for the
Class B(2005-B1) Notes as of the close of business on the last day of the
preceding Monthly Period (after taking into account any reductions or increases
occurring on such date).

      (d) Coverage Funding of the Principal Funding Account of Senior Classes.
If the Transferor determines as of the end of the related Monthly Period that,
after giving effect to all allocations and payments with respect to that Monthly
Period, the Coverage Funding Required Amount of the Class B(2005-B1) Notes will
be greater than zero, the required deposit to the Principal Funding Sub-Account
for the Class B(2005-B1) Notes will be the Coverage Funding Required Amount for
such Class B(2005-B1) Notes.

      (e) Distributions to Paying Agent. On each Principal Payment Date, the
Indenture Trustee, acting in accordance with written instructions from the
Servicer, shall withdraw from the Principal Funding Sub-Account for the Class
B(2005-B1) Notes and distribute to the Paying Agent for payment to the Class
B(2005-B1) Noteholders the amounts deposited into the Principal Funding
Sub-Account for the Class B(2005-B1) Notes pursuant to this Section 2.04.

      Section 2.05 Holders' Rights to Payments of Interest and Principal.

                                      - 8 -
<PAGE>

      (a) Any installment of interest or principal, if any, payable on any Class
B(2005-B1) Note which is punctually paid or duly provided for by the Issuer and
the Indenture Trustee on the applicable Interest Payment Date or Principal
Payment Date shall be paid by the Paying Agent to the Person in whose name such
Class B(2005-B1) Note (or one or more Predecessor Notes) is registered on the
Record Date, by wire transfer of immediately available funds to such Person's
account as has been designated by written instructions received by the Paying
Agent from such Person not later than the close of business on the third
Business Day preceding the date of payment or, if no such account has been so
designated, by check mailed first-class, postage prepaid to such Person's
address as it appears on the Note Register on such Record Date, except that with
respect to Notes registered on the Record Date in the name of the nominee of
Cede & Co., payment shall be made by wire transfer in immediately available
funds to the account designated by such nominee.

      (b) The right of the Class B(2005-B1) Noteholders to receive payments from
the Issuer will terminate on the first Business Day following the Class
B(2005-B1) Termination Date.

      Section 2.06 Cash Collateral Account. In accordance with Section 4.22(a)
of the AdvantaSeries Indenture Supplement, on or prior to the Closing Date, the
Transferor shall deposit, cause to be deposited or maintain funds in the Cash
Collateral Account such that immediately after giving effect to such issuance,
the amount on deposit in the Cash Collateral Account for the AdvantaSeries must
be at least equal to the Required Cash Collateral Account Amount.

      Section 2.07 Spread Account. In accordance with Section 4.24(a) of the
AdvantaSeries Indenture Supplement, on or prior to the Closing Date, the
Transferor shall deposit, cause to be deposited or maintain funds in the Spread
Account such that immediately after the issuance of the Class B(2005-B1) Notes,
the ratio of the amount on deposit in the Spread Account to the Required Spread
Account Amount is equal to or greater than the same ratio immediately preceding
such issuance.

      Section 2.08 Delivery and Payment for the Class B(2005-B1) Notes; Form and
Denomination.

      (a) The Issuer shall execute and issue, and the Indenture Trustee shall
authenticate, the Class B(2005-B1) Notes in accordance with Section 2.03 of the
Indenture. The Indenture Trustee shall deliver the Class B(2005-B1) Notes to or
upon the order of the Issuer when so authenticated. The Class B(2005-B1) Notes
shall be Book-Entry Notes.

      (b) The Depository for the Class B(2005-B1) Notes shall be The Depository
Trust Company, and the Class B(2005-B1) Notes shall initially be registered in
the name of Cede & Co., its nominee.

      (c) The Class B(2005-B1) Notes will be issued in minimum denominations of
$5,000 and integral multiples of $1,000 in excess of that amount.

      Section 2.09 Manner of Payment of Class B(2005-B1) Notes. Except as
provided in Section 11.02 of the Indenture with respect to a final distribution,
distributions to Class B(2005-

                                      - 9 -
<PAGE>

B1) Noteholders hereunder shall be made by (i) check mailed to each Class
B(2005-B1) Noteholder (at such Noteholder's address as it appears in the Note
Register), except that with respect to any Class B(2005-B1) Notes registered in
the name of the nominee of a Clearing Agency, such payment shall be made in
immediately available funds and (ii) without presentation or surrender of any
Class B(2005-B1) Note or the making of any notation thereon.

      Section 2.10 Monthly Servicing Fee. In accordance with Section 3.01(a) of
the AdvantaSeries Indenture Supplement, with respect to the May 20, 2005 Payment
Date, the AdvantaSeries Monthly Servicing Fee allocated to the Class B(2005-B1)
Notes shall be $55,556.

                               [END OF ARTICLE II]

                                     - 10 -
<PAGE>

      IN WITNESS WHEREOF, the undersigned have caused this Terms Document to be
duly executed and delivered by their respective duly authorized officers on the
day and year first above written.

                                      WILMINGTON TRUST COMPANY,
                                           as Owner Trustee of
                                      ADVANTA BUSINESS CARD MASTER TRUST

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

                                      DEUTSCHE BANK TRUST COMPANY AMERICAS,
                                           as Indenture Trustee

                                      By: /s/ Peter T. Becker
                                          --------------------------------------
                                      Name: Peter T. Becker
                                      Title: Vice President

               [Signature Page to Class B(2005-B1) Terms Document]

                                     - 11 -

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