Document:

IMPAC CMB TRUST SERIES 2004-5

                                     Issuer

                                       and

                      DEUTSCHE BANK NATIONAL TRUST COMPANY

                                Indenture Trustee

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

                                    INDENTURE

                            Dated as of May 28, 2004

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                        COLLATERALIZED ASSET-BACKED BONDS

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                                                 TABLE OF CONTENTS

SECTION                                                                                                        PAGE

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ARTICLE I

Definitions
         Section 1.01      DEFINITIONS............................................................................2
         Section 1.02      INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT......................................2
         Section 1.03      RULES OF CONSTRUCTION..................................................................2

Bonds
         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
Conveyance of the Group 1 Subsequent Mortgage Loans...............................................................6
Conveyance of the Group 2 Subsequent Mortgage Loans...............................................................9

Covenants
         Section 3.01      COLLECTION OF PAYMENTS WITH RESPECT TO THE MORTGAGE LOANS.............................13
         Section 3.02      MAINTENANCE OF OFFICE OR AGENCY.......................................................13
         Section 3.03      MONEY FOR PAYMENTS TO BE HELD IN TRUST; PAYING AGENT..................................13
         Section 3.04      EXISTENCE.............................................................................14
         Section 3.05      PAYMENT OF PRINCIPAL AND INTEREST.....................................................15
         Section 3.06      PROTECTION OF TRUST ESTATE............................................................19
         Section 3.07      OPINIONS AS TO TRUST ESTATE...........................................................20
         Section 3.08      PERFORMANCE OF OBLIGATIONS............................................................20
         Section 3.09      NEGATIVE COVENANTS....................................................................21
         Section 3.10      ANNUAL STATEMENT AS TO COMPLIANCE.....................................................21
         Section 3.11      [RESERVED]............................................................................21
         Section 3.12      REPRESENTATIONS AND WARRANTIES CONCERNING THE MORTGAGE LOANS..........................21
         Section 3.13      AMENDMENTS TO SERVICING AGREEMENT.....................................................22
         Section 3.14      MASTER SERVICER AS AGENT AND BAILEE OF THE INDENTURE TRUSTEE..........................22
         Section 3.15      INVESTMENT COMPANY ACT................................................................22
         Section 3.16      ISSUER MAY CONSOLIDATE, ETC...........................................................22
         Section 3.17      SUCCESSOR OR TRANSFEREE...............................................................24
         Section 3.18      NO OTHER BUSINESS.....................................................................24
         Section 3.19      NO BORROWING..........................................................................24
         Section 3.20      GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES.....................................25
         Section 3.21      CAPITAL EXPENDITURES..................................................................25
         Section 3.22      DETERMINATION OF BOND INTEREST RATE...................................................25
         Section 3.23      RESTRICTED PAYMENTS...................................................................25
         Section 3.24      NOTICE OF EVENTS OF DEFAULT...........................................................25
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         Section 3.25      FURTHER INSTRUMENTS AND ACTS..........................................................25
         Section 3.26      STATEMENTS TO BONDHOLDERS.............................................................25
         Section 3.27      [RESERVED]............................................................................26
         Section 3.28      CERTAIN REPRESENTATIONS REGARDING THE TRUST ESTATE....................................26
         Section 3.29      [RESERVED]............................................................................27
         Section 3.30      [RESERVED]............................................................................27
         Section 3.31      REPLACEMENT DERIVATIVE CONTRACTS......................................................27
         Section 3.32      [RESERVED]............................................................................27
         Section 3.33      ALLOCATION OF REALIZED LOSSES.........................................................27
         Section 3.34      THE GROUP 1 PRE-FUNDING ACCOUNT.......................................................28
         Section 3.35      THE GROUP 2 PRE-FUNDING ACCOUNT.......................................................29

The Bonds; Satisfaction and Discharge of Indenture
         Section 4.01      THE BONDS.............................................................................32
         Section 4.02      REGISTRATION OF AND LIMITATIONS ON TRANSFER AND EXCHANGE OF BONDS;
         APPOINTMENT OF BOND REGISTRAR AND CERTIFICATE REGISTRAR.................................................32
         Section 4.03      MUTILATED, DESTROYED, LOST OR STOLEN BONDS............................................33
         Section 4.04      PERSONS DEEMED OWNERS.................................................................34
         Section 4.05      CANCELLATION..........................................................................34
         Section 4.06      BOOK-ENTRY BONDS......................................................................34
         Section 4.07      NOTICES TO DEPOSITORY.................................................................35
         Section 4.08      DEFINITIVE BONDS......................................................................35
         Section 4.09      TAX TREATMENT.........................................................................36
         Section 4.10      SATISFACTION AND DISCHARGE OF INDENTURE...............................................36
         Section 4.11      APPLICATION OF TRUST MONEY............................................................37
         Section 4.12      [RESERVED]............................................................................37
         Section 4.13      REPAYMENT OF MONIES HELD BY PAYING AGENT..............................................37
         Section 4.14      TEMPORARY BONDS.......................................................................37
         Section 4.15      REPRESENTATION REGARDING ERISA........................................................38

ARTICLE V

Default and Remedies
         Section 5.01      EVENTS OF DEFAULT.....................................................................39
         Section 5.02      ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT....................................39
         Section 5.03      COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY INDENTURE TRUSTEE
          .......................................................................................................40
         Section 5.04      REMEDIES; PRIORITIES..................................................................42
         Section 5.05      OPTIONAL PRESERVATION OF THE TRUST ESTATE.............................................44
         Section 5.06      LIMITATION OF SUITS...................................................................44
         Section 5.07      UNCONDITIONAL RIGHTS OF BONDHOLDERS TO RECEIVE PRINCIPAL AND INTEREST
          .......................................................................................................45
         Section 5.08      RESTORATION OF RIGHTS AND REMEDIES....................................................45
         Section 5.09      RIGHTS AND REMEDIES CUMULATIVE........................................................45
         Section 5.10      DELAY OR OMISSION NOT A WAIVER........................................................45
         Section 5.11      CONTROL BY BONDHOLDERS................................................................46
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         Section 5.12      WAIVER OF PAST DEFAULTS...............................................................46
         Section 5.13      UNDERTAKING FOR COSTS.................................................................46
         Section 5.14      WAIVER OF STAY OR EXTENSION LAWS......................................................47
         Section 5.15      SALE OF TRUST ESTATE..................................................................47
         Section 5.16      ACTION ON BONDS.......................................................................48
         Section 5.17      PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS....................................49

ARTICLE VI

The Indenture Trustee
         Section 6.01      DUTIES OF INDENTURE TRUSTEE...........................................................50
         Section 6.02      RIGHTS OF INDENTURE TRUSTEE...........................................................51
         Section 6.03      INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE................................................52
         Section 6.04      INDENTURE TRUSTEE'S DISCLAIMER........................................................52
         Section 6.05      NOTICE OF EVENT OF DEFAULT............................................................52
         Section 6.06      REPORTS BY INDENTURE TRUSTEE TO HOLDERS AND TAX ADMINISTRATION........................52
         Section 6.07      COMPENSATION AND INDEMNITY............................................................52
         Section 6.08      REPLACEMENT OF INDENTURE TRUSTEE......................................................53
         Section 6.09      SUCCESSOR INDENTURE TRUSTEE BY MERGER.................................................54
         Section 6.10      APPOINTMENT OF CO-INDENTURE TRUSTEE OR SEPARATE INDENTURE TRUSTEE.....................54
         Section 6.11      ELIGIBILITY; DISQUALIFICATION.........................................................55
         Section 6.12      PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER......................................55
         Section 6.13      REPRESENTATIONS AND WARRANTIES........................................................55
         Section 6.14      DIRECTIONS TO INDENTURE TRUSTEE.......................................................56
         Section 6.15      THE AGENTS............................................................................56

ARTICLE VII

Bondholders' Lists and Reports
         Section 7.01      ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND ADDRESSES OF BONDHOLDERS
          .......................................................................................................57
         Section 7.02      PRESERVATION OF INFORMATION; COMMUNICATIONS TO BONDHOLDERS............................57
         Section 7.03      REPORTS OF ISSUER.....................................................................57
         Section 7.04      REPORTS BY INDENTURE TRUSTEE..........................................................58
         Section 7.05      STATEMENTS TO BONDHOLDERS.............................................................58

ARTICLE VIII

Accounts, Disbursements and Releases
         Section 8.01      COLLECTION OF MONEY...................................................................61
         Section 8.02      TRUST ACCOUNTS........................................................................61
         Section 8.03      OFFICER'S CERTIFICATE.................................................................61
         Section 8.04      TERMINATION UPON DISTRIBUTION TO BONDHOLDERS..........................................62
         Section 8.05      RELEASE OF TRUST ESTATE...............................................................62
         Section 8.06      SURRENDER OF BONDS UPON FINAL PAYMENT.................................................62
         Section 8.07      OPTIONAL REDEMPTION OF THE BONDS......................................................62
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ARTICLE IX

Supplemental Indentures
         Section 9.01      SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF BONDHOLDERS................................64
         Section 9.02      SUPPLEMENTAL INDENTURES WITH CONSENT OF BONDHOLDERS...................................65
         Section 9.03      EXECUTION OF SUPPLEMENTAL INDENTURES..................................................67
         Section 9.04      EFFECT OF SUPPLEMENTAL INDENTURE......................................................67
         Section 9.05      CONFORMITY WITH TRUST INDENTURE ACT...................................................67
         Section 9.06      REFERENCE IN BONDS TO SUPPLEMENTAL INDENTURES.........................................67

ARTICLE X

Miscellaneous
Compliance Certificates and Opinions, etc........................................................................68
         Section 10.02     FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE......................................69
         Section 10.03     ACTS OF BONDHOLDERS...................................................................70
         Section 10.04     NOTICES ETC., TO INDENTURE TRUSTEE ISSUER AND RATING AGENCIES.........................70
         Section 10.05     NOTICES TO BONDHOLDERS; WAIVER........................................................71
         Section 10.06     CONFLICT WITH TRUST INDENTURE ACT.....................................................71
         Section 10.07     EFFECT OF HEADINGS....................................................................72
         Section 10.09     SEPARABILITY..........................................................................72
         Section 10.10     [RESERVED]............................................................................72
         Section 10.11     LEGAL HOLIDAYS........................................................................72
         Section 10.12     GOVERNING LAW.........................................................................72
         Section 10.13     COUNTERPARTS..........................................................................72
         Section 10.14     RECORDING OF INDENTURE................................................................72
         Section 10.15     ISSUER OBLIGATION.....................................................................72
         Section 10.16     NO PETITION...........................................................................73
         Section 10.17     INSPECTION............................................................................73

                  EXHIBITS

         Exhibit A-1      --        Form of Class [_-A-[_] Bonds
         Exhibit A-2      --        Form of Class [_]-M-[_] Bonds
         Exhibit A-3      --        Form of Class 2-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 Subsequent Transfer Instrument
         Appendix A       --        Definitions
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                  This Indenture, dated as of May 28, 2004, is entered into
between Impac CMB Trust Series 2004-5, a Delaware statutory trust, as Issuer
(the "Issuer"), and Deutsche Bank National Trust Company, a national banking
association, as Indenture Trustee (the "Indenture Trustee").

                                WITNESSETH THAT:

                  Each party hereto agrees as follows for the benefit of the
other party and for the equal and ratable benefit of the Holders of the Issuer's
Collateralized Asset-Backed Bonds, Series 2004-5 (the "Bonds").

                                 GRANTING CLAUSE

                  The Issuer hereby Grants to the Indenture Trustee at the
Closing Date, as trustee for the benefit of the Holders of the Bonds, all of the
Issuer's right, title and interest in and to whether now existing or hereafter
created by (a) the Mortgage Loans, Eligible Substitute Mortgage Loans and the
proceeds thereof and all rights under the Related Documents; (b) all funds on
deposit from time to time in the Collection Account allocable to the Mortgage
Loans excluding any investment income from such funds; (c) all funds on deposit
from time to time in the Payment Account and in all proceeds thereof; (d) all
funds on deposit from time to time in each of the Pre-Funding Account and in all
proceeds thereof; (e) all rights under (i) the Mortgage Loan Purchase Agreement
as assigned to the Issuer, with respect to the Initial Mortgage Loans, and each
Subsequent Mortgage Loan Purchase Agreement as assigned to the Issuer, with
respect to the Group 1 Subsequent Mortgage Loans, respectively , (ii) the
Servicing Agreement and any Subservicing Agreements, (iii) any title, hazard and
primary insurance policies with respect to the Mortgaged Properties and (iv) the
rights with respect to the Derivative Contracts and the Special Certificate Cap
Contract as assigned to the Issuer; and (e) all present and future claims,
demands, causes and choses in action in respect of any or all of the foregoing
and all payments on or under, and all proceeds of every kind and nature
whatsoever in respect of, any or all of the foregoing and all payments on or
under, and all proceeds of every kind and nature whatsoever in the conversion
thereof, voluntary or involuntary, into cash or other liquid property, all cash
proceeds, accounts, accounts receivable, notes, drafts, acceptances, checks,
deposit accounts, rights to payment of any and every kind, and other forms of
obligations and receivables, instruments and other property which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing (collectively, the "Trust Estate" or the "Collateral").

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

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

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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;

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                           (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 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.

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                                   ARTICLE II

                           Original Issuance of Bonds

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

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

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

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

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

         The Indenture Trustee shall upon Issuer Request authenticate and
deliver the Class 1-A-1, Class 1-A-2, Class 1-A-3, Class 1-M-1, Class 1-M-2,
Class 1-M-3, Class 1-M-4, Class 1-M-5, Class 1-M-6, Class 2-A, Class 2-M-1,
Class 2-M-2 and Class 2-B Bonds for original issue in an aggregate initial
principal amount of $1,423,081,000. The Class 1-A-1 Bonds shall be issued in an
aggregate initial principal amount of $877,906,000, the Class 1-A-2 Bonds shall
be issued in an aggregate initial principal amount of $200,000,000, the Class
1-A-3 Bonds shall be issued in an aggregate initial principal amount of
$22,000,000, Class 1-M-1 Bonds shall be issued in an aggregate initial principal
amount of $43,069,000, the Class 1-M-2 Bonds shall be issued in an aggregate
initial principal amount of $46,382,000, Class 1-M-3 Bonds shall be issued in an
aggregate initial principal amount of $29,817,000, Class 1-M-4 Bonds shall be
issued in an aggregate initial principal amount of $39,756,000, Class 1-M-5
Bonds shall be issued in an aggregate initial principal amount of $26,504,000,
Class 1-M-6 Bonds shall be issued in an aggregate initial principal amount of
$39,753,000, the Class 2-A Bonds shall be issued in an aggregate initial
principal amount of $59,888,000, Class 2-M-1 Bonds shall be issued in an
aggregate initial principal amount of $9,214,000, the Class 2-M-2 Bonds shall be
issued in an aggregate initial principal amount of $10,515,000 and the Class 2-B
Bonds shall be issued in an aggregate initial principal amount of $18,277,000.

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

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

         Section 2.03 ACCEPTANCE OF MORTGAGE LOANS BY INDENTURE TRUSTEE. (a)The
Indenture Trustee acknowledges receipt of, subject to the exceptions it notes
pursuant to the procedures described below, the documents (or certified copies
thereof) referred to in Section 2.1(b) of the 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. No later than 45 days after the Closing
Date, with respect to the Initial Mortgage Loans, or the applicable Subsequent
Transfer Date, with respect to the related Group 1 Subsequent Mortgage Loans
(or, with respect to any Eligible Substitute Mortgage Loan, within 5 days after
the receipt by the Indenture Trustee thereof and, with respect to any documents
received beyond 45 days after the Closing Date, promptly thereafter), the
Indenture Trustee agrees, for the benefit of the Bondholders, to review each
Mortgage File delivered to it and to execute and deliver, or cause to be
executed and delivered, to the Seller and the Master Servicer an Initial
Certification in the form annexed hereto as Exhibit C. In conducting such
review, the Indenture Trustee will ascertain whether all required documents
described in Section 2.1(b) of (i) the Mortgage Loan Purchase Agreement, with
respect to the Initial Mortgage Loans, and (ii) the applicable Subsequent
Mortgage Loan Purchase Agreements, with respect to the related Group 1
Subsequent Mortgage Loans, have been executed and received and whether those
documents relate, determined on the basis of the Mortgagor name, original
principal balance and loan number, to the Mortgage Loans it has received, as
identified in Exhibit B to this Indenture, as supplemented (PROVIDED, HOWEVER,
that with respect to those documents described in subclause (b)(vii) of such
section, the Indenture Trustee's obligations shall extend only to documents
actually delivered pursuant to such subclause). In performing any such review,
the Indenture Trustee may conclusively rely on the purported due execution and
genuineness of any such document and on the purported genuineness of any
signature thereon. If the Indenture Trustee finds any document constituting part
of the Mortgage File not to have been executed or received, or to be unrelated
to the Mortgage Loans identified in Exhibit B to this Indenture or to appear to
be defective on its face, the Indenture Trustee shall promptly notify the Seller
of such finding and the Seller's obligation to cure such defect or repurchase or
substitute for the related Mortgage Loan. To the extent the Indenture Trustee
has not received a Mortgage File with respect to any of the Initial Mortgage
Loans by the Closing Date, or any of the related Group 1 Subsequent Mortgage
Loans by the applicable Subsequent Transfer Date, 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 sum of the Cut-off Date Balance and the Original Pre-Funded Amount.

         (b) No later than 180 days after the Closing Date (with respect to the
Initial Mortgage Loans) or the applicable Subsequent Transfer Date (with respect
to the related Group 1 Subsequent Mortgage Loans), the Indenture Trustee will
review, for the benefit of the Bondholders, the Mortgage Files and will execute
and deliver or cause to be executed and delivered to the Seller, a Final

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Certification in the form annexed hereto as Exhibit D. In conducting such
review, the Indenture Trustee will ascertain whether an original of each
document described in subclauses (b)(ii)-(iv) of Section 2.1 of (i) the Mortgage
Loan Purchase Agreement, with respect to the Initial Mortgage Loans, and (ii)
any Subsequent Mortgage Loan Purchase Agreement, with respect to the related
Group 1 Subsequent Mortgage Loans, required to be recorded has been returned
from the recording office with evidence of recording thereon or a certified copy
has been obtained from the recording office. If the Indenture Trustee finds any
document constituting part of the Mortgage File has not been received, or to be
unrelated, determined on the basis of the Mortgagor name, original principal
balance and loan number, to the Mortgage Loans identified in Exhibit B to this
Indenture or to appear defective on its face, the Indenture Trustee shall
promptly notify the Seller.

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

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

         Section 2.05 CONVEYANCE OF THE GROUP 1 SUBSEQUENT MORTGAGE LOANS. (a)
Subject to the conditions set forth in paragraph (b) below and in consideration
of the Indenture Trustee's delivery on the applicable Subsequent Transfer Dates,
to or upon the written order of the Depositor, of all or a portion of the
balance of funds in the Pre-Funding Account, the Depositor shall on any
Subsequent Transfer Date sell, transfer, assign, set over and convey without
recourse to the Trust Estate, but subject to the other terms and provisions of
this Agreement, all of the right, title and interest of the Depositor in and to
(i) the related Group 1 Subsequent Mortgage Loans identified on the Mortgage
Loan Schedule attached to the related Subsequent Transfer Instrument delivered
by the Depositor on such Subsequent Transfer Date, (ii) all interest accruing
thereon on and after the Subsequent Cut-off Date (with respect to the Group 1
Subsequent Mortgage Loans) and all collections in respect of interest and
principal due after the Subsequent Cut-off Date and (iii) all items with respect
to such Group 1 Subsequent Mortgage Loans to be delivered pursuant to Section
2.03 and the other items in the related Mortgage Files; PROVIDED, HOWEVER, that
the Depositor reserves and retains all right, title and interest in and to
principal received and interest accruing on the Group 1 Subsequent Mortgage
Loans prior to the related Subsequent Cut-off Date. The transfer to the
Indenture Trustee for deposit in the Trust Estate by the Depositor of the Group
1 Subsequent Mortgage Loans identified on the Mortgage Loan Schedule shall be
absolute and is intended by the Depositor, the Master Servicer, the Indenture
Trustee and the Bondholders to constitute and to be treated as a sale

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of the Group 1 Subsequent Mortgage Loans by the Depositor to the Trust Estate.
The related Mortgage File for each Group 1 Subsequent Mortgage Loan shall be
delivered to the Indenture Trustee at least three (3) Business Days prior to the
related Subsequent Transfer Date.

         The purchase price paid by the Indenture Trustee from amounts released
from the Pre-Funding Account shall be one-hundred percent (100%) of the
aggregate Stated Principal Balance of the Group 1 Subsequent Mortgage Loans so
transferred (as identified on the Mortgage Loan Schedule provided by the
Depositor).

         (b) The Depositor shall transfer to the Indenture Trustee for deposit
in the Trust Estate the applicable Group 1 Subsequent Mortgage Loans and the
other property and rights related thereto as described in paragraph (a) above,
and the Indenture Trustee shall release such applicable funds from the
Pre-Funding Account, only upon the satisfaction of each of the following
conditions on or prior to the related Subsequent Transfer Date:

                  (i) the Depositor shall have provided the Indenture Trustee
and the Rating Agencies with a timely Addition Notice and shall have provided
any information reasonably requested by the Indenture Trustee with respect to
the Group 1 Subsequent Mortgage Loans;

                  (ii) the Depositor shall have delivered to the Indenture
         Trustee a duly executed Subsequent Transfer Instrument (which the
         Indenture Trustee is hereby authorized to execute), which shall include
         a Mortgage Loan Schedule listing the Group 1 Subsequent Mortgage Loans,
         and the Master Servicer, in its capacity as Originator, shall have
         delivered a computer file containing such Mortgage Loan Schedule to the
         Indenture Trustee at least three (3) Business Days prior to the related
         Subsequent Transfer Date;

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

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

                  (v) the Funding Period shall not have terminated;

                  (vi) the Depositor shall not have selected the applicable
         Group 1 Subsequent Mortgage Loans in a manner that it believed to be
         adverse to the interests of the Bondholders;

                  (vii) the Depositor shall have delivered to the Indenture
         Trustee the related Subsequent Transfer Instrument confirming the
         satisfaction of the conditions specified in this Section 2.05 and,
         pursuant to such Subsequent Transfer Instrument, assigned to the
         Indenture Trustee without recourse for the benefit of the Bondholders
         all the right, title and interest of the Depositor, in, to and under
         the applicable Subsequent Mortgage Loan Purchase Agreement, to the
         extent of the related Group 1 Subsequent Mortgage Loans; and

                                        7

<PAGE>

                  (viii) the Depositor shall have delivered to the Indenture
         Trustee an Opinion of Counsel addressed to the Indenture Trustee and
         the Rating Agencies with respect to the transfer of the applicable
         Group 1 Subsequent Mortgage Loans substantially in the form of the
         Opinion of Counsel delivered to the Indenture Trustee on the Closing
         Date regarding the validity of the conveyance and the true sale of such
         Group 1 Subsequent Mortgage Loans.

         (c) The obligation of the Trust Estate to purchase a Group 1 Subsequent
Mortgage Loan on any Subsequent Transfer Date is subject to the satisfaction of
the conditions set forth in the immediately following paragraph and the accuracy
of the following representations and warranties with respect to each such Group
1 Subsequent Mortgage Loan determined as of the applicable Subsequent Cut-off
Date: (i) such Mortgage Loan may not be 30 or more days delinquent as of the
last day of the month preceding the Subsequent Cut-off Date; (ii) the original
term to stated maturity of such Mortgage Loan will be 360 months; (iii) each
Group 1 Subsequent Mortgage Loan must be an adjustable-rate mortgage loan with a
first lien on the related Mortgaged Property or a fixed rate mortgage loan with
a first lien or second lien on the related Mortgaged Property; (iv) no Group 1
Subsequent Mortgage Loan will have a first Payment Date occurring after
September 1, 2004; (v) the latest maturity date of any Group 1 Subsequent
Mortgage Loan will be no later than June 1, 2034; (vi) none of the Group 1
Subsequent Mortgage Loans will be a buydown loan; (vii) such Mortgage Loan will
have a credit score of not less than 515; (viii) such Mortgage Loan will have a
Mortgage Rate as of the applicable Subsequent Cut-off Date ranging from
approximately 2.250% per annum to approximately 19.950% per annum; (ix) none of
the Group 1 Subsequent Mortgage Loans will be a New York State "high cost" loan;
and (x) such Group 1 Subsequent Mortgage Loan shall have been underwritten in
accordance with the criteria set forth under "The Mortgage Pool--Underwriting
Standards" in the prospectus supplement to the Prospectus.

         (d) In addition, following the purchase of any Group 1 Subsequent
Mortgage Loan by the Trust, the applicable Group 1 Subsequent Mortgage Loans
will as of the related Subsequent Cut-off Date: (i) have a weighted average
Mortgage Rate ranging from 5.000% to 6.000% per annum; (ii) consist of Mortgage
Loans with prepayment charges representing no less than approximately 60% of
such Mortgage Loans; (iii) have a weighted average credit score ranging from 690
to 720; (iv) have no more than 65% of such Mortgage Loans concentrated in the
state of California; (v) have no less than 75% of the Mortgaged Properties
securing Group 1 Loans be owner occupied; (vi) have no less than 66% of the
Mortgaged Properties securing Group 1 Loans be single family detached and de
minimis planned unit developments; (vii) have no more than 29% of the Group 1
Loans be cash-out refinance; (viii) not have any of such group of Group 1
Subsequent Mortgage Loans with a loan-to-value ratio greater than 80% not be
covered by a Primary Insurance Policy or the Radian Lender-Paid PMI Policy; (ix)
have no more than 60% of the Group 1 Loans be mortgage loans with an interest
only period; and (x) together with the Group 1 Loans already included in the
Trust Estate, have no more than 1.00% of such Mortgage Loans (by aggregate
Stated Principal Balance as of the Subsequent Cut-off Date) secured by Mortgaged
Properties located in any one zip code.

         (e) Notwithstanding the foregoing, any Group 1 Subsequent Mortgage Loan
may be rejected by any Rating Agency if the inclusion of any such Group 1
Subsequent Mortgage Loan would adversely affect the ratings of the Bonds. In
addition, minor variances from the characteristics stated above will be
permitted with the consent of the Rating Agencies so long as there are
compensating factors, and the consent of the Rating Agencies to any group of
Group 1 Subsequent

                                        8

<PAGE>

Mortgage Loans shall mean that the representations and warranties set forth in
clauses (c) and (d) above are accurate; PROVIDED, HOWEVER, that the information
furnished to the Rating Agencies in respect of such Group 1 Subsequent Mortgage
Loans is true and correct in all material respects. At least one (1) Business
Day prior to the applicable Subsequent Transfer Date, each Rating Agency shall
notify the Indenture Trustee as to which Group 1 Subsequent Mortgage Loans, if
any, shall not be included in the transfer on such Group 1 Subsequent Transfer
Date; PROVIDED, HOWEVER, that the Master Servicer, in its capacity as
Originator, shall have delivered to each Rating Agency at least three (3)
Business Days prior to such Subsequent Transfer Date a computer file acceptable
to each Rating Agency describing the characteristics specified in paragraphs (c)
and (d) above.

                                        9

<PAGE>

                                   ARTICLE III

                                    Covenants

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

         Section 3.02 MAINTENANCE OF OFFICE OR AGENCY. The Issuer will maintain
an office or agency where, subject to satisfaction of conditions set forth
herein, Bonds may be surrendered for registration of transfer or exchange, and
where notices and demands to or upon the Issuer in respect of the Bonds and this
Indenture may be served. The Issuer hereby initially appoints the Indenture
Trustee to serve as its agent for the foregoing purposes. If at any time the
Issuer shall fail to maintain any such office or agency or shall fail to furnish
the Indenture Trustee with the address thereof, such surrenders may be made at
the office of the Indenture Trustee located at c/o DTC Transfer Services, 55
Water Street, Jeanette Park Entrance, New York, New York 10041, and notices and
demands may be made or served at the Corporate Trust Office, and the Issuer
hereby appoints the Indenture Trustee as its agent to receive all such
surrenders, notices and demands.

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

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

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

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

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<PAGE>

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

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

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

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

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

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

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

                                       11

<PAGE>

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

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

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

                           (i) concurrently, to the Holders of the Class 1-A-1,
         Class 1-A-2 and Class 1-A-3 Bonds, the related Accrued Bond Interest
         for such Class for such Payment Date; and

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

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

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

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

                           (ii) first, concurrently on a pro rata basis, to the
         Holders of the Class 1- A-1, Class 1-A-2 and Class 1-A-3 Bonds, and
         second, sequentially, to the Holders of the Class 1-M-1, Class 1-M-2,
         Class 1-M-3, Class 1-M-4, Class 1-M-5 and Class 1-M-6 Bonds, in that
         order, in an amount equal to the Allocated Realized Loss Amount for
         such Bonds, provided, however, that any Allocated Realized Loss Amount
         allocable to the Class 1-A-3 Bonds will be instead applied to the Class
         1-A-2 Bonds to reduce unpaid Allocated Realized Loss Amounts related to
         the Class 1-A-2 Bonds (if any) until reduced to zero;

                           (iii) first, concurrently, to the Holders of the
         Class 1-A-1, Class 1-A-2 and Class 1-A-3 Bonds, and second,
         sequentially, to the Holders of the Class 1-M-1, Class 1-M- 2, Class
         1-M-3, Class 1-M-4, Class 1-M-5 and Class 1-M-6 Bonds, in that order,
         any Unpaid Interest Shortfall for such Bonds on such Payment Date, to
         the extent not previously reimbursed;

                                       12

<PAGE>

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

                           (v) to the Holders of the Group 2 Bonds, pro rata, an
         amount equal to any related Overcollateralization Increase Amount
         resulting from any previously unreimbursed Realized Losses on the Group
         2 Loans, to the extent that such Realized Losses have not been
         reimbursed by related and non-related Net Monthly Excess Cashflow on
         prior Payment Dates, payable to such holders of the Group 2 Bonds as
         part of the related Principal Distribution Amount as described under
         Section 3.05(g) below;

                           (vi) sequentially, to the Holders of the Class 2-M-1,
         Class 2-M-2 and Class 2-B Bonds in an amount equal to any remaining
         Allocated Realized Loss Amounts for such Bonds;

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

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

         (e) With respect to the Group 1 Derivative Contracts and on each
Payment Date, the Group 1 Net Derivative Contract Payment Amount with respect to
such Payment Date shall be distributed in the following order of priority, in
each case to the extent of amounts available:

                           (i) first, concurrently, to the Holders of the Class
                  1-A-1, Class 1-A-2 and Class 1-A-3 Bonds, and second,
                  sequentially, to the Holders of the Class 1-M-1, Class 1-M-2,
                  Class 1-M-3, Class 1-M-4, Class 1-M-5 and Class 1-M-6 Bonds,
                  in that order, any related Basis Risk Shortfall Carry-Forward
                  Amount for such Payment Date;

                           (ii) on or after the Payment Date in June 2005, any
                  remaining amounts, up to a cumulative amount equal to
                  $80,000,000, shall be included in the Net Monthly Excess
                  Cashflow for the Group 1 Loans and shall be used in Section
                  3.05(d) above; and

                           (iii) 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, the Group 2 Available Funds shall be
distributed in the following manner, to the extent of the Group 2 Available
Funds remaining for such Payment Date, sequentially, to the Holders of the Class
2-A, Class 2-M-1, Class 2-M-2 and Class 2-B Bonds, in that order, the related
Accrued Bond Interest for such Class for such Payment Date

                                       13

<PAGE>

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

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

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

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

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

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

                           (v) to the Holders of the Group 1 Bonds, pro rata, an
         amount equal to any related Overcollateralization Increase Amount
         resulting from any previously unreimbursed Realized Losses on the Group
         1 Loans, to the extent that such Realized Losses have not been
         reimbursed by related and non-related Net Monthly Excess Cashflow on
         prior Payment Dates, payable to such holders of the Group 1 Bonds as
         part of the related Principal Distribution Amount as described under
         Section 3.05(c) above;

                           (vi) first, concurrently on a pro rata basis, to the
         Holders of the Class 1- A-1, Class 1-A-2 and Class 1-A-3 Bonds, and
         second, sequentially, to the Holders of the Class 1-M-1, Class 1-M-2,
         Class 1-M-3, Class 1-M-4, Class 1-M-5 and Class 1-M-6 Bonds, in that
         order, in an amount equal to the Allocated Realized Loss Amount for
         such Bonds, provided, however, that any Allocated Realized Loss Amount
         allocable to the Class 1-A-3 Bonds will be instead applied to the Class
         1-A-2 Bonds to reduce unpaid Allocated Realized Loss Amounts related to
         the Class 1-A-2 Bonds (if any) until reduced to zero;

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

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

                                       14

<PAGE>

         (i) With respect to the Group 2 Derivative Contracts, on each Payment
Date, the Group 2 Net Derivative Contract Payment Amount with respect to such
Payment Date will be allocated to the Group 2 Bonds and the Certificates in the
following order of priority, in each case to the extent of amounts remaining:

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

                  (ii) on or after the Payment Date in June 2005, any remaining
amounts, up to a cumulative amount equal to $8,000,000, shall be included in the
Net Monthly Excess Cashflow for the Group 2 Loans and shall be used in Section
3.05(h) above; and

                  (iii) any remaining amounts to the holders of the
Certificates.

         (j) 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.

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

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

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

         (n) The principal of each Bond 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

                                       15

<PAGE>

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

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

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

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

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

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

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<PAGE>

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

         Section 3.07 OPINIONS AS TO TRUST ESTATE. (a) On the Closing Date, the
Issuer shall furnish to the Indenture Trustee and the Owner Trustee an Opinion
of Counsel either stating that, in the opinion of such counsel, such action has
been taken with respect to the recording and filing 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 2005, the
Issuer shall furnish to the Indenture Trustee an Opinion of Counsel at the
expense of the Issuer either stating that, in the opinion of such counsel, such
action has been taken with respect to the recording, filing, re- recording and
refiling of this Indenture, any indentures supplemental hereto and any other
requisite documents and with respect to the execution and filing of any
financing statements and continuation statements as is necessary to maintain the
lien and first priority security interest in the Collateral and reciting the
details of such action or stating that in the opinion of such counsel no such
action is necessary to maintain such lien and security interest. Such Opinion of
Counsel shall also describe the recording, filing, re-recording and refiling of
this Indenture, any indentures supplemental hereto and any other requisite
documents and the execution and filing of any financing statements and
continuation statements that will, in the opinion of such counsel, be required
to maintain the lien and security interest in the Collateral until December 31
in the following calendar year.

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

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

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

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

                                       17

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

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

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

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

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

         Section 3.10 ANNUAL STATEMENT AS TO COMPLIANCE. The Issuer will deliver
to the Indenture Trustee, by March 1 of each year commencing with the calendar
year 2005, 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 (i) the Mortgage
Loan Purchase Agreement concerning the Seller

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and the Initial Mortgage Loans and (ii) any Subsequent Mortgage Loan Purchase
Agreements concerning the Seller and the Group 1 Subsequent 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 or in the applicable Subsequent
Mortgage Loan Purchase Agreements, the Indenture Trustee shall promptly notify
the Seller of such finding and the Seller's obligation to cure such defect or
repurchase or substitute for the related Mortgage Loan.

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

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

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

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

                           (i) the Person (if other than the Issuer) formed by
         or surviving such consolidation or merger shall be a Person organized
         and existing under the laws of the United States of America or any
         state or the District of Columbia and shall expressly assume, by an
         indenture supplemental hereto, executed and delivered to the Indenture
         Trustee, in form reasonably satisfactory to the Indenture Trustee, the
         due and punctual payment of the principal of and interest on all Bonds,
         and all other amounts payable to the Indenture Trustee and the
         Derivative Contract Counterparty, the payment to the Certificate Paying
         Agent of

                                       19

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         all amounts due to the Certificateholders, and the performance or
         observance of every agreement and covenant of this Indenture on the
         part of the Issuer to be performed or observed, all as provided herein;

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

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

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

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

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

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

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

                                       20

<PAGE>

         Person) shall make all filings with the Commission (and any other
         appropriate Person) required by the Exchange Act in connection with the
         Bonds;

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

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

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

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

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

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

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

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

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

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<PAGE>

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

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

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

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

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

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

         Section 3.26 STATEMENTS TO BONDHOLDERS. On each Payment Date, the
Indenture Trustee and the Certificate Registrar shall prepare and make available
on the Indenture Trustee's website, https://www.corporatetrust.db.com/invr (or
deliver at the recipient's option), to each Bondholder

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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.

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

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

                  (ii) The Collateral constitutes "deposit accounts" 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 that:

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

                  (ii) The Collateral constitutes "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.

                                       23

<PAGE>

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

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

         (d) The Issuer has caused or will have caused, within ten days, the
filing of all appropriate financing statements in the proper filing office in
the appropriate jurisdictions under applicable law in order to perfect the
security interest in all Collateral granted to the Indenture Trustee hereunder
in which a security interest may be perfected by filing. Any financing statement
that is filed in connection with this Section 3.28 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 [RESERVED].

         Section 3.30 [RESERVED].

         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. It shall be a condition to substitution of
any new derivative contracts that there be delivered to the Indenture Trustee an
Opinion of Counsel to the effect that such substitution would not (a) result in
a "substantial modification" of the Bonds under Treasury Regulation section
1.1001-3, or adversely affect the status of the Bonds as indebtedness for
federal income tax purposes, or (b) if 100% of the Certificates are not owned by
IMH Assets Corp., cause the Trust to be subject to an entity level tax for
federal income tax purposes.

         Section 3.32 [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 with the related Remittance Report.

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<PAGE>

         (b) On each Payment Date following the application of all amounts
distributable on such date, to the extent the aggregate Stated Principal Balance
of the Group 1 Loans is less than the aggregate Bond Principal Balances of the
Group 1 Bonds due to Realized Losses on the Group 1 Loans, the Bond Principal
Balances of the (1) Class 1-M-6, Class 1-M-5, Class 1-M-4, Class 1-M-3, Class
1-M-2 and Class 1-M-1 Bonds, in that order, and (2) Class 1-A-1, Class 1-A-2 and
Class 1-A-3 Bonds, pro rata, shall be reduced, in each case until the Bond
Principal Balance thereof has been reduced to zero; provided, however, that any
Realized Losses allocable to the Class1-A-2 Bonds will be instead applied to the
Class 1-A-3 Bonds until the Bond Principal Balance of the Class 1-A-3 Bonds has
been reduced to zero. On each Payment Date following the application of all
amounts distributable on such date, to the extent the aggregate Stated Principal
Balance of the Group 2 Loans is less than the aggregate Bond Principal Balances
of the Group 2 Bonds due to Realized Losses on the Group 2 Loans, the Bond
Principal Balances of the of the Class 2-B, Class 2-M-2 and Class 2-M- 1 Bonds,
in that order, shall be reduced, until the Bond Principal Balance thereof has
been reduced to zero. All Realized Losses allocated to a Class of Bonds will be
allocated in proportion to the Percentage Interests evidenced thereby.

         Section 3.34 THE GROUP 1 PRE-FUNDING ACCOUNT. (a) No later than the
Closing Date, the Indenture Trustee shall establish and maintain a segregated
trust account that is an Eligible Account, which shall be titled "Pre-Funding
Account, Deutsche Bank National Trust Company, as indenture trustee for the
registered holders of IMH Assets Corp., Collateralized Asset-Backed Bonds,
Series 2004-5" (the "Pre-Funding Account"). The Indenture Trustee shall,
promptly upon receipt, deposit in the Pre-Funding Account and retain therein the
Original Pre-Funded Amount remitted on the Closing Date to the Indenture Trustee
by the Depositor. Funds deposited in the Pre-Funding Account shall be held in
trust by the Indenture Trustee for the Bondholders for the uses and purposes set
forth herein.

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

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<PAGE>

the amount of any net loss incurred in respect of any such Eligible Investment
immediately upon realization of such loss without any right of reimbursement
therefor.

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

                  (i) On any Subsequent Transfer Date, the Indenture Trustee
shall withdraw from the Pre-Funding Account an amount equal to 100% of the
aggregate Stated Principal Balances of the related Group 1 Subsequent Mortgage
Loans transferred and assigned to the Indenture Trustee for deposit in the
Mortgage Pool on such Subsequent Transfer Date and pay such amount to or upon
the order of the Issuer upon satisfaction of the conditions set forth in Section
2.05 with respect to such transfer and assignment;

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

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

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

         Section 3.35 [RESERVED].

         Section 3.36 GRANT OF THE GROUP 1 SUBSEQUENT MORTGAGE LOANS. In
consideration of the delivery on each Subsequent Transfer Date to or upon the
order of the Issuer of all or a portion of the amount on deposit in the
Pre-Funding Account, the Depositor shall, to the extent of the availability
thereof, on such Subsequent Transfer Date during the Funding Period, grant to
the Indenture Trustee all of its rights, title and interest in the Group 1
Subsequent Mortgage Loans and simultaneously with the Grant of the Group 1
Subsequent Mortgage Loans, the Depositor will cause the related Mortgage File to
be delivered to the Indenture Trustee.

         Section 3.37 [RESERVED].

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                                   ARTICLE IV

               The Bonds; Satisfaction and Discharge of Indenture

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

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

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

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

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

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

                                       27

<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                  (A) either

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

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

                           a.       have become due and payable,

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

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

and the Issuer, in the case of a. or b. above, has irrevocably deposited or
caused to be irrevocably deposited with the Indenture Trustee cash or direct
obligations of or obligations guaranteed by 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

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Trustee a verification report from a nationally recognized accounting firm
certifying that the amounts deposited with the Indenture Trustee are sufficient
to pay and discharge the entire indebtedness of such Bonds, or, in the case of
c. above, the Issuer shall have complied with all requirements of Section 8.07
hereof,

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

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

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

         Section 4.12 [RESERVED].

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

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

         If temporary Bonds are issued, the Issuer will cause Definitive Bonds
to be prepared without unreasonable delay. After the preparation of the
Definitive Bonds, the temporary Bonds shall be exchangeable for Definitive Bonds
upon surrender of the temporary Bonds at the office of the Indenture Trustee's
agent located at DTC Transfer Services, located at 55 Water Street, Jeanette
Park Entrance, New York, New York 10041, without charge to the Holder. Upon
surrender for

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

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                                    ARTICLE V

                              Default and Remedies

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

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

         At any time after such declaration of acceleration of maturity with
respect to an Event of Default has been made and before a judgment or decree for
payment of the money due has been obtained by the Indenture Trustee as
hereinafter in this Article V provided, Holders of 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; and

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

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

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

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

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

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

         (c) If an Event of Default occurs and is continuing, the Indenture
Trustee, subject to the provisions of Section 10.16 hereof may, as more
particularly provided in Section 5.04 hereof, in its discretion, proceed to
protect and enforce its rights and the rights of the Bondholders, by such
appropriate Proceedings, as directed in writing by 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 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 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:

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<PAGE>

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

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<PAGE>

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

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

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

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

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

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

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

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

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                  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 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,
         to the Class 1-A-1, Class 1-A-2, Class 1-A-3 and Class 2-A Bondholders,
         concurrently, second, to the Class 1-M-1 Bondholders and Class 2- M-1
         Bondholders, concurrently, third, to the Class 1-M-2 Bondholders and
         Class 2-M-2 Bondholders, concurrently, fourth, to the Class 1-M-3
         Bondholders, fifth, to the Class 1-M-4 Bondholders, sixth, to the Class
         1-M-5 Bondholders, seventh, to the Class 1-M-6 Bondholders, and eighth
         to the Class 2-B Bondholders according to the amounts due and payable
         on the Bonds for interest;

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

                  FIFTH: to the Bondholders, first, to the Class 1-A-1, Class
         1-A-2 and Class 1-A-3 Bondholders, concurrently, second, to the Class
         1-M-1 Bondholders and Class 2-M-1 Bondholders, concurrently, third, to
         the Class 1-M-2 Bondholders and Class 2-M-2 Bondholders, concurrently,
         fourth, to the Class 1-M-3 Bondholders, fifth, to the Class 1-M-4
         Bondholders, sixth, to the Class 1-M-5 Bondholders, seventh, to the
         Class 1-M-6 Bondholders, and eighth to the Class 2-B Bondholders, the
         amount of any related Allocated Realized Loss Amount not previously
         paid;

                  SIXTH: to the Bondholders for amounts due and unpaid on the
         Bonds with respect to any related Unpaid Interest Shortfalls, first, to
         the Class 1-A-1, Class 1-A-2, Class 1-A-3 and Class 2-A Bondholders,
         concurrently, second, to the Class 1-M-1 Bondholders and Class 2-M-1
         Bondholders, concurrently, third, to the Class 1-M-2 Bondholders and
         Class 2-M-2 Bondholders, concurrently, fourth, to the Class 1-M-3
         Bondholders, fifth, to the Class 1-M-4 Bondholders, sixth, to the Class
         1-M-5 Bondholders, seventh, to the Class 1-M-6 Bondholders, and eighth
         to the Class 2-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;

                  SEVENTH: to the Bondholders for amounts due and unpaid on the
         Bonds with respect to any related Basis Risk Shortfall Carry-Forward
         Amounts, first, to the Class 1-A-1, Class 1-A-2, Class 1-A-3 and Class
         2-A Bondholders, concurrently, second, to the Class 1- M-1 Bondholders
         and Class 2-M-1 Bondholders, concurrently, third, to the Class 1-M-2
         Bondholders and Class 2-M-2 Bondholders, concurrently, fourth, to the
         Class 1-M-3 Bondholders, fifth, to the Class 1-M-4 Bondholders, sixth,
         to the Class 1-M-5 Bondholders, seventh, to the Class 1-M-6
         Bondholders, and eighth to the Class 2-B Bondholders,

                                       38

<PAGE>

         according to the amounts due and payable on the Bonds with respect
         thereto, from amounts available in the Trust Estate for the
         Bondholders;

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

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

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

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

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

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

                           (ii) the Holders of not less than 25% of the
         aggregate Bond Principal Balances of the Bonds have made a written
         request to the Indenture Trustee to institute such Proceeding in
         respect of such Event of Default in its own name as Indenture Trustee
         hereunder;

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

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

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<PAGE>

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

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

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

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

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

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

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

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<PAGE>

         Section 5.11 CONTROL BY BONDHOLDERS. The Holders of a majority of the
aggregate Bond Principal Balances of Bonds shall have the right to direct the
time, method and place of conducting any Proceeding for any remedy available to
the Indenture Trustee with respect to the Bonds or exercising any trust or power
conferred on the Indenture Trustee; provided that:

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

                           (ii) any direction to the Indenture Trustee to sell
         or liquidate the Trust Estate shall be by Holders of Bonds representing
         not less than 100% of the Bond Principal Balances of the Bonds; and

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

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

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

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

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

                                       41

<PAGE>

principal of or interest on any Bond on or after the respective due dates
expressed in such Bond and in this Indenture.

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

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

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

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

                  (2) the proceeds of such Sale would be not less than the
         entire amount which would be payable to the Bondholders under the Bonds
         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), the Holders
         of Bonds representing at least 100% of the Bond Principal Balances of
         the Bonds consent to such Sale.

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

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

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<PAGE>

as trustee for the benefit of the Holders of the Bonds, shall bid an amount at
least $1.00 more than the highest other bid.

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

                  (1) any Holder or Holders of Bonds may bid for and purchase
         the property offered for sale, and upon compliance with the terms of
         sale may hold, retain and possess and dispose of such property, without
         further accountability, and may, in paying the purchase money therefor,
         deliver any Bonds or claims for interest thereon in lieu of cash up to
         the amount which shall, upon distribution of the net proceeds of such
         sale, be payable thereon, and such Bonds, in case the amounts so
         payable thereon shall be less than the amount due thereon, shall be
         returned to the Holders thereof after being appropriately stamped to
         show such partial payment;

                  (2) the Indenture Trustee, may bid for and acquire the
         property offered for Sale in connection with any Sale thereof, and,
         subject to any requirements of, and to the extent permitted by,
         applicable law in connection therewith, may purchase all or any portion
         of the Trust Estate in a private sale, and, in lieu of paying cash
         therefor, may make settlement for the purchase price by crediting the
         gross Sale price against the sum of (A) the amount which would be
         distributable to the Holders of the Bonds and Holders of Certificates
         as a result of such Sale in accordance with Section 5.04(b) hererof 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

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<PAGE>

or property collected by the Indenture Trustee shall be applied in accordance
with Section 5.04(b) hereof.

         Section 5.17 PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS. (a)
Promptly following a request from the Indenture Trustee to do so, the Issuer in
its capacity as holder of the Mortgage Loans, shall take all such lawful action
as the Indenture Trustee may request to cause the Issuer to compel or secure the
performance and observance by the Seller and the Master Servicer, as applicable,
of each of their obligations to the Issuer under or in connection with the
Mortgage Loan Purchase Agreement, any Subsequent 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, any Subsequent Mortgage
Loan Purchase Agreement and the Servicing Agreement to the extent and in the
manner directed by the Indenture Trustee, as pledgee of the Mortgage Loans,
including the transmission of notices of default on the part of the Seller or
the Master Servicer thereunder and the institution of legal or administrative
actions or proceedings to compel or secure performance by the Seller or the
Master Servicer of each of their obligations under the Mortgage Loan Purchase
Agreement, any Subsequent Mortgage Loan Purchase Agreement and the Servicing
Agreement.

         (b) The Indenture Trustee, as pledgee of the Mortgage Loans, may, and
at the direction (which direction shall be in writing or by telephone (confirmed
in writing promptly thereafter)) of the Holders of 66-2/3% of the Bond Principal
Balances of the Bonds, 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, any Subsequent 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, any
Subsequent 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.

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                                   ARTICLE VI

                              The Indenture Trustee

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

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

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

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

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

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

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

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

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

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

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

                                       45

<PAGE>

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

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

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

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

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

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

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

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

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

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

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<PAGE>

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

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

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

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

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

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

         Section 6.07 COMPENSATION AND INDEMNITY. The Issuer shall pay to the
Indenture Trustee on each Payment Date reasonable compensation for its services.
The amount of the Indenture Trustee's Fee shall be paid by the Master Servicer
to the Indenture Trustee on each Payment Date pursuant to Section 3.07(a)(x) of
the Servicing Agreement and all amounts owing to the Indenture Trustee hereunder
(including amounts owing from the Issuer for indemnification and otherwise) in
excess of such amount shall be paid solely as provided in Section 3.05(d)(ix),
Section 3.05(h)(viii) and Section 5.04(b) hereof. The Indenture Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Issuer shall reimburse the Indenture Trustee for all
reasonable out-of-pocket expenses incurred or made by it, including costs of
collection, in addition to compensation for its services. Such expenses shall
include reasonable compensation and expenses, disbursements and advances of the
Indenture Trustee's agents, counsel, accountants and

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experts. The Issuer shall indemnify the Indenture Trustee against any and all
loss, liability or expense (including attorneys' fees) incurred by it in
connection with the administration of this Trust and the performance of its
duties hereunder. The Indenture Trustee shall notify the Issuer promptly of any
claim for which it may seek indemnity. Failure by the Indenture Trustee to so
notify the Issuer shall not relieve the Issuer of its obligations hereunder. The
Issuer shall defend any such claim, and the Indenture Trustee may have separate
counsel and the Issuer shall pay the fees and expenses of such counsel. The
Issuer is not obligated to reimburse any expense or indemnify against any loss,
liability or expense incurred by the Indenture Trustee through the Indenture
Trustee's own willful misconduct, negligence or bad faith.

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

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

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

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

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

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

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

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

         If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Holders of

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a majority of Bond Principal Balances of the Bonds may petition any court of
competent jurisdiction for the appointment of a successor Indenture Trustee.

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

         Section 6.09 SUCCESSOR INDENTURE TRUSTEE BY MERGER. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all of its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation, without any further act, shall be the successor Indenture Trustee;
provided, that such corporation or banking association shall be otherwise
qualified and eligible under Section 6.11 hereof. The Indenture Trustee shall
provide the Rating Agencies with prior written notice of any such transaction.

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

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

         (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,

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         duties and obligations (including the holding of title to the Trust
         Estate or any portion thereof in any such jurisdiction) shall be
         exercised and performed singly by such separate trustee or co-trustee,
         but solely at the direction of the Indenture Trustee;

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

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

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

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

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

         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

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<PAGE>

         to own its properties and to conduct its business as such properties
         are currently owned and such business is presently conducted;

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

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

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

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

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

         (b) to authenticate and deliver the Bonds substantially in the form
prescribed by Exhibits A-1, A-2 and A-3 to this Indenture in accordance with the
terms of this Indenture; and

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

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

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                                   ARTICLE VII

                         Bondholders' Lists and Reports

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

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

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

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

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

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

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

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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) 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.corporatetrust.db.com/invr or deliver at the
recipient's option to each Bondholder and each Certificateholder, the Derivative
Contract Counterparty, the Depositor, the Owner Trustee, the Certificate Paying
Agent and each Rating Agency, a statement setting forth the following
information as to the Bonds, to the extent applicable:

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

                           (ii) the Group 1 Available Funds, Group 2 Available
         Funds and Net Monthly Excess Cash Flow, with respect to the Group 1
         Loans and Group 2 Loans, payable to each Class of Bondholders for such
         Payment Date, the Basis Risk Shortfall Carry-Forward Amount on each
         Class of Bonds for such Payment Date and the aggregate Unpaid Interest
         Shortfall on each Class of Bonds for such Payment Date;

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

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

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

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

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<PAGE>

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

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

                           (ix) the number and aggregate Stated Principal
         Balances of Mortgage Loans (a) as to which the Monthly Payment is
         delinquent for 31-60 days, 61-90 days, 91 or more days, respectively,
         (b) in foreclosure and (c) that have become REO Property, in each case
         as of the end of the preceding calendar month, determined in the
         aggregate and separately for Loan Group 1 and Loan Group 2;

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

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

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

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

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

                           (xv) the book value of any REO Property;

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

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

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<PAGE>

                           (xviii) the amount withdrawn from the Pre-Funding
         Account and used to make payments to Bondholders on that Payment Date,
         the amount remaining on deposit following such Payment Date, and the
         amount withdrawn from the Pre-Funding Account used to buy certain Group
         1 Subsequent Mortgage Loans prior to such Payment 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 Group 1 and Group 2 Net Derivative Contract
Payment Amount furnished to the Indenture Trustee pursuant to the Derivative
Contracts in its preparation of its Statement to Bondholders.

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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 and the Derivative
Contract Counterparty, the Payment Account as provided in Section 3.01 hereof.

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

         (c) On each Payment Date, the Indenture Trustee shall pay itself the
Indenture Trustee's Fee for such Payment Date and then shall pay the Derivative
Contract Counterparty the Group 1 Net Derivative Contract Payment Amount and
Group 2 Net Derivative Contract Payment Amount, in each case excluding any
Additional Derivative Contract Counterparty Payment, 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.

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

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<PAGE>

to the Indenture Trustee, stating the legal effect of any such action, outlining
the steps required to complete the same, and concluding that all conditions
precedent to the taking of such action have been complied with.

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

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

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

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

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

         Section 8.07 OPTIONAL REDEMPTION OF THE BONDS. (a) The Majority
Certificateholder shall have the option to redeem the Group 1 Bonds in whole,
but not in part, on any Payment Date on or after the earlier of (i) the Payment
Date on which the aggregate Stated Principal Balance of the Group 1 Loans as of
the end of the prior Due Period is less than or equal to 20% of the aggregate
Group 1 Cut-off Date Balance and (ii) the Payment Date occurring in June 2014.
The Majority Certificateholder shall have the option to redeem the Group 2 Bonds
in whole, but not in part, on any Payment Date on or after the earlier of (i)
the Payment Date on which the aggregate Stated Principal Balance of the Group 2
Loans as of the end of the prior Due Period is less than or equal to 20% of the
aggregate Group 2 Cut-off Date Balance and (ii) the Payment Date occurring in
June 2014. The aggregate redemption price for each Group of Bonds will be equal
to the unpaid Bond Principal Balance of such Bonds as of the Payment Date on
which the proposed redemption will take place in accordance with the foregoing,
together with accrued and unpaid interest thereon at the applicable

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Bond Interest Rate through such Payment Date (including any related Unpaid
Interest Shortfall and Basis Risk Shortfall Carry-Forward Amount), plus an
amount sufficient to pay in full all amounts owing to the Indenture Trustee
under this Indenture (which amounts shall be specified in writing upon request
of the Issuer by the Indenture Trustee) and plus an amount equal to any amounts
owing to the Derivative Contract Counterparty under the Derivative Contracts.

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

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                                   ARTICLE IX

                             Supplemental Indentures

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

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

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

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

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

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

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

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

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

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

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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 and
prior notice to the Rating Agencies, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Holders of the Bonds under this
Indenture; PROVIDED, HOWEVER, that such action as evidenced by an Opinion of
Counsel, (i) is permitted by this Indenture, and shall not (ii) adversely affect
in any material respect the interests of any Bondholder or (iii) if 100% of the
Certificates are not owned by IMH Assets Corp., cause the Issuer to be subject
to an entity level tax for federal income tax purposes.

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

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

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

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

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

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

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

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

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

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

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

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

         Promptly after the execution by the Issuer and the Indenture Trustee of
any supplemental indenture pursuant to this Section 9.02, the Indenture Trustee
shall mail to the Holders of the Bonds to which such amendment or supplemental
indenture relates a notice setting forth in general terms the substance of such
supplemental indenture. Any failure of the Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.

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

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

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

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

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                                    ARTICLE X

                                  Miscellaneous

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

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

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

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

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

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

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

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

                           (ii) Whenever the Issuer is required to furnish to
         the Indenture Trustee an Officer's Certificate certifying or stating
         the opinion of any signer thereof as to the matters described in clause
         (i) above, the Issuer shall also deliver to the Indenture Trustee an
         Independent Certificate from a nationally recognized accounting firm as
         to the same matters, if the fair value of the securities to be so
         deposited and of all other such securities made the

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         basis of any such withdrawal or release since the commencement of the
         then current fiscal year of the Issuer, as set forth in the
         certificates delivered pursuant to clause (i) above and this clause
         (ii), is 10% or more of the Bond Principal Balances of the Bonds, but
         such a certificate need not be furnished with respect to any securities
         so deposited, if the fair value thereof as set forth in the related
         Officer's Certificate is less than $25,000 or less than one percent of
         the Bond Principal Balances of the Bonds.

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

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

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

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

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

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

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

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

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

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

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

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

                           (ii) the Issuer by the Indenture Trustee or by any
         Bondholder shall be sufficient for every purpose hereunder if in
         writing and mailed first-class, postage prepaid

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         to the Issuer addressed to: Impac CMB Trust Series 2004-5, in care of
         Wilmington Trust Company, Rodney Square North, 1100 North Market
         Street, Wilmington, Delaware 19990- 0001, Attention: Corporate Trust
         Administration, or at any other address previously furnished in writing
         to the Indenture Trustee by the Issuer. The Issuer shall promptly
         transmit any notice received by it from the Bondholders to the
         Indenture Trustee.

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

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

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

         In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Bondholders 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.

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

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

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

         Section 10.09 SEPARABILITY. In case any provision in this Indenture or
in the Bonds shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.

         Section 10.10 [RESERVED].

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

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

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

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

         Section 10.15 ISSUER OBLIGATION. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Bonds or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of

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a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director, employee or agent of the Indenture Trustee or the
Owner Trustee in its individual capacity, any holder of a beneficial interest in
the Issuer, the Owner Trustee or the Indenture Trustee or of any successor or
assign of the Indenture Trustee or the Owner Trustee in its individual capacity,
except as any such Person may have expressly agreed (it being understood that
the Indenture Trustee and the Owner Trustee have no such obligations in their
individual capacity) and except that any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity. For all purposes of this Indenture, in
the performance of any duties or obligations of the Issuer hereunder, the Owner
Trustee shall be subject to, and entitled to the benefits of, the terms and
provisions of Article VI, VII and VIII of the Trust Agreement.

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

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

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         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 2004-5, 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

                                            DEUTSCHE BANK NATIONAL TRUST
                                            COMPANY, as Indenture Trustee

                                            By:     /s/ Alan Sueda
                                                   -----------------------------
                                            Name:   Alan Sueda
                                            Title:  Associate

                                            By:      /s/ Jeremy Conyers
                                                   -----------------------------
                                            Name:   Jeremy Conyers
                                            Title:  Associate

<PAGE>

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

         On this 28th day of May, 2004, 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 CALIFORNIA         )
                            ) ss.:
COUNTY OF ORANGE            )

         On this 28th day of May, 2004, before me personally appeared
____________________ to me known, who being by me duly sworn, did depose and
say, that he is an _________________________ of the Indenture Trustee, one of
the corporations described in and which executed the above instrument; and that
she signed her name thereto by like order.

                                                    Notary Public

                                                    ___________________________
                                                    NOTARY PUBLIC

[NOTARIAL SEAL]

<PAGE>

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

         On this 28th day of May, 2004, 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>

                                   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 2004-5
                        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 2004-5 (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 June 2004
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 2004-5 (the "Bonds"), issued under an
Indenture dated as of May 28, 2004 (the "Indenture"), between the Issuer and
Deutsche Bank National Trust Company, as indenture trustee (the "Indenture
Trustee", which term includes any successor Indenture Trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights thereunder of the
Issuer, the Indenture Trustee, and the Holders of the Bonds and the terms upon
which the Bonds are to be authenticated and delivered. All terms used in this
Bond which are defined in the Indenture shall have the meanings assigned to them
in the Indenture.

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

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

                                      A-1-2

<PAGE>

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

         The Group 1 Bonds are subject to redemption in whole, but not in part,
by the Majority Certificateholder, on or after the earlier of (i) the payment
date on which the aggregate Stated Principal Balance of the Group 1 Loans as of
the end of the prior Due Period is less than or equal to 20% of the aggregate
Stated Principal Balance of the Group 1 Loans as of the Cut-off Date and the
Group 1 Original Pre-Funded Amount and (ii) the payment date occurring in June
2014. The Group 2 Bonds are subject to redemption in whole, but not in part, by
the Majority Certificateholder, on or after the earlier of (i) the payment date
on which the aggregate Stated Principal Balance of the Group 2 Loans as of the
end of the prior Due Period is less than or equal to 20% of the aggregate Stated
Principal Balance of the Group 2 Loans as of the Cut-off Date and (ii) the
payment date occurring in June 2014.

         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.

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

                                      A-1-3

<PAGE>

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

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

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

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

         Prior to the due presentment for registration of transfer of this Bond,
the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Bond is registered as the owner
of such Bond (i) on the applicable Record Date for the purpose of

                                      A-1-4

<PAGE>

making payments and interest of such Bond, and (ii) on any other date for all
other purposes whatsoever, as the owner hereof, whether or not this Bond be
overdue, and neither the Issuer, the Indenture Trustee nor any such agent of the
Issuer or the Indenture Trustee shall be affected by notice to the contrary.

         The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Bonds under the Indenture at any
time by the Issuer and the Holders of a majority of all Bonds at the time
outstanding. The Indenture also contains provisions permitting the Holders of
Bonds representing specified percentages of the aggregate Bond Principal Balance
of the Bonds on behalf of the Holders of all the Bonds, to waive any past
Default under the Indenture and its consequences. Any such waiver by the Holder,
at the time of the giving thereof, of this Bond (or any one or more predecessor
Bonds) shall bind the Holder of every Bond issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not notation
of such consent or waiver is made upon such Bond. The Indenture also permits the
Issuer and the Indenture Trustee to amend or 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: May 28, 2004

                                           IMPAC CMB TRUST SERIES 2004-5

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

                                           By:_________________________________
                                           Authorized Signatory

                INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Class [_-A-_] Bonds referred to in the within-mentioned
Indenture.

DEUTSCHE BANK NATIONAL TRUST COMPANY, as Indenture Trustee

By:______________________________________
    Authorized Signatory

                                      A-1-6

<PAGE>

                                  ABBREVIATIONS
                                  -------------

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

         TEN COM               --      as tenants in common
         TEN ENT               --      as tenants by the entireties
         JT TEN                --      as joint tenants with right of
                                       survivorship and not as tenants in common
UNIF GIFT MIN ACT              --      __________ Custodian
                                       __________________________________
                                            (Cust)          (Minor)

                                       under Uniform Gifts to Minor Act
                                       _______________________
                                                                       (State)

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

                                      A-1-7

<PAGE>

                                   ASSIGNMENT
                                   ----------

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

         PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE:

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

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

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

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

Dated: ________________        ________________________________________________

Signature Guaranteed by _______________________________________________________

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

                                      A-1-8

<PAGE>

                                   EXHIBIT A-2

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

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

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

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

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

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

                                      A-2-1

<PAGE>

                          IMPAC CMB TRUST SERIES 2004-5
                        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 2004-5 (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 June 2004 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 2004-5 (the "Bonds"), issued under an
Indenture dated as of May 28, 2004 (the "Indenture"), between the Issuer and
Deutsche Bank National Trust Company, 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.

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

                                      A-2-2

<PAGE>

         The Group 1 Bonds are subject to redemption in whole, but not in part,
by the Majority Certificateholder, on or after the earlier of (i) the payment
date on which the aggregate Stated Principal Balance of the Group 1 Loans as of
the end of the prior Due Period is less than or equal to 20% of the aggregate
Stated Principal Balance of the Group 1 Loans as of the Cut-off Date and the
Group 1 Original Pre-Funded Amount and (ii) the payment date occurring in June
2014. The Group 2 Bonds are subject to redemption in whole, but not in part, by
the Majority Certificateholder, on or after the earlier of (i) the payment date
on which the aggregate Stated Principal Balance of the Group 2 Loans as of the
end of the prior Due Period is less than or equal to 20% of the aggregate Stated
Principal Balance of the Group 2 Loans as of the Cut-off Date and (ii) the
payment date occurring in June 2014.

         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

                                      A-2-3

<PAGE>

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

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

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

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

         Prior to the due presentment for registration of transfer of this Bond,
the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Bond is registered as the owner
of such Bond (i) on the applicable Record Date 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

                                      A-2-4

<PAGE>

Indenture Trustee nor any such agent of the Issuer or the Indenture Trustee
shall be affected by notice to the contrary.

         The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Bonds under the Indenture at any
time by the Issuer and the Holders of a majority of all Bonds at the time
outstanding. The Indenture also contains provisions permitting the Holders of
Bonds representing specified percentages of the aggregate Bond Principal Balance
of the Bonds on behalf of the Holders of all the Bonds, to waive any past
Default under the Indenture and its consequences. Any such waiver by the Holder,
at the time of the giving thereof, of this Bond (or any one or more predecessor
Bonds) shall bind the Holder of every Bond issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not notation
of such consent or waiver is made upon such Bond. The Indenture also permits the
Issuer and the Indenture Trustee to amend or 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: May 28, 2004

                                      IMPAC CMB TRUST SERIES 2004-5

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

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

                INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Class [_]-M-[_] Bonds referred to in the within-mentioned
Indenture.

DEUTSCHE BANK NATIONAL TRUST COMPANY, as Indenture Trustee

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

                                      A-2-6

<PAGE>

                                  ABBREVIATIONS
                                  -------------

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

         TEN COM                 --      as tenants in common
         TEN ENT                 --      as tenants by the entireties
         JT TEN                  --      as joint tenants with right of
                                         survivorship and not as tenants
                                         in common
UNIF GIFT MIN ACT                --      __________ Custodian
                                         _________________________________
                                              (Cust)               (Minor)

                                         under Uniform Gifts to Minor Act
                                         _______________________
                                                                        (State)

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

                                      A-2-7

<PAGE>

                                   ASSIGNMENT
                                   ----------

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

         PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE:

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

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

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

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

Dated: ________________        ________________________________________________

Signature Guaranteed by _______________________________________________________

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

                                      A-2-8

<PAGE>

                                   EXHIBIT A-3

                             FORM OF CLASS 2-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 2004-5
                        COLLATERALIZED ASSET-BACKED BONDS
                                    CLASS 2-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 2004-5 (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 May 2004 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 2004-5 (the "Bonds"), issued under an
Indenture dated as of May 28, 2004 (the "Indenture"), between the Issuer and
Deutsche Bank National Trust Company, 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.

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

                                      A-3-2

<PAGE>

         The Group 1 Bonds are subject to redemption in whole, but not in part,
by the Majority Certificateholder, on or after the earlier of (i) the payment
date on which the aggregate Stated Principal Balance of the Group 1 Loans as of
the end of the prior Due Period is less than or equal to 20% of the aggregate
Stated Principal Balance of the Group 1 Loans as of the Cut-off Date and the
Group 1 Original Pre-Funded Amount and (ii) the payment date occurring in June
2014. The Group 2 Bonds are subject to redemption in whole, but not in part, by
the Majority Certificateholder, on or after the earlier of (i) the payment date
on which the aggregate Stated Principal Balance of the Group 2 Loans as of the
end of the prior Due Period is less than or equal to 20% of the aggregate Stated
Principal Balance of the Group 2 Loans as of the Cut-off Date and (ii) the
payment date occurring in June 2014.

         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 2-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 2-B Bonds pursuant to the Indenture
and the rights conveyed to the Issuer under the Indenture.

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

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

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

                                                       A-3-3

<PAGE>

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

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

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

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

         Prior to the due presentment for registration of transfer of this Bond,
the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Bond is registered as the owner
of such Bond (i) on the applicable Record Date 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

                                      A-3-4

<PAGE>

Indenture Trustee nor any such agent of the Issuer or the Indenture Trustee
shall be affected by notice to the contrary.

         The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Bonds under the Indenture at any
time by the Issuer and the Holders of a majority of all Bonds at the time
outstanding. The Indenture also contains provisions permitting the Holders of
Bonds representing specified percentages of the aggregate Bond Principal Balance
of the Bonds on behalf of the Holders of all the Bonds, to waive any past
Default under the Indenture and its consequences. Any such waiver by the Holder,
at the time of the giving thereof, of this Bond (or any one or more predecessor
Bonds) shall bind the Holder of every Bond issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not notation
of such consent or waiver is made upon such Bond. The Indenture also permits the
Issuer and the Indenture Trustee to amend or 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: May 28, 2004

                                    IMPAC CMB TRUST SERIES 2004-5

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

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

                INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Class 2-B Bonds referred to in the within-mentioned
Indenture.

DEUTSCHE BANK NATIONAL TRUST COMPANY, as Indenture Trustee

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

                                      A-3-6

<PAGE>

                                  ABBREVIATIONS
                                  -------------

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

         TEN COM                  --      as tenants in common
         TEN ENT                  --      as tenants by the entireties
         JT TEN                   --      as joint tenants with right of
                                          survivorship and not as tenants
                                          in common
UNIF GIFT MIN ACT                 --      __________ Custodian
                                          ________________________________
                                               (Cust)              (Minor)

                                          under Uniform Gifts to Minor Act
                                          _______________________
                                                                       (State)

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

                                      A-3-7

<PAGE>

                                   ASSIGNMENT
                                   ----------

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

         PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE:

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

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

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

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

Dated: ________________        ________________________________________________

Signature Guaranteed by _______________________________________________________

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

                                      A-3-8

<PAGE>

                                    EXHIBIT B

                             MORTGAGE LOAN SCHEDULE

                                (Filed Manually)

                                       B-1

<PAGE>

                                    EXHIBIT C

                          FORM OF INITIAL CERTIFICATION

                                                                        , 200_
                                              --------------------------

[Issuer]

[Master Servicer]

Attention:  Impac CMB Trust Series 2004-5

         Re:      Indenture dated as of May 28, 2004, between Impac CMB Trust
                  Series 2004- 5 and Deutsche Bank National Trust Company
                  -------------------------------------------------------

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 May 28, 2004 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.

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

                                       C-1

<PAGE>

                                               DEUTSCHE BANK NATIONAL
                                               TRUST COMPANY,
                                               as Indenture Trustee

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

                                       C-2

<PAGE>

                                    EXHIBIT D

                           FORM OF FINAL CERTIFICATION

                                                                       , 200__
                                             --------------------------

[Issuer]

[Master Servicer]

Attention:  Impac CMB Trust Series 2004-5

         Re:      Indenture, dated as of May 28, 2004, between Impac CMB Trust
                  Series 2004- 5 and Deutsche Bank National Trust Company
                  -------------------------------------------------------

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 May 28, 2004, 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.

                                              DEUTSCHE BANK NATIONAL
                                              TRUST COMPANY,
                                              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 SUBSEQUENT TRANSFER INSTRUMENT

         Pursuant to this Subsequent Transfer Instrument, dated
[_______________] (the "Instrument"), between IMH Assets Corp. as Seller (the
"Company"), and Deutsche Bank National Trust Company as indenture trustee of the
IMH Assets Corp., Collateralized Asset-Backed Bonds, Series 2004-5, as purchaser
(the "Indenture Trustee"), on behalf of Impac CMB Trust Series 2004-5 (the
"Issuer"), as purchaser, and pursuant to the Indenture, dated as of May 28, 2004
(the "Indenture"), between the Issuer and the Indenture Trustee, as indenture
trustee, the Company and the Indenture Trustee agree to the sale by the Company
and the purchase by the Indenture Trustee in trust, on behalf of the Trust, of
the Group 1 Subsequent Mortgage Loans on the attached Schedule 1 of Mortgage
Loans (the "Group 1 Subsequent Mortgage Loans").

         Capitalized terms used but not otherwise defined herein shall have the
meanings set forth in the Indenture.

                  Section 1. CONVEYANCE OF GROUP 1 SUBSEQUENT MORTGAGE LOANS;
ACCEPTANCE OF MORTGAGE LOANS BY THE INDENTURE TRUSTEE.

                  (a) The Company does hereby sell, transfer, assign, set over
and convey to the Indenture Trustee in trust, on behalf of the Trust, without
recourse, all of its right, title and interest in and to the Group 1 Subsequent
Mortgage Loans, including all amounts due on the Group 1 Subsequent Mortgage
Loans after the related Subsequent Cut-off Date, and all items with respect to
the Group 1 Subsequent Mortgage Loans to be delivered pursuant to Section 2.05
of the Indenture; provided, however that the Company reserves and retains all
right, title and interest in and to amounts due on the Group 1 Subsequent
Mortgage Loans on or prior to the related Subsequent Cut-off Date. The Company,
contemporaneously with the delivery of this Agreement, has delivered or caused
to be delivered to the Indenture Trustee each item set forth in Section 2.05 of
the Indenture. The transfer to the Indenture Trustee by the Company of the Group
1 Subsequent Mortgage Loans identified on the Mortgage Loan Schedule shall be
absolute and is intended by the Company, the Master Servicer, the Indenture
Trustee, the Bondholders to constitute and to be treated as a sale by the
Company to the Trust Fund.

                  (b) The Company, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Indenture Trustee without recourse for the benefit of the Bondholders all the
right, title and interest of the Company, in, to and under the Subsequent
Mortgage Loan Purchase Agreement, dated [_______________], between the Company,
as purchaser, and Impac Mortgage Holdings, Inc., as seller (the "Purchase
Agreement").

                  (c) The Indenture Trustee acknowledges receipt of, subject to
the exceptions it notes pursuant to the procedures described in Section 2.03 of
the Indenture, the documents (or certified copies thereof) referred to in
Section 2.1(b) of the Subsequent 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.

                                       F-2

<PAGE>

                  (d) Additional terms of the sale are set forth on Attachment A
hereto.

                  Section 2. REPRESENTATIONS AND WARRANTIES; CONDITIONS
PRECEDENT.

                  (a) The Company hereby confirms that each of the conditions
and the representations and warranties set forth in Section 2.05 of the
Indenture are satisfied as of the date hereof.

                  (b) All terms and conditions of the Indenture are hereby
ratified and confirmed; provided, however, that in the event of any conflict,
the provisions of this Instrument shall control over the conflicting provisions
of the Indenture.

                  Section 3. RECORDATION OF INSTRUMENT.

                  To the extent permitted by applicable law, this Instrument, or
a memorandum thereof if permitted under applicable law, is subject to
recordation in all appropriate public offices for real property records in all
of the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Master Servicer at the Bondholders' expense on direction of the related
Bondholders, but only when accompanied by an Opinion of Counsel to the effect
that such recordation materially and beneficially affects the interests of the
Bondholders or is necessary for the administration or servicing of the Group 1
Subsequent Mortgage Loans.

                  Section 4. GOVERNING LAW.

                  This Instrument shall be construed in accordance with the laws
of the State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws, without giving
effect to principles of conflicts of law.

                  Section 5. COUNTERPARTS.

                  This Instrument may be executed in one or more counterparts
and by the different parties hereto on separate counterparts, each of which,
when so executed, shall be deemed to be an original; such counterparts,
together, shall constitute one and the same instrument.

                  Section 6. SUCCESSORS AND ASSIGNS.

                  This Instrument shall inure to the benefit of and be binding
upon the Company and the Indenture Trustee and their respective successors and
assigns.

                                       F-3

<PAGE>

IMH ASSETS CORP.

By:___________________
Name:
Title:

DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity
but solely as Indenture Trustee for the Trust.

By: _______________________
Name:
Title:

                                       F-4

<PAGE>

                                   APPENDIX A
                                   DEFINITIONS

                  ACCRUAL PERIOD: With respect to each Class of 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.

                  ACCRUED BOND INTEREST: With respect to any Payment Date and
each Class of 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.

                  ADDITIONAL DERIVATIVE CONTRACT COUNTERPARTY PAYMENT: With
respect to any Payment Date, any termination payments 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 2-A Bonds, and any Payment Date, an amount equal to
the sum of any Realized Loss allocated to 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.

                  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.

<PAGE>

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

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

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

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

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

                  (i) the product of:

                           (1) the weighted average of

                                    (x)     the Group 1 Net WAC Rate and

                                    (y)     the amount of interest earned on
                                            amounts on deposit in the
                                            Pre-Funding Account from the prior
                                            Payment Date to the current Payment
                                            Date, expressed as a percentage of
                                            the Pre-Funded Amount at the end of
                                            the prior Due Period and converted
                                            to a per annum rate,

                                    in the case of (x), weighted on the basis of
                                    the aggregate Stated Principal Balance of
                                    the Group 1 Mortgage Loans as of the end of
                                    the prior Due Period, and in the case of
                                    (y), weighted on the basis of the Pre-Funded
                                    Amount as of the end of the related Due
                                    Period, and

                           (2) a fraction equal to

                                    (x) the sum of the aggregate Stated
                           Principal Balance of the Group 1 Loans and the
                           Pre-Funded Amount as of the end of the prior Due
                           Period divided by

                                        2

<PAGE>

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

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

On any Payment Date following the Funding Period and with respect tot he Group 1
Bonds, the per annum rate equal to the product of:

                  (i) the product of:

                           (1) the Group 1 Net WAC Rate and

                           (2) a fraction equal to

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

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

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

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

                  (i) the product of:

                           (1) the Group 2 Net WAC Rate and

                           (2) a fraction equal to

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

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

                  (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, each Group 1 Subsequent Mortgage

                                        3

<PAGE>

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

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

                  BASIS RISK SHORTFALL CARRY-FORWARD AMOUNT: With respect to
each Class of Bonds 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 related Derivative Contracts or by related 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, Class M or Class 2-B Bond.

                  BOND INTEREST RATE: With respect to each Payment Date and each
Class of 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 related Available Funds Rate with respect to such Payment Date.

                  BOND MARGIN: With respect to the Class 1-A-1 Bonds, on any
Payment Date prior to the Step-Up Date, 0.360% per annum, and on any Payment
Date on and after the Step-Up Date, 0.720% per annum. With respect to the Class
1-A-2 Bonds, on any Payment Date prior to the Step-Up Date, 0.350% per annum,
and on any Payment Date on and after the Step-Up Date, 0.700% per annum. With
respect to the Class 1-A-3 Bonds, on any Payment Date prior to the Step-Up Date,
0.460% per annum, and on any Payment Date on and after the Step-Up Date, 0.920%
per annum. With respect to the Class 2-A 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, 0.840% per annum. With respect to the Class 1-M-1 Bonds, on any Payment
Date prior to the Step-Up Date, 0.530% per annum, and on any Payment Date on and
after the Step-Up Date, 0.795% per annum. With respect to the Class 1-M-2 Bonds,
on any Payment Date prior to the Step-Up Date, 0.580% per annum, and on any

                                        4

<PAGE>

Payment Date on and after the Step-Up Date, 0.870% per annum. With respect to
the Class 1-M-3 Bonds, on any Payment Date prior to the Step-Up Date, 0.630% per
annum, and on any Payment Date on and after the Step-Up Date, 0.945% per annum.
With respect to the Class 1-M-4 Bonds, on any Payment Date prior to the Step-Up
Date, 1.100% per annum, and on any Payment Date on and after the Step-Up Date,
1.650% per annum. With respect to the Class 1-M-5 Bonds, on any Payment Date
prior to the Step-Up Date, 1.300% per annum, and on any Payment Date on and
after the Step-Up Date, 1.950% per annum. With respect to the Class 1-M-6 Bonds,
on any Payment Date prior to the Step-Up Date, 1.550% per annum, and on any
Payment Date on and after the Step-Up Date, 2.325% per annum. With respect to
the Class 2-M-1 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 2-M-2 Bonds, on any Payment Date prior to the Step-Up
Date, 1.250% per annum, and on any Payment Date on and after the Step-Up Date,
1.875% per annum. With respect to the Class 2-B Bonds, on any Payment Date prior
to the Step-Up Date, 2.100% per annum, and on any Payment Date on and after the
Step-Up Date, 3.150% per annum.

                  BOND OWNER: The Beneficial Owner of a Bond.

                  BOND PRINCIPAL BALANCE: With respect to any Bond 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 Class 1-A, Class M or Class 2-B 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,
other than the Class 2-A 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. With respect to any Class of
Bonds, the Bond Principal Balance thereof shall be equal to the sum of the Bond
Principal Balances of all Outstanding Bonds of such Class.

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

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

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

                                        5

<PAGE>

the pledgee's right so to act with respect to such Bonds and that the pledgee is
not the Issuer, any other obligor upon the Bonds or any Affiliate of any of the
foregoing Persons.

                  BONDS: The Class A Bonds, Class M Bonds and Class 2-B Bonds
issued and outstanding at any time pursuant to the Indenture.

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

                  BUSINESS DAY: Any day other than (i) a Saturday or a Sunday or
(ii) a day on which banking institutions in the City of New York, Delaware,
California or in the city in which the corporate trust offices of the Indenture
Trustee 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
2004-5 Trust Certificates, Series 2004-5, 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.

                                        6

<PAGE>

                  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 2-B
Bonds.

                  CLASS 1-A BONDS: The Class 1-A-1, Class 1-A-2 and Class 1-A-3
Bonds.

                  CLASS 1-M BONDS: The Class 1-M-1, Class 1-M-2, Class 1-M-3,
Class 1-M-4, Class 1-M-5 and Class 1-M-6 Bonds.

                  CLASS 2-M BONDS: The Class 2-M-1 Bonds and Class 2-M-2 Bonds.

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

                  CLASS B BONDS: The Class 2-B Bonds in the form attached as
Exhibit A-3 to the Indenture.

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

                  CMSA IRP: Commercial Mortgage Securities Association Investor
Reporting Package.

                  CLOSING DATE: May 28, 2004.

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

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

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

                  COMMISSION: The Securities and Exchange Commission.

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

                                        7

<PAGE>

preceding such Payment Date and (b) the sum of the Master Servicing Fee and
Subservicing Fee for such Payment Date for the related Mortgage Loans.

                  CORPORATE TRUST OFFICE: With respect to the Indenture Trustee,
Certificate Registrar, Certificate Paying Agent and Paying Agent, the principal
corporate trust office of the Indenture Trustee and Bond Registrar at which at
any particular time its corporate trust business shall be administered, which
office at the date of the execution of this instrument is located at 1761 East
St. Andrew Place, Santa Ana, California 92705, Attention: IM0405. 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 2004-5
(IM0405).

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

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

                  CUT-OFF DATE: With respect to the Initial Mortgage Loans, May
1, 2004. With respect to the Group 1 Subsequent Mortgage Loans, the applicable
Subsequent Cut-off Date.

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

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

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

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

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

                  DEFICIENT VALUATION: With respect to any Mortgage Loan, a
valuation by a court of competent jurisdiction of the Mortgaged Property in an
amount less than the then outstanding indebtedness under the Mortgage Loan, or
any reduction in the amount of principal to be paid in

                                        8

<PAGE>

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 Group 1 Derivative Contracts or
Group 2 Derivative Contracts, as applicable.

                  DERIVATIVE CONTRACT COUNTERPARTY: Lehman Brothers Derivatives
Products Inc.

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

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

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

                  ELIGIBLE ACCOUNT: An account that is any of the following: (i)
a segregated account maintained with a federal or state chartered depository
institution (A) the short-term obligations of which are rated A-1+ or better by
Standard & Poor's and P-1 by Moody's at the time of any deposit therein or (B)
fully insured to the limits established by the FDIC, PROVIDED that any deposits
not so insured shall, to the extent acceptable to each Rating Agency, as
evidenced in writing, be maintained such that (as evidenced by an Opinion of
Counsel delivered to the Indenture Trustee and each Rating Agency) the Indenture
Trustee has a claim with respect to the funds in such account or a perfected
first security interest against any collateral (which shall be limited to
Eligible Investments) securing such funds that is superior to claims of any
other depositors or creditors of the depository institution with which such
account is maintained, (ii) a segregated trust account or accounts maintained
with a federal or state chartered depository institution or trust company
subject to regulations regarding

                                        9

<PAGE>

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.

                  ELIGIBLE INVESTMENTS: One or more of the following::

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

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

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

                                       10

<PAGE>

                           (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.

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

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

                  ELIGIBLE SUBSTITUTE MORTGAGE LOAN: A Mortgage Loan substituted
by the Seller for a Deleted Mortgage Loan which must, on the date of such
substitution, as confirmed in an Officer's Certificate delivered to the
Indenture Trustee, (i) have an outstanding principal balance, after deduction of
the principal portion of the monthly payment due in the month of substitution
(or in the case of a substitution of more than one Mortgage Loan for a Deleted
Mortgage Loan, an aggregate outstanding principal balance, after such
deduction), not in excess of the outstanding principal balance of the Deleted
Mortgage Loan (the amount of any shortfall to be deposited by the Seller in the
Collection Account in the month of substitution); (ii) comply with each
non-statistical representation and warranty set forth in Section 3.1(b) of the
Mortgage Loan Purchase Agreement as of the date of substitution; (iii) have a
Mortgage Rate no lower than and not more than 1% per annum higher than the
Mortgage Rate of the Deleted Mortgage Loan as of the date of substitution;

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<PAGE>

(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.

                  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 2-B Bonds to
                  zero; or

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

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

                                       12

<PAGE>

                           (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 the Master Servicing Fee Rate, the applicable Subservicing Fee Rate, the
Minimum Spread Rate, the Indenture Trustee's Fee Rate, the Owner Trustee's Fee
Rate, the Radian PMI Rate, if such Mortgage Loan is a Radian PMI Insured Loan,
and the related Net Derivative Fee Rate.

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

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

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

                  FINAL CERTIFICATION: The final certification delivered by the
Indenture Trustee 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 October 2034.

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

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

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

                                       13

<PAGE>

                  FUNDING PERIOD: With respect to Loan Group 1, the period from
the Closing Date until the earlier of (i) the date on which the amount on
deposit in the Pre-Funding Account is reduced to less than $10,000 or (ii) June
30, 2004.

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

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

                  GROUP 1 AVAILABLE FUNDS: With respect to any Payment Date, the
sum of the following, in each case with respect to the Group 1 Loans:

                           (i) 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 and other than Monthly Payments with respect to
                  which the Master Servicer has made an unreimbursed Advance) on
                  each outstanding Group 1 Loan (less the related Master
                  Servicing Fees, any Subservicing Fees under any Subservicing
                  Agreement and any fees or penalties retained by the Master
                  Servicer or any Subservicer, the fees of the Owner Trustee and
                  the Indenture Trustee and any amounts in respect of the
                  premium payable to Radian under the Radian Lender-Paid PMI
                  Policies);

                           (ii) all proceeds of any Group 1 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;

                           (iii) all other unscheduled collections (including,
                  without limitation, Principal Prepayments, Insurance Proceeds,
                  Liquidation Proceeds and REO Proceeds) received during the
                  related Prepayment Period to the extent applied by the Master
                  Servicer as recoveries of principal or interest of the related
                  Group 1 Loan pursuant to the Servicing Agreement; and

                                       14

<PAGE>

                           (iv) any (i) Compensating Interest payments and (ii)
                  Foreclosure Profits, to the extent not payable to the
                  Subservicers;

                           (v) at the end of the Funding Period, any excess
                  amounts transferred from the Pre-Funding Account; and

                           (vi) interest earned on amounts on deposit in the
                  Pre-Funding Account;

                  MINUS

                           (vii) expenses incurred by and reimbursable to the
                  Master Servicer or the Depositor pursuant to the Servicing
                  Agreement or otherwise, or in connection with enforcing any
                  repurchase, substitution or indemnification obligation of the
                  Seller (other than an Affiliate of the Depositor) in respect
                  of a Group 1 Loan;

                           (viii) amounts expended by the Master Servicer (a)
                  pursuant to the Servicing Agreement in good faith in
                  connection with the restoration of property related to a Group
                  1 Loan damaged by an Uninsured Cause, and (b) in connection
                  with the liquidation of a Mortgage Loan or disposition of an
                  REO Property related to a Group 1 Loan to the extent not
                  otherwise reimbursed to the Master Servicer pursuant to the
                  Servicing Agreement;

                           (ix) if the Bonds have been declared due and payable
                  following an Event of Default on such Payment Date, any
                  amounts owed to the Indenture Trustee by the Issuer pursuant
                  to Section 6.07 of the Indenture;

                           (x) the related Net Derivative Fee; and

                           (xi) any other amounts withdrawn from the Collection
                  Account by the Master Servicer pursuant to Section 3.07(a)(ii)
                  through (xv) of the Servicing Agreement, not described above
                  in clauses (vii) through (x) above.

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

                  GROUP 1 CUT-OFF DATE BALANCE: $1,302,187,895.84, plus the
Original Pre-Funded amount.

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

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

                                       15

<PAGE>

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

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

                  GROUP 1 OVERCOLLATERALIZATION TARGET AMOUNT: With respect to
any Payment Date (i) on or before the Payment Date occurring in November 2004,
approximately zero, or (ii) after November 2004, 0.50% of the Group 1 Cut-off
Date Balance.

                  GROUP 1 PRINCIPAL DISTRIBUTION AMOUNT: For any Payment Date
and the Group 1 Loans, the sum of (a) the related Basic Principal Distribution
Amount, (b) the amount of non-related Net Monthly Excess Cashflow used to cover
Realized Losses as provided in Section 3.05(h)(v) of the Indenture and (c) the
related Overcollateralization Increase Amount.

                  GROUP 1 SUBSEQUENT MORTGAGE LOANS: A Mortgage Loan sold by the
Depositor to the Trust Estate pursuant to Section 2.05 of the Indenture, such
Mortgage Loan being identified on the Mortgage Loan Schedule attached to a
Subsequent Transfer Instrument.

                  GROUP 2 AVAILABLE FUNDS: With respect to any Payment Date, the
sum of the following, in each case with respect to the Group 2 Loans:

                           (i) 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 and other than Monthly Payments with respect to
                  which the Master Servicer has made an unreimbursed Advance) on
                  each outstanding Group 2 Loan (less the related Master
                  Servicing Fees, any Subservicing Fees under any Subservicing
                  Agreement and any fees or penalties retained by the Master
                  Servicer or any Subservicer, the fees of the Owner Trustee and
                  the Indenture Trustee);

                           (ii) all proceeds of any Group 2 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;

                           (iii) all other unscheduled collections (including,
                  without limitation, Principal Prepayments, Insurance Proceeds,
                  Liquidation Proceeds and REO

                                       16

<PAGE>

                  Proceeds) received during the related Prepayment Period to the
                  extent applied by the Master Servicer as recoveries of
                  principal or interest of the related Group 2 Loan pursuant to
                  the Servicing Agreement; and

                           (iv) any (i) Compensating Interest payments and (ii)
                  Foreclosure Profits, to the extent not payable to the
                  Subservicers;

                  MINUS

                           (v) expenses incurred by and reimbursable to the
                  Master Servicer or the Depositor pursuant to the Servicing
                  Agreement or otherwise, or in connection with enforcing any
                  repurchase, substitution or indemnification obligation of the
                  Seller (other than an Affiliate of the Depositor) in respect
                  of a Group 2 Loan;

                           (vi) amounts expended by the Master Servicer (a)
                  pursuant to the Servicing Agreement in good faith in
                  connection with the restoration of property related to a Group
                  2 Loan damaged by an Uninsured Cause, and (b) in connection
                  with the liquidation of a Mortgage Loan or disposition of an
                  REO Property related to a Group 2 Loan to the extent not
                  otherwise reimbursed to the Master Servicer pursuant to the
                  Servicing Agreement;

                           (vii) if the Bonds have been declared due and payable
                  following an Event of Default on such Payment Date, any
                  amounts owed to the Indenture Trustee by the Issuer pursuant
                  to Section 6.07 of the Indenture;

                           (viii) the related Net Derivative Fee; and

                           (ix) any other amounts withdrawn from the Collection
                  Account by the Master Servicer pursuant to Section 3.07(a)(ii)
                  through (xv) of the Servicing Agreement, not described above
                  in clauses (v) through (viii) above.

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

                  GROUP 2 CUT-OFF DATE BALANCE: $100,280,208.50.

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

                  GROUP 2 LOAN: A Mortgage Loan in Loan Group 2. All of the
Group 2 Loans are Multifamily Loans.

                  GROUP 2 NET DERIVATIVE CONTRACT PAYMENT AMOUNT: With respect
to any Payment Date, the amount equal to the excess, if any, of (a) the
aggregate amount payable on that Payment Date to the Issuer from the Derivative
Contract Counterparty pursuant to the Group 2 Derivative

                                       17

<PAGE>

Contracts, over (b) the aggregate amount payable on that Payment Date to the
Derivative Contract Counterparty under the Group 2 Derivative Contracts, in each
case as described in Section 8.02(c) of the Indenture.

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

                  GROUP 2 OVERCOLLATERALIZATION TARGET AMOUNT: With respect to
any Payment Date prior to the Group 2 Stepdown Date, 4.25% of the Group 2
Cut-off Date Balance. With respect to any Payment Date on or after the Group 2
Stepdown Date, the greater of (i) 8.50% of the aggregate Stated Principal
Balance of the Group 2 Loans as of the end of the related Due Period, and (ii)
0.50% of the Group 2 Cut-off Date Balance; provided however, that on or after
the Group 2 Stepdown Date, if a Group 2 Trigger Event is in effect, the Group 2
Overcollateralization Target Amount will be equal to such amount on the previous
Payment Date.

                  GROUP 2 PRINCIPAL DISTRIBUTION AMOUNT: For any Payment Date
and the Group 2 Loans, the sum of (a) the related Basic Principal Distribution
Amount, (b) the amount of non-related Net Monthly Excess Cashflow used to cover
Realized Losses as provided in Section 3.05(h)(ii) of the Indenture and (c) the
related Overcollateralization Increase Amount.

                  GROUP 2 STEPDOWN DATE: The later to occur of (x) the Payment
Date occurring in June 2011 and (y) the first Payment Date for which the
aggregate Stated Principal Balance of the Group 2 Loans as of the last day of
the related Due Period (after giving effect to scheduled payments of principal
due during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period, and after reduction for Realized Losses incurred during the related
Prepayment Period) is less than or equal to 50.00% of the sum of the Group 2
Cut-off Date Balance.

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

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

                           (2) (a) in the case of any payment date after the
                  85th Payment Date and on or before the 96th Payment Date, the
                  cumulative amount of Realized Losses incurred on the Group 2
                  Loans from the Cut-off Date, through the end of the calendar
                  month immediately preceding such Payment Date exceeds 5.75% of
                  the Group 2 Cut-off Date Balance, plus an additional 1/12th of
                  0.75% of the Group 2 Cut-off Date Balance for each Payment
                  Date after the 85th Payment Date to and including the 96th

                                       18

<PAGE>

                  Payment Date, (b) in the case of any Payment Date after the
                  96th Payment Date and on or before the 108th Payment Date, the
                  cumulative amount of Realized Losses from the Cut-off Date,
                  through the end of the calendar month immediately preceding
                  such Payment Date exceeds 6.50% of the Group 2 Cut-off Date
                  Balance, plus an additional 1/12th of 1.00% of the Group 2
                  Cut-off Date Balance for each Payment Date after the 96th
                  payment date to and including the 108th Payment Date, (c) in
                  the case of any Payment Date after the 108th Payment Date and
                  on or before the 120th Payment Date, the cumulative amount of
                  Realized Losses from the Cut-off Date, through the end of the
                  calendar month immediately preceding such Payment Date exceeds
                  7.50% of the Group 2 Cut-off Date Balance, plus an additional
                  1/12th of 0.75% of the Group 2 Cut-off Date Balance for each
                  Payment Date after the 108th Payment Date to and including the
                  120th Payment Date, and (d) in the case of any Payment Date
                  after the 120th payment date, the cumulative amount of
                  Realized Losses from the Cut-off Date, through the end of the
                  calendar month immediately preceding such Payment Date exceeds
                  8.25% of the Group 2 Cut-off Date Balance.

                  For purposes of the foregoing calculations, a mortgage loan is
considered "60 days" and "90 days" delinquent if a payment due on the first day
of a month has not been received by the second day of the second following month
and third following month, respectively.

                  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.

                  HIGH CLTV LOANS: Group 1 Loans that are secured by second
liens and were originated with a limited expectation of recovering any amounts
from the foreclosure of the related Mortgaged Property and are underwritten with
an emphasis on the creditworthiness of the related borrower.

                  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 May 28, 2004, between the
Issuer and the Indenture Trustee, relating to the Impac CMB Trust Series 2004-5
Bonds.

                  INDENTURE TRUSTEE: Deutsche Bank National Trust Company, and
its successors and assigns or any successor indenture trustee appointed pursuant
to the terms of the Indenture.

                                       19

<PAGE>

                  INDENTURE TRUSTEE'S FEE: With respect to any Payment Date, one
month's interest accrued at the Indenture Trustee's Fee Rate on the Stated
Principal Balance of each Mortgage Loan as of the first day of the related Due
Period, plus amounts on deposit in the Pre-Funding Account.

                  INDENTURE TRUSTEE'S FEE RATE: A rate equal to 0.0015% per
annum.

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

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

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

                  INITIAL BOND PRINCIPAL BALANCE: With respect to the Class
1-A-1 Bonds, $877,906,000, with respect to the Class 1-A-2 Bonds, $200,000,000,
with respect to the Class 1-A-3 Bonds, $22,000,000, with respect to the Class
1-M-1 Bonds, $43,069,000, with respect to the Class 1-M-2 Bonds, $46,382,000,
Class 1-M-3 Bonds, $29,817,000, Class 1-M-4 Bonds, $39,756,000, Class 1- M-5
Bonds, $26,504,000, Class 1-M-6 Bonds, $39,753,000, with respect to the Class
2-A Bonds, $59,888,000, with respect to the Class 2-M-1 Bonds, $9,214,000, with
respect to the Class 2-M-2 Bonds, $10,515,000 and with respect to the Class 2-B
Bonds, $18,277,000.

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

                  INITIAL MORTGAGE LOAN: Any of the Mortgage Loans included in
the Trust Estate as of the Closing Date. The aggregate principal balance of the
Initial Mortgage Loans as of the Cut-off Date is equal to approximately
$1,402,468,104.34.

                  INITIAL SUBSERVICERS: With respect to substantially all of the
Mortgage Loans (except for the fixed rate first lien Mortgage Loans) in Loan
Group 1, Countrywide Home Loans Servicing LP. With respect to substantially all
of the fixed rate first lien Mortgage Loans in Loan Group 1, GMAC Mortgage
Corporation. With respect to all of the Mortgage Loans in Loan Group 2, Midland
Loan Services, Inc.

                                       20

<PAGE>

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

                  INTEREST DETERMINATION DATE: With respect to 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 2004-5, a Delaware statutory
trust, or its successor in interest.

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

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

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

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

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

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

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

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

                  LOAN GROUP 1: The Group 1 Loans.

                  LOAN GROUP 2: The Group 2 Loans.

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

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

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

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

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

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

                  MASTER SERVICING FEE RATE: With respect to any Mortgage Loan,
0.030% per annum.

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

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

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

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

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

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

                  MONTHLY PAYMENT: With respect to any Mortgage Loan (including
any REO Property) and any Due Date, the payment of principal and interest due
thereon in accordance with the amortization schedule at the time applicable
thereto (after adjustment, if any, for partial Principal Prepayments and for
Deficient Valuations occurring prior to such Due Date but before any adjustment
to such amortization schedule by reason of any bankruptcy, other than a
Deficient Valuation, or similar proceeding or any moratorium or similar waiver
or grace period).

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

                  MORTGAGE: The mortgage, deed of trust or other instrument
creating a first lien on an estate in fee simple interest in real property
securing a Mortgage Loan.

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

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

                  MORTGAGE LOAN PURCHASE AGREEMENT: The Mortgage Loan Purchase
Agreement, dated as of the Closing Date, between the Seller, as seller, and the
Purchaser, as purchaser, relating to the sale, transfer and assignment of the
Initial 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 (i) Initial
Mortgage Loans as of the Cut-off Date is

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the schedule set forth in Exhibit B of the Indenture and (ii) the applicable
Group 1 Subsequent Mortgage Loans as of the related Subsequent Cut-off Date is
Schedule 1 of the applicable Subsequent Transfer Instrument, which respective
schedules set 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;

                           (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 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 Group 1 Loan
                  or a Group 2 Loan;

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

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

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

                  MORTGAGE NOTE: The note or other evidence of the indebtedness
of a Mortgagor under a Mortgage Loan.

                  MORTGAGE RATE: With respect to any Mortgage Loan, the annual
rate at which interest accrues on such Mortgage Loan.

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

                  MORTGAGOR: The obligor or obligors under a Mortgage Note.

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

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

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

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

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

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

                  NET MONTHLY EXCESS CASH FLOW: For any Payment Date and each
Loan Group, the sum of (a) any related Overcollateralization Release Amount and
(b) the excess of (x) the related Available Funds for such Payment Date over (y)
the sum for such Payment Date of (A) the aggregate amount of Accrued Bond
Interest for the related Bonds, (B) the related Principal Remittance Amount

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<PAGE>

and (C) any amounts payable from the related Derivative Contracts as described
in Section 3.05 of the Indenture.

                  NET MORTGAGE RATE: With respect to any Mortgage Loan and any
day, the related Mortgage Rate less the Expense Fee Rate.

                  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.

                  NON-HIGH CLTV LOANS: At any time, collectively, all the
Mortgage Loans which are not High CLTV Loans.

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

                  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

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                  Period shall 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 in its reasonable discretion which counsel may be in-house
counsel for the Master Servicer if acceptable to the Indenture Trustee and the
Rating Agencies or counsel for the Depositor, as the case may be.

                  ORIGINAL PRE-FUNDED AMOUNT: $22,999,104.16, which is the
amount deposited in the Pre-Funding Account on the Closing Date by the Indenture
Trustee with funds received from the Company.

                  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 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.

                  OUTSTANDING MORTGAGE LOAN: As to any Due Date, a Mortgage Loan
(including an REO Property) which was not the subject of a Principal Prepayment
in Full, Cash Liquidation or REO Disposition and which was not purchased,
deleted or substituted for prior to such Due Date pursuant to the Servicing
Agreement.

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

                  OVERCOLLATERALIZATION RELEASE AMOUNT: With respect to any
Payment Date and each Loan Group, the lesser of (x) the related Principal
Remittance Amount for such Payment Date and (y) the excess, if any, of (i) the
Overcollateralized Amount for such Payment Date (assuming that

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<PAGE>

100% of the related Principal Remittance Amount is applied as a principal
payment on such Payment Date) over (ii) the related Overcollateralization Target
Amount for such Payment Date.

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

                  OVERCOLLATERALIZED AMOUNT: As of any Payment Date and each
Loan Group, the amount, if any, by which (i) the aggregate principal balance of
the related Mortgage Loans (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or Advanced,
and unscheduled collections of principal received during the related Prepayment
Period including Realized Losses on the related Mortgage Loans incurred during
the related Prepayment Period) plus, in the case of the Group 1 Loans, the
Pre-Funded Amount, exceeds (ii) the aggregate Bond Principal Balance of the
related Bonds as of such Payment Date (assuming that 100% of the related
Principal Remittance Amount is applied as a principal payment on the Bonds on
such Payment Date).

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

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

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

                  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.

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

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

                  PLAN: Any employee benefit plan or certain other retirement
plans and arrangements, including individual retirement accounts and annuities,
Keogh plans and bank collective investment funds and insurance company general
or separate accounts in which such plans, accounts or arrangements are invested,
that are subject to ERISA or Section 4975 of the Code.

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

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

                  PREPAYMENT ASSUMPTION: A Prepayment Assumption of 100%
assumes, (i) with respect to the fixed rate second lien and adjustable rate
Group 1 Loans, 30% CPR, (ii) with respect to the fixed rate first lien Group 1
Loans, 2% CPR in month 1, an additional 1/11th of 6% CPR for each month
thereafter, building to 8% CPR in month 12 and remaining constant at 8% CPR
thereafter, adjusted for any seasoning (iii) with respect to the Group 2 Loans,
a prepayment vector which assumes no prepayments in the first 12 months after
the origination date of such mortgage loan, 10% CPR in the second 12 month
period, 15% CPR in the third 12 month period, 25% CPR in the fourth 12 month
period and 30% CPR thereafter, adjusted for any seasoning.

                  PRE-FUNDED AMOUNT: The amount on deposit in the Pre-Funding
Account on any date of determination.

                  PRE-FUNDING ACCOUNT: An account established by the Indenture
Trustee for the benefit of the Bondholders and funded on the Closing Date by the
Company with the Original Pre-Funded Amount.

                  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.

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<PAGE>

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

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

                  PRINCIPAL DISTRIBUTION AMOUNT: The Group 1 Principal
Distribution Amount or Group 2 Principal Distribution Amount, as applicable.

                  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
and each Loan Group, 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 May 26, 2004,
together with the attached Prospectus, dated March 29, 2004.

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<PAGE>

                  PURCHASE PRICE: The meaning specified in Section 2.2(a) of the
Mortgage Loan Purchase Agreement.

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

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

                  RADIAN: Radian Guaranty, Inc., or its successors or assigns.

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

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

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

                  RADIAN PMI RATE: With respect to any Mortgage Loan covered by
the Radian Lender- Paid PMI Policy, the rate per annum at which the premium with
respect to such policy accrues as indicated in the Mortgage Loan Schedule.

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

                  REALIZED LOSS: With respect to each Mortgage Loan (or REO
Property) as to which a Cash Liquidation or REO Disposition has occurred, an
amount (not less than zero) equal to (i) the Stated Principal Balance of the
Mortgage Loan (or REO Property) as of the date of Cash Liquidation or REO
Disposition, plus (ii) interest (and REO Imputed Interest, if any) at the Net
Mortgage Rate from the Due Date as to which interest was last paid or advanced
to Bondholders up to the last day of the month in which the Cash Liquidation (or
REO Disposition) occurred on the Stated Principal

                                       31

<PAGE>

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.

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

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

                  RELATED DOCUMENTS: With respect to each Mortgage Loan, the
documents specified in Section 2.1(b) of (i) the Mortgage Loan Purchase
Agreement (with respect to the Initial Mortgage Loans) and (ii) the Subsequent
Mortgage Loan Purchase Agreement (with respect to the Group 1 Subsequent
Mortgage Loans) and any documents required to be added to such documents
pursuant to the Mortgage Loan Purchase Agreement, any Subsequent 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.

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

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

                                       33

<PAGE>

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

                  RESPONSIBLE OFFICER: With respect to the Indenture Trustee,
any officer of the Indenture Trustee with direct responsibility for the
administration of the Indenture and also, with respect to a particular matter,
any other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.

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

                  SECURITIES INTERMEDIARY: Deutsche Bank National Trust Company,
or its successors and assigns.

                  SECURITY: Any of the Certificates or Bonds.

                  SECURITYHOLDER or HOLDER: Any Bondholder or a
Certificateholder.

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

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

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

                  SERVICING ADVANCES: All customary, reasonable and necessary
"out of pocket"costs and expenses incurred in connection with a default,
delinquency or other unanticipated event in the performance by the Master
Servicer or any Subservicer of its servicing obligations, including, without
duplication, but not limited to, the cost of (i) the preservation, restoration
and protection of a Mortgaged Property, (ii) any enforcement or judicial
proceedings, including foreclosures and any expenses incurred in relation to any
such proceedings that result from the Mortgage Loan being registered on the MERS
System, (iii) the management and liquidation of any REO Property and (iv)
compliance with the obligations under Sections 3.10, 3.11, 3.13 of the Servicing
Agreement.

                  SERVICING AGREEMENT: The Servicing Agreement dated as of May
28, 2004, among the Master Servicer, the Issuer and the Indenture Trustee.

                                       34

<PAGE>

                  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(j) of the
Indenture.

                  SPECIAL SERVICER: Any special servicer that may be appointed
by the Master Servicer for the purposes of servicing the Specially Serviced
Mortgage Loans.

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

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

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

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

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

                           (e) a default, of which the Master Servicer has
                  notice (other than a failure by such Mortgagor to pay
                  principal or interest) and which in the sole judgment of the
                  Master Servicer, materially and adversely affects the
                  interests of the Bondholders, has occurred and remained
                  unremedied for the applicable grace period specified in such

                                       35

<PAGE>

                  Group 2 Loan (or, if no grace period is specified, 60 days);
                  provided, however, that a default requiring a Servicing
                  Advance shall be deemed to materially and adversely affect the
                  interests of the Bondholders for purposes of this definition;
                  or

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

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

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

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

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

provided, however, in each case that at the time no circumstance identified in
clauses (a) through (f) above exists that would cause the Group 2 Loan to
continue to be characterized as a Specially Serviced Mortgage Loan.

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

                  STATED PRINCIPAL BALANCE: With respect to any Mortgage Loan or
related REO Property as of any date of determination, (i) the principal balance
of the Mortgage Loan outstanding as of the Cut-off Date, after application of
all scheduled Monthly Payments due on or before such date, whether or not
received, minus (ii) the sum of (a) the principal portion of the Monthly
Payments due with respect to such Mortgage Loan or REO Property during each Due
Period ending prior to the most recent Payment Date which were received or with
respect to which an Advance was made, (b) all Principal Prepayments with respect
to such Mortgage Loan or REO Property, and all Insurance Proceeds, Liquidation
Proceeds and REO Proceeds to the extent applied by the Master Servicer as
recoveries of principal in accordance with Section 3.13 of the Servicing
Agreement with respect to such Mortgage Loan or REO Property, which were
distributed pursuant to Section 3.05 of the Indenture on any previous Payment
Date, and (c) the principal portion of any Realized Loss with respect thereto
allocated pursuant to Section 3.33 of the Indenture for any previous Payment
Date.

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

                                       36

<PAGE>

                  STEP-UP DATE: With respect to the (1) Group 1 Bonds, the first
Payment Date following the earlier of (i) the first Payment Date for which the
aggregate Stated Principal Balance of the Group 1 Loans as of the end of the
related Due Period has been reduced to 20% or less of the Group 1 Cut-off Date
Balance and (ii) the Payment Date occurring in June 2014 and (2) Group 2 Bonds,
the first Payment Date following the earlier of (i) the first Payment Date for
which the aggregate Stated Principal Balance of the Group 2 Loans as of the end
of the related Due Period has been reduced to 20% or less of the Group 2 Cut-off
Date Balance and (ii) the Payment Date occurring in June 2014.

                  SUBSEQUENT CUT-OFF DATE: With respect to any Group 1
Subsequent Mortgage Loan, the date, as designated by the Company, that is the
later of (i) the first day of the month in which the related Subsequent Transfer
Date occurs and (ii) the origination date of such Group 1 Subsequent Mortgage
Loan, as the cut-off date with respect to the related Group 1 Subsequent
Mortgage Loan.

                  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.

                  SUBSEQUENT TRANSFER DATE: With respect to any Group 1
Subsequent Mortgage Loan, the applicable date upon which such Mortgage Loan was
purchased from the Seller with amounts on deposit in the Pre-Funding Account.

                  SUBSEQUENT TRANSFER INSTRUMENT: With respect to the Group 1
Subsequent Mortgage Loans, the subsequent transfer instrument, dated as of the
applicable Subsequent Transfer Date, between IMH Assets Corp., as Company, and
Deutsche Bank National Trust Company, as indenture trustee, or such other
instrument as agreed upon by the Company and the Indenture Trustee.

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

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

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

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

                  SUBSERVICING FEE RATE: On each adjustable rate Group 1 Loan, a
rate equal to 0.375% per annum. On each fixed rate first lien Group 1 Loan, a
rate equal to 0.250% per annum. On each fixed rate second lien Group 1 Loan, a
rate equal to 0.750% per annum. On each Group 2 Loan, a rate equal to 0.170% per
annum, with such rate increasing to 0.750% per annum for any multifamily loan
that becomes a Specially Serviced Multifamily Loan.

                                       37

<PAGE>

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

                  TELERATE SCREEN PAGE 3750: The display designated as page 3750
on the Telerate Service (or such other page as may replace page 3750 on that
service for the purpose of displaying London interbank offered rates of major
banks).

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

                  TRUST: The Impac CMB Trust Series 2004-5 to be created
pursuant to the Trust Agreement.

                  TRUST AGREEMENT: The Amended and Restated Trust Agreement
dated as of May 28, 2004, among the Owner Trustee, the Depositor and Deutsche
Bank National Trust Company, as Certificate Registrar and Certificate Paying
Agent, relating to the Trust.

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

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

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

                  UNDERWRITERS: Countrywide Securities Corporation and Merrill
Lynch, Pierce, Fenner & Smith Incorporated.

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

                  UNPAID INTEREST SHORTFALL: For each class of Bonds 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, to the extent not covered by Compensating
Interest, and (b) any Relief Act Shortfalls, plus interest on the amount of
previously allocated Unpaid Interest Shortfall on such class of Bonds which
remains unreimbursed, at the Bond Interest Rate for such Class for the related
Accrual Period.

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

                                       38================================================================================

                           IMPAC SECURED ASSETS CORP.,
                                    Company,

                            IMPAC FUNDING CORPORATION
                                Master Servicer,

                                       and

                      DEUTSCHE BANK NATIONAL TRUST COMPANY
                                     Trustee

                         POOLING AND SERVICING AGREEMENT

                             Dated as of May 1, 2004

                            ________________________

                       Mortgage Pass-Through Certificates

                                  Series 2004-2

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

<PAGE>

<TABLE>
<CAPTION>
                                                 TABLE OF CONTENTS

                                                                                                               Page
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<S>                                                                                                            <C>
ARTICLE I

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

<PAGE>

         Class M-1 Principal Distribution Amount..................................................................8
         Class M-2 Certificate....................................................................................9
         Class M-2 Principal Distribution Amount..................................................................9
         Class M-3 Certificate....................................................................................9
         Class M-3 Principal Distribution Amount..................................................................9
         Class P Certificate.....................................................................................10
         Class R Certificate.....................................................................................10
         Class R-1 Interest......................................................................................10
         Class R-2 Interest......................................................................................10
         Closing Date............................................................................................10
         Code....................................................................................................10
         Collateral Value........................................................................................10
         Commission..............................................................................................10
         Company.................................................................................................10
         Compensating Interest...................................................................................10
         Corporate Trust Office..................................................................................10
         Countrywide.............................................................................................11
         Credit Enhancement Percentage...........................................................................11
         Curtailment.............................................................................................11
         Custodial Account.......................................................................................11
         Cut-off Date............................................................................................11
         Defaulted Mortgage Loan.................................................................................12
         Deficient Valuation.....................................................................................12
         Definitive Certificate..................................................................................12
         Deleted Mortgage Loan...................................................................................12
         Depository..............................................................................................12
         Depository Participant..................................................................................12
         Determination Date......................................................................................12
         Disqualified Organization...............................................................................12
         Distribution Date.......................................................................................13
         Due Date................................................................................................13
         Due Period..............................................................................................13
         Eligible Account........................................................................................13
         Event of Default........................................................................................13
         Excess Overcollateralized Amount........................................................................13
         Excess Proceeds.........................................................................................13
         Exchange Act............................................................................................13
         Extra Principal Distribution Amount.....................................................................14
         Fannie Mae..............................................................................................14
         FDIC....................................................................................................14
         Freddie Mac.............................................................................................14
         Funding Date............................................................................................14
         GMAC....................................................................................................14
         Initial Certificate Principal Balance...................................................................14
         Initial Mortgage Loans..................................................................................14

<PAGE>

         Insurance Policy........................................................................................14
         Insurance Proceeds......................................................................................14
         Interest Remittance Amount..............................................................................14
         Late Collections........................................................................................15
         LIBOR...................................................................................................15
         LIBOR Business Day......................................................................................15
         LIBOR Rate Adjustment Date..............................................................................15
         Liquidated Mortgage Loan................................................................................15
         Liquidation Proceeds....................................................................................15
         Loan-to-Value Ratio.....................................................................................15
         Lost Note Affidavit.....................................................................................15
         Majority Class C Certificateholder......................................................................15
         Marker Rate.............................................................................................15
         Master Servicer.........................................................................................16
         Master Servicer Prepayment Charge Payment Amount........................................................16
         Master Servicing Fees...................................................................................16
         Master Servicing Fee Rate...............................................................................16
         Maximum Uncertificated Accrued Interest Deferral Amount.................................................16
         MERS....................................................................................................17
         MERS(R)System............................................................................................17
         Mezzanine Certificate...................................................................................17
         MIN.....................................................................................................17
         MOM Loan................................................................................................17
         Monthly Interest Distributable Amount...................................................................17
         Monthly Payment.........................................................................................18
         Moody's.................................................................................................18
         Mortgage................................................................................................18
         Mortgage File...........................................................................................18
         Mortgage Loan...........................................................................................18
         Mortgage Loan Purchase Agreement........................................................................18
         Mortgage Loan Schedule..................................................................................18
         Mortgage Note...........................................................................................20
         Mortgage Rate...........................................................................................20
         Mortgaged Property......................................................................................20
         Mortgagor...............................................................................................20
         Net Liquidation Proceeds................................................................................20
         Net Mortgage Rate.......................................................................................20
         Net Monthly Excess Cashflow.............................................................................20
         Net Prepayment Interest Shortfall.......................................................................20
         Net WAC Rate............................................................................................20
         Net WAC Shortfall Amount................................................................................21
         Net WAC Shortfall Reserve Fund..........................................................................22
         Net WAC Shortfall Reserve Fund Deposit..................................................................22
         Nonrecoverable Advance..................................................................................22
         Non-United States Person................................................................................22

<PAGE>

         Officers' Certificate...................................................................................22
         One Month LIBOR.........................................................................................22
         Opinion of Counsel......................................................................................22
         Optional Termination Date...............................................................................23
         OTS.....................................................................................................23
         Outstanding Mortgage Loan...............................................................................23
         Overcollateralization Deficiency Amount.................................................................23
         Overcollateralization Release Amount....................................................................23
         Overcollateralization Target Amount.....................................................................23
         Overcollateralization Target Percentage.................................................................23
         Overcollateralized Amount...............................................................................23
         Ownership Interest......................................................................................24
         Pass-Through Rate.......................................................................................24
         Percentage Interest.....................................................................................26
         Permitted Investment....................................................................................26
         Permitted Transferee....................................................................................27
         Person..................................................................................................27
         Prepayment Assumption...................................................................................27
         Prepayment Charge.......................................................................................27
         Prepayment Interest Shortfall...........................................................................27
         Prepayment Period.......................................................................................28
         Primary Hazard Insurance Policy.........................................................................28
         Primary Insurance Policy................................................................................28
         Principal Distribution Amount...........................................................................28
         Principal Prepayment....................................................................................28
         Principal Prepayment in Full............................................................................28
         Principal Remittance Amount.............................................................................28
         Prospectus Supplement...................................................................................28
         Purchase Price..........................................................................................28
         Qualified Insurer.......................................................................................29
         Qualified Substitute Mortgage Loan......................................................................29
         Radian..................................................................................................29
         Radian Insured Loans....................................................................................29
         Radian Lender-Paid PMI Policy...........................................................................29
         Radian PMI Policy Rate..................................................................................29
         Rate Increase...........................................................................................29
         Rating Agency...........................................................................................30
         Realized Loss...........................................................................................30
         Record Date.............................................................................................30
         Regular Certificate.....................................................................................30
         Relief Act..............................................................................................30
         Relief Act Interest Shortfall...........................................................................30
         REMIC...................................................................................................31
         REMIC 1.................................................................................................31
         REMIC 1 Regular Interest AA.............................................................................31

<PAGE>

         REMIC 1 Regular Interest A-1............................................................................31
         REMIC 1 Regular Interest A-2............................................................................31
         REMIC 1 Regular Interest A-3............................................................................31
         REMIC 1 Regular Interest A-4............................................................................32
         REMIC 1 Regular Interest A-5............................................................................32
         REMIC 1 Regular Interest A-6............................................................................32
         REMIC 1 Regular Interest M-1............................................................................32
         REMIC 1 Regular Interest M-2............................................................................32
         REMIC 1 Regular Interest M-3............................................................................32
         REMIC 1 Regular Interest P..............................................................................33
         REMIC 1 Regular Interest ZZ.............................................................................33
         REMIC 1 Regular Interests...............................................................................33
         REMIC 1 Interest Loss Allocation Amount.................................................................33
         REMIC 1 Overcollateralized Amount.......................................................................33
         REMIC 1 Principal Loss Allocation Amount................................................................33
         REMIC 1 Overcollateralization Target Amount.............................................................34
         REMIC 2.................................................................................................34
         REMIC Provisions........................................................................................34
         REMIC Regular Interest..................................................................................34
         Remittance Report.......................................................................................34
         REO Acquisition.........................................................................................34
         REO Disposition.........................................................................................34
         REO Imputed Interest....................................................................................34
         REO Proceeds............................................................................................34
         REO Property............................................................................................34
         Request for Release.....................................................................................35
         Residual Interest.......................................................................................35
         Responsible Officer.....................................................................................35
         Seller..................................................................................................35
         Servicing Account.......................................................................................35
         Servicing Advances......................................................................................35
         Servicing Guide.........................................................................................35
         Servicing Officer.......................................................................................35
         Single Certificate......................................................................................35
         Standard & Poor's.......................................................................................36
         Startup Day.............................................................................................36
         Stated Principal Balance................................................................................36
         Stepdown Date...........................................................................................36
         Sub-Servicer............................................................................................37
         Sub-Servicer Remittance Date............................................................................37
         Sub-Servicing Account...................................................................................37
         Sub-Servicing Agreement.................................................................................37
         Sub-Servicing Fees......................................................................................37
         Sub-Servicing Fee Rate..................................................................................37
         Substitution Adjustment.................................................................................37

<PAGE>

         Tax Returns.............................................................................................38
         Transfer................................................................................................38
         Transferor..............................................................................................38
         Trigger Event...........................................................................................38
         Trust Fund..............................................................................................38
         Trustee.................................................................................................38
         Trustee's Fee...........................................................................................39
         Trustee Fee Rate........................................................................................39
         Uncertificated Accrued Interest.........................................................................39
         Uncertificated Principal Balance........................................................................39
         Uncertificated REMIC 1 Pass-Through Rate................................................................39
         Uninsured Cause.........................................................................................39
         United States Person....................................................................................39
         Unpaid Interest Shortfall Amount........................................................................40
         Voting Rights...........................................................................................40
         Weighted Average Net Mortgage Rate......................................................................40
Section 1.02      Determination of LIBOR.........................................................................40
Section 1.03      Allocation of Certain Interest Shortfalls......................................................41

ARTICLE II

CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES................................................................................43
Section 2.01.     Conveyance of Mortgage Loans...................................................................43
Section 2.02.     Acceptance of the Trust Fund by the Trustee....................................................46
Section 2.03.     Representations, Warranties and Covenants of the Master Servicer and the
                  Company........................................................................................47
Section 2.04.     Representations and Warranties of the Seller...................................................50
Section 2.05.     Issuance of Certificates; Conveyance of  REMIC Regular Interests and
                  Acceptance of REMIC 2 by the Trustee...........................................................51
Section 2.06.     Conveyance of Subsequent Mortgage Loans........................................................52

ARTICLE III

ADMINISTRATION AND SERVICING
OF THE TRUST FUND................................................................................................56
Section 3.01.     Master Servicer to Act as Master Servicer......................................................56
Section 3.02.     Sub-Servicing Agreements Between Master Servicer and Sub-Servicers.............................58
Section 3.03.     Successor Sub-Servicers........................................................................59
Section 3.04.     Liability of the Master Servicer...............................................................59

<PAGE>

Section 3.05.     No Contractual Relationship Between Sub-Servicers and Trustee or
                  Certificateholders.............................................................................59
Section 3.06.     Assumption or Termination of Sub-Servicing Agreements by Trustee...............................60
Section 3.07.     Collection of Certain Mortgage Loan Payments...................................................60
Section 3.08.     Sub-Servicing Accounts.........................................................................61
Section 3.09.     Collection of Taxes, Assessments and Similar Items; Servicing Accounts.........................62
Section 3.10.     Custodial Account..............................................................................62
Section 3.11.     Permitted Withdrawals From the Custodial Account...............................................63
Section 3.12.     Permitted Investments..........................................................................64
Section 3.13.     Maintenance of Primary Hazard Insurance........................................................65
Section 3.14.     Enforcement of Due-on-Sale Clauses; Assumption Agreements......................................67
Section 3.15.     Realization Upon Defaulted Mortgage Loans......................................................68
Section 3.16.     Trustee to Cooperate; Release of Mortgage Files................................................69
Section 3.17.     Servicing Compensation.........................................................................70
Section 3.18.     Maintenance of Certain Servicing Policies......................................................71
Section 3.19.     Annual Statement as to Compliance..............................................................71
Section 3.20.     Annual Independent Public Accountants' Servicing Statement.....................................72
Section 3.21.     Access to Certain Documentation................................................................73
Section 3.22.     Title, Conservation and Disposition of REO Property............................................73
Section 3.23.     Additional Obligations of the Master Servicer..................................................75
Section 3.24.     Additional Obligations of the Company..........................................................75
Section 3.25.     Exchange Act Reporting.........................................................................76

ARTICLE IV

PAYMENTS TO CERTIFICATEHOLDERS...................................................................................79
Section 4.01.     Distributions..................................................................................79
Section 4.02.     Statements to Certificateholders...............................................................83
Section 4.03.     Remittance Reports; Advances by the Master Servicer............................................86
Section 4.04.     Distributions on the REMIC 1 Regular Interests.................................................87
Section 4.05.     Allocation of Realized Losses..................................................................88
Section 4.06.     Information Reports to Be Filed by the Master Servicer.........................................89
Section 4.07.     Compliance with Withholding Requirements.......................................................89
Section 4.08.     Net WAC Shortfall Reserve Fund.................................................................90
Section 4.09.     Pre-Funding Account............................................................................91

ARTICLE V

THE CERTIFICATES.................................................................................................93
Section 5.01.     The Certificates...............................................................................93
Section 5.02.     Registration of Transfer and Exchange of Certificates..........................................95

<PAGE>

Section 5.03.     Mutilated, Destroyed, Lost or Stolen Certificates.............................................100
Section 5.04.     Persons Deemed Owners.........................................................................100
Section 5.05.     Rule 144A Information.........................................................................100

ARTICLE VI

THE COMPANY AND THE MASTER SERVICER.............................................................................101
Section 6.01.     Liability of the Company and the Master Servicer..............................................101
Section 6.02.     Merger, Consolidation or Conversion of the Company or the Master Servicer
                   .............................................................................................101
Section 6.03.     Limitation on Liability of the Company, the Master Servicer and Others........................101
Section 6.04.     Limitation on Resignation of the Master Servicer..............................................102
Section 6.05.     Sale and Assignment of Master Servicing.......................................................103

ARTICLE VII

DEFAULT.........................................................................................................104
Section 7.01.     Events of Default.............................................................................104
Section 7.02.     Trustee to Act; Appointment of Successor......................................................106
Section 7.03.     Notification to Certificateholders............................................................107
Section 7.04.     Waiver of Events of Default...................................................................107
Section 7.05.     List of Certificateholders....................................................................108

ARTICLE VIII

CONCERNING THE TRUSTEE..........................................................................................109
Section 8.01.     Duties of Trustee.............................................................................109
Section 8.02.     Certain Matters Affecting the Trustee.........................................................110
Section 8.03.     Trustee Not Liable for Certificates or Mortgage Loans.........................................112
Section 8.04.     Trustee May Own Certificates..................................................................112
Section 8.05.     Trustee's Fees................................................................................112
Section 8.06.     Eligibility Requirements for Trustee..........................................................113
Section 8.07.     Resignation and Removal of the Trustee........................................................113
Section 8.08.     Successor Trustee.............................................................................114
Section 8.09.     Merger or Consolidation of Trustee............................................................115
Section 8.10.     Appointment of Co-Trustee or Separate Trustee.................................................115

<PAGE>

ARTICLE IX

TERMINATION.....................................................................................................117
Section 9.01.     Termination Upon Repurchase or Liquidation of All Mortgage Loans or upon
                  Purchase of Certificates......................................................................117
Section 9.02.     Termination of REMIC 2........................................................................119
Section 9.03.     Additional Termination Requirements...........................................................119

ARTICLE X

REMIC PROVISIONS................................................................................................121
Section 10.01.    REMIC Administration..........................................................................121
Section 10.02.    Prohibited Transactions and Activities........................................................124
Section 10.03.    Master Servicer and Trustee Indemnification...................................................124

ARTICLE XI

MISCELLANEOUS PROVISIONS........................................................................................125
Section 11.01.    Amendment.....................................................................................125
Section 11.02.    Recordation of Agreement; Counterparts........................................................126
Section 11.03.    Limitation on Rights of Certificateholders....................................................127
Section 11.04.    Governing Law.................................................................................127
Section 11.05.    Notices.......................................................................................128
Section 11.06.    Severability of Provisions....................................................................128
Section 11.07.    Successors and Assigns........................................................................128
Section 11.08.    Article and Section Headings..................................................................128
Section 11.09.    Notice to Rating Agencies.....................................................................128

Signatures
Acknowledgments

Exhibit A         Form of Class A Certificate
Exhibit B-1       Form of Class M Certificate
Exhibit B-2       Form of Class C Certificate
Exhibit B-3       Form of Class P Certificate
Exhibit B-4       Form of Class R Certificate
Exhibit C         Form of Trustee Initial Certification
Exhibit D         Form of Trustee Final Certification
Exhibit E         Form of Remittance Report

<PAGE>

Exhibit F-1       Request for Release
Exhibit F-2       Request for Release for Mortgage Loans Paid in Full
Exhibit G-1       Form of Investor Representation Letter
Exhibit G-2       Form of Transferor Representation Letter
Exhibit G-3       Form of Rule 144A Investment Representation
Exhibit G-4       Transferor Certificate for Transfers of Residual Certificates
Exhibit G-5       Transfer Affidavit and Agreement for Transfers of Residual Certificates
Exhibit H         Mortgage Loan Schedule
Exhibit I         Seller Representations and Warranties
Exhibit J         Form of Notice Under Section 3.24
Exhibit K         Impac Funding Corporation Servicing Guide
Exhibit L-1       Form 10-K Certification
Exhibit L-2       Form 10-K Back-up Certification (Master Servicer)
Exhibit L-3       Form 10-K Back-up Certification (Trustee)
Exhibit M         Form of Subsequent Transfer Instrument
Exhibit N         Form of Addition Notice
Exhibit O         Subsequent Mortgage Loan Schedule
</TABLE>

<PAGE>

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

PRELIMINARY STATEMENT:

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

REMIC 1
-------

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

<TABLE>
<CAPTION>
                                                                 Initial
                        Uncertificated REMIC 1                Uncertificated              Assumed Final
   Designation             Pass-Through Rate                Principal Balance           Maturity Date(1)
   -----------             -----------------                -----------------           ----------------
<S>                           <C>                           <C>                         <C>
        AA                    Variable(2)                   $ 196,000,098.00            August 25, 2034
       A-1                    Variable(2)                   $     571,240.00            August 25, 2034
       A-2                    Variable(2)                   $     139,440.00            August 25, 2034
       A-3                    Variable(2)                   $     409,970.00            August 25, 2034
       A-4                    Variable(2)                   $     262,590.00            August 25, 2034
       A-5                    Variable(2)                   $     313,260.00            August 25, 2034
       A-6                    Variable(2)                   $     188,500.00            August 25, 2034
       M-1                    Variable(2)                   $      50,000.00            August 25, 2034
       M-2                    Variable(2)                   $      40,000.00            August 25, 2034
       M-3                    Variable(2)                   $      25,000.00            August 25, 2034
        ZZ                    Variable(2)                   $   2,000,002.00            August 25, 2034

<PAGE>

        P                     Variable(2)              $                       100       August 25, 2034
</TABLE>
___________________
(1)      Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
         regulations, the Distribution Date in the month following the maturity
         date for the Mortgage Loan with the latest possible maturity date has
         been designated as the "latest possible maturity date" for each REMIC 1
         Regular Interest.
(2)      Calculated in accordance with the definition of "Uncertificated REMIC 1
         Pass-Through Rate" in this Agreement.

                                     REMIC 2
                                     -------

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

         The following table irrevocably sets forth the Class designation,
Pass-Through Rate and Initial Certificate Principal Balance for each Class of
Certificates that represents one or more of the "regular interests" in REMIC 2
created hereunder:

<TABLE>
<CAPTION>
                              Initial Certificate                                       Assumed Final
Class Designation             Principal Balance              Pass-Through Rate          Maturity Date(1)
-----------------             -----------------              -----------------          ----------------
<S>                             <C>                              <C>                    <C>
    Class A-1                   $ 57,124,000.00                  Variable(2)            August 25, 2034
    Class A-2                   $ 13,944,000.00                  Variable(2)            August 25, 2034
    Class A-3                   $ 40,997,000.00                  Variable(2)            August 25, 2034
    Class A-4                   $ 26,259,000.00                  Variable(2)            August 25, 2034
    Class A-5                   $ 31,326,000.00                  Variable(2)            August 25, 2034
    Class A-6                   $ 18,850,000.00                  Variable(2)            August 25, 2034
    Class M-1                    $ 5,000,000.00                  Variable(2)            August 25, 2034
    Class M-2                    $ 4,000,000.00                  Variable(2)            August 25, 2034
    Class M-3                    $ 2,500,000.00                  Variable(2)            August 25, 2034
     Class C                        $ 100(3)                     Variable(2)            August 25, 2034
     Class P                        $ 100.00                       N/A(4)               August 25, 2034
</TABLE>
___________________
(1)      Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
         regulations, the Distribution Date in the month following the maturity
         date for the Mortgage Loan with the latest possible maturity date has
         been designated as the "latest possible maturity date" for each Class
         of Certificates that represents one or more of the "regular interests"
         in REMIC 2.
(2)      Calculated in accordance with the definition of "Pass-Through Rate" in
         this Agreement.
(3)      The Class C Certificates will accrue interest at their variable
         Pass-Through Rate on the Notional Amount of the Class C Certificates
         outstanding from time to time which shall equal the aggregate of the
         Uncertificated Principal Balances of the REMIC 1 Regular Interests.

                                        2

<PAGE>

         The Class C Certificates will not accrue interest on their Certificate
         Principal Balance. The Class C Certificates will also be entitled to
         Subsequent Mortgage Loan Interest, as a right with respect to a
         component of the Class C Certificates that will not be treated as a
         REMIC regular interest but rather as a separate interest strips from
         the Subsequent Mortgage Loans for a specified period of time.
(4)      The Class P Certificates do not accrue interest.

                                        3

<PAGE>

                                    ARTICLE I

                                   DEFINITIONS

         Section 1.01. Defined Terms.

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

         "Accrual Period": With respect to each Class of Regular Certificates
(other than the Class A-1, Class M-2 and Class M-3 and Class P Certificates) and
each Distribution Date, the calendar month prior to the month of such
Distribution Date. With respect to the Class A-1, Class M-2 and Class M-3
Certificates (i) with respect to the Distribution Date in June 2004, the period
commencing the Closing Date and ending on the day preceding the Distribution
Date in June 2004, and (ii) with respect to any Distribution Date after the
Distribution Date in June 2004, the period commencing on the Distribution Date
in the month immediately preceding the month in which such Distribution Date
occurs and ending on the day preceding such Distribution Date.

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

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

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

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

                                        4

<PAGE>

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

         "Allocated Realized Loss Amount": With respect to any Distribution Date
and any Class of Mezzanine Certificates, an amount equal to the sum of any
Allocated Realized Loss Amount allocated to that Class of Certificates on that
Distribution Date and any Allocated Realized Loss Amount for that Class
remaining unpaid from any previous Distribution Date.

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

         "Available Distribution Amount": With respect to any Distribution Date,
an amount equal to (a) the sum of (i) the balance on deposit in the Custodial
Account as of the close of business on the related Determination Date, (ii) the
aggregate amount of any Advances made and all amounts required to be paid by the
Master Servicer pursuant to Sections 3.13 and 3.23 by deposits into the
Certificate Account on the immediately preceding Certificate Account Deposit
Date, (iii) the aggregate amount of Mortgage Loan purchases made pursuant to
Section 9.01, (iv) the aggregate amount required to be deposited by the Master
Servicer pursuant to Section 4.01(h) and (v) any amounts transferred from the
Pre-Funding Account pursuant to Section 4.09 after giving effect to any purchase
of Subsequent Mortgage Loans, reduced by (b) the sum, as of the close of
business on the related Determination Date, of (i) Monthly Payments collected
but due during a Due Period subsequent to the Due Period ending on the first day
of the month of the related Distribution Date, (ii) all interest or other income
earned on deposits in the Custodial Account or the Certificate Account, (iii)
any other amounts reimbursable or payable to the Trustee, Master Servicer or any
Sub- Servicer pursuant to Section 3.11, (iv) the Master Servicing Fees, the
Sub-Servicing Fees and the fees of the Trustee payable on such Distribution
Date, (v) any amounts in respect of the premium payable to Radian under the
Radian Lender-Paid PMI Policy, (vi) Insurance Proceeds, Liquidation Proceeds,
Subsequent Recoveries, Principal Prepayments, REO Proceeds and the proceeds of
Mortgage Loan purchases made pursuant to Sections 2.02, 2.04 or 3.14, in each
case received or made in the month of such Distribution Date and (vii) amounts
on deposit in the Custodial Account representing any Prepayment Charges or
Master Servicer Prepayment Charge Payment Amounts.

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

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

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

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

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

                                        5

<PAGE>

nominee.

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

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

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

         "Certificate Account": The trust account or accounts created and
maintained pursuant to Section 4.01, which shall be entitled Deutsche Bank
National Trust Company, in trust for registered holders of Impac Secured Assets
Corp., Mortgage Pass-Through Certificates, Series 2004-2, and which account or
accounts must each be an Eligible Account.

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

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

         "Certificate Margin":With respect to the Class A-1, Class M-2 and Class
M-3 Certificates, on any Distribution Date prior to the Step-Up Date, 0.190%,
1.450% and 2.400% per annum, respectively, and on any Distribution Date on and
after the Step-Up Date, 0.380%, 2.175% and 3.600% per annum, respectively.

         "Certificate Owner": With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Certificate, as reflected on the
books of an indirect participating brokerage

                                        6

<PAGE>

firm for which a Depository Participant acts as agent, if any, and otherwise on
the books of a Depository Participant, if any, and otherwise on the books of the
Depository.

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

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

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

         "Class A Certificate": Any one of the Class A-1, Class A-2, Class A-3,
Class A-4, Class A-5 or Class A-6 Certificates.

         "Class A Principal Distribution Amount": For any applicable
Distribution Date, an amount equal to the excess (if any) of (x) the aggregate
Certificate Principal Balance of the Class A Certificates, immediately prior to
such Distribution Date over (y) the difference between (a) the sum of the
Aggregate Stated Principal Balance of the Mortgage Loans as of the last day of
the related Due Period (after giving effect to scheduled payments of principal
due during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period, and after reduction for Realized Losses incurred during the related
Prepayment Period) and (b) the Aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period, and after reduction for Realized Losses
incurred during the related Prepayment Period) multiplied by the greater of (A)
approximately 12.80% and (B) the Overcollateralization Target Percentage.

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

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

         "Class A-3 Certificate": Any one of the Class A-3 Certificates as
designated on the face

                                        7

<PAGE>

thereof substantially in the form annexed hereto as Exhibit A, executed by the
Trustee and authenticated and delivered by the Trustee, representing the right
to distributions as set forth herein and therein and evidencing a REMIC Regular
Interest in REMIC 2.

         "Class A-4 Certificate": Any one of the Class A-4 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and therein
and evidencing a REMIC Regular Interest in REMIC 2.

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

         "Class A-6 Certificate": Any one of the Class A-6 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and therein
and evidencing a REMIC Regular Interest in REMIC 2.

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

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

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

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

         "Class M-1 Principal Distribution Amount": For any applicable
Distribution Date, an

                                        8

<PAGE>

amount equal to the excess (if any) of (x) the aggregate Certificate Principal
Balance of the Class M- 1 Certificates immediately prior to such Distribution
Date over (y) the difference between (a) the sum of the Aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period, and
after reduction for Realized Losses incurred during the related Prepayment
Period) and (b) the sum of (1) the aggregate Certificate Principal Balance of
the Class A Certificates ( after taking into account the payment of the Class A
Principal Distribution Amount on such Distribution Date) and (2) the Aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period, and
after reduction for Realized Losses incurred during the related Prepayment
Period) multiplied by the greater of (A) approximately 7.80% and (B) the
Overcollateralization Target Percentage.

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

         "Class M-2 Principal Distribution Amount": For any applicable
Distribution Date, an amount equal to the excess (if any) of (x) the aggregate
Certificate Principal Balance of the Class M- 2 Certificates immediately prior
to such Distribution Date over (y) the difference between (a) the sum of the
Aggregate Stated Principal Balance of the Mortgage Loans as of the last day of
the related Due Period (after giving effect to scheduled payments of principal
due during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period, and after reduction for Realized Losses incurred during the related
Prepayment Period) and (b)the sum of (1) the aggregate Certificate Principal
Balance of the Class A Certificates (and after taking into account the payment
of the Class A Principal Distribution Amount on such Distribution Date), (2) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), and (3) the Aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period, and after reduction for Realized Losses
incurred during the related Prepayment Period) multiplied by the greater of (A)
approximately 3.80% and (B) the Overcollateralization Target Percentage.

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

         "Class M-3 Principal Distribution Amount": For any applicable
Distribution Date, an amount equal to the excess (if any) of (x) the aggregate
Certificate Principal Balance of the Class M-

                                        9

<PAGE>

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

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

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

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

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

         "Closing Date": May 28, 2004.

         "Code":  The Internal Revenue Code of 1986.

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

         "Commission":  The Securities and Exchange Commission.

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

                                       10

<PAGE>

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

         "Corporate Trust Office": The principal corporate trust office of the
Trustee at which at any particular time its corporate trust business related to
this Agreement shall be administered, which office at the date of the execution
of this Agreement is located at 1761 East St. Andrew Place, Santa Ana,
California 92705, Attention: Corporate Trust, Impac Secured Assets Corp. Series
2004-2 (IM04S2).

         Corresponding Certificate: With respect to each REMIC 1 Regular
Interest (other than REMIC 1 Regular Interest AA and REMIC 1 Regular Interest
ZZ), the Certificate with the corresponding designation.

         "Corridor Contract": The Corridor Contract between the Trust Fund and
the Corridor Contract Provider for the benefit of the Class M-2 Certificates and
Class M-3 Certificates.

         "Corridor Contract Provider":  Bank of America, N.A.

         "Corridor Contract Payment Amount": With respect to any Distribution
Date, the amount equal to the aggregate amount payable on that Distribution Date
to the Trust Fund from the Corridor Contract, as described in this Agreement.

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

         "Credit Enhancement Percentage": For any Distribution Date is the
percentage equivalent of a fraction, the numerator of which is equal to (x) the
excess of (i) the Aggregate Stated Principal Balance of the Mortgage Loans for
the preceding Distribution Date over (ii) (1) before the Certificate Principal
Balances of the Class A Certificates have been reduced to zero, the sum of the
Certificate Principal Balances of the Class A Certificates, or (2) after such
time, the Certificate Principal Balance of the most senior class of Mezzanine
Certificates outstanding, as of the preceding Distribution Date, and the
denominator of which is equal to the sum of (y) the Aggregate Stated Principal
Balance of the Mortgage Loans, calculated after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period and distribution of the Principal Distribution Amount
to the Holders of the Certificates then entitled to distributions of principal
on the Distribution Date and (ii) the amount of deposit in the Pre-Funding
Account, exclusive of investment earnings therein.

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

         "Custodial Account": The custodial account or accounts created and
maintained pursuant to Section 3.10 in the name of a depository institution, as
custodian for the Holders of the

                                       11

<PAGE>

Certificates. Any such account or accounts shall be an Eligible Account.

         "Cut-off Date": With respect to the Initial Mortgage Loans, May 1,
2004. With respect to the Subsequent Mortgage Loans, the applicable Subsequent
Cut-off Date. References herein to the "Cut-off Date," when used with respect to
more than one Mortgage Loan, shall be to the respective Cut-off Dates for such
Mortgage Loans.

         "Cut-off Date Balance": The sum of (a) the Aggregate Stated Principal
Balance of the Initial Mortgage Loans as of the Cut-off Date and (b) the
Original Pre-Funded Amount.

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

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

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

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

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

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

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

         "Disqualified Organization": Any organization defined as a
"disqualified organization" under Section 860E(e)(5) of the Code, which includes
any of the following: (i) the United States, any State or political subdivision
thereof, any possession of the United States, or any agency or instrumentality
of any of the foregoing (other than an instrumentality which is a corporation if
all of its activities are subject to tax and, except for the Freddie Mac, a
majority of its board of directors is not selected by such governmental unit),
(ii) a foreign government, any international organization, or any agency or
instrumentality of any of the foregoing, (iii) any organization (other than
certain farmers'

                                       12

<PAGE>

cooperatives described in Section 521 of the Code) which is exempt from the tax
imposed by Chapter 1 of the Code (including the tax imposed by Section 511 of
the Code on unrelated business taxable income), (iv) rural electric and
telephone cooperatives described in Section 1381(a)(2)(C) of the Code and (v)
any other Person so designated by the Trustee based upon an Opinion of Counsel
that the holding of an Ownership Interest in a Class R Certificate by such
Person may cause REMIC 1 or REMIC 2 or any Person having an Ownership Interest
in any Class of Certificates (other than such Person) to incur a liability for
any federal tax imposed under the Code that would not otherwise be imposed but
for the Transfer of an Ownership Interest in a Class R Certificate to such
Person. The terms "United States", "State" and "international organization"
shall have the meanings set forth in Section 7701 of the Code or successor
provisions.

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

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

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

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

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

                                       13

<PAGE>

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

         "Excess Proceeds":  As defined in Section 3.22.

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

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

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

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

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

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

         "Funding Period": The period from the Closing Date until the earlier of
(i) the date on which the amount on deposit in the Pre-Funding Account is
reduced to less than $10,000 or (ii) June 30, 2004.

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

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

         "Initial Mortgage Loans": Any of the Mortgage Loans included in the
Trust Fund as of the Closing Date as indicated on the Mortgage Loan Schedule
attached hereto.

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

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

                                       14

<PAGE>

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

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

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

         "LIBOR": With respect to any Distribution Date and the Pass-Through
Rates on the Class A-1, Class M-2 and Class M-3 Certificates, the arithmetic
mean of the Loan interbank offered rate quotations of reference banks (which
will be selected by the Trustee after consultation with the Master Servicer) for
one-month U.S. dollar deposits, expressed on a per annum basis, determined in
accordance with Section 1.02.

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

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

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

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

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

                                       15

<PAGE>

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

         "Majority Class C Certificateholder": The holder of a 50.01% or greater
Percentage Interest of the Class C Certificates.

         "Marker Rate": With respect to the Class C Certificates and any
Distribution Date, a per annum rate equal to two (2) times the weighted average
of the Uncertificated REMIC 1 Pass- Through Rates for REMIC 1 Regular Interest
A-1, REMIC 1 Regular Interest A-2, REMIC 1 Regular Interest A-3, REMIC 1 Regular
Interest A-4, REMIC 1 Regular Interest A-5, REMIC 1 Regular Interest A-6, REMIC
1 Regular Interest M-1, REMIC 1 Regular Interest M-2, REMIC 1 Regular Interest
M-3 and REMIC 1 Regular Interest ZZ, with the rate on REMIC 1 Regular Interest
A-1 subject to a cap equal to the lesser of (x) LIBOR plus 0.190% per annum and
(y) the Net WAC Rate for the purpose of this calculation; with the rate on REMIC
1 Regular Interest A-2 subject to a cap equal to the lesser of (x) 4.039% per
annum plus the Rate Increase after the 10% Clean-Up Call Date and (y) the Net
WAC Rate for the purpose of this calculation; with the rate on REMIC 1 Regular
Interest A-3 subject to a cap equal to the lesser of (x) 4.995% per annum plus
the Rate Increase after the 10% Clean-Up Call Date and (y) the Net WAC Rate for
the purpose of this calculation; with the rate on REMIC 1 Regular Interest A-4
subject to a cap equal to the lesser of (x) 5.815% per annum plus the Rate
Increase after the 10% Clean-Up Call Date and (y) the Net WAC Rate for the
purpose of this calculation; with the rate on REMIC 1 Regular Interest A-5
subject to a cap equal to the lesser of (x) 5.900% per annum plus the Rate
Increase after the 10% Clean-Up Call Date and (y) the Net WAC Rate for the
purpose of this calculation; with the rate on REMIC 1 Regular Interest A-6
subject to a cap equal to the lesser of (x) 5.740% per annum plus the Rate
Increase after the 10% Clean-Up Call Date and (y) the Net WAC Rate for the
purpose of this calculation; with the rate on REMIC 1 Regular Interest M-1
subject to a cap equal to, the lesser of (x) 5.900% per annum plus the Rate
Increase after the 10% Clean-Up Call Date and (y) the Net WAC Rate; with the
rate on REMIC 1 Regular Interest M-2 subject to a cap equal to the lesser of (x)
LIBOR plus 1.450% per annum and (y) the Net WAC Rate; with the rate on REMIC 1
Regular Interest M-3 subject to a cap equal to the lesser of (x) LIBOR plus
2.400% per annum and (y) the Net WAC Rate; and with the rate on REMIC 1 Regular
Interest ZZ subject to a cap of zero for the purpose of this calculation.

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

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

         "Master Servicing Fees": As to each Mortgage Loan, an amount, payable
out of any payment of interest on the Mortgage Loan, equal to interest at the
Master Servicing Fee Rate on the Stated Principal Balance of such Mortgage Loan
as of the Due Date in the calendar month preceding the

                                       16

<PAGE>

month in which the payment of the Master Servicing Fee is due (alternatively, in
the event such payment of interest accompanies a Principal Prepayment in full
made by the Mortgagor, interest for the number of days covered by such payment
of interest). The Master Servicing Fee consists of servicing compensation
payable to the Master Servicer in respect of its master servicing
responsibilities.

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

         "Maximum Uncertificated Accrued Interest Deferral Amount": With respect
to any Distribution Date, the excess of (a) accrued interest at the
Uncertificated REMIC 1 Pass-Through Rate applicable to REMIC 1 Regular Interest
ZZ for such Distribution Date on a balance equal to the excess of (i) the
Uncertificated Principal Balance of REMIC 1 Regular Interest ZZ over (ii) the
REMIC 1 Overcollateralized Amount, in each case for such Distribution Date over
(b) the sum of (I) Uncertificated Accrued Interest on REMIC 1 Regular Interest
A-1, with the rate on REMIC 1 Regular Interest A-1 subject to a cap equal to the
lesser of (x) LIBOR plus 0.190% per annum and (y) the Net WAC Rate, (II)
Uncertificated Accrued Interest on REMIC 1 Regular Interest A-2 with the rate on
REMIC 1 Regular Interest A-2 subject to a cap equal to the lesser of (x) 4.039%
per annum and (y) the Net WAC Rate, (III) Uncertificated Accrued Interest on
REMIC 1 Regular Interest A-3, with the rate on REMIC 1 Regular Interest A-3
subject to a cap equal to the lesser of (x) 4.995% per annum and (y) the Net WAC
Rate, (IV) Uncertificated Accrued Interest on REMIC 1 Regular Interest A-4, with
the rate on REMIC 1 Regular Interest A-4 subject to a cap equal to the lesser of
(x) 5.815% per annum and (y) the Net WAC Rate, (V) Uncertificated Accrued
Interest on REMIC 1 Regular Interest A-5, with the rate on REMIC 1 Regular
Interest A-5 subject to a cap equal to the lesser of (x) 5.900% per annum and
(y) the Net WAC Rate, (VI) Uncertificated Accrued Interest on REMIC 1 Regular
Interest A-6, with the rate on REMIC 1 Regular Interest A-6 subject to a cap
equal to the lesser of (x) 5.740% per annum and (y) the Net WAC Rate, (VII)
Uncertificated Accrued Interest on REMIC 1 Regular Interest M-1, with the rate
on REMIC 1 Regular Interest M-1 subject to a cap equal to the lesser of (x)
5.900% per annum and (y) the Net WAC Rate, (VIII) Uncertificated Accrued
Interest on REMIC 1 Regular Interest M-2, with the rate on REMIC 1 Regular
Interest M-2 subject to a cap equal to the lesser of (x) LIBOR plus the 1.450%
per annum and (y) the Net WAC Rate, and (IX) Uncertificated Accrued Interest on
REMIC 1 Regular Interest M-3, with the rate on REMIC 1 Regular Interest M-3
subject to a cap equal to the lesser of (x) LIBOR plus 2.400% per annum and (y)
the Net WAC Rate.

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

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

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

         "MIN": The Mortgage Identification Number for Mortgage Loans registered
with MERS on

                                       17

<PAGE>

the MERS(R) System.

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

         "Monthly Interest Distributable Amount": With respect to the Class A
Certificates, Mezzanine Certificates and Class C Certificates and any
Distribution Date, the amount of interest accrued during the related Accrual
Period at the related Pass-Through Rate on the Certificate Principal Balance of
such Class immediately prior to such Distribution Date, in each case, reduced by
any Net Prepayment Interest Shortfalls and Relief Act Interest Shortfalls
(allocated to such Certificate as set forth in Section 1.03). The Monthly
Interest Distributable Amount on the Regular Certificates, other than the Class
A-1, Class M-2 and Class M-3 Certificates, will be calculated on the basis of a
360-day year consisting of twelve 30-day months. The Monthly Interest
Distributable Amount on the Class A-1, Class M-2 and Class M-3 Certificates will
be calculated on the basis of the actual number of days in the related Accrual
Period and a 360-day year.

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

         "Monthly Strike Rate": With respect to the Corridor Contract, the fixed
rate set forth in the Corridor Contract used to determine payments to the Trust
Fund.

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

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

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

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

         "Mortgage Loan Purchase Agreement": The Mortgage Loan Purchase
Agreement dated as of May 1, 2004, among Impac Funding Corporation, as seller,
Impac Mortgage Holdings, Inc., as

                                       18

<PAGE>

guarantor, and the Company as purchaser, and all amendments thereof and
supplements thereto.

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

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

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

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

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

         (v) the first payment date;

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

         (vii) the type of Mortgaged Property;

         (viii) the Monthly Payment in effect as of the Cut-off Date (or the
related Subsequent Cut- off Date with respect to a Subsequent Mortgage Loan);

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

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

         (xi) the occupancy status;

         (xii) the purpose of the Mortgage Loan;

         (xiii) the Collateral Value of the Mortgaged Property;

         (xiv) the original term to maturity;

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<PAGE>

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

         (xvi) the Master Servicing Fee Rate;

         (xvii) the Sub-Servicing Fee Rate;

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

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

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

         (xxi) the documentation type; and

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

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

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

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

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

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

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

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

         "Net Monthly Excess Cashflow": With respect to each Distribution Date,
the sum of (a) any Overcollateralization Release Amount for such Distribution
Date and (b) the excess of (x) Available

                                       20

<PAGE>

Distribution Amount for such Distribution Date over (y) the sum for such
Distribution Date of (A) the Monthly Interest Distributable Amounts for the
Class A Certificates and the Mezzanine Certificates and (B) the Principal
Remittance Amount.

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

         "Net WAC Rate": With respect to the Class A Certificates and the
Mezzanine Certificates, the weighted average of the Net Mortgage Rates of the
Mortgage Loans, weighted on the basis of the Stated Principal Balances thereof
as of the close of business on the first day of the calendar month preceding the
month in which such Distribution Date occurs and any amount remaining on deposit
in the Pre-Funding Account (exclusive of any investment income therein),
multiplied, in the case of the Class A-1, Class M-2 and Class M-3 Certificates,
by a fraction equal to (x) 30 divided by (y) the number of days in the related
Accrual Period.

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

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

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

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

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

                                       21

<PAGE>

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

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

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

         "Optional Termination Date": The first Distribution Date on which the
Master Servicer may opt to terminate the Trust Fund pursuant to Section 9.01.

         "Original Pre-Funded Amount": The amount deposited in the Pre-Funding
Account on the Closing Date by the Trustee.

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

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

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

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

                                       22

<PAGE>

         "Overcollateralization Floor": With respect to any Distribution Date,
0.50% of the Cut-off Date Balance.

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

         "Overcollateralization Target Amount": With respect to any Distribution
Date prior to the Distribution Date occurring in August 2004, $0. With respect
to any Distribution Date on or after the Distribution Date in August 2004 but
prior to the Stepdown Date, 0.65% of the Cut-off Date Balance. With respect to
any Distribution Date on or after the Stepdown Date, the greater of (x) 1.30% of
the Aggregate Stated Principal Balance of the Mortgage Loans and (y) the
Overcollateralization Floor; provided, however, that if a Trigger Event is in
effect on any Distribution Date, the Overcollateralization Target Amount will be
equal to the Overcollateralization Target Amount on the prior Distribution Date.

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

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

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

         (i) the Class A-1 Certificates, the least of (x) One-Month LIBOR plus
the related Certificate Margin and (y) the Net WAC Rate and (z) 11.25% per
annum;

         (ii) the Class A-2 Certificates, the lesser of (x) 4.039% per annum
plus the Rate Increase and (y) the Net WAC Rate;

         (iii) the Class A-3 Certificates, the lesser of (x) 4.995% per annum
plus the Rate Increase and (y) the Net WAC Rate;

         (iv) the Class A-4 Certificates, the lesser of (x) 5.815% per annum
plus the Rate Increase and (y) the Net WAC Rate;

         (v) the Class A-5 Certificates, the lesser of (x) 5.900% per annum plus
the Rate Increase and (y) the Net WAC Rate;

         (vi) the Class A-6 Certificates, the lesser of (x) 5.740% per annum
plus the Rate Increase and (y) the Net WAC Rate;

                                       23

<PAGE>

         (viii) the Class M-1 Certificates, the lesser of (x) 5.900% per annum
plus the Rate Increase and (y) the Net WAC Rate;

         (ix) the Class M-2 Certificates, the least of (x) One-Month LIBOR plus
the related Certificate Margin and (y) the Net WAC Rate and (z) 11.25% per
annum;

         (x) the Class M-3 Certificates, the lesser of (x) One-Month LIBOR plus
the related Certificate Margin and (y) the Net WAC Rate and (z) 11.25% per
annum; and

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

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

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

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

                  (D) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest A-3 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest A-3;

                  (E) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest A-4 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest A-4;

                  (F) the Uncertificated REMIC 1Pass-Through Rate for REMIC 1
Regular Interest A-5 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest A-5;

                  (G) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest A-6 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest A-6;

                  (H) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest M-1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of

                                       24

<PAGE>

REMIC 1 Regular Interest M-1;

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

                  (J) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest M-3 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest M-3;

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

                  (L) 100% of the interest on REMIC 1 Regular Interest P.

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

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

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

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

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

         (iii) federal funds, certificates of deposit, demand deposits, time
deposits and bankers' acceptances (which shall each have an original maturity of
not more than 90 days and, in the case of bankers' acceptances, shall in no
event have an original maturity of more than 365 days or a remaining maturity of
more than 30 days) denominated in United States dollars of any U.S. depository
institution or trust company incorporated under the laws of the United States or
any state thereof or of any domestic branch of a foreign depository institution
or trust company; provided that the debt obligations of such depository
institution or trust company (or, if the only Rating Agency is Standard &
Poor's, in the case of the principal depository institution in a depository
institution

                                       25

<PAGE>

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

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

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

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

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

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

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

         "Pre-Funding Amount": The amount on deposit in the Pre-Funding Account
on any Determination Date.

         "Pre-Funding Account": An account established by the Trustee for the
benefit of the

                                       26

<PAGE>

Certificateholders and funded on the Closing Date by the Company with the
Original Pre-Funded Amount.

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

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

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

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

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

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

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

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

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

         "Principal Remittance Amount": With respect to any Distribution Date,
the sum of (i) each scheduled payment of principal collected or advanced on the
Mortgage Loans by the Master Servicer that were due during the related Due
Period, (ii) the principal portion of all partial and full Principal Prepayments
of the Mortgage Loans applied by the Master Servicer during the related
Prepayment Period, (iii) the principal portion of all Net Liquidation Proceeds,
REO Proceeds, Insurance Proceeds, and Subsequent Recoveries received during the
related Prepayment Period, (iv) the principal portion of proceeds of Mortgage
Loan purchases made pursuant to Section 2.02, 2.04 or

                                       27

<PAGE>

3.14, in each case received or made during the related Prepayment Period, (v)
the principal portion of any related Substitution Adjustments deposited in the
Custodial Account during the related Prepayment Period and (vi) on the
Distribution Date on which the Trust Fund is to be terminated pursuant to
Section 9.01, the principal portion of the termination price received from the
Master Servicer in connection with a termination of the Trust Fund to occur on
such Distribution Date.

         "Prospectus Supplement": That certain Prospectus Supplement dated May
26, 2004 relating to the public offering of the Class A Certificates and the
Mezzanine Certificates.

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

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

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

                                       28

<PAGE>

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

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

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

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

         "Rate Increase": If the Master Servicer does not exercise its purchase
option as described under Section 9.01 with respect to the Certificates, on any
Distribution Dates after the Step-Up Date, 0.50% per annum.

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

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

         "Record Date": With respect to each Class of Certificates, other than
the Class A-1, Class M-2 and Class M-3 Certificates and each Distribution Date,
the last Business Day of the month immediately preceding the month of the
related Distribution Date. With respect to each Distribution Date and any Class
A-1, Class M-2 and Class M-3 Certificates which are Book-Entry Certificates,

                                       29

<PAGE>

the Business Day prior to such Distribution Date. With respect to each
Distribution Date and any Class A-1, Class M-2 and Class M-3 Certificates which
are not Book-Entry Certificates, the close of business on the last Business Day
of the month preceding the month in which such Distribution Date occurs.

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

         "Relief Act": The Servicemembers Relief Act, as amended, and similar
legislation or regulations.

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

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

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

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

         "REMIC 1 Regular Interest A-1": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC

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<PAGE>

1 Regular Interest A-1 shall accrue interest at the related Uncertificated REMIC
1 Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.

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

         "REMIC 1 Regular Interest A-3": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest A-3 shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

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

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

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

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

                                       31

<PAGE>

Balance as set forth in the Preliminary Statement hereto.

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

         "REMIC 1 Regular Interest M-3": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest M-3 shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to any Prepayment Charges relating to the Mortgage
Loans collected by the Master Servicer and to a distribution of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.

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

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

         "REMIC 1 Regular Interests": REMIC 1 Regular Interest AA, REMIC 1
Regular Interest A-1, REMIC 1 Regular Interest A-2, REMIC 1 Regular Interest
A-3, REMIC 1 Regular Interest A-4, REMIC 1 Regular Interest A-5, REMIC 1 Regular
Interest A-6, REMIC 1 Regular Interest M-1, REMIC 1 Regular Interest M-2, REMIC
1 Regular Interest M-3, REMIC 1 Regular Interest ZZ and REMIC 1 Regular Interest
P.

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

         "REMIC 1 Overcollateralized Amount": With respect to any date of
determination, (i) 1% of the aggregate Uncertificated Principal Balances of
REMIC 1 Regular Interest AA, REMIC 1 Regular Interest A-1, REMIC 1 Regular
Interest A-2, REMIC 1 Regular Interest A-3, REMIC 1

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<PAGE>

Regular Interest A-4, REMIC 1 Regular Interest A-5, REMIC 1 Regular Interest
A-6, REMIC 1 Regular Interest M-1, REMIC 1 Regular Interest M-2, REMIC 1 Regular
Interest M-3 and REMIC 1 Regular Interest ZZ, minus (ii) the aggregate of the
Uncertificated Principal Balances of REMIC 1 Regular Interest A-1, REMIC 1
Regular Interest A-2, REMIC 1 Regular Interest A-3, REMIC 1 Regular Interest
A-4, REMIC 1 Regular Interest A-5, REMIC 1 Regular Interest A-6, REMIC 1 Regular
Interest M-1, REMIC 1 Regular Interest M-2 and REMIC 1 Regular Interest M-3, in
each case as of such date of determination.

         "REMIC 1 Principal Loss Allocation Amount": With respect to any
Distribution Date and the mortgage loans, an amount equal to (a) the product of
(i) the Aggregate Stated Principal Balance of the Mortgage Loans and related REO
Properties then outstanding and (ii) 1 minus a fraction, the numerator of which
is two times the aggregate of the Uncertificated Principal Balances of REMIC 1
Regular Interest A-1, REMIC 1 Regular Interest A-2, REMIC 1 Regular Interest
A-3, REMIC 1 Regular Interest A-4, REMIC 1 Regular Interest A-5, REMIC 1 Regular
Interest A-6, REMIC 1 Regular Interest M-1, REMIC 1 Regular Interest M-2 and
REMIC 1 Regular Interest M-3, and the denominator of which is the aggregate of
the Uncertificated Principal Balances of REMIC 1 Regular Interest A-1, REMIC 1
Regular Interest A-2, REMIC 1 Regular Interest A-3, REMIC 1 Regular Interest
A-4, REMIC 1 Regular Interest A-5, REMIC 1 Regular Interest A-6, REMIC 1 Regular
Interest M-1, REMIC 1 Regular Interest M-2, REMIC 1 Regular Interest M-3 and
REMIC 1 Regular Interest ZZ.

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

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

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

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

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

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

         "REO Disposition": The receipt by the Master Servicer of Insurance
Proceeds, Liquidation

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<PAGE>

Proceeds and other payments and recoveries (including proceeds of a final sale)
which the Master Servicer expects to be finally recoverable from the sale or
other disposition of the REO Property.

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

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

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

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

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

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

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

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

         "Servicing Advances": All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in connection with a default, delinquency or
other unanticipated event in the performance by the Master Servicer or any
Sub-Servicer of its servicing obligations, including, but not limited to, the
cost of (i) the preservation, restoration and protection of a Mortgaged
Property, (ii) any enforcement or judicial proceedings, including foreclosures,
including any expenses incurred in relation to any such proceedings that result
from the Mortgage Loan being registered on the MERS

                                       34

<PAGE>

System, (iii) the management and liquidation of any REO Property, including
reasonable fees paid to any independent contractor in connection therewith, and
(iv) compliance with the obligations under the second paragraph of Section 3.01,
Section 3.09 and Section 3.13 (other than any deductible described in the last
paragraph thereof).

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

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

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

         "Special Deposit": An amount equal to $402,691.31.

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

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

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

         "Step-Up Date": The first Distribution Date following the first month
in which the aggregate unpaid principal balance of the mortgage loans, and
properties acquired in respect thereof, remaining in the trust has been reduced
to less than or equal to 10% of the Cut-off Date Balance.

         "Stepdown Date": Is the earlier of (i) the first Distribution Date on
which the aggregate Certificate Principal Balance of the Class A Certificates
has been reduced to zero and (ii) the later to occur of (x) the Distribution
Date occurring in June 2007 and (y) the first Distribution Date on which the
aggregate Certificate Principal Balance of the Class A Certificates (calculated
for this

                                       35

<PAGE>

purpose only after taking into account the receipt of principal on the Mortgage
Loans, but prior to any distribution of principal to the Holders of the
Certificates) is greater than or equal to approximately 87.20% of the Aggregate
Stated Principal Balance of the Mortgage Loans, calculated after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced and unscheduled collections of principal received
during the related Prepayment Period.

         "Subsequent Cut-off Date": With respect to any Subsequent Mortgage
Loan, the date, as designated by the Company, that is the later of (i) the first
day of the month in which the related Subsequent Transfer Date occurs and (ii)
the origination date of such subsequent Mortgage Loan, as the Cut-off Date with
respect to the related Subsequent Mortgage Loan.

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

         "Subsequent Mortgage Loan Purchase Agreement": Any Mortgage Loan
Purchase Agreement dated as of the Subsequent Cut-off Date, among Impac Funding
Corporation, as seller, Impac Mortgage Holdings, Inc., as guarantor, and the
Company as purchaser, and all amendments thereof and supplements thereto.

         "Subsequent Recoveries": Any Liquidation Proceeds (net of amounts owed
to the Master Servicer or any Sub-servicer with respect to the related Mortgage
Loan) received after the final liquidation of a Mortgage Loan. If Subsequent
Recoveries are received, they will be included as part of the Principal
Remittance Amount for the following Distribution Date and distributed in
accordance with the priorities described in Section 4.01 of this Agreement. In
addition, after giving effect to all distributions on a Distribution Date, if
any Allocated Realized Loss Amounts are outstanding, the Allocated Realized Loss
Amount for the class of Mezzanine Certificates then outstanding with the highest
distribution priority will be decreased by the amount of such Subsequent
Recoveries until reduced to zero (with any remaining Subsequent Recoveries
applied to reduce the Allocated Realized Loss Amount of the class with the next
highest distribution priority), and the Certificate Principal Balance of such
class or classes of Mezzanine Certificates will be increased by the same amount.
Thereafter, such class or classes of Mezzanine Certificates will accrue interest
on the increased Certificate Principal Balance.

         "Subsequent Transfer Date": With respect to any Subsequent Mortgage
Loan, the applicable date upon which such Mortgage Loan was purchased from the
Seller with amounts on deposit in the Pre-Funding Account or other date as
designated by the Seller.

         "Subsequent Transfer Instrument": With respect to the Subsequent
Mortgage Loans, the Subsequent Transfer Instrument, dated as of the applicable
Subsequent Transfer Date, between the Company and the Trustee, or such other
instrument as agreed upon by the Company and the Trustee, a form of which is
attached hereto as Exhibit M.

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<PAGE>

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

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

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

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

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

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

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

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

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

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

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

                  (1) the product of (a) 2.0 and (b) the average three-month
         rolling percentage obtained by dividing (x) the aggregate Stated
         Principal Balance of Mortgage Loans that are 60 or more days delinquent
         (including for this purpose any such Mortgage Loans in

                                       37

<PAGE>

         foreclosure, Mortgage Loans with respect to which the related Mortgaged
         Property has been acquired by the Trust Fund, and Mortgage Loans
         discharged due to bankruptcy) by (y) the Aggregate Stated Principal
         Balance of the Mortgage Loans, in each case, as of the last day of the
         previous calendar month, exceeds the Credit Enhancement Percentage; or

                  (2) the cumulative amount of Realized Losses incurred on the
         Mortgage Loans from the Cut-off Date through the end of the calendar
         month immediately preceding such Distribution Date divided by the
         Cut-off Date Balance exceeds (i) 0.75% with respect to any Distribution
         Date occurring in June 2007, plus an additional 1/12th of 0.50% for
         each month thereafter up to and including the Distribution Date in May
         2008, (ii) 1.25% with respect to the Distribution Date occurring in
         June 2008, plus an additional 1/12th of 0.15% for each month thereafter
         up to and including the Distribution Date in May 2009, (iii) 1.40% with
         respect to any Distribution Date occurring in June 2009, plus an
         additional 1/12th of 0.10% for each month thereafter up to and
         including the Distribution Date in May 2010 and (iv) 1.50% with respect
         to any Distribution Date occurring in June 2010 and thereafter.

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

         "Trust Fund": REMIC 1, REMIC 2, the Corridor Contract, the Net WAC
Shortfall Reserve Fund and the Pre-Funding Account.

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

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

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

         "Uncertificated Accrued Interest": With respect to each REMIC 1 Regular
Interest on each Distribution Date, an amount equal to one month's interest at
the related Uncertificated Pass- Through Rate on the Uncertificated Principal
Balance of such REMIC 1 Regular Interest. In each case, Uncertificated Accrued
Interest will be reduced by any Net Prepayment Interest Shortfalls and Relief
Act Interest Shortfalls (allocated to such REMIC 1 Regular Interests as set
forth in Section 1.03).

         "Uncertificated Principal Balance": With respect to each REMIC 1
Regular Interest, the principal amount of such REMIC 1 Regular Interest
outstanding as of any date of determination. As of the Closing Date, the
Uncertificated Principal Balance of each REMIC 1 Regular Interest shall equal
the amount set forth in the Preliminary Statement hereto as its initial
Uncertificated Principal Balance. On each Distribution Date, the Uncertificated
Principal Balance of each such REMIC 1

                                       38

<PAGE>

Regular Interest shall be reduced by all distributions of principal made on such
REMIC 1 Regular Interest on such Distribution Date pursuant to Section 4.04 and,
if and to the extent necessary and appropriate, shall be further reduced on such
Distribution Date by Realized Losses as provided in Section 4.05. The
Uncertificated Principal Balance of REMIC 1 Regular Interest ZZ shall be
increased by interest deferrals as provided in Section 4.04. The Uncertificated
Principal Balance of each REMIC 1 Regular Interest shall never be less than
zero.

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

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

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

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

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<PAGE>

         "Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. At all times during the term
of this Agreement, (i) 98% of all Voting Rights will be allocated among the
Holders of the Class A Certificates, the Mezzanine Certificates and the Class C
Certificates in proportion to the then outstanding Certificate Principal
Balances of their respective Certificates, (ii) 1% of all Voting Rights will be
allocated to the Holders of the Class P Certificates and (iii) 1% of all Voting
Rights will be allocated to the Holders of the Class R Certificates. The Voting
Rights allocated to any Class of Certificates shall be allocated among all
Holders of the Certificates of such Class in proportion to the outstanding
Percentage Interests in such Class represented thereby.

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

         Section 1.02 Determination of LIBOR.

         LIBOR applicable to the calculation of the Pass-Through Rate on the
Class A-1, Class M-2 and Class M-3 Certificates for any Accrual Period will be
determined on each LIBOR Rate Adjustment Date.

         On each LIBOR Rate Adjustment Date, LIBOR shall be established by the
Trustee and, as to any Accrual Period, will equal the rate for one month United
States dollar deposits that appears on the Telerate Screen Page 3750 as of 11:00
a.m., London time, on such LIBOR Rate Adjustment Date. "Telerate Screen Page
3750" means the display designated as page 3750 on the Telerate Service (or such
other page as may replace page 3750 on that service for the purpose of
displaying London interbank offered rates of major banks). If such rate does not
appear on such page (or such other page as may replace that page on that
service, or if such service is no longer offered, LIBOR shall be so established
by use of such other service for displaying LIBOR or comparable rates as may be
selected by the Trustee after consultation with the Master Servicer), the rate
will be the Reference Bank Rate. The "Reference Bank Rate" will be determined on
the basis of the rates at which deposits in U.S. Dollars are offered by the
reference banks (which shall be any three major banks that are engaged in
transactions in the London interbank market, selected by the Trustee after
consultation with the Master Servicer) as of 11:00 a.m., London time, on the
LIBOR Rate Adjustment Date to prime banks in the London interbank market for a
period of one month in amounts approximately equal to the aggregate Certificate
Principal Balance of the Class A-1, Class M-2 and Class M-3 Certificates then
outstanding. The Trustee will request the principal London office of each of the
reference banks to provide a quotation of its rate. If at least two such
quotations are provided, the rate will be the arithmetic mean of the quotations
rounded up to the next multiple of 1/16%. If on such date fewer than two
quotations are provided as requested, the rate will be the arithmetic mean of
the rates quoted by one or more major banks in New York City, selected by the
Trustee after consultation with the Master Servicer, as of 11:00 a.m., New York
City time, on such date for loans in U.S. Dollars to leading European banks for
a period of one month in amounts approximately equal to the aggregate
Certificate Principal Balance of the Class A-1, Class M-2 and Class M-3
Certificates then outstanding. If no such quotations can be obtained, the rate
will be

                                       40

<PAGE>

LIBOR for the prior Distribution Date; provided however, if, under the
priorities described above, LIBOR for a Distribution Date would be based on
LIBOR for the previous Distribution Date for the third consecutive Distribution
Date, the Trustee shall select an alternative comparable index after
consultation with the Master Servicer (over which the Trustee has no control),
used for determining one-month Eurodollar lending rates that is calculated and
published (or otherwise made available) by an independent party.

         The establishment of LIBOR by the Trustee on any LIBOR Rate Adjustment
Date and the Trustee's subsequent calculation of the Pass-Through Rate
applicable to the Class A-1, Class M-2 and Class M-3 Certificates for the
relevant Accrual Period, in the absence of manifest error, will be final and
binding.

         Promptly following each LIBOR Rate Adjustment Date the Trustee shall
supply the Master Servicer with the results of its determination of LIBOR on
such date. Furthermore, the Trustee will supply to any Certificateholder so
requesting by telephone the Pass-Through Rate on the Class A-1, Class M-2 and
Class M-3 Certificates for the current and the immediately preceding Accrual
Period.

         Section 1.03 Allocation of Certain Interest Shortfalls.

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

         For purposes of calculating the amount of Uncertificated Accrued
Interest for the Uncertificated REMIC 1 Regular Interests for any Distribution
Date, the aggregate amount of any Net Prepayment Interest Shortfalls and any
Relief Act Interest Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated (i) with respect to the Mortgage Loans,
first, to Uncertificated Accrued Interest payable to REMIC 1 Regular Interest AA
and REMIC 1 Regular Interest ZZ up to an aggregate amount equal to the REMIC 1
Interest Loss Allocation Amount, 98% and 2%, respectively, and thereafter among
REMIC 1 Regular Interest AA, REMIC 1 Regular Interest A-1, REMIC 1 Regular
Interest A-2, REMIC 1 Regular Interest A-3, REMIC 1 Regular Interest A-4, REMIC
1 Regular Interest A-5, REMIC 1 Regular Interest A-6, REMIC 1 Regular Interest
M-1, REMIC 1 Regular Interest M-2, REMIC 1 Regular Interest, M-3 and REMIC 1
Regular Interest ZZ, PRO RATA based on, and to the extent of, one month's
interest at the then applicable respective Uncertificated REMIC 1 Pass-Through
Rate on the respective Uncertificated

                                       41

<PAGE>

Principal Balance of each such REMIC 1 Regular Interest.

                                       42

<PAGE>

                                   ARTICLE II

                          CONVEYANCE OF MORTGAGE LOANS;
                        ORIGINAL ISSUANCE OF CERTIFICATES

         Section 2.01. Conveyance of Mortgage Loans.

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

         In addition, on or after the Closing Date, the Company shall deposit in
the Collection Account the Special Deposit, which shall be used to cover
interest shortfalls as a result of the Pre- Funding Account. The Special Deposit
shall remain uninvested.

         In connection with such transfer and assignment, the Company has caused
the Seller to deliver to, and deposit with the Trustee, as described in the
Mortgage Loan Purchase Agreement, with respect to each Mortgage Loan, and the
Company has caused the Seller to deliver to, and deposit with the Trustee, as
described in accordance with Section 2.06, with respect to each Subsequent
Mortgage Loan, the following documents or instruments:

         (i) the original Mortgage Note endorsed without recourse, "Deutsche
Bank National Trust Company, as trustee under the Pooling and Servicing
Agreement relating to Impac Secured Assets Corp., Mortgage Pass-Through
Certificates, Series 2004-2" with all intervening endorsements showing an
unbroken chain of endorsements from the originator to the Person endorsing it to
the Trustee or, with respect to any Mortgage Loan as to which the original
Mortgage Note has been permanently lost or destroyed and has not been replaced,
a Lost Note Affidavit;

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

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

                                       43

<PAGE>

National Trust Company, as trustee," or to "Deutsche Bank National Trust
Company, as trustee for holders of Impac Secured Assets Corp., Mortgage
Pass-Through Certificates, Series 2004-2";

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

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

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

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

         The Seller is obligated as described in the Mortgage Loan Purchase
Agreement, with respect to the Mortgage Loans, and in accordance with Section
2.06 and the Subsequent Mortgage Loan Purchase Agreement, with respect to the
Subsequent Mortgage Loans, to deliver to the Trustee: (a) either the original
recorded Mortgage, or in the event such original cannot be delivered by the
Seller, a copy of such Mortgage certified as true and complete by the
appropriate recording office, in those instances where a copy thereof certified
by the Seller was delivered to the Trustee pursuant to clause (ii) above; and
(b) either the original Assignment or Assignments of the Mortgage, with evidence
of recording thereon, showing an unbroken chain of assignment from the
originator to the Seller, or in the event such original cannot be delivered by
the Seller, a copy of such Assignment or Assignments certified as true and
complete by the appropriate recording office, in those instances where copies
thereof certified by the Seller were delivered to the Trustee pursuant to clause
(iv) above. However, pursuant to the Mortgage Loan Purchase Agreement with
respect to the Initial Mortgage Loans and pursuant to Section 2.06 and the
Subsequent Mortgage Loan Purchase Agreement with respect to the Subsequent
Mortgage Loans, the Seller need not cause to be recorded any assignment in any
jurisdiction under the laws of which, as evidenced by an Opinion of Counsel
delivered by the Seller to the Trustee and the Rating Agencies, the recordation
of such assignment is not necessary to protect the Trustee's interest in the
related Mortgage Loan; provided, however, notwithstanding the delivery of any
Opinion of Counsel, each assignment shall be submitted for recording by the
Seller in the manner described above, at no expense to the Trust or the Trustee,
upon the earliest to occur of: (i) direction by the Holders of Certificates
evidencing at least 25% of the Voting Rights, (ii) the occurrence of a Event of
Default, (iii) the occurrence of a bankruptcy, insolvency or foreclosure
relating to the Seller, (iv) the occurrence of a servicing transfer as described
in Section 7.02 hereof and (v) if the Seller is not the Master Servicer and with
respect to any one assignment, the occurrence of a bankruptcy, insolvency or
foreclosure relating to the Mortgagor under the related Mortgage.

                                       44

<PAGE>

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

         If any Assignment is lost or returned unrecorded to the Trustee because
of any defect therein, the Seller is required, as described in the Mortgage Loan
Purchase Agreement with respect to the Initial Mortgage Loans, and as described
in the Subsequent Mortgage Loan Purchase Agreement and in accordance with
Section 2.06, with respect to the Subsequent Mortgage Loans, to prepare a
substitute Assignment or cure such defect, as the case may be, and the Seller
shall cause such Assignment to be recorded in accordance with this section.

         The Seller is required as described in the Mortgage Loan Purchase
Agreement with respect to the Initial Mortgage Loans, and as described in the
Subsequent Mortgage Loan Purchase Agreement and in accordance with Section 2.06,
with respect to the Subsequent Mortgage Loans], with respect to the Mortgage
Loans, to exercise its best reasonable efforts to deliver or cause to be
delivered to the Trustee within 120 days of the Closing Date, with respect to
the Mortgage Loans, the original or a photocopy of the title insurance policy
with respect to each such Mortgage Loan assigned to the Trustee pursuant to this
Section 2.01.

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

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

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

         It is intended that the conveyance of the Mortgage Loans by the Company
to the Trustee as provided in this Section be, and be construed as, a sale of
the Mortgage Loans as provided for in this

                                       45

<PAGE>

Section 2.01 by the Company to the Trustee for the benefit of the
Certificateholders. It is, further, not intended that such conveyance be deemed
a pledge of the Mortgage Loans by the Company to the Trustee to secure a debt or
other obligation of the Company. However, in the event that the Mortgage Loans
are held to be property of the Company, or if for any reason this Agreement is
held or deemed to create a security interest in the Mortgage Loans, then it is
intended that, (a) this Agreement shall also be deemed to be a security
agreement within the meaning of Articles 8 and 9 of the New York Uniform
Commercial Code and the Uniform Commercial Code of any other applicable
jurisdiction; (b) the conveyance provided for in this Section shall be deemed to
be (1) a grant by the Company to the Trustee of a security interest in all of
the Company's right (including the power to convey title thereto), title and
interest, whether now owned or hereafter acquired, in and to (A) the Mortgage
Loans, including the Mortgage Notes, the Mortgages, any related Insurance
Policies and all other documents in the related Mortgage Files, (B) all amounts
payable to the holders of the Mortgage Loans in accordance with the terms
thereof and (C) all proceeds of the conversion, voluntary or involuntary, of the
foregoing into cash, instruments, securities or other property, including
without limitation all amounts from time to time held or invested in the
Certificate Account or the Custodial Account, whether in the form of cash,
instruments, securities or other property and (2) an assignment by the Company
to the Trustee of any security interest in any and all of the Seller's right
(including the power to convey title thereto), title and interest, whether now
owned or hereafter acquired, in and to the property described in the foregoing
clauses (1)(A) through (C); (c) the possession by the Trustee or any other agent
of the Trustee of Mortgage Notes and such other items of property as constitute
instruments, money, negotiable documents or chattel paper shall be deemed to be
"possession by the secured party" or possession by a purchaser or a person
designated by such secured party, for purposes of perfecting the security
interest pursuant to the New York Uniform Commercial Code and the Uniform
Commercial Code of any other applicable jurisdiction (including, without
limitation, Sections 9-115, 9-305, 8-102, 8-301, 8-501 and 8-503 thereof); and
(d) notifications to persons holding such property, and acknowledgments,
receipts or confirmations from persons holding such property, shall be deemed
notifications to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the Trustee for the purpose
of perfecting such security interest under applicable law. The Company and the
Trustee shall, to the extent consistent with this Agreement, take such actions
as may be necessary to ensure that, if this Agreement were deemed to create a
security interest in the Mortgage Loans and the REMIC 1 Regular Interests, such
security interest would be deemed to be a perfected security interest of first
priority under applicable law and will be maintained as such throughout the term
of the Agreement.

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

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

         The Trustee agrees, for the benefit of the Certificateholders, to
review or cause to be

                                       46

<PAGE>

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

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

         If in the process of reviewing the Mortgage Files and preparing the
certifications referred to above the Trustee finds any document or documents
constituting a part of a Mortgage File to be missing or defective in any
material respect, the Trustee shall promptly notify the Seller, the Master
Servicer and the Company. The Trustee shall promptly notify the Seller of such
defect and request that the Seller cure any such defect within 60 days from the
date on which the Seller was notified of such defect, and if the Seller does not
cure such defect in all material respects during such period, request on behalf
of the Certificateholders that the Seller purchase such Mortgage Loan from the
Trust Fund at the Purchase Price within 90 days after the date on which the
Seller was notified of such defect; provided that if such defect would cause the
Mortgage Loan to be other than a "qualified mortgage" as defined in Section
860G(a)(3) of the Code, any such cure or repurchase must occur within 90 days
from the date such breach was discovered. It is understood and agreed that the
obligation of the Seller to cure a material defect in, or purchase any Mortgage
Loan as to which a material defect in a constituent document exists shall
constitute the sole remedy respecting such defect available to
Certificateholders or the Trustee on behalf of Certificateholders. The Purchase
Price for the purchased Mortgage Loan shall be deposited or caused to be
deposited upon receipt by the Master Servicer in the Custodial Account and, upon
receipt by the Trustee of written notification of such deposit signed by a
Servicing Officer, the Trustee shall release or cause to be released to the
Seller the related Mortgage File and shall execute and deliver such instruments
of transfer or assignment, in each case without recourse, as the Seller shall
require as necessary to vest in the Seller ownership of any Mortgage Loan
released pursuant hereto and at such time the Trustee shall have

                                       47

<PAGE>

no further responsibility with respect to the related Mortgage File. In
furtherance of the foregoing, if the Seller is not a member of MERS and the
Mortgage is registered on the MERS(R) System, the Master Servicer, at its own
expense and without any right of reimbursement, shall cause MERS to execute and
deliver an assignment of the Mortgage in recordable form to transfer the
Mortgage from MERS to the Seller and shall cause such Mortgage to be removed
from registration on the MERS(R) System in accordance with MERS' rules and
regulations.

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

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

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

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

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

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

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

                                       48

<PAGE>

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

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

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

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

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

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

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

                                       49

<PAGE>

of the representations, warranties and covenants contained in the Mortgage Loan
Purchase Agreement.

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

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

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

         Section 2.04. Representations and Warranties of the Seller.

         The Company hereby assigns to the Trustee for the benefit of
Certificateholders all of its rights (but none of its obligations) in, to and
under the Mortgage Loan Purchase Agreement. Insofar as the Mortgage Loan
Purchase Agreement relates to such representations and warranties and any
remedies provided thereunder for any breach of such representations and
warranties, such right, title and interest may be enforced by the Trustee on
behalf of the Certificateholders. Upon the discovery by the Company, the Master
Servicer or the Trustee of a breach of any of the representations and warranties
made in the Mortgage Loan Purchase Agreement in respect of any Mortgage Loan
which materially and adversely affects the interests of the Certificateholders
in such Mortgage Loan, the party discovering such breach shall give prompt
written notice to the other parties. The Trustee shall promptly notify the
Seller of such breach and request that the Seller shall, within 90 days from the
date that the Seller was notified or otherwise obtained knowledge of such
breach, either (i) cure such breach in all material respects or (ii) purchase
such Mortgage Loan from the Trust Fund at the Purchase Price and in the manner
set forth in Section 2.02; provided that if such breach would cause the Mortgage
Loan to be other than a "qualified mortgage" as defined in Section 860G(a)(3) of
the Code, any such cure or repurchase must occur within 90 days from the date
such breach was discovered. However, in the case of a breach under the Mortgage
Loan Purchase Agreement, subject to the approval of the Company the Seller shall
have the option to substitute a Qualified Substitute Mortgage Loan or Loans for
such Mortgage Loan if such substitution occurs within two years following the
Closing Date, except that if the breach would cause the Mortgage Loan to be
other than a "qualified mortgage" as defined in Section 860G(a)(3) of the Code,
any such substitution must occur within 90 days from the date the breach was
discovered if such 90 day period expires before two years following the Closing
Date. In the event that the Seller elects to substitute a Qualified Substitute
Mortgage Loan or Loans for a Deleted Mortgage Loan pursuant to this Section
2.04, the Trustee shall enforce the obligation of the Seller under the Mortgage
Loan Purchase Agreement to deliver to the Trustee and the Master Servicer, as
appropriate, with respect to such Qualified Substitute Mortgage Loan or Loans,
the original Mortgage Note, the Mortgage, an Assignment of the Mortgage in
recordable form, and such other documents and agreements as are required by

                                       50

<PAGE>

Section 2.01, with the Mortgage Note endorsed as required by Section 2.01. No
substitution will be made in any calendar month after the Determination Date for
such month. Monthly Payments due with respect to Qualified Substitute Mortgage
Loans in the month of substitution, to the extent received by the Master
Servicer or any Sub-Servicer, shall not be part of the Trust Fund and will be
retained by the Master Servicer and remitted by the Master Servicer to the
Seller on the next succeeding Distribution Date. For the month of substitution,
distributions to Certificateholders will include the Monthly Payment due on a
Deleted Mortgage Loan for such month and thereafter the Seller shall be entitled
to retain all amounts received in respect of such Deleted Mortgage Loan. The
Company shall amend or cause to be amended the Mortgage Loan Schedule for the
benefit of the Certificateholders to reflect the removal of such Deleted
Mortgage Loan and the substitution of the Qualified Substitute Mortgage Loan or
Loans and the Company shall deliver the amended Mortgage Loan Schedule to the
Trustee. Upon such substitution, the Qualified Substitute Mortgage Loan or Loans
shall be subject to the terms of this Agreement in all respects, the Seller
shall be deemed to have made the representations and warranties with respect to
the Qualified Substitute Mortgage Loan contained in the Mortgage Loan Purchase
Agreement as of the date of substitution, and the Company shall be deemed to
have made with respect to any Qualified Substitute Mortgage Loan or Loans, as of
the date of substitution, the representations and warranties set forth in
Exhibit I hereof (other than representations (xiv), (xvi), (xxix) and (xxxiii)
through (xli)).

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

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

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         Section 2.05. Issuance of Certificates; Conveyance of REMIC 1 Regular
                       Interests and Acceptance of REMIC 2 by the Trustee.

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

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

         (c) In exchange for the REMIC 1 Regular Interests and, concurrently
with the assignment to the Trustee thereof, pursuant to the written request of
the Company executed by an officer of the Company, the Trustee has executed,
authenticated and delivered to or upon the order of the Company, the Regular
Certificates in authorized denominations evidencing (together with the Class R-2
Interest) the entire beneficial ownership interest in REMIC 2.

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

         Section 2.06. Conveyance of Subsequent Mortgage Loans.

         (a) Subject to the conditions set forth in paragraph (b) below, in
consideration of the Trustee's delivery on the Subsequent Transfer Dates to or
upon the order of the Company of all or a portion of the balance of funds in the
Pre-Funding Account, the Company shall on any Subsequent Transfer Date sell,
transfer, assign, set over and convey without recourse to the Trustee for the
benefit of the Trust Fund but subject to the other terms and provisions of this
Agreement all of the right, title and interest of the Company in and to (i) the
Subsequent Mortgage Loans identified on

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the Mortgage Loan Schedule attached to the related Subsequent Transfer
Instrument delivered by the Company on such Subsequent Transfer Date, (ii)
principal due and interest accruing on the Subsequent Mortgage Loans after the
related Subsequent Cut-off Date and (iii) all items with respect to such
Subsequent Mortgage Loans to be delivered pursuant to Section 2.01 and the other
items in the related Mortgage Files; provided, however, that the Company
reserves and retains all right, title and interest in and to principal due and
interest accruing on the Subsequent Mortgage Loans prior to the related
Subsequent Cut-off Date. The transfer and delivery to the Trustee for deposit in
the Mortgage Pool by the Company of the Subsequent Mortgage Loans identified on
the Mortgage Loan Schedule attached to the related Subsequent Transfer Agreement
shall be absolute and is intended by the Company, the Master Servicer, the
Trustee and the Certificateholders to constitute and to be treated as a sale of
the Subsequent Mortgage Loans by the Company to the Trust Fund. The related
Mortgage File for each Subsequent Mortgage Loan shall be delivered to the
Trustee or the Custodian at least three Business Days prior to the related
Subsequent Transfer Date.

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

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

                  (i) the Company shall have provided the Trustee with a timely
         Addition Notice;

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

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

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

                  (v) the Funding Period shall not have terminated;

                  (vi) the Company shall not have selected the Subsequent
         Mortgage Loans in a

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<PAGE>

         manner that it believed to be adverse to the interests of the
         Certificateholders;

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

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

                  (c) The obligation of the Trust Fund to purchase a Subsequent
         Mortgage Loan on any Subsequent Transfer Date is subject to the
         satisfaction of the conditions set forth in paragraph (d) below and the
         accuracy of the following representations and warranties with respect
         to such Subsequent Mortgage Loan determined as of the related
         Subsequent Cut-off Date:

                           (i) the Subsequent Mortgage Loan may not be 30 or
         more days delinquent as of the related Subsequent Cut-off Date;
         provided, however that the Subsequent Mortgage Loans may have a first
         payment date occurring on or after the Subsequent Cut-off Date and,
         therefore, such Subsequent Mortgage Loans could not have been
         delinquent as of the Subsequent Cut-off Date;

                           (ii) the original term to stated maturity of the
         Subsequent Mortgage Loan will not be less than 180 months and will not
         exceed 360 months from its first payment date;

                           (iii) the Subsequent Mortgage Loan must be a
         fixed-rate, residential mortgage loan with a first lien on the related
         Mortgaged Property;

                           (iv) the Subsequent Mortgage Loan must have a first
         payment date occurring prior to September 1, 2004;

                           (v) the Subsequent Mortgage Loan must have a maturity
         date no later than August 1, 2034;

                           (vi) no Subsequent Mortgage Loan will be a buy-down
         loan or a New York State "high cost loan";

                           (vii) the Subsequent Mortgage Loan must have a credit
         score of not less than 500;

                           (viii) the Subsequent Mortgage Loan must have a
         Mortgage Rate as of the

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<PAGE>

         applicable Subsequent Cut-off Date ranging from 5.70% per annum to
         10.625% per annum;

                           (ix) the Subsequent Mortgage Loan will have been
         underwritten in accordance with the criteria set forth under "The
         Mortgage Pool--Underwriting Standards" in the Prospectus Supplement.

                  (d) as of the related Subsequent Cut-off Date, each group of
Subsequent Mortgage Loans will satisfy the following criteria: (i) have a
weighted average Mortgage Rate ranging from 6.500% to 7.100% per annum; (ii)
consist of Mortgage Loans with prepayment charges representing no less than
approximately 60% of such Mortgage Loans; (iii) have a weighted average credit
score ranging from 688 to 710; (iv) have no more than 42% of such Mortgage Loans
concentrated in the state of California; (v) have no less than 72% of the
Mortgaged Properties securing Mortgage Loans be owner occupied; (vi) have no
less than 68% of the Mortgaged Properties securing Mortgage Loans be single
family detached and DE MINIMIS planned unit developments; (vii) have no more
than 46% of the Mortgage Loans be cash-out refinance; (viii) not have any of
such group of Subsequent Mortgage Loans with a Loan-to-Value Ratio greater than
80% not be covered by a Primary Insurance Policy or the Radian Lender-Paid PMI
Policy; (ix) have no more than 13% of the Mortgage Loans be Mortgage Loans with
an interest only period; and (x) together with the Mortgage Loans already
included in the Trust, have no more than 1% of such Mortgage Loans (by aggregate
Stated Principal Balance as of the Subsequent Cut-off Date) secured by Mortgaged
Properties located in any one zip code.

                  (e) Notwithstanding the foregoing, any Subsequent Mortgage
Loan may be rejected by any Rating Agency if the inclusion of any such
Subsequent Mortgage Loan would adversely affect the ratings of any class of
Certificates. In addition, minor variances from the characteristics stated in
clauses (c) and (d) above will be permitted with the consent of the Rating
Agencies so long as there are compensating factors. At least one Business Day
prior to the related Subsequent Transfer Date, the Company shall obtain
confirmation from each Rating Agency which Subsequent Mortgage Loans, if any,
shall not be included in the transfer on the related Subsequent Transfer Date
and deliver such confirmation to the Trustee and the Master Servicer; provided,
however, that the Master Servicer, in its capacity as Seller, shall have
delivered to each Rating Agency at least three Business Days prior to such
Subsequent Transfer Date a computer file reasonably acceptable to each Rating
Agency describing the characteristics specified in paragraphs (c) and (d) above.

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<PAGE>

                                   ARTICLE III

                          ADMINISTRATION AND SERVICING
                                OF THE TRUST FUND

         Section 3.01. Master Servicer to Act as Master Servicer.

         The Master Servicer shall supervise, or take such actions as are
necessary to ensure, the servicing and administration of the Mortgage Loans and
any REO Property in accordance with this Agreement and its normal servicing
practices, which generally shall conform to the standards (i) of the Servicing
Guide, if Impac Funding Corporation is Master Servicer, or (ii) if Impac Funding
Corporation is not the Master Servicer, of an institution prudently servicing
mortgage loans for its own account and shall have full authority to do anything
it reasonably deems appropriate or desirable in connection with such servicing
and administration. To the extent consistent with the foregoing, the Master
Servicer shall waive (or permit a Sub-Servicer to waive) a Prepayment Charge
only if such waiver would maximize recovery of total proceeds taking into
account the value of such Prepayment Charge and related Mortgage Loan and doing
so is standard and customary in servicing mortgage loans similar to the Mortgage
Loans (including any waiver of a Prepayment Charge in connection with a
refinancing of a Mortgage Loan that is related to a default or a reasonably
foreseeable default), and in no event will it waive a Prepayment Charge in
connection with a refinancing of a Mortgage Loan that is not related to a
default or a reasonably foreseeable default.

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

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<PAGE>

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

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

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

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

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

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

                                       57

<PAGE>

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

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

         (a) The Master Servicer may enter into Sub-Servicing Agreements with
Sub-Servicers for the servicing and administration of the Mortgage Loans and for
the performance of any and all other activities of the Master Servicer
hereunder; provided, however, that such agreements would not result in a
withdrawal or a downgrading by Standard & Poor's of its rating on any Class of
Certificates. Each Sub-Servicer shall be either (i) an institution the accounts
of which are insured by the FDIC or (ii) another entity that engages in the
business of originating or servicing mortgage loans comparable to the Mortgage
Loans, and in either case shall be authorized to transact business in the state
or states in which the related Mortgaged Properties it is to service are
situated, if and to the extent required by applicable law to enable the
Sub-Servicer to perform its obligations hereunder and under the Sub-Servicing
Agreement, and in either case shall be a Freddie Mac or Fannie Mae approved
mortgage servicer. Any Sub-Servicing Agreement entered into by the Master
Servicer shall include the provision that such Agreement may be immediately
terminated (x) with cause and without any termination fee by any Master Servicer
hereunder or (y) without cause in which case the Master Servicer shall be
responsible for any termination fee or penalty resulting therefrom. In addition,
each Sub-Servicing Agreement shall provide for servicing of the Mortgage Loans
consistent with the terms of this Agreement. With the consent of the Trustee,
the Master Servicer and the Sub-Servicers may enter into Sub-Servicing
Agreements and make amendments to the Sub- Servicing Agreements or enter into
different forms of Sub-Servicing Agreements providing for, among other things,
the delegation by the Master Servicer to a Sub-Servicer of additional duties
regarding the administration of the Mortgage Loans; provided, however, that any
such amendments or different forms shall be consistent with and not violate the
provisions of this Agreement, and that no such amendment or different form shall
be made or entered into which could be reasonably expected to be materially
adverse to the interests of the Certificateholders, without the consent of the
Holders of Certificates entitled to at least 51% of the Voting Rights. The
parties hereto acknowledge that the initial Sub-Servicer shall be Countrywide.

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

         (b) As part of its servicing activities hereunder, the Master Servicer,
for the benefit of the Trustee and the Certificateholders, shall enforce the
obligations of each Sub-Servicer under the related Sub-Servicing Agreement. Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Sub-Servicing Agreements and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such
time as the Master Servicer, in its good faith business judgment, would require
were it the owner of the related Mortgage Loans. The Master Servicer shall pay
the costs of such enforcement at its own expense, but shall be reimbursed
therefor only (i) from a general recovery resulting from such enforcement only
to the extent, if any, that such recovery exceeds all amounts due in respect of
the related Mortgage Loan or (ii) from a specific recovery of costs, expenses or
attorneys' fees against the party

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<PAGE>

against whom such enforcement is directed.

         (c) The Master Servicer represents that it has entered into a contract
regarding the sale of sub-servicing rights with respect to substantially all of
the Mortgage Loans with GMAC and shall transfer the subservicing of
substantially all of the Mortgage Loans from Countrywide to GMAC on or about
July 28, 2004. The Trustee hereby consents to such transfer.

         (d) The Master Servicer represents that it will cause any Sub-Servicer
to accurately and fully report its borrower credit files to all three credit
repositories in a timely manner.

         Section 3.03. Successor Sub-Servicers.

         The Master Servicer shall be entitled to terminate any Sub-Servicing
Agreement and the rights and obligations of any Sub-Servicer pursuant to any
Sub-Servicing Agreement in accordance with the terms and conditions of such
Sub-Servicing Agreement. In the event of termination of any Sub-Servicer, all
servicing obligations of such Sub-Servicer shall be assumed simultaneously by
the Master Servicer without any act or deed on the part of such Sub-Servicer or
the Master Servicer, and the Master Servicer either shall service directly the
related Mortgage Loans or shall enter into a Sub- Servicing Agreement with a
successor Sub-Servicer which qualifies under Section 3.02.

         Section 3.04. Liability of the Master Servicer.

         Notwithstanding any Sub-Servicing Agreement, any of the provisions of
this Agreement relating to agreements or arrangements between the Master
Servicer and a Sub-Servicer or reference to actions taken through a Sub-Servicer
or otherwise, the Master Servicer shall under all circumstances remain obligated
and primarily liable to the Trustee and Certificateholders for the servicing and
administering of the Mortgage Loans and any REO Property in accordance with the
provisions of Article III without diminution of such obligation or liability by
virtue of such Sub- Servicing Agreements or arrangements or by virtue of
indemnification from the Sub-Servicer and to the same extent and under the same
terms and conditions as if the Master Servicer alone were servicing and
administering the Mortgage Loans. For purposes of this Agreement, the Master
Servicer shall be deemed to have received payments on Mortgage Loans when the
Sub-Servicer has received such payments. The Master Servicer shall be entitled
to enter into any agreement with a Sub-Servicer for indemnification of the
Master Servicer by such Sub-Servicer and nothing contained in this Agreement
shall be deemed to limit or modify such indemnification.

         Section 3.05. No Contractual Relationship Between Sub-Servicers and
                       Trustee or Certificateholders.

         Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Sub-Servicer
in its capacity as such and not as an originator shall be deemed to be between
the Sub-Servicer and the Master Servicer alone, and the Trustee and
Certificateholders shall not be deemed parties thereto and shall have no claims,
rights, obligations, duties or liabilities with respect to the Sub-Servicer
except as set forth in Section 3.06. The Master Servicer (or Sub-Servicer) shall
be liable for the payment of any franchise taxes which

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<PAGE>

may be assessed by the California Franchise Tax Board in connection with the
activities of the Trust under this Agreement.

         Section 3.06. Assumption or Termination of Sub-Servicing Agreements by
Trustee.

         (a) If the Trustee or its designee shall assume the master servicing
obligations of the Master Servicer in accordance with Section 7.02 below, the
Trustee, to the extent necessary to permit the Trustee to carry out the
provisions of Section 7.02 with respect to the Mortgage Loans, shall succeed to
all of the rights and obligations of the Master Servicer under each of the
Sub-Servicing Agreements. In such event, the Trustee or its designee as the
successor master servicer shall be deemed to have assumed all of the Master
Servicer's rights and obligations therein and to have replaced the Master
Servicer as a party to such Sub-Servicing Agreements to the same extent as if
such Sub-Servicing Agreements had been assigned to the Trustee or its designee
as a successor master servicer, except that the Trustee or its designee as a
successor master servicer shall not be deemed to have assumed any obligations or
liabilities of the Master Servicer arising prior to such assumption (other than
the obligation to make any Advances hereunder) and the Master Servicer shall not
thereby be relieved of any liability or obligations under such Sub-Servicing
Agreements arising prior to such assumption. Nothing in the foregoing shall be
deemed to entitle the Trustee or its designee as a successor master servicer at
any time to receive any portion of the servicing compensation provided under
Section 3.17 except for such portion as the Master Servicer would be entitled to
receive.

         (b) In the event that the Trustee or its designee as successor master
servicer for the Trustee assumes the servicing obligations of the Master
Servicer under Section 7.02, upon the reasonable request of the Trustee or such
designee as successor master servicer the Master Servicer shall at its own
expense deliver to the Trustee, or at its written request to such designee,
photocopies of all documents, files and records, electronic or otherwise,
relating to the Sub-Servicing Agreements and the related Mortgage Loans or REO
Property then being serviced and an accounting of amounts collected and held by
it, if any, and will otherwise cooperate and use its reasonable efforts to
effect the orderly and efficient transfer of the Sub-Servicing Agreements, or
responsibilities hereunder to the Trustee, or at its written request to such
designee as successor master servicer.

         Section 3.07. Collection of Certain Mortgage Loan Payments.

         (a) The Master Servicer will coordinate and monitor remittances by
Sub-Servicers to the Master Servicer with respect to the Mortgage Loans in
accordance with this Agreement.

         (b) The Master Servicer shall make its reasonable efforts to collect or
cause to be collected all payments required under the terms and provisions of
the Mortgage Loans and shall follow, and use its reasonable efforts to cause
Sub-Servicers to follow, collection procedures comparable to the collection
procedures of prudent mortgage lenders servicing mortgage loans for their own
account to the extent such procedures shall be consistent with this Agreement.
Consistent with the foregoing, the Master Servicer may in its discretion (i)
waive or permit to be waived any late payment charge, prepayment charge,
assumption fee, or any penalty interest in connection with the prepayment of a
Mortgage Loan and (ii) suspend or reduce or permit to be suspended or reduced

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<PAGE>

regular monthly payments for a period of up to six months, or arrange or permit
an arrangement with a Mortgagor for a scheduled liquidation of delinquencies. In
the event the Master Servicer shall consent to the deferment of the due dates
for payments due on a Mortgage Note, the Master Servicer shall nonetheless make
an Advance or shall cause the related Sub-Servicer to make an advance to the
same extent as if such installment were due, owing and delinquent and had not
been deferred through liquidation of the Mortgaged Property; provided, however,
that the obligation of the Master Servicer or related Sub-Servicer to make an
Advance shall apply only to the extent that the Master Servicer believes, in
good faith, that such advances are not Nonrecoverable Advances.

         (c) On each Determination Date, with respect to each Mortgage Loan for
which during the related Prepayment Period the Master Servicer has determined
that all amounts which it expects to recover from or on account of each such
Mortgage Loan have been recovered and that no further Liquidation Proceeds will
be received in connection therewith, the Master Servicer shall provide to the
Trustee a certificate of a Servicing Officer that such Mortgage Loan became a
Liquidated Mortgage Loan in a Cash Liquidation or REO Disposition.

         The Master Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Mortgage Loans, and
shall, to the extent such procedures shall be consistent with this Agreement and
the terms and provisions of any related Insurance Policy, follow such collection
procedures as it would follow with respect to mortgage loans comparable to the
Mortgage Loans and held for its own account. The Master Servicer shall not be
required to institute or join in litigation with respect to collection of any
payment (whether under a Mortgage, Mortgage Note, Primary Hazard Insurance
Policy or otherwise or against any public or governmental authority with respect
to a taking or condemnation) if it reasonably believes that it is prohibited by
applicable law from enforcing the provision of the Mortgage or other instrument
pursuant to which such payment is required. The Master Servicer shall be
responsible for preparing and distributing all information statements relating
to payments on the Mortgage Loans, in accordance with all applicable federal and
state tax laws and regulations.

         Section 3.08. Sub-Servicing Accounts.

         In those cases where a Sub-Servicer is servicing a Mortgage Loan
pursuant to a Sub- Servicing Agreement, the Sub-Servicer will be required to
establish and maintain one or more accounts (collectively, the "Sub-Servicing
Account"). The Sub-Servicing Account shall be an Eligible Account and shall
otherwise be acceptable to the Master Servicer. All amounts held in a
Sub-Servicing Account shall be held in trust for the Trustee for the benefit of
the Certificateholders. Any investment of funds held in such an account shall be
in Permitted Investments maturing not later than the Business Day immediately
preceding the next Sub-Servicer Remittance Date. The Sub- Servicer will be
required to deposit into the Sub-Servicing Account no later than two Business
Days after receipt all proceeds of Mortgage Loans received by the Sub-Servicer,
less its servicing compensation and any unreimbursed expenses and advances, to
the extent permitted by the Sub- Servicing Agreement. On each Sub-Servicer
Remittance Date the Sub-Servicer will be required to remit to the Master
Servicer for deposit in the Custodial Account all funds held in the
Sub-Servicing Account with respect to any Mortgage Loan as of the Sub-Servicer
Remittance Date, after deducting from such remittance an amount equal to the
servicing compensation (including interest on Permitted

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Investments) and unreimbursed expenses and advances to which it is then entitled
pursuant to the related Sub-Servicing Agreement, to the extent not previously
paid to or retained by it. In addition, on each Sub-Servicer Remittance Date the
Sub-Servicer will be required to remit to the Master Servicer any amounts
required to be advanced pursuant to the related Sub-Servicing Agreement. The
Sub-Servicer will also be required to remit to the Master Servicer, within five
Business Days of receipt, the proceeds of any Principal Prepayment made by the
Mortgagor, and, on each Sub-Servicer Remittance Date, the amount of any
Insurance Proceeds or Liquidation Proceeds received during the related
Prepayment Period.

         Section 3.09. Collection of Taxes, Assessments and Similar Items;
                       Servicing Accounts.

         The Master Servicer and the Sub-Servicers shall establish and maintain
one or more accounts (the "Servicing Accounts"), and shall deposit and retain
therein all collections from the Mortgagors (or related advances from
Sub-Servicers) for the payment of taxes, assessments, Primary Hazard Insurance
Policy premiums, and comparable items for the account of the Mortgagors, to the
extent that the Master Servicer customarily escrows for such amounts.
Withdrawals of amounts so collected from a Servicing Account may be made only to
(i) effect payment of taxes, assessments, Primary Hazard Insurance Policy
premiums and comparable items; (ii) reimburse the Master Servicer (or a
Sub-Servicer to the extent provided in the related Sub-Servicing Agreement) out
of related collections for any payments made pursuant to Sections 3.01 (with
respect to taxes and assessments), and 3.13 (with respect to Primary Hazard
Insurance Policies); (iii) refund to Mortgagors any sums as may be determined to
be overages; or (iv) clear and terminate the Servicing Account at the
termination of this Agreement pursuant to Section 9.01. As part of its servicing
duties, the Master Servicer or Sub-Servicers shall, if and to the extent
required by law, pay to the Mortgagors interest on funds in Servicing Accounts
from its or their own funds, without any reimbursement therefor.

         Section 3.10. Custodial Account.

         (a) The Master Servicer shall establish and maintain one or more
accounts (collectively, the "Custodial Account") in which the Master Servicer
shall deposit or cause to be deposited on a daily basis, or as and when received
from the Sub-Servicers, the following payments and collections received or made
by or on behalf of it subsequent to the Cut-off Date with respect to the Initial
Mortgage Loans, or the related Subsequent Cut-off Date with respect to the
Subsequent Mortgage Loans, or payments received by it prior to the Cut-off Date
but allocable to a period subsequent thereto (other than in respect of principal
and interest on the Mortgage Loans due on or before the Cut-off Date):

                  (i) all payments (including advances by a Sub-Servicer) on
account of principal, including Principal Prepayments, on the Mortgage Loans;

                  (ii) all payments (including advances by a Sub-Servicer) on
account of interest on the Mortgage Loans, net of any portion thereof retained
by the Master Servicer or any Sub- Servicer as Servicing Fees;

                  (iii) all Insurance Proceeds, other than proceeds that
represent reimbursement of

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costs and expenses incurred by the Master Servicer or any Sub-Servicer in
connection with presenting claims under the related Insurance Policies,
Liquidation Proceeds and REO Proceeds;

                  (iv) all proceeds of any Mortgage Loan or REO Property
repurchased or purchased in accordance with Sections 2.02, 2.04, 3.14 or 9.01;
and all amounts required to be deposited in connection with the substitution of
a Qualified Substitute Mortgage Loan pursuant to Section 2.04; and

                  (v) any amounts required to be deposited pursuant to Section
3.12, 3.13, 3.15 or 3.22.

         The foregoing requirements for deposit in the Custodial Account shall
be exclusive. In the event the Master Servicer shall deposit in the Custodial
Account any amount not required to be deposited therein, it may withdraw such
amount from the Custodial Account, any provision herein to the contrary
notwithstanding. The Custodial Account shall be maintained as a segregated
account, separate and apart from trust funds created for mortgage pass-through
certificates of other series, and the other accounts of the Master Servicer.

         (b) Funds in the Custodial Account may be invested in Permitted
Investments in accordance with the provisions set forth in Section 3.12. The
Master Servicer shall give notice to the Trustee and the Company of the location
of the Custodial Account after any change thereof.

         Section 3.11. Permitted Withdrawals From the Custodial Account.

         The Master Servicer may, from time to time as provided herein, make
withdrawals from the Custodial Account of amounts on deposit therein pursuant to
Section 3.10 that are attributable to the Mortgage Loans for the following
purposes:

         (i) to make deposits into the Certificate Account in the amounts and in
the manner provided for in Section 4.01;

         (ii) to pay to itself, the Company, the Seller or any other appropriate
person, as the case may be, with respect to each Mortgage Loan that has
previously been purchased or repurchased pursuant to Sections 2.02, 2.04, 3.14
or 9.01 all amounts received thereon and not yet distributed as of the date of
purchase or repurchase;

         (iii) to reimburse itself or any Sub-Servicer for Advances not
previously reimbursed, the Master Servicer's or any Sub-Servicer's right to
reimbursement pursuant to this clause (iii) being limited to amounts received
which represent Late Collections (net of the related Servicing Fees) of Monthly
Payments on Mortgage Loans with respect to which such Advances were made and as
further provided in Section 3.15;

         (iv) to reimburse or pay itself, the Trustee or the Company for
expenses incurred by or reimbursable to the Master Servicer, the Trustee or the
Company pursuant to Sections 3.22, 6.03, 8.05 or 10.01(g), except as otherwise
provided in such Sections hereof;

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         (v) to reimburse itself or any Sub-Servicer for costs and expenses
incurred by or reimbursable to it relating to the prosecution of any claims
pursuant to Section 3.13 that are in excess of the amounts so recovered;

         (vi) to reimburse itself or any Sub-Servicer for unpaid Master
Servicing Fees, Sub- Servicing Fees and unreimbursed Servicing Advances, the
Master Servicer's or any Sub-Servicer's right to reimbursement pursuant to this
clause (vi) with respect to any Mortgage Loan being limited to late recoveries
of the payments for which such advances were made pursuant to Section 3.01 or
Section 3.09 and any other related Late Collections;

         (vii) to pay itself as servicing compensation (in addition to the
Master Servicing Fee and Sub-Servicing Fee), on or after each Distribution Date,
any interest or investment income earned on funds deposited in the Custodial
Account for the period ending on such Distribution Date;

         (viii) to reimburse itself or any Sub-Servicer for any Advance or
Servicing Advance previously made, after a Realized Loss has been allocated with
respect to the related Mortgage Loan if the Advance or Servicing Advance was not
reimbursed pursuant to clauses (iii) and (vi);

         (ix) to pay Radian the premium under the Radian Lender-Paid PMI
Policies; and

         (x) to clear and terminate the Custodial Account at the termination of
this Agreement pursuant to Section 9.01.

         The Master Servicer shall keep and maintain separate accounting records
on a Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Custodial Account pursuant to such subclauses (ii) through
(x).

         Section 3.12. Permitted Investments.

         Any institution maintaining the Custodial Account shall at the
direction of the Master Servicer invest the funds in such account in Permitted
Investments, each of which shall mature not later than (i) the Business Day
immediately preceding the date on which such funds are required to be withdrawn
from such account pursuant to this Agreement, if a Person other than the Trustee
is the obligor thereon, and (ii) no later than the date on which such funds are
required to be withdrawn from such account pursuant to this Agreement, if the
Trustee is the obligor thereon and shall not be sold or disposed of prior to its
maturity. All income and gain realized from any such investment as well as any
interest earned on deposits in the Custodial Account shall be for the benefit of
the Master Servicer. The Master Servicer shall deposit in the Custodial Account
an amount equal to the amount of any loss incurred in respect of any such
investment immediately upon realization of such loss without right of
reimbursement.

         The Trustee or its Affiliates are permitted to receive additional
compensation that could be deemed to be in the Trustee's economic self-interest
for (i) serving as investment adviser, administrator, shareholder servicing
agent, custodian or sub-custodian with respect to certain of the Permitted
Investments, (ii) using Affiliates to effect transactions in certain Permitted
Investments

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and (iii) effecting transactions in certain Permitted Investments.

         Funds on deposit in the Pre-Funding Accounts and the Net WAC Shortfall
Reserve Fund Deposit may be Permitted Investments in accordance with this
Section 3.12 subject to any limitations set forth in Section 4.08 (with respect
to the Net WAC Shortfall Reserve Fund) and Section 4.09 (with respect to the
Pre-Funding Account) and any investment earnings or interest paid shall accrue
to the benefit of the party designated in such section and the party so
designated shall deposit in the related account from its own funds the amount of
any loss incurred on Permitted Investments in such account.

         Section 3.13. Maintenance of Primary Hazard Insurance.

         (a) The Master Servicer shall cause to be maintained for each Mortgage
Loan primary hazard insurance by a Qualified Insurer or other insurer
satisfactory to the Rating Agencies with extended coverage on the related
Mortgaged Property in an amount equal to the lesser of (i) 100% of the
replacement value of the improvements, as determined by the insurance company,
on such Mortgaged Property or (ii) the unpaid principal balance of the Mortgage
Loan. The Master Servicer shall also cause to be maintained on property acquired
upon foreclosure, or deed in lieu of foreclosure, of any Mortgage Loan, fire
insurance with extended coverage in an amount equal to the replacement value of
the improvements thereon. Any costs incurred in maintaining any insurance
described in this Section 3.13 (other than any deductible described in the last
paragraph hereof) shall be recoverable as a Servicing Advance. The Master
Servicer shall not be obligated to advance any amounts pursuant to this Section
3.13 if, in its good faith judgment, the Master Servicer determines that such
advance would be a Nonrecoverable Advance. Pursuant to Section 3.10, any amounts
collected by the Master Servicer under any such policies (other than amounts to
be applied to the restoration or repair of the related Mortgaged Property or
property thus acquired or amounts released to the Mortgagor in accordance with
the Master Servicer's normal servicing procedures) shall be deposited in the
Custodial Account, subject to withdrawal pursuant to Section 3.11. Any cost
incurred by the Master Servicer in maintaining any such insurance shall not, for
the purpose of calculating monthly distributions to Certificateholders, be added
to the amount owing under the Mortgage Loan, notwithstanding that the terms of
the Mortgage Loan so permit. It is understood and agreed that no earthquake or
other additional insurance is to be required of any Mortgagor or maintained on
property acquired in respect of a Mortgage Loan other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance.

         The Master Servicer shall, or shall cause the related Sub-Servicer to,
exercise its best reasonable efforts to maintain and keep in full force and
effect each Primary Insurance Policy by a Qualified Insurer, or other insurer
satisfactory to the Rating Agencies, with respect to each first lien Mortgage
Loan as to which as of the Cut-Off Date such a Primary Insurance Policy was in
effect (or, in the case of a Qualified Substitute Mortgage Loan, the date of
substitution) and the original principal amount of the related Mortgage Note
exceeded 80% of the Collateral Value in an amount at least equal to the excess
of such original principal amount over 75% of such Collateral Value until the
principal amount of any such first lien Mortgage Loan is reduced below 80% of
the Collateral Value or, based upon a new appraisal, the principal amount of
such first lien Mortgage Loan

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<PAGE>

represents less than 80% of the new appraised value. The Master Servicer shall,
or shall cause the related Sub-Servicer to, effect the timely payment of the
premium on each Primary Insurance Policy. The Master Servicer and the related
Sub-Servicer shall have the power to substitute for any Primary Insurance Policy
another substantially equivalent policy issued by another Qualified Insurer,
provided, that, such substitution shall be subject to the condition that it will
not cause the ratings on the Certificates to be downgraded or withdrawn, as
evidenced in writing from each Rating Agency.

         The Master Servicer shall cooperate with Radian and shall use its best
efforts to furnish all reasonable aid, evidence and information in the
possession of the Master Servicer or to which the Master Servicer has access
with respect to any Radian Insured Loan.

         In the event of a default by Radian under the Radian Lender-Paid PMI
Policy (a "Replacement Event"), the Master Servicer shall use its best efforts
to obtain a substitute lender-paid primary mortgage insurance policy (a
"Substitute PMI Policy"); provided, however, that the Master Servicer shall not
be obligated, and shall have no liability for failing, to obtain a Substitute
PMI Policy unless such Substitute PMI Policy can be obtained on the following
terms and conditions: (i) the Certificates shall be rated no lower than the
rating assigned by each Rating Agency to the Certificates immediately prior to
such Replacement Event, as evidenced by a letter from each Rating Agency
addressed to the Company, the Master Servicer and the Trustee, (ii) the timing
and mechanism for drawing on such new Substitute PMI Policy shall be reasonably
acceptable to the Master Servicer and the Trustee and (iii) the premiums under
the proposed Substitute PMI Policy shall not exceed such premiums under the
existing Radian Lender-Paid PMI Policy.

         With respect to the Radian PMI Insured Loans covered by a Radian
Lender-Paid PMI Policy, the Master Servicer will confirm with Radian, and Radian
will certify to the Trustee, on or before July 1, 2004, that the Mortgage Loans
indicated on the Mortgage Loan Schedule as being covered by Radian Lender-Paid
PMI Policy are so covered.

         No earthquake or other additional insurance is to be required of any
Mortgagor or maintained on property acquired with respect to a security
instrument other than pursuant to such applicable laws and regulations as shall
at any time be in force and shall require such additional insurance. When, at
the time of origination of the Mortgage Loan or at any subsequent time, the
Mortgaged Property is located in a federally designated special flood hazard
area, the Master Servicer shall cause with respect to the Mortgage Loans and
each REO Property flood insurance (to the extent available and in accordance
with mortgage servicing industry practice) to be maintained. Such flood
insurance shall cover the Mortgaged Property, including all items taken into
account in arriving at the Collateral Value on which the Mortgage Loan was
based, and shall be in an amount equal to the lesser of (i) the Stated Principal
Balance of the related Mortgage Loan and (ii) the minimum amount required under
the terms of coverage to compensate for any damage or loss on a replacement cost
basis, but not more than the maximum amount of such insurance available for the
related Mortgaged Property under either the regular or emergency programs of the
National Flood Insurance Program (assuming that the area in which such Mortgaged
Property is located is participating in such program). Unless applicable state
law requires a higher deductible, the deductible on such flood insurance may not
exceed $1,000 or 1% of the applicable amount of coverage, whichever is less.

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         In the event that the Master Servicer shall obtain and maintain a
blanket fire insurance policy with extended coverage insuring against hazard
losses on all of the Mortgage Loans, it shall conclusively be deemed to have
satisfied its obligations as set forth in the first two sentences of this
Section 3.13, it being understood and agreed that such policy may contain a
deductible clause, in which case the Master Servicer shall, in the event that
there shall not have been maintained on the related Mortgaged Property a policy
complying with the first two sentences of this Section 3.13 and there shall have
been a loss which would have been covered by such policy, deposit in the
Certificate Account from its own funds the amount not otherwise payable under
the blanket policy because of such deductible clause. Any such deposit by the
Master Servicer shall be made on the Certificate Account Deposit Date next
preceding the Distribution Date which occurs in the month following the month in
which payments under any such policy would have been deposited in the Custodial
Account. Any such deposit shall not be deemed Servicing Advances and the Master
Servicer shall not be entitled to reimbursement therefor. In connection with its
activities as administrator and servicer of the Mortgage Loans, the Master
Servicer agrees to present, on behalf of itself, the Trustee and
Certificateholders, claims under any such blanket policy.

         Section 3.14. Enforcement of Due-on-Sale Clauses; Assumption
                       Agreements.

         The Master Servicer will, to the extent it has knowledge of any
conveyance or prospective conveyance by any Mortgagor of the Mortgaged Property
(whether by absolute conveyance or by contract of sale, and whether or not the
Mortgagor remains or is to remain liable under the Mortgage Note or the
Mortgage), exercise or cause to be exercised its rights to accelerate the
maturity of such Mortgage Loan under any "due-on-sale" clause applicable
thereto; provided, however, that the Master Servicer shall not exercise any such
rights if it reasonably believes that it is prohibited by law from doing so. The
Master Servicer or the related Sub-Servicer may repurchase a Mortgage Loan at
the Purchase Price when the Master Servicer requires acceleration of the
Mortgage Loan, but only if the Master Servicer is satisfied, as evidenced by an
Officer's Certificate delivered to the Trustee, that either (i) such Mortgage
Loan is in default or default is reasonably foreseeable or (ii) if such Mortgage
Loan is not in default or default is not reasonably foreseeable, such repurchase
will have no adverse tax consequences for the Trust Fund or any
Certificateholder. If the Master Servicer is unable to enforce such
"due-on-sale" clause (as provided in the second preceding sentence) or if no
"due-on-sale" clause is applicable, the Master Servicer or the Sub-Servicer is
authorized to enter into an assumption and modification agreement with the
Person to whom such property has been conveyed or is proposed to be conveyed,
pursuant to which such Person becomes liable under the Mortgage Note and, to the
extent permitted by applicable state law, the Mortgagor remains liable thereon;
provided, however, that the Master Servicer shall not enter into any assumption
and modification agreement if the coverage provided under the Primary Insurance
Policy, if any, would be impaired by doing so. The Master Servicer shall notify
the Trustee, whenever possible, before the completion of such assumption
agreement, and shall forward to the Trustee the original copy of such assumption
agreement, which copy shall be added by the Trustee to the related Mortgage File
and which shall, for all purposes, be considered a part of such Mortgage File to
the same extent as all other documents and instruments constituting a part
thereof. In connection with any such assumption agreement, the interest rate on
the related Mortgage Loan shall not be changed and no other material alterations
in the Mortgage Loan shall be made unless such material alteration would not
cause any of REMIC 1 or REMIC 2 to fail to qualify as a REMIC for federal income
tax

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purposes, as evidenced by an Opinion of Counsel. The Master Servicer is also
authorized to enter into a substitution of liability agreement with such Person,
pursuant to which the original Mortgagor is released from liability and such
Person is substituted as the Mortgagor and becomes liable under the Mortgage
Note. Any fee collected by or on behalf of the Master Servicer for entering into
an assumption or substitution of liability agreement will be retained by or on
behalf of the Master Servicer as additional servicing compensation. In
connection with any such assumption, no material term of the Mortgage Note
(including but not limited to the Mortgage Rate, the amount of the Monthly
Payment and any other term affecting the amount or timing of payment on the
Mortgage Loan) may be changed. The Master Servicer shall not enter into any
substitution or assumption if such substitution or assumption shall (i) both
constitute a "significant modification" effecting an exchange or reissuance of
such Mortgage Loan under the Code (or Treasury regulations promulgated
thereunder) and cause any of REMIC 1 or REMIC 2 to fail to qualify as a REMIC
under the REMIC Provisions or (ii) cause the imposition of any tax on
"prohibited transactions" or "contributions" after the Startup Day under the
REMIC Provisions. The Master Servicer shall notify the Trustee that any such
substitution or assumption agreement has been completed by forwarding to the
Trustee the original copy of such substitution or assumption agreement, which
copy shall be added to the related Mortgage File and shall, for all purposes, be
considered a part of such Mortgage File to the same extent as all other
documents and instruments constituting a part thereof. A portion equal to up to
2% of the Collateral Value of the related Mortgage Loan, of any fee or
additional interest collected by the related Sub-Servicer for consenting in any
such conveyance or entering into any such assumption agreement may be retained
by the related Sub-Servicer as additional servicing compensation.

         Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Master Servicer shall not be deemed to be in default, breach or
any other violation of its obligations hereunder by reason of any assumption of
a Mortgage Loan by operation of law or any assumption that the Master Servicer
may be restricted by law from preventing, for any reason whatsoever. For
purposes of this Section 3.14, the term "assumption" is deemed to also include a
sale of a Mortgaged Property that is not accompanied by an assumption or
substitution of liability agreement.

         Section 3.15. Realization Upon Defaulted Mortgage Loans.

         The Master Servicer shall exercise reasonable efforts, consistent with
the procedures that the Master Servicer would use in servicing loans for its own
account, to foreclose upon or otherwise comparably convert (which may include an
REO Acquisition) the ownership of properties securing such of the Mortgage Loans
as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments pursuant to
Section 3.07, and which are not released from the Trust Fund pursuant to any
other provision hereof. The Master Servicer shall use reasonable efforts to
realize proceeds from such defaulted Mortgage Loans in such manner (including
short sales and passing through to the Trust Fund less than the full amount it
expects to receive from the related Mortgage Loan) as will maximize the receipt
of principal and interest by Certificateholders, taking into account, among
other things, the timing of foreclosure proceedings. The foregoing is subject to
the provisions that, in any case in which Mortgaged Property shall have suffered
damage from an Uninsured Cause, the Master Servicer shall not be required to
expend its own funds toward the restoration of such property unless it shall
determine in its sole discretion (i)

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that such restoration will increase the net proceeds of liquidation of the
related Mortgage Loan to Certificateholders after reimbursement to itself for
such expenses, and (ii) that such expenses will be recoverable by the Master
Servicer through Insurance Proceeds or Liquidation Proceeds from the related
Mortgaged Property, as contemplated in Section 3.11. The Master Servicer shall
be responsible for all other costs and expenses incurred by it in any such
proceedings; provided, however, that it shall be entitled to reimbursement
thereof from the related property, as contemplated in Section 3.11.

         The proceeds of any Cash Liquidation or REO Disposition, as well as any
recovery resulting from a partial collection of Insurance Proceeds or
Liquidation Proceeds or any income from an REO Property, will be deposited into
the Custodial Account and applied in the following order of priority: first, to
reimburse the Master Servicer or any Sub-Servicer for any related unreimbursed
Servicing Advances, pursuant to Section 3.11(vi) or 3.22; second, to accrued and
unpaid interest on the Mortgage Loan or REO Imputed Interest, at the Mortgage
Rate, to the date of the Cash Liquidation or REO Disposition, or to the Due Date
prior to the Distribution Date on which such amounts are to be distributed if
not in connection with a Cash Liquidation or REO Disposition; and third, as a
recovery of principal of the Mortgage Loan. If the amount of the recovery so
allocated to interest is less than a full recovery thereof, that amount will be
allocated as follows: first, to unpaid Master Servicing Fees or Sub-Servicing
Fees; and second, to interest at the Net Mortgage Rate. The portion of the
recovery so allocated to unpaid Master Servicing Fees or Sub-Servicing Fees
shall be reimbursed to the Master Servicer or any Sub-Servicer pursuant to
Section 3.11(vi). The portions of the recovery so allocated to interest at the
Net Mortgage Rate and to principal of the Mortgage Loan shall be applied as
follows: first, to reimburse the Master Servicer or any Sub-Servicer for any
related unreimbursed Advances in accordance with Section 3.11(iii) or 3.22,
second, payment to Radian in accordance with Sections 3.11(ix) and third, for
payment to the Trustee and distribution to the Certificateholders in accordance
with the provisions of Section 4.01, subject to Section 3.22 with respect to
certain recoveries from an REO Disposition constituting Excess Proceeds. To the
extent the Master Servicer receives additional recoveries following a Cash
Liquidation, the amount of the Realized Loss will be restated, and the
additional recoveries will be passed through the Trust Fund as Liquidation
Proceeds.

         Section 3.16. Trustee to Cooperate; Release of Mortgage Files.

         Upon the payment in full of any Mortgage Loan, or the receipt by the
Master Servicer of a notification that payment in full shall be escrowed in a
manner customary for such purposes, the Master Servicer will immediately notify
the Trustee by a certification (which certification shall include a statement to
the effect that all amounts received or to be received in connection with such
payment which are required to be deposited in the Custodial Account pursuant to
Section 3.10 have been or will be so deposited) of a Servicing Officer and shall
request delivery to it of the Mortgage File in the form of the Request for
Release attached hereto as Exhibit F-2. Upon receipt of such certification and
request, the Trustee shall promptly release the related Mortgage File to the
Master Servicer. Subject to the receipt by the Master Servicer of the proceeds
of such payment in full and the payment of all related fees and expenses, the
Master Servicer shall arrange for the release to the Mortgagor of the original
canceled Mortgage Note. In connection with the satisfaction of any MOM Loan, the
Master Servicer is authorized to cause the removal from the registration on the
MERS(R)

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System of such Mortgage. All other documents in the Mortgage File shall be
retained by the Master Servicer to the extent required by applicable law. The
Master Servicer shall provide for preparation of the appropriate instrument of
satisfaction covering any Mortgage Loan which pays in full and the Trustee shall
cooperate in the execution and return of such instrument to provide for its
delivery or recording as may be required. No expenses incurred in connection
with any instrument of satisfaction or deed of reconveyance shall be chargeable
to the Custodial Account or the Certificate Account.

         From time to time and as appropriate for the servicing or foreclosure
of any Mortgage Loan, including, for this purpose, collection under any
insurance policy relating to the Mortgage Loan, the Trustee shall, upon request
of the Master Servicer and delivery to the Trustee of a Request for Release in
the form attached hereto as Exhibit F-1, release the related Mortgage File to
the Master Servicer and the Trustee shall execute such documents as the Master
Servicer shall prepare and request as being necessary to the prosecution of any
such proceedings. Such Request for Release shall obligate the Master Servicer to
return each document previously requested from the Mortgage File to the Trustee
when the need therefor by the Master Servicer no longer exists; and in any event
within 21 days of the Master Servicer's receipt thereof, unless the Mortgage
Loan has been liquidated and the Liquidation Proceeds relating to the Mortgage
Loan have been deposited in the Custodial Account or the Mortgage File or such
document has been delivered to an attorney, or to a public trustee or other
public official as required by law, for purposes of initiating or pursuing legal
action or other proceedings for the foreclosure of the Mortgaged Property either
judicially or non- judicially, and the Master Servicer has delivered to the
Trustee a certificate of a Servicing Officer certifying as to the name and
address of the Person to which such Mortgage File or such document was delivered
and the purpose or purposes of such delivery. Upon receipt of a Request for
Release stating that such Mortgage Loan was liquidated and that all amounts
received or to be received in connection with such liquidation which are
required to be deposited into the Custodial Account have been or will be so
deposited, or that such Mortgage Loan has become an REO Property, a copy of the
Request for Release shall be released by the Trustee to the Master Servicer.

         Upon written request of a Servicing Officer, the Trustee shall execute
and deliver to the Master Servicer any court pleadings, requests for trustee's
sale or other documents prepared by the Master Servicer that are necessary to
the foreclosure or trustee's sale in respect of a Mortgaged Property or to any
legal action brought to obtain judgment against any Mortgagor on the Mortgage
Note or Mortgage or to obtain a deficiency judgment, or to enforce any other
remedies or rights provided by the Mortgage Note or Mortgage or otherwise
available at law or in equity. Each such request that such pleadings or
documents be executed by the Trustee shall include a certification signed by a
Servicing Officer as to the reason such documents or pleadings are required and
that the execution and delivery thereof by the Trustee will not invalidate or
otherwise affect the lien of the Mortgage, except for the termination of such a
lien upon completion of the foreclosure or trustee's sale.

         Section 3.17. Servicing Compensation.

         As compensation for its activities hereunder, the Master Servicer shall
be entitled to withhold and retain, from deposits to the Custodial Account of
amounts representing payments or recoveries

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of interest, the Master Servicing Fees and Sub-Servicing Fees with respect to
each Mortgage Loan (less any portion of such amounts retained by any
Sub-Servicer). In addition, the Master Servicer shall be entitled to recover
unpaid Master Servicing Fees and Sub-Servicing Fees out of related Late
Collections to the extent permitted in Section 3.11.

         Each Sub-Servicing Agreement shall permit the related Sub-Servicer to
retain the Sub- Servicer Fees from collections on the related Mortgage Loans, or
shall provide that the Sub-Servicer be paid directly by the Master Servicer from
collections on the related Mortgage Loans. To the extent the Master Servicer
directly services a Mortgage Loan, the Master Servicer shall be entitled to
retain the Sub-Servicing Fees for that Mortgage Loan.

         The Master Servicer also shall be entitled pursuant to Section 3.11 to
receive from the Custodial Account as additional servicing compensation interest
or other income earned on deposits therein, subject to Section 3.23, as well as
any assumption fees, late payment charges and reconveyance fees. The Master
Servicer shall not be entitled to retain any Prepayment Charges. The Master
Servicer shall be required to pay all expenses incurred by it in connection with
its servicing activities hereunder (including payment of the premiums for any
blanket policy insuring against hazard losses pursuant to Section 3.13 and
servicing compensation of the Sub-Servicer to the extent not retained by it),
and shall not be entitled to reimbursement therefor except as specifically
provided in Section 3.11. The Master Servicing Fee may not be transformed in
whole or in part except in connection with the transfer of all of the Master
Servicer's responsibilities and obligations under this Agreement.

         The Master Servicer also shall be entitled pursuant to Section 3.11 to
receive from the Custodial Account as additional servicing compensation interest
or other income earned on deposits therein, subject to Section 3.23, as well as
any assumption fees, late payment charges and reconveyance fees. The Master
Servicer shall not be entitled to retain any Prepayment Charges. Any Prepayment
Charges shall be paid to the Holders of the Class P Certificates. The Master
Servicer shall be required to pay all expenses incurred by it in connection with
its servicing activities hereunder (including payment of the premiums for any
blanket policy insuring against hazard losses pursuant to Section 3.13 and
servicing compensation of the Sub-Servicer to the extent not retained by it),
and shall not be entitled to reimbursement therefor except as specifically
provided in Section 3.11. The Master Servicing Fee may not be transferred in
whole or in part except in connection with the transfer of all of the Master
Servicer's responsibilities and obligations under this Agreement.

         Section 3.18. Maintenance of Certain Servicing Policies.

         The Master Servicer shall obtain and maintain at its own expense and
shall cause each Sub- Servicer to obtain and maintain for the duration of this
Agreement a blanket fidelity bond and an errors and omissions insurance policy
covering the Master Servicer's and such Sub-Servicer's officers, employees and
other persons acting on its behalf in connection with its activities under this
Agreement. The amount of coverage shall be at least equal to the coverage
maintained by the Master Servicer or Sub-Servicer in order to be acceptable to
Fannie Mae or Freddie Mac to service loans for it or otherwise in an amount as
is commercially available at a cost that is generally not regarded as excessive
by industry standards. The Master Servicer shall promptly notify the Trustee in
writing

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of any material change in the terms of such bond or policy. The Master Servicer
shall provide annually to the Trustee a certificate of insurance that such bond
and policy are in effect. If any such bond or policy ceases to be in effect, the
Master Servicer shall, to the extent possible, give the Trustee ten days' notice
prior to any such cessation and shall use its reasonable best efforts to obtain
a comparable replacement bond or policy, as the case may be.

         Section 3.19. Annual Statement as to Compliance.

         Not later than the earlier of (a) March 15 of each calendar year (other
than the calendar year during which the Closing Date occurs) or (b) with respect
to any calendar year during which the Company's annual report on Form 10-K is
required to be filed in accordance with the Exchange Act and the rules and
regulations of the Commission, 15 Business Days before the date on which the
Company's annual report on Form 10-K is required to be filed in accordance with
the Exchange Act and the rules and regulations of the Commission (or, in each
case, if such day is not a Business Day, the immediately preceding Business
Day), the Master Servicer at its own expense shall deliver to the Trustee, with
a copy to the Rating Agencies, a certificate signed by a Servicing Officer
stating, as to the signers thereof, that (i) a review of the activities of the
Master Servicer during the preceding calendar year and of performance under this
Agreement has been made under such officers' supervision, (ii) to the best of
such officers' knowledge, based on such review, the Master Servicer has
fulfilled all its obligations under this Agreement for such year, or, if there
has been a default in the fulfillment of any such obligation, specifying each
such default known to such officer and the nature and status thereof including
the steps being taken by the Master Servicer to remedy such default; (iii) a
review of the activities of each Sub-Servicer during the Sub-Servicer's most
recently ended fiscal year on or prior to such December 31 and its performance
under its Sub-Servicing Agreement has been made under such officer's
supervision; and (iv) to the best of the Servicing Officer's knowledge, based on
his review and the certification of an officer of the Sub-Servicer (unless the
Servicing Officer has reason to believe that reliance on such certification is
not justified), either each Sub-Servicer has performed and fulfilled its duties,
responsibilities and obligations under this Agreement and its Sub-Servicing
Agreement in all material respects throughout the year, or, if there has been a
default in performance or fulfillment of any such duties, responsibilities or
obligations, specifying the nature and status of each such default known to the
Servicing Officer. Copies of such statements shall be provided by the Master
Servicer to the Certificateholders upon request or by the Trustee at the expense
of the Master Servicer should the Master Servicer fail to provide such copies.

         Section 3.20. Annual Independent Public Accountants' Servicing
                       Statement.

         (a) Not later than the earlier of (a) March 15 of each calendar year
(other than the calendar year during which the Closing Date occurs) or (b) with
respect to any calendar year during which the Company's annual report on Form
10-K is required to be filed in accordance with the Exchange Act and the rules
and regulations of the Commission, 15 Business Days before the date on which the
Company's annual report on Form 10-K is required to be filed in accordance with
the Exchange Act and the rules and regulations of the Commission (or, in each
case, if such day is not a Business Day, the immediately preceding Business
Day), the Master Servicer, at its expense, shall cause a firm of independent
public accountants who are members of the American Institute of

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Certified Public Accountants and who are KPMG LLP (or a successor thereof) to
furnish a statement to the Master Servicer, which will be provided to the
Trustee and the Rating Agencies, to the effect that, in connection with the
firm's examination of the Master Servicer's financial statements as of the end
of such calendar year, nothing came to their attention that indicated that the
Master Servicer was not in compliance with the provisions of this Agreement
except for (i) such exceptions as such firm believes to be immaterial and (ii)
such other exceptions as are set forth in such statement.

         (b) Not later than the earlier of (a) March 15 of each calendar year
(other than the calendar year during which the Closing Date occurs) or (b) with
respect to any calendar year during which the Company's annual report on Form
10-K is required to be filed in accordance with the Exchange Act and the rules
and regulations of the Commission, 15 Business Days before the date on which the
Company's annual report on Form 10-K is required to be filed in accordance with
the Exchange Act and the rules and regulations of the Commission (or, in each
case, if such day is not a Business Day, the immediately preceding Business
Day), the Master Servicer, at its expense, shall or shall cause each
Sub-Servicer to cause a nationally recognized firm of independent certified
public accountants to furnish to the Master Servicer or such Sub-Servicer a
report stating that (i) it has obtained a letter of representation regarding
certain matters from the management of the Master Servicer or such Sub-Servicer
which includes an assertion that the Master Servicer or such Sub- Servicer has
complied with certain minimum mortgage loan servicing standards (to the extent
applicable to commercial and multifamily mortgage loans) identified in the
Uniform Single Attestation Program for Mortgage Bankers established by the
Mortgage Bankers Association of America with respect to the servicing of first
and second lien conventional single family mortgage loans during the most
recently completed calendar year and (ii) on the basis of an examination
conducted by such firm in accordance with standards established by the American
Institute of Certified Public Accountants, such representation is fairly stated
in all material respects, subject to such exceptions and other qualifications
that may be appropriate. Immediately upon receipt of such report, the Master
Servicer shall or shall cause each Sub-Servicer to furnish a copy of such report
to the Trustee and the Rating Agencies.

         Section 3.21. Access to Certain Documentation.

         The Master Servicer shall provide, and shall cause any Sub-Servicer to
provide, to the Trustee, access to the documentation in their possession
regarding the related Mortgage Loans and REO Properties and to the
Certificateholders, the FDIC, and the supervisory agents and examiners of the
FDIC (to which the Trustee shall also provide) access to the documentation
regarding the related Mortgage Loans required by applicable regulations, such
access being afforded without charge but only upon reasonable request and during
normal business hours at the offices of the Master Servicer or the Sub-Servicers
that are designated by these entities; provided, however, that, unless otherwise
required by law, the Trustee, the Master Servicer or the Sub-Servicer shall not
be required to provide access to such documentation if the provision thereof
would violate the legal right to privacy of any Mortgagor; provided, further,
however, that the Trustee shall coordinate its requests for such access so as
not to impose an unreasonable burden on, or cause an unreasonable interruption
of, the business of the Master Servicer or any Sub-Servicer. The Master
Servicer, the Sub-Servicers and the Trustee shall allow representatives of the
above entities to photocopy any of the documentation and shall provide equipment
for that purpose at a charge that covers their own

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actual out-of-pocket costs.

         Section 3.22. Title, Conservation and Disposition of REO Property.

         This Section shall apply only to REO Properties acquired for the
account of REMIC 1 and shall not apply to any REO Property relating to a
Mortgage Loan which was purchased or repurchased from REMIC 1 pursuant to
Sections 2.02, 2.04 or 3.14. In the event that title to any such REO Property is
acquired, the deed or certificate of sale shall be issued to the Trustee, or to
its nominee, on behalf of the Certificateholders. The Master Servicer, on behalf
of REMIC 1, shall either sell any REO Property before the close of the third
taxable year following the taxable year in which REMIC 1 acquires ownership of
such REO Property for purposes of Section 860G(a)(8) of the Code or, at the
expense of REMIC 1, request, more than 60 days before the day on which the
three-year grace period would otherwise expire an extension of the three-year
grace period, unless the Master Servicer has delivered to the Trustee an Opinion
of Counsel (which shall not be at the expense of the Trustee), addressed to the
Trustee and the Master Servicer, to the effect that the holding by REMIC 1 of
such REO Property subsequent to the close of the third taxable year following
the taxable year in which REMIC 1 acquires ownership of such REO Property will
not result in the imposition on REMIC 1 of taxes on "prohibited transactions"
thereof, as defined in Section 860F of the Code, or cause any of REMIC 1 or
REMIC 2 to fail to qualify as a REMIC under the REMIC Provisions or comparable
provisions of the laws of the State of California at any time that any
Certificates are outstanding. The Master Servicer shall manage, conserve,
protect and operate each REO Property for the Certificateholders solely for the
purpose of its prompt disposition and sale in a manner which does not cause such
REO Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) or result in the receipt by any of REMIC 1 or REMIC 2 of any
"income from non-permitted assets" within the meaning of Section 860F(a)(2)(B)
of the Code or any "net income from foreclosure property" which is subject to
taxation under the REMIC Provisions. Pursuant to its efforts to sell such REO
Property, the Master Servicer shall either itself or through an agent selected
by the Master Servicer protect and conserve such REO Property in the same manner
and to such extent as is customary in the locality where such REO Property is
located and may, incident to its conservation and protection of the interests of
the Certificateholders, rent the same, or any part thereof, as the Master
Servicer deems to be in the best interest of the Certificateholders for the
period prior to the sale of such REO Property.

         Any REO Disposition shall be for cash only (unless changes in the REMIC
Provisions made subsequent to the Startup Day allow a sale for other
consideration).

         The Master Servicer shall segregate and hold all funds collected and
received in connection with the operation of any REO Property separate and apart
from its own funds and general assets. The Master Servicer shall deposit, or
cause to be deposited, on a daily basis in the Custodial Account all revenues
received with respect to the REO Properties, net of any directly related
expenses incurred or withdraw therefrom funds necessary for the proper
operation, management and maintenance of the REO Property.

         If as of the date of acquisition of title to any REO Property there
remain outstanding unreimbursed Servicing Advances with respect to such REO
Property or any outstanding Advances

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allocated thereto the Master Servicer, upon an REO Disposition, shall be
entitled to reimbursement for any related unreimbursed Servicing Advances and
any unreimbursed related Advances as well as any unpaid Master Servicing Fees or
Sub-Servicing Fees from proceeds received in connection with the REO
Disposition, as further provided in Section 3.15. The Master Servicer shall not
be obligated to advance any amounts with respect to an REO Property if, in its
good faith judgment, the Master Servicer determines that such advance would
constitute a Nonrecoverable Advance.

         The REO Disposition shall be carried out by the Master Servicer at such
price and upon such terms and conditions as the Master Servicer shall determine.

         The Master Servicer shall deposit the proceeds from the REO
Disposition, net of any payment to the Master Servicer as provided above, in the
Custodial Account upon receipt thereof for distribution in accordance with
Section 4.01; provided, that any such net proceeds received by the Master
Servicer which are in excess of the applicable Stated Principal Balance plus all
unpaid REO Imputed Interest thereon through the last day of the month in which
the REO Disposition occurred ("Excess Proceeds") shall be retained by the Master
Servicer as additional servicing compensation.

         With respect to any Mortgage Loan as to which the Master Servicer has
received notice of, or has actual knowledge of, the presence of any toxic or
hazardous substance on the Mortgaged Property, the Master Servicer shall not, on
behalf of the Trustee, either (i) obtain title to the related Mortgaged Property
as a result of or in lieu of foreclosure or otherwise, or (ii) otherwise acquire
possession of, the related Mortgaged Property, unless the Master Servicer has,
at least 30 days prior to taking such action, obtained and delivered to the
Trustee an environmental audit report prepared by a Person who regularly
conducts environmental audits using customary industry standards. The Master
Servicer shall take such action as it deems to be in the best economic interest
of the Trust Fund (other than proceeding against the Mortgaged Property) and is
hereby authorized at such time as it deems appropriate to release such Mortgaged
Property from the lien of the related Mortgage.

         The cost of the environmental audit report contemplated by this Section
3.22 shall be advanced by the Master Servicer as an expense of the Trust Fund,
and the Master Servicer shall be reimbursed therefor from the Custodial Account
as provided in Section 3.11, any such right of reimbursement being prior to the
rights of the Certificateholders to receive any amount in the Custodial Account.

         If the Master Servicer determines, as described above, that it is in
the best economic interest of the Trust Fund to take such actions as are
necessary to bring any such Mortgaged Property in compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes, or petroleum-based materials affecting any such Mortgaged Property, then
the Master Servicer shall take such action as it deems to be in the best
economic interest of the Trust Fund. The cost of any such compliance,
containment, clean-up or remediation shall be advanced by the Master Servicer as
an expense of the Trust Fund, and the Master Servicer shall be entitled to be
reimbursed therefor from the Custodial Account as provided in Section 3.11, any
such right of reimbursement being prior to the rights of the Certificateholders
to receive any amount in the Custodial Account.

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         Section 3.23. Additional Obligations of the Master Servicer.

         On each Certificate Account Deposit Date, the Master Servicer shall
deliver to the Trustee for deposit in the Certificate Account from its own funds
and without any right of reimbursement therefor, a total amount equal to the
amount of Compensating Interest for the related Distribution Date.

         Section 3.24. Additional Obligations of the Company.

         The Company agrees that on or prior to the tenth day after the Closing
Date, the Company shall provide the Trustee with a written notification,
substantially in the form of Exhibit J attached hereto, relating to each Class
of Certificates, setting forth (i) in the case of each Class of such
Certificates, (a) if less than 10% of the aggregate Certificate Principal
Balance of such Class of Certificates has been sold as of such date, the value
calculated pursuant to clause (b)(iii) of Exhibit J hereto, or, (b) if 10% or
more of such Class of Certificates has been sold as of such date but no single
price is paid for at least 10% of the aggregate Certificate Principal Balance of
such Class of Certificates, then the weighted average price at which the
Certificates of such Class were sold and the aggregate percentage of
Certificates of such Class sold, (c) the first single price at which at least
10% of the aggregate Certificate Principal Balance of such Class of Certificates
was sold, or (d) if any Certificates of each Class of Certificates are retained
by the Company or an affiliate corporation, or are delivered to the Seller, the
fair market value of such Certificates as of the Closing Date, (ii) the
Prepayment Assumption used in pricing the Certificates, and (iii) such other
information as to matters of fact as the Trustee may reasonably request to
enable it to comply with its reporting requirements with respect to each Class
of such Certificates to the extent such information can in the good faith
judgment of the Company be determined by it.

         Section 3.25. Exchange Act Reporting.

         (a) The Trustee and the Master Servicer shall reasonably cooperate with
the Company in connection with the Trust's satisfying the reporting requirements
under the Exchange Act. The Trustee shall prepare on behalf of the Trust any
Forms 8-K and 10-K customary for similar securities as required by the Exchange
Act and the Rules and Regulations of the Commission thereunder, and the Master
Servicer shall sign (or shall cause another entity acceptable to the Commission
to sign) and the Trustee shall file (via the Commission's Electronic Data
Gathering and Retrieval System) such forms on behalf of the Company (or such
other entity). The Company hereby grants to the Trustee a limited power of
attorney to execute any Form 8-K and file each such document on behalf of the
Company. Such power of attorney shall continue until the earlier of (i) receipt
by the Trustee from the Company of written termination of such power of attorney
and (ii) the termination of the Trust. Notwithstanding anything herein to the
contrary, the Master Servicer, and not the Trustee, shall be responsible for
executing each Form 10-K filed on behalf of the Trust.

         (b) Each Form 8-K shall be filed by the Trustee within 15 days after
each Distribution Date, with a copy of the statement to the Certificateholders
for such Distribution Date as an exhibit thereto. Prior to March 30th of each
year (or such earlier date as may be required or permitted by the Exchange Act
and the Rules and Regulations of the Commission), the Trustee shall file a Form
10-

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K, in substance as required by applicable law or applicable Commission staffs
interpretations. The Trustee shall prepare the Form 10-K and provide the Master
Servicer with the Form 10-K no later than March 20th of each year. The Master
Servicer shall execute such Form 10-K upon its receipt and shall provide the
original of such executed Form 10-K to the Trustee no later than March 25th of
each year. Such Form 10-K shall include as exhibits the Master Servicer's annual
statement of compliance described under Section 3.19 and the accountant's report
described under Section 3.20(a), in each case to the extent they have been
timely delivered to the Trustee. If they are not so timely delivered, the
Trustee shall file an amended Form 10-K including such documents as exhibits
reasonably promptly after they are delivered to the Trustee. The Trustee shall
have no liability with respect to any failure to properly prepare or file such
periodic reports resulting from or relating to the Trustee's inability or
failure to obtain any information not resulting from its own negligence or
willful misconduct. The Form 10-K shall also include a certification in the form
attached hereto as Exhibit L-1 (the "Certification"), in compliance with Rules
13a-14 and 15d-14 under the Exchange Act and any additional directives of the
Commission, which shall be signed by the senior officer of the Master Servicer
in charge of securitization.

         (c) In addition, the Trustee shall sign a certification (in the form
attached hereto as Exhibit L-2) for the benefit of the Master Servicer and its
officers, directors and Affiliates regarding certain aspects of items 1 through
3 of the Certification (provided, however, that the Trustee shall not undertake
an analysis of any accountant's report attached as an exhibit to the Form 10-K).

         (d) In addition, (i) the Trustee shall indemnify and hold harmless the
Master Servicer and the Company and their officers, directors and Affiliates
from and against any losses, damages, penalties, fines, forfeitures, reasonable
and necessary legal fees and related costs, judgments and other costs and
expenses arising out of or based upon a breach of the Trustee's obligations
under this Section 3.25 caused by the Trustee's negligence, bad faith or willful
misconduct in connection therewith, and (ii) the Master Servicer shall indemnify
and hold harmless the Trustee, the Master Servicer, the Company and their
respective officers, directors and Affiliates from and against any losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon a breach of the Master Servicer's obligations under this Section 3.25 or
the Master Servicer's negligence, bad faith or willful misconduct in connection
therewith. If (i) the indemnification provided for herein is unavailable or
insufficient to hold harmless the Master Servicer, then the Trustee agrees that
it shall contribute to the amount paid or payable by the Master Servicer as a
result of the losses, claims, damages or liabilities of the Master Servicer in
such proportion as is appropriate to reflect the relative fault of the Master
Servicer on the one hand and the Trustee on the other in connection with a
breach of the Trustee's obligations under this Section 3.25 caused by the
Trustee's negligence, bad faith or willful misconduct in connection therewith
and (ii) the indemnification provided for herein is unavailable or insufficient
to hold harmless the Trustee, then the Master Servicer agrees that it shall
contribute to the amount paid or payable by the Trustee as a result of the
losses, claims, damages or liabilities of the Trustee in such proportion as is
appropriate to reflect the relative fault of the Trustee on the one hand and the
Master Servicer on the other in connection with a breach of the Master
Servicer's obligations under this Section 3.25 or the Master Servicer's
negligence, bad faith or willful misconduct in connection therewith.

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         (e) In the event the Commission permits separate or split
certifications to be made with respect to the items currently contained in the
Certification, the Trustee shall provide a certification with respect to items 1
and 2 and the Master Servicer shall provide a certification with respect to
items 3, 4 and 5 contained within the Certification, in each case substantially
in the form of the Certification attached as Exhibit L-1, or other form as
indicated by the Commission for this purpose. In addition, the Trustee shall
sign a certification (in the form attached hereto as Exhibit L-3) for the
benefit of the Master Servicer and its officers, directors and Affiliates
regarding certain aspects of item 3 of the Certification (provided, however,
that the Trustee shall not undertake an analysis of any accountant's report
attached as an exhibit to the Form 10-K).

         (f) Notwithstanding any other provision of the Agreement, the
provisions of this Section 3.25 may be amended by the Master Servicer, the
Company and the Trustee without the consent of the Certificateholders.

         (g) Prior to January 30th of the first year in which the Trustee is
able to do so under applicable law, the Trustee shall file with the Commission a
Form 15D Suspension Notification with respect to the Trust.

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                                   ARTICLE IV

                         PAYMENTS TO CERTIFICATEHOLDERS

         Section 4.01. Distributions.

         (a) The Trustee shall establish and maintain a Certificate Account, in
which the Master Servicer shall cause to be deposited on behalf of the Trustee
on or before 5:00 P.M. New York time on each Certificate Account Deposit Date by
wire transfer of immediately available funds an amount equal to the sum of (i)
any Advance for the immediately succeeding Distribution Date, (ii) any amount
required to be deposited in the Certificate Account pursuant to Sections 3.11,
3.13 or 3.23, (iii) all other amounts constituting the Available Distribution
Amount for the immediately succeeding Distribution Date and (iv) any amounts on
deposit in the Custodial Account representing Prepayment Charges collected by
the Master Servicer (and any Master Servicer Prepayment Charge Payment Amounts
paid by, or collected on behalf of the Trust Fund by, the Master Servicer or any
Sub-Servicer), other than any such Prepayment Charges or Master Servicer
Prepayment Charge Payment Amounts relating to Principal Prepayments that
occurred after the end of the related Prepayment Period.

         On each Distribution Date, prior to making any other distributions
referred to in Section 4.01, the Trustee shall withdraw from the Certificate
Account and pay itself the Trustee's Fee for such Distribution Date.

         On each Distribution Date the Trustee shall distribute to each
Certificateholder of record as of the next preceding Record Date (other than as
provided in Section 9.01 respecting the final distribution) either in
immediately available funds (by wire transfer or otherwise) to the account of
such Certificateholder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder has so notified the Trustee at least 5
Business Days prior to the related Record Date, or otherwise by check mailed to
such Certificateholder at the address of such Holder appearing in the
Certificate Register, such Certificateholder's share (based on the aggregate of
the Percentage Interests represented by Certificates of the applicable Class
held by such Holder) of the amounts required to be distributed to such Holder
pursuant to this Section 4.01.

         On each Distribution Date, the Trustee shall withdraw from the
Certificate Account that portion of Available Distribution Amount for such
Distribution Date consisting of the Interest Remittance Amount for such
Distribution Date, and make the following disbursements and transfers in the
order of priority described below, in each case to the extent of the Interest
Remittance Amount remaining for such Class for such Distribution Date:

                  (i) to the Holders of the Class A Certificates, pro rata, the
related Monthly Interest Distributable Amount and any Unpaid Interest Shortfall
Amount for each such Class for such Distribution Date;

                  (ii) from the remaining Interest Remittance Amount, to the
Holders of the Class M-1 Certificates the related Monthly Interest Distributable
Amount for such Class for such

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<PAGE>

Distribution Date;

                  (iii) from the remaining Interest Remittance Amount, to the
Holders of the Class M-2 Certificates the related Monthly Interest Distributable
Amount for such Class for such Distribution Date; and

                  (iv) from the remaining Interest Remittance Amount, to the
Holders of the Class M-3 Certificates the related Monthly Interest Distributable
Amount for such Class for such Distribution Date.

         (b) Except as provided in clause (d) below, on each Distribution Date
(i) prior to the Stepdown Date or (ii) on or after the Stepdown Date if a
Trigger Event is in effect, the Trustee shall withdraw from the Certificate
Account an amount equal to the Principal Distribution Amount and distribute to
the Holders of the Class A Certificates and the Holders of the Mezzanine
Certificates, distributions in respect of principal to the extent of the
Principal Distribution Amount remaining for such Distribution Date:

                  (i) to the Holders of the Class A-6 Certificates, the Class
A-6 Lockout Distribution Amount for that Distribution Date, until the
Certificate Principal Balance thereof has been reduced to zero; and

                  (ii) from the remaining Principal Distribution Amount,
sequentially to Holders of the Class A-1, Class A-2, Class A-3, Class A-4, Class
A-5, Class A-6, Class M-1, Class M-2 and Class M-3 Certificates, in each case
until the Certificate Principal Balance thereof has been reduced to zero.

         (c) Except as provided in clause (d) below, on each Distribution Date
(i) on and after the Stepdown Date and (ii) on which Trigger Event is not in
effect, the Trustee shall withdraw from the Certificate Account an amount equal
to the Principal Distribution Amount and distribute to the Holders of the Class
A Certificates and the Holders of the Mezzanine Certificates, distributions in
respect of principal to the extent of the Principal Distribution Amount
remaining for such Distribution Date:

                  (i) from the Class A Principal Distribution Amount, to the
Holders of the Class A-6 Certificates, the Class A-6 Lockout Distribution Amount
for that Distribution Date to the extent of the Class A Principal Distribution
Amount, until the Certificate Principal Balance thereof has been reduced to
zero;

                  (ii) from the remaining Class A Principal Distribution Amount,
sequentially to the Holders of the Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5 and Class A-6 Certificates, in each case until the Certificate
Principal Balance thereof has been reduced to zero;

                  (iii) to the Holders of the Class M-1 Certificates, the Class
M-1 Principal Distribution Amount, until the Certificate Principal Balance
thereof has been reduced to zero;

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                  (iv) to the Holders of the Class M-2 Certificates, the Class
M-2 Principal Distribution Amount, until the Certificate Principal Balance
thereof has been reduced to zero; and

                  (v) to the Holders of the Class M-3 Certificates, the Class
M-3 Principal Distribution Amount, until the Certificate Principal Balance
thereof has been reduced to zero.

         (d) Notwithstanding the foregoing, on any Distribution Date on which
the aggregate Certificate Principal Balance of the Mezzanine Certificates and
the Overcollateralized Amount have been reduced to zero, the Principal
Distribution Amount will be paid to the Class A Certificates on a pro rata
basis, based on the Certificate Principal Balance thereof, until reduced to
zero.

         (e) On each Distribution Date the Net Monthly Excess Cashflow shall be
distributed in the following order of priority, in each case to the extent of
the Net Monthly Excess Cashflow remaining for such Distribution Date:

                  (i) to the Holders of the Class or Classes of Certificates
then entitled to receive distributions in respect of principal, in an amount
equal to any Extra Principal Distribution Amount, payable to such Holders as
part of the Principal Distribution Amount as described under Sections 4.01(b),
(c) and (d) above, as applicable;

                  (ii) to the Holders of the Class M-1 Certificates, in an
amount equal to any Unpaid Interest Shortfall Amount allocable to such
Certificates;

                  (iii) to the Holders of the Class M-2 Certificates, in an
amount equal to any Unpaid Interest Shortfall Amount allocable to such
Certificates;

                  (iv) to the Holders of the Class M-3 Certificates, in an
amount equal to any Unpaid Interest Shortfall Amount allocable to such
Certificates;

                  (v) from amounts otherwise payable to the Holders of the Class
C Certificates, to the Net WAC Shortfall Reserve Fund, (I) in an amount equal to
the related Net WAC Shortfall Amount for each class of offered certificates
which amount shall be distributed pursuant to Section 4.08(c) to the Holders of
the Class A-1 Certificates, the Class A-2 Certificates, the Class A-3
Certificates, the Class A-4 Certificates, the Class A-5 Certificates, the Class
A-6 Certificates, the Class M-1 Certificates, the Class M-2 Certificates and the
Class M-3 Certificates, in that order, in each case until the related Net WAC
Shortfall Amount has been reduced to zero, and then (II) in an amount sufficient
to maintain a balance in the Net WAC Shortfall Reserve Fund equal to the Net WAC
Shortfall Reserve Fund Deposit;

                  (vi) to the Holders of the Class C Certificates, the Monthly
Interest Distributable Amount for such Class and the amount of any remaining
Overcollateralization Release Amount for such Distribution Date;

                  (vii) if such Distribution Date follows the Prepayment Period
during which occurs the latest date on which a Prepayment Charge may be required
to be paid in respect of any Mortgage

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Loans, to the Holders of the Class P Certificates, in reduction of the
Certificate Principal Balance thereof, until the Certificate Principal Balance
thereof is reduced to zero; and

                  (viii) any remaining amounts to the Holders of the Class R
Certificates (in respect of the appropriate Residual Interest).

         (f) On each Distribution Date, all amounts representing Prepayment
Charges in respect of the Mortgage Loans received during the related Prepayment
Period and any Master Servicer Prepayment Charge Amounts paid by the Master
Servicer during the related Prepayment Period will be withdrawn from the
Certificate Account and distributed by the Trustee to the Holders of the Class P
Certificates and shall not be available for distribution to the Holders of any
other Class of Certificates. The payment of the foregoing amounts to the Holders
of the Class P Certificates shall not reduce the Certificate Principal Balances
thereof.

         (g) Each distribution with respect to a Book-Entry Certificate shall be
paid to the Depository, as Holder thereof, and the Depository shall be
responsible for crediting the amount of such distribution to the accounts of its
Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible for disbursing such distribution to
the Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. None of the Trustee, the Company
or the Master Servicer shall have any responsibility therefor except as
otherwise provided by this Agreement or applicable law.

         (h) The Trustee, upon written direction of the Master Servicer, shall
invest or cause the institution maintaining the Certificate Account to invest
the funds in the Certificate Account in Permitted Investments designated in the
name of the Trustee for the benefit of the Certificateholders, which shall
mature not later than the Business Day next preceding the Distribution Date next
following the date of such investment and shall not be sold or disposed of prior
to maturity. All income and gain realized from any such investment shall be for
the benefit of the Master Servicer and shall be subject to its withdrawal or
order from time to time. The amount of any losses incurred in respect of any
such investments shall be deposited in the Certificate Account by the Master
Servicer out of its own funds immediately as realized without any right of
reimbursement.

         (i) Except as otherwise provided in Section 9.01, if the Master
Servicer anticipates that a final distribution with respect to any Class of
Certificates will be made on the next Distribution Date, the Master Servicer
shall, no later than the Determination Date in the month of such final
distribution, notify the Trustee and the Trustee shall, no later than two (2)
Business Days after such Determination Date, mail on such date to each Holder of
such Class of Certificates a notice to the effect that: (i) the Trustee
anticipates that the final distribution with respect to such Class of
Certificates will be made on such Distribution Date but only upon presentation
and surrender of such Certificates at the office of the Trustee or as otherwise
specified therein, and (ii) no interest shall accrue on such Certificates from
and after the end of the prior calendar month.

         Any funds not distributed to any Holder or Holders of Certificates of
such Class on such

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Distribution Date because of the failure of such Holder or Holders to tender
their Certificates shall, on such date, be set aside and held in trust and
credited to the account of the appropriate non- tendering Holder or Holders. If
any Certificates as to which notice has been given pursuant to this Section
4.01(i) shall not have been surrendered for cancellation within six months after
the time specified in such notice, the Trustee shall mail a second notice to the
remaining non-tendering Certificateholders to surrender their Certificates for
cancellation in order to receive the final distribution with respect thereto. If
within six months after the second notice all such Certificates shall not have
been surrendered for cancellation, the Trustee shall take reasonable steps as
directed by the Company, or appoint an agent to take reasonable steps, to
contact the remaining non-tendering Certificateholders concerning surrender of
their Certificates. The costs and expenses of maintaining the funds in trust and
of contacting such Certificateholders shall be paid out of the assets remaining
in the Trust Fund. If within nine months after the second notice any such
Certificates shall not have been surrendered for cancellation, the Class R
Certificateholders shall be entitled to all unclaimed funds and other assets
which remain subject hereto. No interest shall accrue or be payable to any
Certificateholder on any amount held in trust as a result of such
Certificateholder's failure to surrender its Certificate(s) for final payment
thereof in accordance with this Section 4.01(i).

         Section 4.02. Statements to Certificateholders.

         (a) On each Distribution Date, based, as applicable, on information
provided to it by the Master Servicer, the Trustee shall prepare and make
available on the Trustee's website, which may be obtained by calling the Trustee
at (800) 735-7777, to each Holder of the Regular Certificates, the Master
Servicer and the Rating Agencies, a statement as to the distributions made on
such Distribution Date setting forth:

                  (i) (A) the amount of the distribution made on such
Distribution Date to the Holders of each Class of Regular Certificates,
separately identified, allocable to principal and (B) the amount of the
distribution made on such Distribution Date to the Holders of the Class P
Certificates allocable to Prepayment Charges and Master Servicer Prepayment
Charge Payment Amounts;

                  (ii) the amount of the distribution made on such Distribution
Date to the Holders of each Class of Regular Certificates (other than the Class
P Certificates) allocable to interest, separately identified;

                  (iii) the Pass-Through Rate on each Class of Regular
Certificates (other than the Class P Certificates) for such Distribution Date;

                  (iv) the aggregate amount of Advances for such Distribution
Date;

                  (v) the number and Aggregate Stated Principal Balance of the
Mortgage Loans as of the end of the related Due Period and the number and
Aggregate Stated Principal Balance of the Subsequent Mortgage Loans as of the
end of the related Due Period;

                  (vi) the Overcollateralized Amount, the Excess
Overcollateralized Amount, the

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Overcollateralization Release Amount, the Overcollateralization Deficiency
Amount and the Overcollateralization Target Amount for such Distribution Date;

                  (vii) the aggregate Certificate Principal Balance of each
Class of Regular Certificates after giving effect to the amounts distributed on
such Distribution Date (in the case of each Class of the Mezzanine Certificates,
separately identifying any reduction thereof due to the allocation of Realized
Losses thereto);

                  (viii) the number and aggregate Stated Principal Balance of
Mortgage Loans (a) delinquent 31 to 60 days, (b) delinquent 61 to 90 days, (c)
delinquent 91 days or more, in each case as of the end of the calendar month
prior to such Distribution Date;

                  (ix) the number, aggregate principal balance and book value of
any REO Properties as of the close of business on the last day of the calendar
month preceding the month in which such Distribution Date occurs;

                  (x) the weighted average remaining term to maturity, weighted
average Mortgage Rate and weighted average Net Mortgage Rate of the Mortgage
Loans as of the close of business on the first day of the calendar month in
which such Distribution Date occurs;

                  (xi) the aggregate amount of Principal Prepayments made during
the related Prepayment Period;

                  (xii) the aggregate amount of Realized Losses incurred during
the related Prepayment Period and the cumulative amount of Realized Losses;

                  (xiii) the aggregate amount of extraordinary Trust Fund
expenses withdrawn from the Custodial Account or the Certificate Account for
such Distribution Date;

                  (xiv) the aggregate amount of any Prepayment Interest
Shortfalls for such Distribution Date, to the extent not covered by payments by
the Master Servicer or a Sub-Servicer pursuant to Section 3.23, and the
aggregate amount of Relief Act Interest Shortfalls for such Distribution Date;

                  (xv) the Monthly Interest Distributable Amount in respect of
each Class of the Class A Certificates and Mezzanine Certificates for such
Distribution Date and the Unpaid Interest Shortfall Amount, if any, with respect
to each Class of the Class A Certificates and Mezzanine Certificates for such
Distribution Date;

                  (xvi) (A) the Overcollateralization Target Amount, (B) the
Overcollateralized Amount and (C) the amount, if any, by which the
Overcollateralization Target Amount exceeds the Overcollateralized Amount, in
each case after giving effect to the distribution made on the Regular
Certificates on such Distribution Date;

                  (xvii) the aggregate amount of servicing compensation received
by the Master

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Servicer with respect to the related Due Period and such other customary
information as the Trustee deems necessary or desirable, or which a
Certificateholder reasonably requests, to enable Certificateholders to prepare
their tax returns;

                  (xviii) the aggregate of any deposits to and withdrawals from
the Net WAC Shortfall Reserve Fund for such Distribution Date and the remaining
amount on deposit in the Net WAC Shortfall Reserve Fund after such deposits and
withdrawals;

                  (xix) the Available Distribution Amount for such Distribution
Date;

                  (xx) amounts paid under the Corridor Contract; and

                  (xxi) the amount withdrawn from the Pre-Funding Account and
used to make payments to Certificateholders on that Distribution Date, the
amount remaining on deposit in the Pre- Funding Account following such
Distribution Date, and the amount withdrawn from the Pre-Funding Account used to
buy certain Subsequent Mortgage Loans prior to such Distribution Date.

         In the case of information furnished pursuant to subclauses (i) and
(ii) above, the amounts shall also be expressed as a dollar amount per Single
Certificate.

         On each Distribution Date the Trustee shall provide Bloomberg Financial
Markets, L.P. ("Bloomberg") CUSIP level factors for each Class of Certificates
as of such Distribution Date, using a format and media mutually acceptable to
the Trustee and Bloomberg.

         Within a reasonable period of time after the end of each calendar year,
the Trustee shall prepare and forward, to each Person who at any time during the
calendar year was a Holder of a Certificate, a statement containing the
information set forth in subclauses (i) and (ii) above, aggregated for such
calendar year or applicable portion thereof during which such person was a
Certificateholder. Such obligation of the Trustee shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Trustee pursuant to any requirements of the Code and regulations
thereunder as from time to time are in force.

         On each Distribution Date the Trustee shall prepare and make available
on the Trustee's website, which may be obtained by calling the Trustee at (800)
735-7777 (or deliver at the recipient's option), to each Holder of a Class R
Certificate a copy of the reports forwarded to the other Certificateholders on
such Distribution Date.

         Within a reasonable period of time after the end of each calendar year,
the Trustee shall prepare and forward, to each Person who at any time during the
calendar year was a Holder of a Class R Certificate a statement containing the
information provided pursuant to the previous paragraph aggregated for such
calendar year or applicable portion thereof during which such Person was a
Certificateholder. Such obligation of the Trustee shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Trustee pursuant to any requirements of the Code as from time to
time are in force.

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         Section 4.03. Remittance Reports; Advances by the Master Servicer.

         (a) On the Business Day following each Determination Date, the Master
Servicer shall deliver to the Trustee a report, prepared as of the close of
business on the Determination Date (the "Remittance Report"), in the form of an
electromagnetic tape or disk. The Remittance Report and any written information
supplemental thereto shall include such information with respect to the Mortgage
Loans that is required by the Trustee for purposes of making the calculations
and preparing the statement described in Sections 4.01 and 4.02, as set forth in
written specifications or guidelines issued by the Trustee from time to time.
The Trustee shall have no obligation to recompute, recalculate or verify any
information provided to it by the Master Servicer.

         (b) The Master Servicer shall determine the aggregate amount of
Advances required to be made for the related Distribution Date, which shall be
in an aggregate amount equal to the sum of (1) the aggregate amount of Monthly
Payments (with each interest portion thereof adjusted to the Mortgage Rate less
the sum of the Master Servicing Fee Rate, the Sub-Servicing Fee Rate and any
applicable Radian PMI Policy Rate, other than Balloon Payments, less the amount
of any reductions in the amount of interest collectable from the Mortgagor
pursuant to the Relief Act, on the Outstanding Mortgage Loans as of the related
Due Date, which Monthly Payments were delinquent as of the close of business as
of the related Determination Date) plus (2) with respect to each Balloon Loan
delinquent in respect of its Balloon Payment as of the close of business on the
related Determination Date, an amount equal to the assumed Monthly Payment (net
of the related Master Servicing Fees and Sub-Servicing Fees) that would have
been due on the related Due Date based on the original principal amortization
scheduled for such Balloon Loan until such Balloon Loan is finally liquidated;
provided that no Advance shall be made if it would be a Nonrecoverable Advance.
On or before 4:00 P.M. New York time on each Certificate Account Deposit Date,
the Master Servicer shall either (i) deposit in the Certificate Account from its
own funds, or funds received therefor from the Sub-Servicers, an amount equal to
the Advances to be made by the Master Servicer or any Sub-Servicers in respect
of the related Distribution Date, (ii) withdraw from amounts on deposit in the
Custodial Account and deposit in the Certificate Account all or a portion of the
amounts held for future distribution in discharge of any such Advance, or (iii)
make advances in the form of any combination of (i) and (ii) aggregating the
amount of such Advance. Any portion of the amounts held for future distribution
so used shall be replaced by the Master Servicer by deposit in the Certificate
Account on or before 1:00 P.M. New York time on any future Certificate Account
Deposit Date to the extent that funds attributable to the Mortgage Loans that
are available in the Custodial Account for deposit in the Certificate Account on
such Certificate Account Deposit Date shall be less than payments to
Certificateholders required to be made on the following Distribution Date. The
amount of any reimbursement pursuant to Section 3.11 in respect of outstanding
Advances on any Distribution Date shall be allocated to specific Monthly
Payments due but delinquent for previous Due Periods, which allocation shall be
made, to the extent practicable, to Monthly Payments which have been delinquent
for the longest period of time. Such allocations shall be conclusive for
purposes of reimbursement to the Master Servicer from recoveries on related
Mortgage Loans pursuant to Section 3.11. The determination by the Master
Servicer that it has made a Nonrecoverable Advance or that any proposed Advance,
if made, would constitute a Nonrecoverable Advance, shall be evidenced by a
certificate of a Servicing Officer delivered to the Seller and the Trustee with
the Remittance Report. The Trustee shall deposit all funds it receives

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pursuant to this Section 4.03 into the Certificate Account.

         (c) In the event that the Master Servicer determines as of any
Certificate Account Deposit Date that it will be unable to deposit in the
Certificate Account an amount equal to the Advance required to be made for the
immediately succeeding Distribution Date in the amount determined by the Master
Servicer pursuant to paragraph (b) above, it shall give notice to the Trustee of
its inability to Advance (such notice may be given by telecopy), not later than
4:00 P.M., New York time, on such date, specifying the portion of such amount
that it will be unable to deposit. Not later than 4:00 P.M., New York time, on
the earlier of (x) two Business Days following such Certificate Account Deposit
Date or (y) the Business Day preceding the related Distribution Date, unless by
such time the Master Servicer shall have directly or indirectly deposited in the
Certificate Account the entire amount of the Advances required to be made for
the related Distribution Date, pursuant to Section 7.01, the Trustee shall (a)
terminate all of the rights and obligations of the Master Servicer under this
Agreement in accordance with Section 7.01 and (b) assume the rights and
obligations of the Master Servicer hereunder, including the obligation to
deposit in the Certificate Account an amount equal to the Advance for the
immediately succeeding Distribution Date.

         Section 4.04. Distributions on the REMIC 1 Regular Interests.

         (a) On each Distribution Date, the Trustee shall cause the Available
Distribution Amount, in the following order of priority, to be distributed by
REMIC 1 to REMIC 2 on account of the REMIC 1 Regular Interests or withdrawn from
the Certificate Account and distributed to the Holders of the Class R
Certificates (in respect of the Class R-1 Interest), as the case may be:

         (i) first, to Holders of REMIC 1 Regular Interest AA, REMIC 1 Regular
Interest A-1, REMIC 1 Regular Interest A-2, REMIC 1 Regular Interest A-3, REMIC
1 Regular Interest A-4, REMIC 1 Regular Interest A-5, REMIC 1 Regular Interest
A-6, REMIC 1 Regular Interest M-1, REMIC 1 Regular Interest M-2, REMIC 1 Regular
Interest M-3, REMIC 1 Regular Interest ZZ, and REMIC 1 Regular Interest P, PRO
RATA, in an amount equal to

                  (A)      the related Uncertificated Accrued Interest for such
                           Distribution Date, plus

                  (B)      any amounts in respect thereof remaining unpaid from
                           the previous Distribution Dates.

Amounts payable as Uncertificated Accrued Interest in respect of REMIC 1 Regular
Interest ZZ shall be reduced when the REMIC 1 Overcollateralized Amount is less
than the REMIC 1 Overcollateralization Target Amount, by the lesser of (x) the
amount of such difference and (y) the Maximum Uncertificated Accrued Interest
Deferral Amount, and such amount will be payable to the Holders of REMIC 1
Regular Interest A-1, REMIC 1 Regular Interest A-2, REMIC 1 Regular Interest
A-3, REMIC 1 Regular Interest M-1, REMIC 1 Regular Interest M-2 and REMIC 1
Regular Interest M-3 in the same proportion as the Overcollateralization
Deficiency Amount is allocated to the Corresponding Certificates and the
Uncertificated Principal Balance of REMIC I Regular Interest ZZ shall be
increased by such amount;

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<PAGE>

         (ii) to the Holders of REMIC 1 Regular Interest P, (A) on each
Distribution Date, 100% of the amount paid in respect of Prepayment Charges and
Master Servicer Prepayment Charge Payment Amounts on the Corresponding
Certificate and (B) on the Distribution Date immediately following the
expiration of the latest Prepayment Charge as identified on the Prepayment
Charge Schedule or any Distribution Date thereafter until $100 has been
distributed pursuant to this clause;

         (iii) to the Holders of the REMIC 1 Regular Interests, in an amount
equal to the remainder of the Available Funds for such Distribution Date after
the distributions made pursuant to clauses (i) and (ii) above, allocated as
follows:

                  (A) to the Holders of REMIC 1 Regular Interest AA, 98% of such
remainder, until the Uncertificated Principal Balance of such REMIC 1 Regular
Interest is reduced to zero;

                  (B) to the Holders of REMIC 1 Regular Interest A-1, REMIC 1
Regular Interest A-2, REMIC 1 Regular Interest A-3, REMIC 1 Regular Interest
A-4, REMIC 1 Regular Interest A-5, REMIC 1 Regular Interest A-6, REMIC 1 Regular
Interest M-1, REMIC 1 Regular Interest M-2, REMIC 1 Regular Interest M-3, 1% of
such remainder, in the same proportion as principal payments are allocated to
the Corresponding Certificates, until the Uncertificated Principal Balances of
such REMIC 1 Regular Interests are reduced to zero;

                  (C) to the Holders of REMIC 1 Regular Interest ZZ, 1% of such
remainder, until the Uncertificated Principal Balance of such REMIC 1 Regular
Interest is reduced to zero; and

                  (D) any remaining amount to the Holders of the Class R
Certificates (in respect of the Class R-1 Interest);

provided, however, that 98% and 2% of any principal payments that are
attributable to an Overcollateralization Release Amount shall be allocated to
Holders of REMIC 1 Regular Interest AA and REMIC 1 Regular Interest ZZ,
respectively.

         Section 4.05. Allocation of Realized Losses.

         (a) All Realized Losses on the Mortgage Loans shall be allocated by the
Trustee on each Distribution Date as follows: first, to Net Monthly Excess
Cashflow, through a distribution of the Extra Principal Distribution Amount for
that Distribution Date; second, to the Overcollateralized Amount by a reduction
of the Certificate Principal Balance of the Class C Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; third, to the
Class M-3 Certificates, until the Certificate Principal Balance thereof has been
reduced to zero; fourth, to the Class M-2 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; and fifth, to the Class M-1
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero. All Realized Losses to be allocated to the Certificate Principal
Balances of all Classes on any Distribution Date shall be so allocated after the
actual distributions to be made on such date as provided above. All references
above to the Certificate Principal Balance of any Class of Certificates shall be
to the Certificate Principal Balance of such Class immediately prior to the
relevant Distribution Date, before reduction thereof by any Realized Losses, in
each case to be

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<PAGE>

allocated to such Class of Certificates, on such Distribution Date.

         Any allocation of Realized Losses to a Mezzanine Certificate on any
Distribution Date shall be made by reducing the Certificate Principal Balance
thereof by the amount so allocated. Any allocation of Realized Losses to a Class
C Certificate shall be made by (i) FIRST, reducing the amount otherwise payable
in respect thereof pursuant to Section 4.01(e)(vi), and (ii) SECOND, by reducing
the Certificate Principal Balance thereof by the amount so allocated. No
allocations of any Realized Losses shall be made to the Certificate Principal
Balances of the Class A Certificates or the Class P Certificates.

         (b) All Realized Losses on the Mortgage Loans shall be allocated by the
Trustee on each Distribution Date to the following REMIC 1 Regular Interests in
the specified percentages, as follows: first to Uncertificated Accrued Interest
payable to the REMIC 1 Regular Interest AA and REMIC 1 Regular Interest ZZ up to
an aggregate amount equal to the REMIC 1 Interest Loss Allocation Amount, 98%
and 2% respectively; second, to the Uncertificated Principal Balances of REMIC 1
Regular Interest AA and REMIC 1 Regular Interest ZZ up to an aggregate amount
equal to the REMIC 1 Principal Loss Allocation Amount, 98% and 2%, respectively;
third, to the Uncertificated Principal Balances of REMIC 1 Regular Interest AA,
REMIC 1 Regular Interest M-3 and REMIC 1 Regular Interest ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC 1 Regular
Interest M-3 has been reduced to zero; fourth, to the Uncertificated Principal
Balances of REMIC 1 Regular Interest AA, REMIC 1 Regular Interest M-2 and REMIC
1 Regular Interest ZZ, 98%, 1% and 1%, respectively, until the Uncertificated
Principal Balance of REMIC 1 Regular Interest M-2 has been reduced to zero; and
fifth, to the Uncertificated Principal Balances of REMIC 1 Regular Interest AA,
REMIC 1 Regular Interest M-1 and REMIC 1 Regular Interest ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC 1 Regular
Interest M-1 has been reduced to zero.

         Section 4.06. Information Reports to Be Filed by the Master Servicer.

         The Master Servicer or the Sub-Servicers shall file information reports
with respect to the receipt of mortgage interest received in a trade or
business, foreclosures and abandonments of any Mortgaged Property and the
information returns relating to cancellation of indebtedness income with respect
to any Mortgaged Property required by Sections 6050H, 6050J and 6050P of the
Code, respectively, and deliver to the Trustee an Officers' Certificate stating
that such reports have been filed. Such reports shall be in form and substance
sufficient to meet the reporting requirements imposed by such Sections 6050H,
6050J and 6050P of the Code.

         Section 4.07. Compliance with Withholding Requirements.

         Notwithstanding any other provision of this Agreement, the Trustee
shall comply with all federal withholding requirements respecting payments to
Certificateholders of interest or original issue discount on the Mortgage Loans,
that the Trustee reasonably believes are applicable under the Code. The consent
of Certificateholders shall not be required for such withholding. In the event
the Trustee withholds any amount from interest or original issue discount
payments or advances thereof to any Certificateholder pursuant to federal
withholding requirements, the Trustee shall, together

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with its monthly report to such Certificateholders pursuant to Section 4.02
hereof, indicate such amount withheld.

         Section 4.08. Net WAC Shortfall Reserve Fund.

         (a) On the Closing Date, the Trustee shall establish and maintain in
its name, in trust for the benefit of Class A Certificates and the Mezzanine
Certificates, the Net WAC Shortfall Reserve Fund. In addition, on the Closing
Date, the Company shall deposit into the Net WAC Shortfall Reserve Fund an
amount equal to the Net WAC Shortfall Reserve Fund Deposit. The Trustee shall
demand payment of all money payable by the Corridor Contract Provider under the
Corridor Contract. The Trustee shall deposit in the Net WAC Shortfall Reserve
Fund any Corridor Contract Payment Amounts.

         (b) On each Distribution Date, to the extent required, the Trustee
shall make withdrawals from the Net WAC Shortfall Reserve Fund to the extent of
any Corridor Contract Payment Amounts and distribute such amounts first, to the
Holders of the Class A-1 Certificates to the extent of any Net WAC Shortfall
Amount on such Certificates and second, to the Holders of the Class C
Certificates.

         (c) On each Distribution Date, the Trustee shall transfer from the
Certificate Account to the Net WAC Shortfall Reserve Fund the amounts specified
pursuant to Sections 4.01(d)(vii). On each Distribution Date, to the extent
required, the Trustee shall make withdrawals from the Net WAC Shortfall Reserve
Fund and use the amounts in the Net WAC Shortfall Reserve Fund, other than
amounts received from the Corridor Contract Provider, to make distributions to
the Class A Certificates and the Mezzanine Certificates, in an amount equal to
the amount of any Net WAC Shortfall Amount on such Certificates. Any such
amounts shall be distributed to the Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5, Class A-6, Class M-1, Class M-2 and Class M-3 Certificates, in that
order, in each case until the related Net WAC Shortfall Amount has been reduced
to zero. Any such amounts transferred shall be treated for federal tax purposes
as amounts distributed by REMIC 2 to the Holders of the Class C Certificates.

         (d) The Net WAC Shortfall Reserve Fund shall be an Eligible Account.
Amounts held in the Net WAC Shortfall Reserve Fund from time to time shall
continue to constitute assets of the Trust Fund, but not of the REMICs, until
released from the Net WAC Shortfall Reserve Fund pursuant to this Section 4.08.
The Net WAC Shortfall Reserve Fund constitutes an "outside reserve fund" within
the meaning of Treasury Regulation ss. 1.860G-2(h) and is not an asset of any
REMIC. The Holders of the Class C Certificates shall be the owner of the Net WAC
Shortfall Reserve Fund. The Trustee shall keep records that accurately reflect
the funds on deposit in the Net WAC Shortfall Reserve Fund. The Trustee shall,
at the written direction of the Majority Class C Certificateholder, invest
amounts on deposit in the Net WAC Shortfall Reserve Fund in Permitted
Investments. In the absence of written direction to the Trustee from the
Majority Class C Certificateholder, all funds in

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the Net WAC Shortfall Reserve Fund shall remain uninvested. On each Distribution
Date, the Trustee shall distribute, not in respect of any REMIC, any interest
earned on the Net WAC Shortfall Reserve Fund to the Holders of the Class C
Certificates.

         Section 4.09. Pre-Funding Account.

         (a) No later than the Closing Date, the Trustee shall establish and
maintain a segregated trust account that is an Eligible Account, which shall be
titled "Pre-Funding Account, Deutsche Bank National Trust Company, as trustee
for the registered holders of Impac Secured Assets Corp., Mortgage Pass-Through
Certificates, Series 2004-2" (the "Pre-Funding Account"). The Trustee shall,
promptly upon receipt, deposit in the Pre-Funding Account and retain therein the
Original Pre-Funded Amount remitted on the Closing Date to the Trustee by the
Depositor. Funds deposited in the Pre-Funding Account shall be held in trust by
the Trustee for the Certificateholders for the uses and purposes set forth
herein.

         (b) The Trustee will invest funds deposited in the Pre-Funding Account,
as directed by the Master Servicer in writing, in Permitted Investments with a
maturity date (i) no later than the Business Day immediately preceding the date
on which such funds are required to be withdrawn from such account pursuant to
this Agreement, if a Person other than the Trustee or an Affiliate manages or
advises such investment or (ii) no later than the date on which such funds are
required to be withdrawn from such account pursuant to this Agreement, if the
Trustee or an Affiliate manages or advises such investment. For federal income
tax purposes, the Master Servicer shall be the owner of the Pre-Funding Account
and shall report all items of income, deduction, gain or loss arising therefrom.
All income and gain realized from investment of funds deposited in the
Pre-Funding Account shall be included in the Available Distribution Amount at
the following times: (i) on the Business Day immediately preceding each
Distribution Date, if a Person other than the Trustee or an Affiliate of the
Trustee manages or advises such investment, or on each Distribution Date, if the
Trustee or an Affiliate of the Trustee manages or advises such investment, (ii)
on the Business Day immediately preceding each Subsequent Transfer Date, if a
Person other than the Trustee or an Affiliate of the Trustee manages or advises
such investment, or on each Subsequent Transfer Date, if the Trustee or an
Affiliate of the Trustee manages or advises such investment or (iii) within one
(1) Business Day of the Trustee's receipt thereof. The Master Servicer shall
deposit in the Pre-Funding Account the amount of any net loss incurred in
respect of any such Eligible Investment immediately upon realization of such
loss without any right of reimbursement therefor.

         (c) Amounts on deposit in the Pre-Funding Account shall be withdrawn by
the Trustee as follows:

                  (i) On any Subsequent Transfer Date, the Trustee shall
withdraw from the Pre-Funding Account an amount equal to 100% of the aggregate
Stated Principal Balances of the related Subsequent Mortgage Loans transferred
and assigned to the Trustee for deposit in the

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Mortgage Pool on such Subsequent Transfer Date and pay such amount to or upon
the order of the Issuer upon satisfaction of the conditions set forth in Section
2.06 with respect to such transfer and assignment;

                  (ii) If the amount on deposit in the Pre-Funding Account has
not been reduced to zero during the Funding Period, on the day immediately
following the termination of the Funding Period, the Trustee shall deposit into
the Certificate Account any amounts remaining in the Pre-Funding Account for
distribution in accordance with the terms hereof;

                  (iii) To withdraw any amount not required to be deposited in
the Pre-Funding Account or deposited therein in error; and

                  (iv) To clear and terminate the Pre-Funding Account upon the
earlier to occur of (A) the Distribution Date immediately following the end of
the Funding Period and (B) the termination of this Indenture, with any amounts
remaining on deposit therein being paid to the Holders of the Certificates then
entitled to distributions in respect of principal.

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                                    ARTICLE V

                                THE CERTIFICATES

         Section 5.01. The Certificates.

         (a) The Certificates will be substantially in the respective forms
annexed hereto as Exhibits A and B-1 through B-4. The Certificates will be
issuable in registered form only. The Certificates (other than the Class P
Certificates, the Class C Certificates and the Class R Certificates) will be
issued in minimum denominations of $25,000 Initial Certificate Principal Balance
and integral multiples of $1 in excess thereof. The Class C Certificates will be
issued in minimum denominations of $1.00 Initial Notional Amount and integral
multiples of $1.00 in excess thereof. The Class P Certificates and the Class R
Certificates will each be issuable in minimum denominations of any Percentage
Interest representing 20.00% and multiples of 0.01% in excess thereof.

         Upon original issue, the Certificates shall, upon the written request
of the Company executed by an officer of the Company, be executed and delivered
by the Trustee, authenticated by the Trustee and delivered to or upon the order
of the Company upon receipt by the Trustee of the documents specified in Section
2.01. The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee in its capacity as trustee hereunder by a Responsible
Officer. Certificates bearing the manual or facsimile signatures of individuals
who were at the time they signed the proper officers of the Trustee shall bind
the Trustee, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Certificates
or did not hold such offices at the date of such Certificates. No Certificate
shall be entitled to any benefit under this Agreement, or be valid for any
purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form provided for herein executed by the
Trustee by manual signature, and such certificate upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates issued on the Closing
Date shall be dated the Closing Date and any Certificates delivered thereafter
shall be dated the date of their authentication.

         (b) The Class A Certificates and the Mezzanine Certificates shall
initially be issued as one or more Certificates registered in the name of the
Depository or its nominee and, except as provided below, registration of such
Certificates may not be transferred by the Trustee except to another Depository
that agrees to hold such Certificates for the respective Certificate Owners with
Ownership Interests therein. The Certificate Owners shall hold their respective
Ownership Interests in and to each of such Book-Entry Certificates through the
book-entry facilities of the Depository and, except as provided below, shall not
be entitled to Definitive Certificates in respect of such Ownership Interests.
All transfers by Certificate Owners of their respective Ownership Interests in
the Book-Entry Certificates shall be made in accordance with the procedures
established by the

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Depository Participant or brokerage firm representing such Certificate Owner.
Each Depository Participant shall transfer the Ownership Interests only in the
Book-Entry Certificates of Certificate Owners it represents or of brokerage
firms for which it acts as agent in accordance with the Depository's normal
procedures. The Trustee shall not be required to monitor, determine or inquire
as to compliance with the transfer restrictions with respect to the Book-Entry
Certificates, and the Trustee shall have no liability for transfers of Ownership
Interests in the Book Entry Certificates made through the book-entry facilities
of the Depositary or between or among Depositary Participants or Certificate
Owners, made in violation of the applicable restrictions.

         The Trustee, the Master Servicer and the Company may for all purposes
(including the making of payments due on the respective Classes of Book-Entry
Certificates) deal with the Depository as the authorized representative of the
Certificate Owners with respect to the respective Classes of Book-Entry
Certificates for the purposes of exercising the rights of Certificateholders
hereunder. The rights of Certificate Owners with respect to the respective
Classes of Book-Entry Certificates shall be limited to those established by law
and agreements between such Certificate Owners and the Depository Participants
and brokerage firms representing such Certificate Owners. Multiple requests and
directions from, and votes of, the Depository as Holder of any Class of Book-
Entry Certificates with respect to any particular matter shall not be deemed
inconsistent if they are made with respect to different Certificate Owners. The
Trustee may establish a reasonable record date in connection with solicitations
of consents from or voting by Certificateholders and shall give notice to the
Depository of such record date.

         If (i)(A) the Company advises the Trustee in writing that the
Depository is no longer willing or able to properly discharge its
responsibilities as Depository and (B) the Company is unable to locate a
qualified successor or (ii) the Company at its option advises the Trustee in
writing that it elects to terminate the book-entry system through the
Depository, the Trustee shall notify all Certificate Owners, through the
Depository, of the occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners requesting the same. Upon
surrender to the Trustee of the Book-Entry Certificates by the Depository,
accompanied by registration instructions from the Depository for registration of
transfer, the Trustee shall, at the expense of the Company, issue the Definitive
Certificates. Neither the Company, the Master Servicer nor the Trustee shall be
liable for any actions taken by the Depository or its nominee, including,
without limitation, any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Certificates the Trustee and the Master Servicer
shall recognize the Holders of the Definitive Certificates as Certificateholders
hereunder.

         (c) Each Certificate is intended to be a "security" governed by Article
8 of the Uniform Commercial Code as in effect in the State of New York and any
other applicable jurisdiction, to the extent that any of such laws may be
applicable.

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         Section 5.02. Registration of Transfer and Exchange of Certificates.

         (a) The Trustee shall maintain a Certificate Register in which, subject
to such reasonable regulations as it may prescribe, the Trustee shall provide
for the registration of Certificates and of transfers and exchanges of
Certificates as herein provided.

         (b) Except as provided in Section 5.02(c), no transfer, sale, pledge or
other disposition of a Class P Certificate, Class C Certificate or a Class R
Certificate shall be made unless such transfer, sale, pledge or other
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "Act"), and any applicable state securities laws or is
made in accordance with said Act and laws. In the event that a transfer of a
Class P Certificate, Class C Certificate or Class R Certificate is to be made
under this Section 5.02(b), (i) the Trustee shall require an Opinion of Counsel
acceptable to and in form and substance satisfactory to the Trustee that such
transfer shall be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, from said Act and laws or is being made
pursuant to said Act and laws, which Opinion of Counsel shall not be an expense
of the Trustee, the Company or the Master Servicer, provided that such Opinion
of Counsel will not be required in connection with the initial transfer of any
such Certificate by the Company or any affiliate thereof, to a non-affiliate of
the Company and (ii) the Trustee shall require the transferee to execute a
representation letter, substantially in the form of Exhibit G-1 hereto, and the
Trustee shall require the transferor to execute a representation letter,
substantially in the form of Exhibit G-2 hereto, each acceptable to and in form
and substance satisfactory to the Trustee certifying to the Company and the
Trustee the facts surrounding such transfer, which representation letters shall
not be an expense of the Trustee, the Company or the Master Servicer; provided,
however, that such representation letters will not be required in connection
with any transfer of any such Certificate by the Company to an affiliate of the
Company and the Trustee shall be entitled to conclusively rely upon a
representation (which, upon the request of the Trustee, shall be a written
representation) from the Company of the status of such transferee as an
affiliate of the Company. Any such Certificateholder desiring to effect such
transfer shall, and does hereby agree to, indemnify the Trustee, the Company and
the Master Servicer against any liability that may result if the transfer is not
so exempt or is not made in accordance with such applicable federal and state
laws.

         (c) Notwithstanding the requirements of Section 5.02(b), transfers of
Class P Certificates, Class C Certificates and Class R Certificates may be made
in accordance with this Section 5.02(c) if the prospective transferee of a
Certificate provides the Trustee and the Company with an investment letter
substantially in the form of Exhibit G-3 attached hereto, which investment
letter shall not be an expense of the Trustee, the Company or the Master
Servicer, and which investment letter states that, among other things, such
transferee is a "qualified institutional buyer" as defined under Rule 144A. Such
transfers shall be deemed to have complied with the requirements of Section
5.02(b) hereof; provided, however, that no Transfer of any of the Class P
Certificates, Class C Certificates or Class R Certificates may be made pursuant
to this Section 5.02(c) by the Company.

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<PAGE>

Any such Certificateholder desiring to effect such transfer shall, and does
hereby agree to, indemnify the Trustee, the Company and the Master Servicer
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such applicable federal and state laws.

         The Trustee shall require an Opinion of Counsel, on which the Trustee,
Company and Master Servicer may rely, from a prospective transferee prior to the
transfer of any Class P Certificate, Class C Certificate or Class R Certificate
to any employee benefit plan or other retirement arrangement, including
individual retirement accounts and Keogh plans, that is subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") or Section 4975 of
the Code (any of the foregoing, a "Plan"), to a trustee or other Person acting
on behalf of any Plan, or to any other person who is using "plan assets" of any
Plan to effect such acquisition (including any insurance company using funds in
its general or separate accounts that may constitute "plan assets"). Such
Opinion of Counsel must establish to the satisfaction of the Trustee that such
transfer is permissible under applicable law, will not constitute or result in a
prohibited transaction under Section 406 of ERISA and Section 4975 of the Code,
and will not subject the Trustee, the Master Servicer or the Company to any
obligation in addition to those undertaken in this Agreement. Neither the
Company, the Master Servicer nor the Trustee will be required to obtain such
Opinion of Counsel on behalf of any prospective transferee.

         Each beneficial owner of a Class M-1, Class M-2 or Class M-3
Certificate or any interest therein shall be deemed to have represented, by
virtue of its acquisition or holding of that certificate or interest therein,
that either (i) it is not a Plan or a trustee or other Person acting on behalf
of a Plan or using "plan assets" of a Plan to effect such acquisition (including
any insurance company using funds in its general or separate accounts that may
constitute "plan assets"), (ii) it has acquired and is holding such certificate
in reliance on Prohibited Transaction Exemption 2002-41 (the "Exemption"), and
that it understands that there are certain conditions to the availability of the
Exemption, including that the certificate must be rated, at the time of
purchase, not lower than "BBB-" (or its equivalent) by S&P, Fitch Ratings, Inc.
or Moody's, and the certificate is so rated or (iii) (1) it is an insurance
company, (2) the source of funds used to acquire or hold the certificate or
interest therein is an "insurance company general account," as such term is
defined in Prohibited Transaction Class Exemption ("PTCE") 95-60, and (3) the
conditions in Sections I and III of PTCE 95-60 have been satisfied.

         (d) [Reserved]

         (e) (i) Each Person who has or who acquires any Ownership Interest in a
Class R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably authorized the Trustee or its designee under clause (iii)(A)
below to deliver payments to a Person other than such Person and to negotiate
the terms of any mandatory sale under clause (iii)(B) below and to execute all
instruments of transfer and to do all other things necessary in connection with
any such sale. The rights of each

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Person acquiring any Ownership Interest in a Class R Certificate are expressly
subject to the following provisions:

                  (A) Each Person holding or acquiring any Ownership Interest in
a Class R Certificate shall be a Permitted Transferee and shall promptly notify
the Trustee of any change or impending change in its status as a Permitted
Transferee.

                  (B) In connection with any proposed Transfer of any Ownership
Interest in a Class R Certificate, the Trustee shall require delivery to it, and
shall not register the Transfer of any Class R Certificate until its receipt of
(I) an affidavit and agreement (a "Transfer Affidavit and Agreement" in the form
attached hereto as Exhibit G-5) from the proposed Transferee, in form and
substance satisfactory to the Trustee representing and warranting, among other
things, that it is a Permitted Transferee, that it is not acquiring its
Ownership Interest in the Class R Certificate that is the subject of the
proposed Transfer as a nominee, trustee or agent for any Person who is not a
Permitted Transferee, that for so long as it retains its Ownership Interest in a
Class R Certificate, it will endeavor to remain a Permitted Transferee, and that
it has reviewed the provisions of this Section 5.02 and agrees to be bound by
them, and (II) a certificate, in the form attached hereto as Exhibit G- 4, from
the Holder wishing to transfer the Class R Certificate, in form and substance
satisfactory to the Trustee representing and warranting, among other things,
that no purpose of the proposed Transfer is to impede the assessment or
collection of tax.

                  (C) Notwithstanding the delivery of a Transfer Affidavit and
Agreement by a proposed Transferee under clause (B) above, if a Responsible
Officer of the Trustee assigned to this transaction has actual knowledge that
the proposed Transferee is not a Permitted Transferee, no Transfer of an
Ownership Interest in a Class R Certificate to such proposed Transferee shall be
effected.

                  (D) Each Person holding or acquiring any Ownership Interest in
a Class R Certificate shall agree (x) to require a Transfer Affidavit and
Agreement from any other Person to whom such Person attempts to transfer its
Ownership Interest in a Class R Certificate and (y) not to transfer its
Ownership Interest unless it provides a certificate to the Trustee in the form
attached hereto as Exhibit G-4.

                  (E) Each Person holding or acquiring an Ownership Interest in
a Class R Certificate, by purchasing an Ownership Interest in such Certificate,
agrees to give the Trustee written notice that it is a "pass-through interest
holder" within the meaning of Temporary Treasury Regulations Section
1.67-3T(a)(2)(i)(A) immediately upon acquiring an Ownership Interest in a Class
R Certificate, if it is "a pass-through interest holder", or is holding an
Ownership Interest in a Class R Certificate on behalf of a "pass-through
interest holder."

         (ii) The Trustee will register the Transfer of any Class R Certificate
only if it shall have

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received the Transfer Affidavit and Agreement in the form attached hereto as
Exhibit G-5, a certificate of the Holder requesting such transfer in the form
attached hereto as Exhibit G-4 and all of such other documents as shall have
been reasonably required by the Trustee as a condition to such registration.
Transfers of the Class R Certificates other than to Permitted Transferees are
prohibited.

         (iii) (A) If any Person other than a Permitted Transferee shall become
a Holder of a Class R Certificate, then the last preceding Permitted Transferee
shall be restored, to the extent permitted by law, to all rights and obligations
as Holder thereof retroactive to the date of registration of such Transfer of
such Class R Certificate. If a Non-United States Person shall become a Holder of
a Class R Certificate, then the last preceding Permitted Transferee shall be
restored, to the extent permitted by law, to all rights and obligations as
Holder thereof retroactive to the date of registration of such Transfer of such
Class R Certificate. If a transfer of a Class R Certificate is disregarded
pursuant to the provisions of Treasury Regulations Section 1.860E-1 or Section
1.860G-3, then the last preceding Permitted Transferee shall be restored, to the
extent permitted by law, to all rights and obligations as Holder thereof
retroactive to the date of registration of such transfer of such Class R
Certificate. The prior Holder shall be entitled to recover from any purported
Holder of a Class R Certificate that was in fact not a Permitted Transferee
under this Section 5.05(b) at the time it became a Holder all payments made on
such Class R Certificate. Each Holder of a Class R Certificate, by acceptance
thereof, shall be deemed for all purposes to have consented to the provisions of
this clause (b) and to any amendment of this Agreement deemed necessary (whether
as a result of new legislation or otherwise) by counsel of the Company to ensure
that the Class R Certificates are not transferred to any Person who is not a
Permitted Transferee and that any transfer of such Class R Certificates will not
cause the imposition of a tax upon the Trust or cause any such REMIC to fail to
qualify as a REMIC. The Trustee shall be under no liability to any Person for
any registration of Transfer of a Class R Certificate that is in fact not
permitted by this Section 5.02 or for making any payments due on such
Certificate to the Holder thereof or for taking any other action with respect to
such Holder under the provisions of this Agreement.

                  (B) If any purported Transferee shall become a Holder of a
Class R Certificate in violation of the restrictions in this Section 5.02 and to
the extent that the retroactive restoration of the rights of the Holder of such
Class R Certificate as described in clause (iii)(A) above shall be invalid,
illegal or unenforceable, then the Trustee shall have the right, without notice
to the Holder or any prior Holder of such Class R Certificate, to sell such
Class R Certificate to a purchaser selected by the Trustee on such terms as the
Trustee may choose. Such purported Transferee shall promptly endorse and deliver
each Class R Certificate in accordance with the instructions of the Trustee.
Such purchaser may be the Trustee itself. The proceeds of such sale, net of the
commissions (which may include commissions payable to the Trustee), expenses and
taxes due, if any, will be remitted by the Trustee to such purported Transferee.
The terms and conditions of any sale under this clause (iii)(B) shall be
determined in the sole discretion of the Trustee, and the Trustee shall not be
liable to any Person having an Ownership Interest in a Class R Certificate as a
result of its exercise of such discretion.

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<PAGE>

         (iv) The Trustee shall make available to the Internal Revenue Service
and those Persons specified by the REMIC Provisions, all information necessary
to compute any tax imposed (A) as a result of the transfer of an ownership
interest in a Class R Certificate to any Person who is a Disqualified
Organization, including the information regarding "excess inclusions" of such
Class R Certificates required to be provided to the Internal Revenue Service and
certain Persons as described in Treasury Regulations Sections 1.860D-1(b)(5) and
1.860E-2(a)(5), and (B) as a result of any regulated investment company, real
estate investment trust, common trust fund, partnership, trust, estate or
organization described in Section 1381 of the Code that holds an Ownership
Interest in a Class R Certificate having as among its record Holders at any time
any Person who is a Disqualified Organization. The Trustee may charge and shall
be entitled to reasonable compensation for providing such information as may be
required from those Persons which may have had a tax imposed upon them as
specified in clauses (A) and (B) of this paragraph for providing such
information.

                  (F) Subject to the preceding paragraphs, upon surrender for
registration of transfer of any Certificate at the office of the Trustee
maintained for such purpose, the Trustee shall execute and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of the same Class of a like aggregate
Percentage Interest. Every Certificate surrendered for transfer shall be
accompanied by notification of the account of the designated transferee or
transferees for the purpose of receiving distributions pursuant to Section 4.01
by wire transfer, if any such transferee desires and is eligible for
distribution by wire transfer.

                  (G) At the option of the Certificateholders, Certificates may
be exchanged for other Certificates of authorized denominations of the same
Class of a like aggregate Percentage Interest, upon surrender of the
Certificates to be exchanged at the office of the Trustee. Whenever any
Certificates are so surrendered for exchange the Trustee shall execute,
authenticate and deliver the Certificates which the Certificateholder making the
exchange is entitled to receive. Every Certificate presented or surrendered for
transfer or exchange shall (if so required by the Trustee) be duly endorsed by,
or be accompanied by a written instrument of transfer in the form satisfactory
to the Trustee duly executed by, the Holder thereof or his attorney duly
authorized in writing. In addition, with respect to each Class R Certificate,
the Holder thereof may exchange, in the manner described above, such Class R
Certificate for three separate Certificates, each representing such Holder's
respective Percentage Interest in the Class R-1 Interest, the Class R-2 Interest
and the Class R-3 Interest, respectively, in each case that was evidenced by the
Class R Certificate being exchanged.

                  (H) No service charge shall be made to the Certificateholders
for any transfer or exchange of Certificates, but the Trustee may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.

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                  (I) All Certificates surrendered for transfer and exchange
shall be canceled and retained by the Trustee in accordance with the Trustee's
standard procedures.

         Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.

         If (i) any mutilated Certificate is surrendered to the Trustee and the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate, and (ii) there is delivered to the Trustee such security or
indemnity as may be required by it to save it harmless, then, in the absence of
notice to the Trustee that such Certificate has been acquired by a bona fide
purchaser, the Trustee shall execute, authenticate and deliver, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of the same Class and Percentage Interest. Upon the issuance of any
new Certificate under this Section, the Trustee may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Trustee) connected therewith. Any replacement Certificate issued pursuant to
this Section shall constitute complete and indefeasible evidence of ownership in
the Trust Fund, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.

         Section 5.04. Persons Deemed Owners.

         The Company, the Master Servicer, the Trustee and any agent of any of
them may treat the person in whose name any Certificate is registered as the
owner of such Certificate for the purpose of receiving distributions pursuant to
Section 4.01 and for all other purposes whatsoever, and neither the Company, the
Master Servicer, the Trustee nor any agent of any of them shall be affected by
notice to the contrary.

         Section 5.05. Rule 144A Information.

         For so long as any Class P Certificates, Class C Certificates and Class
R Certificates are outstanding and are "restricted securities" within the
meaning of Rule 144(a)(3) of the Securities Act, (1) the Company will provide or
cause to be provided to any Holder of such Certificates and any prospective
purchaser thereof designated by such a Holder, upon the request of such Holder
or prospective purchaser, the information required to be provided to such Holder
or prospective purchaser by Rule 144A(d)(4) under the Securities Act; and (2)
the Company shall update such information from time to time in order to prevent
such information from becoming false and misleading and will take such other
actions as are necessary to ensure that the safe harbor exemption from the
registration requirements of the Securities Act under Rule 144A is and will be
available for resales of such Certificates conducted in accordance with Rule
144A. The Master Servicer shall cooperate with the Company and furnish the
Company such information in the Master Servicer's possession as the Company may
reasonably request.

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                                   ARTICLE VI

                       THE COMPANY AND THE MASTER SERVICER

         Section 6.01. Liability of the Company and the Master Servicer.

         The Company and the Master Servicer each shall be liable in accordance
herewith only to the extent of the obligations specifically imposed upon and
undertaken by the Company and the Master Servicer herein. Only the Master
Servicer, any successor Master Servicer or the Trustee acting as Master Servicer
shall be liable with respect to the servicing of the Mortgage Loans and the REO
Property for actions taken by any such Person in contravention of the Master
Servicer's duties hereunder.

         Section 6.02. Merger, Consolidation or Conversion of the Company or the
                       Master Servicer.

         The Company and the Master Servicer each will keep in full effect its
existence, rights and franchises as a corporation under the laws of the state of
its incorporation, and each will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates or any of the Mortgage Loans
and to perform its respective duties under this Agreement.

         Any Person into which the Company or the Master Servicer may be merged,
consolidated or converted, or any corporation resulting from any merger or
consolidation to which the Company or the Master Servicer shall be a party, or
any Person succeeding to the business of the Company or the Master Servicer,
shall be the successor of the Company or the Master Servicer, as the case may
be, hereunder, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person to
the Master Servicer shall be qualified to sell mortgage loans to and service
mortgage loans for Fannie Mae or Freddie Mac.

         Section 6.03. Limitation on Liability of the Company, the Master
                       Servicer and Others.

         Neither the Company, the Master Servicer nor any of the directors,
officers, employees or agents of the Company or the Master Servicer shall be
under any liability to the Trust Fund or the Certificateholders for any action
taken or for refraining from the taking of any action in good faith pursuant to
this Agreement, or for errors in judgment; provided, however, that this
provision shall not protect the Company or the Master Servicer (but this
provision shall protect the above described persons) against any breach of
warranties or representations made herein, or against any specific liability
imposed on the Master Servicer pursuant to Section 3.01 or any other Section
hereof; and provided further that this provision shall not protect the Company,
the Master Servicer or any such

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person, against any liability which would otherwise be imposed by reason of
willful misfeasance, bad faith or gross negligence in the performance of duties
or by reason of reckless disregard of obligations and duties hereunder. The
Company, the Master Servicer and any director, officer, employee or agent of the
Company or the Master Servicer may rely in good faith on any document of any
kind PRIMA FACIE properly executed and submitted by any Person respecting any
matters arising hereunder. The Company, the Master Servicer and any director,
officer, employee or agent of the Company or the Master Servicer shall be
indemnified and held harmless by the Trust Fund against any loss, liability or
expense incurred in connection with any legal action relating to this Agreement
or the Certificates (including reasonable legal fees and disbursements of
counsel), other than (a) any loss, liability or expense related to Master
Servicer's servicing obligations with respect to any specific Mortgage Loan or
Mortgage Loans (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement) or related to the Master Servicer's
obligations under Section 3.01, or (b) any loss, liability or expense incurred
by reason of willful misfeasance, bad faith or gross negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. Neither the Company nor the Master Servicer
shall be under any obligation to appear in, prosecute or defend any legal action
which is not incidental to its respective duties under this Agreement and which
in its opinion may involve it in any expense or liability; provided, however,
that the Company or the Master Servicer may in its sole discretion undertake any
such action which it may deem necessary or desirable with respect to this
Agreement and the rights and duties of the parties hereto and the interests of
the Certificateholders hereunder. In such event, the legal expenses and costs of
such action and any liability resulting therefrom (except any action or
liability related to the Master Servicer's obligations under Section 3.01) shall
be expenses, costs and liabilities of the Trust Fund, and the Company and the
Master Servicer shall be entitled to be reimbursed therefor from the Certificate
Account as provided in Section 3.11, any such right of reimbursement being prior
to the rights of Certificateholders to receive any amount in the Certificate
Account.

         Section 6.04. Limitation on Resignation of the Master Servicer.

         The Master Servicer shall not resign from the obligations and duties
hereby imposed on it except (a) upon appointment of a successor servicer
reasonably acceptable to the Trustee upon receipt by the Trustee of a letter
from each Rating Agency (obtained by the Master Servicer and at its expense)
that such a resignation and appointment will not, in and of itself, result in a
downgrading of the Certificates or (b) upon determination that its duties
hereunder are no longer permissible under applicable law. Any such determination
permitting the resignation of the Master Servicer shall be evidenced by an
Opinion of Counsel (at the expense of the resigning Master Servicer) to such
effect delivered to the Trustee. No such resignation shall become effective
until the Trustee or a successor servicer shall have assumed the Master
Servicer's responsibilities, duties, liabilities and obligations hereunder.

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         Section 6.05. Sale and Assignment of Master Servicing.

         The Master Servicer may sell and assign its rights and delegate its
duties and obligations in their entirety as Master Servicer under this
Agreement; provided, however, that: (i) the purchaser or transferee accepting
such assignment and delegation (a) shall be a Person which shall be qualified to
service mortgage loans for Fannie Mae or Freddie Mac; (b) shall, in the case of
successor master servicers only, have a net worth of not less than $10,000,000
(unless otherwise approved by each Rating Agency pursuant to clause (ii) below);
(c) shall be reasonably satisfactory to the Trustee (as evidenced in a writing
signed by the Trustee) as having a comparable servicing ability to that of the
Master Servicer on the Closing Date; (d) shall execute and deliver to the
Trustee an agreement, in form and substance reasonably satisfactory to the
Trustee, which contains an assumption by such Person of the due and punctual
performance and observance of each covenant and condition to be performed or
observed by it as master servicer under this Agreement and any custodial
agreement, from and after the effective date of such agreement; (ii) each Rating
Agency shall be given prior written notice of the identity of the proposed
successor to the Master Servicer and each Rating Agency's rating of the
Certificates in effect immediately prior to such assignment, sale and delegation
will not be downgraded or withdrawn as a result of such assignment, sale and
delegation, as evidenced by a letter to such effect obtained by the Master
Servicer at its expense and delivered to the Trustee; and (iii) the Master
Servicer assigning and selling the master servicing shall deliver to the Trustee
an Officer's Certificate and an Opinion of Counsel (at the expense of the Master
Servicer), each stating that all conditions precedent to such action under this
Agreement have been completed and such action is permitted by and complies with
the terms of this Agreement. No such assignment or delegation shall affect any
liability of the Master Servicer arising prior to the effective date thereof.

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                                   ARTICLE VII

                                     DEFAULT

         Section 7.01. Events of Default.

         "Event of Default", wherever used herein, means any one of the
following events:

         (i) any failure by the Master Servicer to deposit into the Certificate
Account on each Certificate Account Deposit Date the amounts required to be
deposited therein (other than an Advance) under the terms of this Agreement
which continues unremedied for two (2) Business Days after such amount was
required to be remitted; or

         (ii) any failure on the part of the Master Servicer duly to observe or
perform in any material respect any other of the covenants or agreements on the
part of the Master Servicer contained in the Certificates or in this Agreement
(including any breach of the Master Servicer's representations and warranties
pursuant to Section 2.03(a) which materially and adversely affects the interests
of the Certificateholders) which continues unremedied for a period of 60 days
after the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Master Servicer by the Trustee, or to the
Master Servicer and the Trustee by the Holders of Certificates entitled to at
least 25% of the Voting Rights; or

         (iii) a decree or order of a court or agency or supervisory authority
having jurisdiction in an involuntary case under any present or future federal
or state bankruptcy, insolvency or similar law or the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against the
Master Servicer and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 consecutive days; or

         (iv) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating to
the Master Servicer or of or relating to all or substantially all of its
property; or

         (v) the Master Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of or
otherwise voluntarily commence a case or proceeding under any applicable
bankruptcy, insolvency, reorganization or other similar statute, make an
assignment for the benefit of its creditors, or voluntarily suspend payment of
its obligations; or

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         (vi) the Master Servicer shall fail to deposit in the Certificate
Account on any Certificate Account Deposit Date an amount equal to any required
Advance which continues unremedied for the earlier of (a) a period of two (2)
Business Days or (b) the Business Day immediately preceding the Distribution
Date.

         If an Event of Default described in clauses (i) - (v) of this Section
shall occur, then, and in each and every such case, so long as such Event of
Default shall not have been remedied, the Trustee or the Holders of Certificates
entitled to at least 51% of the Voting Rights, by notice in writing to the
Master Servicer (and to the Trustee if given by such Holders of Certificates),
with a copy to the Rating Agencies, may terminate all of the rights and
obligations (but not the liabilities) of the Master Servicer under this
Agreement and in and to the Trust Fund, other than its rights as a
Certificateholder hereunder; provided, however, that the successor to the Master
Servicer appointed pursuant to Section 7.02 shall have accepted the duties of
Master Servicer effective upon the resignation or termination of the Master
Servicer. If an Event of Default described in clause (vi) hereof shall occur,
the Trustee shall, by notice to the Master Servicer, and the Company, terminate
all of the rights and obligations of the Master Servicer under this Agreement
and in and to the Trust Fund, other than its rights as a Certificateholder
hereunder; provided, however, that if the Trustee determines (in its sole
discretion) that the failure by the Master Servicer to make any required Advance
was due to circumstances beyond its control, and the required Advance was
otherwise made, the Trustee shall not terminate the Master Servicer. On or after
the receipt by the Master Servicer of such notice, all authority and power of
the Master Servicer under this Agreement, whether with respect to the
Certificates (other than as a Holder thereof) or the Mortgage Loans or
otherwise, shall pass to and be vested in the Trustee pursuant to and under this
Section, and, without limitation, the Trustee is hereby authorized and empowered
to execute and deliver, on behalf of the Master Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement or
assignment of the Mortgage Loans and related documents, or otherwise at the
expense of the Master Servicer. The Master Servicer agrees to cooperate with
(and pay any related costs and expenses of) the Trustee in effecting the
termination of the Master Servicer's responsibilities and rights hereunder,
including, without limitation, the transfer to the Trustee or the successor
Master Servicer for administration by it of (i) the property and amounts which
are then or should be part of the Trust Fund or which thereafter become part of
the Trust Fund; (ii) originals or copies of all documents of the Master Servicer
reasonably requested by the Trustee to enable it to assume the Master Servicer's
duties thereunder; (iii) the rights and obligations of the Master Servicer under
the Sub-Servicing Agreements with respect to the Mortgage Loans; and (iv) all
cash amounts which shall at the time be deposited by the Master Servicer or
should have been deposited to the Custodial or the Certificate Account or
thereafter be received with respect to the Mortgage Loans. The Trustee shall not
be deemed to have breached any obligation hereunder as a result of a failure to
make or delay in making any distribution as and when required hereunder caused
by the failure of the Master Servicer to remit

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any amounts received by it or to deliver any documents held by it with respect
to the Mortgage Loans. For purposes of this Section 7.01, the Trustee shall not
be deemed to have knowledge of an Event of Default unless a Responsible Officer
of the Trustee has actual knowledge thereof or unless notice of any event which
is in fact such an Event of Default is received by the Trustee as provided in
Section 11.05 and such notice references the Certificates, the Trust Fund or
this Agreement.

         Section 7.02. Trustee to Act; Appointment of Successor.

         Within 90 days of the time the Master Servicer receives a notice of
termination pursuant to Section 7.01(i) - (v), the Trustee or its appointed
agent shall be the successor in all respects to the Master Servicer in its
capacity as Master Servicer under this Agreement and the transactions set forth
or provided for herein and shall be subject thereafter to all the
responsibilities, duties and liabilities relating thereto placed on the Master
Servicer including the obligation to make Advances which have been or will be
required to be made (except for the responsibilities, duties and liabilities
contained in Section 2.03 and its obligations to deposit amounts in respect of
losses pursuant to Section 3.12 and 4.01(h)) by the terms and provisions hereof;
and provided further, that any failure to perform such duties or
responsibilities caused by the Master Servicer's failure to provide information
required by Section 4.03 shall not be considered a default by the Trustee
hereunder. As compensation therefor, the Trustee shall be entitled to all funds
relating to the Mortgage Loans which the Master Servicer would have been
entitled to charge to the Custodial Account and the Certificate Account if the
Master Servicer had continued to act hereunder. If the Trustee has become the
successor to the Master Servicer in accordance with Section 6.04 or Section
7.02, then notwithstanding the above, if the Trustee shall be unwilling to so
act, or shall be unable to so act, the Trustee may appoint, or petition a court
of competent jurisdiction or appoint, any established housing and home finance
institution, which is also a Fannie Mae- or Freddie Mac-approved mortgage
servicing institution, having a net worth of not less than $10,000,000 as the
successor to the Master Servicer hereunder in the assumption of all or any part
of the responsibilities, duties or liabilities of the Master Servicer hereunder.
Pending appointment of a successor to the Master Servicer hereunder, the Trustee
shall act in such capacity as herein above provided. In connection with such
appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it and such
successor shall agree; provided, however, that no such compensation shall be in
excess of that permitted the Master Servicer hereunder. Each of the Seller, the
Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession. In no event
shall the successor Master Servicer be liable for the acts or omissions of the
predecessor Master Servicer.

         In connection with the termination or resignation of the Master
Servicer hereunder, either (i) the successor Master Servicer, including the
Trustee if the Trustee is acting as successor Master Servicer, shall represent
and warrant that it is a member of MERS in good standing and shall agree to
comply in all material respects with the rules and procedures of MERS in
connection with the

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servicing of the Mortgage Loans that are registered with MERS, in which case the
predecessor Master Servicer shall cooperate with the successor Master Servicer
in causing MERS to revise its records to reflect the transfer of servicing to
the successor Master Servicer as necessary under MERS' rules and regulations, or
(ii) the predecessor Master Servicer shall cooperate with the successor Master
Servicer in causing MERS to execute and deliver an assignment of Mortgage in
recordable form to transfer the Mortgage from MERS to the Trustee and to execute
and deliver such other notices, documents and other instruments as may be
necessary or desirable to effect a transfer of such Mortgage Loan or servicing
of such Mortgage Loan on the MERS(R) System to the successor Master Servicer.
The predecessor Master Servicer shall file or cause to be filed any such
assignment in the appropriate recording office. The predecessor Master Servicer
shall bear any and all fees of MERS, costs of preparing any assignments of
Mortgage, and fees and costs of filing any assignments of Mortgage that may be
required under this Section 7.02. The successor Master Servicer shall cause such
assignment to be delivered to the Trustee promptly upon receipt of the original
with evidence of recording thereon or a copy certified by the public recording
office in which such assignment was recorded.

         Any successor, including the Trustee, to the Master Servicer shall
maintain in force during its term as master servicer hereunder policies and
fidelity bonds to the same extent as the Master Servicer is so required pursuant
to Section 3.18.

         Notwithstanding anything else herein to the contrary, in no event shall
the Trustee be liable for any Master Servicing Fee or Sub-Servicing Fee or for
any differential in the amount of the Master Servicing Fee or Sub-Servicing Fee
paid hereunder and the amount necessary to induce any successor Master Servicer
or Sub-Servicer, as applicable, to act as successor Master Servicer or Sub-
Servicer, as applicable, under this Agreement and the transactions set forth or
provided for herein.

         Section 7.03. Notification to Certificateholders.

         (a) Upon any such termination or appointment of a successor to the
Master Servicer, the Trustee shall give prompt notice thereof to
Certificateholders and to the Rating Agencies.

         (b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Holders of Certificates notice of each
such Event of Default hereunder known to the Trustee, unless such Event of
Default shall have been cured or waived.

         Section 7.04. Waiver of Events of Default.

         The Holders representing at least 51% of the Voting Rights of
Certificates affected by a default or Event of Default hereunder, may waive such
default or Event of Default (other than an Event of Default set forth in Section
7.01(vi)); provided, however, that (a) a default or Event of

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Default under clause (i) of Section 7.01 may be waived only by all of the
Holders of Certificates affected by such default or Event of Default and (b) no
waiver pursuant to this Section 7.04 shall affect the Holders of Certificates in
the manner set forth in the second paragraph of Section 11.01 or materially
adversely affect any non-consenting Certificateholder. Upon any such waiver of a
default or Event of Default by the Holders representing the requisite percentage
of Voting Rights of Certificates affected by such default or Event of Default,
such default or Event of Default shall cease to exist and shall be deemed to
have been remedied for every purpose hereunder. No such waiver shall extend to
any subsequent or other default or Event of Default or impair any right
consequent thereon except to the extent expressly so waived. The Master Servicer
shall give notice of any such waiver to the Rating Agencies.

         Section 7.05. List of Certificateholders.

         Upon written request of three or more Certificateholders of record, for
purposes of communicating with other Certificateholders with respect to their
rights under this Agreement, the Trustee will afford such Certificateholders
access during business hours to the most recent list of Certificateholders held
by the Trustee.

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                                  ARTICLE VIII

                             CONCERNING THE TRUSTEE

         Section 8.01. Duties of Trustee.

         The Trustee, prior to the occurrence of an Event of Default and after
the curing or waiver of all Events of Default which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Agreement. If an Event of Default occurs, is continuing and has
not been waived, the Trustee shall exercise such of the rights and powers vested
in it by this Agreement, and use the same degree of care and skill in their
exercise as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs. Any permissive right of the Trustee enumerated in
this Agreement shall not be construed as a duty.

         The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them in accordance with the
requirements of this Agreement. If any such instrument is found not to conform
to the requirements of this Agreement in a material manner, the Trustee shall
take such action as it deems appropriate to have the instrument corrected, and
if the instrument is not corrected to the Trustee's satisfaction, the Trustee
will provide notice thereof to the Certificateholders. Notwithstanding the
foregoing, the Trustee shall not be responsible for the accuracy or content of
any resolution, certificate, statement, opinion, report, document, order or
other instrument furnished by the Master Servicer hereunder or any Opinion of
Counsel required hereunder.

         The Trustee shall prepare and file or cause to be filed on behalf of
the Trust Fund any tax return that is required with respect to REMIC 1 and REMIC
2 pursuant to applicable federal, state or local tax laws.

         The Trustee covenants and agrees that it shall perform its obligations
hereunder in a manner so as to maintain the status of REMIC 1 and REMIC 2 under
the REMIC Provisions and to prevent the imposition of any federal, state or
local income, prohibited transaction, contribution or other tax on any of REMIC
1 or REMIC 2 to the extent that maintaining such status and avoiding such taxes
are within the control of the Trustee and are reasonably within the scope of its
duties under this Agreement.

         No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct; provided, however, that:

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         (i) Prior to the occurrence of an Event of Default, and after the
curing or waiver of all such Events of Default which may have occurred, the
duties and obligations of the Trustee shall be determined solely by the express
provisions of this Agreement, the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set forth in this
Agreement, no implied covenants or obligations shall be read into this Agreement
against the Trustee and, in the absence of bad faith on the part of the Trustee,
the Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or opinions
furnished to the Trustee and conforming to the requirements of this Agreement;

         (ii) The Trustee shall not be liable for an error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it shall be proved that the Trustee was negligent in ascertaining the
pertinent facts; and

         (iii) The Trustee shall not be liable with respect to any action taken,
suffered or omitted to be taken by it in good faith in accordance with the
direction of the Holders of Certificates entitled to at least 25% of the Voting
Rights relating to the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Agreement.

         Section 8.02. Certain Matters Affecting the Trustee.

         Except as otherwise provided in Section 8.01:

         (a) The Trustee may conclusively rely upon and shall be fully protected
in acting or refraining from acting in reliance upon any resolution, Officers'
Certificate, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal, bond or
other paper or document reasonably believed by it to be genuine and to have been
signed or presented by the proper party or parties;

         (b) The Trustee may consult with counsel and any Opinion of Counsel
shall be full and complete authorization and protection in respect of any action
taken or suffered or omitted by it hereunder in good faith and in accordance
therewith;

         (c) The Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Agreement, other than its obligation to
give notice pursuant to this Agreement, or to institute, conduct or defend any
litigation hereunder or in relation hereto at the request, order or direction of
any of the Certificateholders, pursuant to the provisions of this Agreement,
unless such Certificateholders shall have offered to the Trustee security or
indemnity satisfactory to it against the costs, expenses and liabilities which
may be incurred therein or thereby; nothing contained herein shall, however,
relieve the Trustee of the obligation, upon the occurrence of an Event of
Default of

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<PAGE>

which a Responsible Officer of the Trustee's corporate trust department has
actual knowledge (which has not been waived or cured), to exercise such of the
rights and powers vested in it by this Agreement, and to use the same degree of
care and skill in their exercise as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs;

         (d) The Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement;

         (e) Prior to the occurrence of an Event of Default hereunder and after
the curing or waiver of all Events of Default which may have occurred, the
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond or other paper or document,
unless requested in writing to do so by the Holders of Certificates entitled to
at least 25% of the Voting Rights; provided, however, that if the payment within
a reasonable time to the Trustee of the costs, expenses or liabilities likely to
be incurred by it in the making of such investigation is, in the opinion of the
Trustee, reasonably assured to the Trustee by the security afforded to it by the
terms of this Agreement reasonable expense of every such examination shall be
paid by the Certificateholders requesting the investigation;

         (f) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents, nominees,
custodians or attorneys appointed with due care, and shall not be responsible
for any willful misconduct or negligence on the part of any agent, attorney,
custodian or nominee so appointed;

         (g) The Trustee shall not be required to give any bond or surety with
respect to the execution of the trust created hereby or the powers granted
hereunder; and

         (h) Whenever in the administration of the provisions of this Agreement
the Trustee shall deem it necessary or desirable that a matter be proved or
established prior to taking or suffering any action to be taken hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of gross negligence or bad faith on the part of
the Trustee, be deemed to be conclusively proved and established by a
certificate signed and delivered to the Trustee and such certificate, in the
absence of gross negligence or bad faith on the part of the Trustee, shall be
full warrant to the Trustee for any action taken, suffered or omitted by it
under the provisions of this Agreement upon the faith thereof.

         The Trustee shall have no obligation to invest and reinvest any cash
held in the absence of timely and specific written investment direction from the
Master Servicer. In no event shall the Trustee be liable for the selection of
investments or for investment losses incurred thereon. The

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Trustee shall have no liability in respect of losses incurred as a result of the
liquidation of any investment incurred as a result of the liquidation of any
investment prior to its stated maturity or the failure of the Master Servicer to
provide timely written investment direction.

         In order to comply with its duties under the U.S. Patriot Act, the
Trustee shall obtain and verify certain information and documentation from other
parties hereto, including, but not limited to, such party's name, address and
other identifying information.

         Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans.

         The recitals contained herein and in the Certificates (other than the
signature of the Trustee, the authentication of the Trustee on the Certificates,
the acknowledgments of the Trustee contained in Article II) shall be taken as
the statements of the Company and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations or warranties as to the
validity or sufficiency of this Agreement or of the Certificates (other than the
signature and authentication of the Trustee on the Certificates) or of any
Mortgage Loan or related document, or of MERS or the MERS(R) System. The Trustee
shall not be accountable for the use or application by the Company of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Company or the Master Servicer in respect
of the Mortgage Loans or deposited in or withdrawn from the Custodial Account by
the Master Servicer.

         Section 8.04. Trustee May Own Certificates.

         The Trustee in its individual or any other capacity (other than as
Trustee hereunder) may become the owner or pledgee of Certificates with the same
rights it would have if it were not Trustee and may otherwise deal with the
parties hereto.

         Section 8.05. Trustee's Fees.

         On each Distribution Date, the Trustee shall be entitled to withdraw
from the Certificate Account as compensation hereunder the Trustee's Fees. Such
compensation (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) shall be paid for all
services rendered by it (except as otherwise reimbursed by the Seller pursuant
to a separate fee letter between the Seller and the Trustee) in the execution of
the trusts hereby created and in the exercise and performance of any of the
powers and duties hereunder or of the Trustee. Except as otherwise provided in
this Agreement, the Trustee and any director, officer, employee or agent of the
Trustee shall be indemnified and held harmless by the Trust Fund against any
claim, loss, liability, fee or expense incurred in connection with any Event of
Default, any breach of this Agreement or any claim or legal action (including
any pending or threatened claim or legal action) relating to the acceptance or
administration of its trusts hereunder or the Trustee's performance under

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the Certificates, other than any claim, loss, liability or expense (i) sustained
in connection with this Agreement related to the willful misfeasance, bad faith
or negligence of the Master Servicer in the performance of its duties hereunder
or (ii) incurred in connection with a breach constituting willful misfeasance,
bad faith or negligence of the Trustee in the performance of its duties
hereunder or by reason of reckless disregard of its obligations and duties
hereunder.

         The Master Servicer shall indemnify the Trustee and any director,
officer, employee or agent of the Trustee against any such claim or legal action
(including any pending or threatened claim or legal action), loss, liability,
fee or expense that may be sustained in connection with this Agreement related
to the willful misfeasance, bad faith, or negligence in the performance of the
Master Servicer's duties hereunder.

         The provisions of this Section 8.05 shall survive the resignation or
removal of the Trustee or the termination of this Agreement.

         Section 8.06. Eligibility Requirements for Trustee.

         The Trustee hereunder shall at all times be a corporation or a national
banking association organized and doing business under the laws of any state or
the United States of America or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $50,000,000 and subject to supervision or examination by federal or
state authority. In addition, the Trustee shall at all times be acceptable to
the Rating Agency rating the Certificates. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 8.07.
The corporation or national banking association serving as Trustee may have
normal banking and trust relationships with the Seller and their affiliates or
the Master Servicer and its affiliates; provided, however, that such corporation
cannot be an affiliate of the Master Servicer other than the Trustee in its role
as successor to the Master Servicer.

         Section 8.07. Resignation and Removal of the Trustee.

         The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the Master Servicer; with a
copy to the Rating Agencies; provided, that such resignation shall not be
effective until a successor trustee is appointed and accepts appointment in
accordance with the following provisions; provided, however, that the resigning
Trustee shall not resign and be discharged from the trusts hereby created until
such time as the

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Rating Agency rating the Certificates approves the successor trustee. Upon
receiving such notice of resignation, the Master Servicer shall promptly appoint
a successor trustee who meets the eligibility requirements of Section 8.06 by
written instrument, in triplicate, one copy of which instrument shall be
delivered to each of the resigning Trustee and to the successor trustee. If no
successor trustee shall have been so appointed and have accepted appointment
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor trustee.

         If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 and shall fail to resign after written
request therefor by the Master Servicer, or if at any time the Trustee shall
become incapable of acting, or shall be adjudged bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, the
Master Servicer may remove the Trustee and appoint a successor trustee who meets
the eligibility requirements of Section 8.06 by written instrument, in
triplicate, which instrument shall be delivered to the Trustee so removed and to
the successor trustee.

         The Holders of Certificates entitled to at least 51% of the Voting
Rights, may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which instruments
shall be delivered to the Master Servicer, one complete set to the Trustee so
removed and one complete set to the successor so appointed. A copy of such
instrument shall be delivered to the Certificateholders and the Company by the
Master Servicer.

         Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor trustee as
provided in Section 8.08.

         Section 8.08. Successor Trustee.

         Any successor trustee appointed as provided in Section 8.07 shall
execute, acknowledge and deliver to the Master Servicer and to its predecessor
trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with the like effect as if originally named as trustee
herein. The predecessor trustee shall after payment of its outstanding fees and
expenses, promptly deliver to the successor trustee all assets and records of
the Trust Fund held by it hereunder, and the Master Servicer and the predecessor
trustee shall execute and deliver all such instruments and do such other things
as may reasonably be required for more fully and certainly vesting and
confirming in the successor trustee all such rights, powers,

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duties and obligations.

         No successor trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 8.06.

         Upon acceptance of appointment by a successor trustee as provided in
this Section, the Master Servicer shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates at their addresses as shown in
the Certificate Register. If the Master Servicer fails to mail such notice
within ten days after acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed at the expense of the
Master Servicer.

         Section 8.09. Merger or Consolidation of Trustee.

         Any state bank or trust company or corporation or national banking
association into which the Trustee may be merged or converted or with which it
may be consolidated or any state bank or trust company or national banking
association resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any state bank or trust company or corporation or
national banking association succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided such state bank or trust company or corporation or national
banking association shall be eligible under the provisions of Section 8.06
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding.

         Section 8.10. Appointment of Co-Trustee or Separate Trustee.

         Notwithstanding any other provisions hereof, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Fund or property securing the same may at the time be located, the
Master Servicer and the Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more Persons approved by
the Trustee to act as co-trustee or co-trustees, jointly with the Trustee, or
separate trustee or separate trustees, of all or any part of the Trust Fund, and
to vest in such Person or Persons, in such capacity, such title to the Trust
Fund, or any part thereof, and, subject to the other provisions of this Section
8.10, such powers, duties, obligations, rights and trusts as the Master Servicer
and the Trustee may consider necessary or desirable. If the Master Servicer
shall not have joined in such appointment within 15 days after the receipt by it
of a request so to do, or in case an Event of Default shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment
without the Master Servicer. No co-trustee or separate trustee hereunder shall
be required to meet the terms of eligibility as a successor trustee under
Section 8.06 hereunder and no notice to Holders of Certificates of the
appointment of co-trustee(s) or separate trustee(s) shall be required under
Section 8.08 hereof.

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<PAGE>

         In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 8.10, all rights, powers, duties and obligations
conferred or imposed upon the Trustee and required to be conferred or such
co-trustee shall be conferred or imposed upon and exercised or performed by the
Trustee and such separate trustee or co-trustee jointly, except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be performed (whether as Trustee hereunder or as successor to the Master
Servicer hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust Fund or any portion thereof in any
such jurisdiction) shall be exercised and performed by such separate trustee or
co-trustee at the direction of the Trustee.

         Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.

         Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co- trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.

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                                   ARTICLE IX

                                   TERMINATION

         Section 9.01. Termination Upon Repurchase or Liquidation of All
                       Mortgage Loans or upon Purchase of Certificates.

         (a) Subject to Section 9.03, the respective obligations and
responsibilities of the Company, the Master Servicer and the Trustee created
hereby (other than the obligations of the Master Servicer to the Trustee
pursuant to Section 8.05 and of the Master Servicer to provide for and the
Trustee to make payments to Certificateholders as hereafter set forth) shall
terminate upon payment to the Certificateholders of all amounts held by or on
behalf of the Trustee and required to be paid to them hereunder following the
earlier to occur of (i) the repurchase by the Master Servicer or its designee of
all Mortgage Loans and each REO Property in respect thereof remaining in the
Trust Fund at a price equal to (a) 100% of the unpaid principal balance of each
Mortgage Loan (other than one as to which a REO Property was acquired) on the
day of repurchase together with accrued interest on such unpaid principal
balance at the Net Mortgage Rate to the first day of the month in which the
proceeds of such repurchase are to be distributed, plus (b) the appraised value
of any REO Property (but not more than the unpaid principal balance of the
related Mortgage Loan, together with accrued interest on that balance at the Net
Mortgage Rate to the first day of the month such repurchase price is
distributed), less the good faith estimate of the Master Servicer of liquidation
expenses to be incurred in connection with its disposal thereof, such appraisal
to be conducted by an appraiser mutually agreed upon by the Master Servicer and
the Trustee at the expense of the Master Servicer, and (ii) the final payment or
other liquidation (or any Advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund (or the disposition of all REO Property in
respect thereof); provided, however, that in no event shall the trust created
hereby continue beyond the earlier of (i) the Distribution Date occurring in
March 2034 and (ii) the expiration of 21 years from the death of the last
survivor of the descendants of Joseph P. Kennedy, the late ambassador of the
United States to the Court of St. James, living on the date hereof, and provided
further, that the purchase price set forth above shall be increased as is
necessary, as determined by the Master Servicer, to avoid disqualification of
any of REMIC 1 or REMIC 2 as a REMIC. In the case of any repurchase by the
Master Servicer pursuant to clause (i), the Master Servicer shall exercise
reasonable efforts to cooperate fully with the Trustee in effecting such
repurchase and the transfer of the Mortgage Loans and related Mortgage Files and
related records to the Master Servicer.

         The right of the Master Servicer or its designee to repurchase all
Mortgage Loans pursuant to (i) above shall be conditioned upon the Aggregate
Stated Principal Balance of such Mortgage Loans at the time of any such
repurchase aggregating an amount equal to or less than 10% of the Cut-off Date
Balance of the Initial Mortgage Loans and the Original Pre-Funded Amounts. If
such right is exercised, the Master Servicer upon such repurchase shall provide
to the Trustee, notice of

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such exercise prior to the Determination Date in the month preceding the month
of purchase and the certification required by Section 3.16.

         Written notice of any termination, specifying the Distribution Date
upon which the Certificateholders may surrender their Certificates to the
Trustee for payment of the final distribution and cancellation, shall be given
promptly by the Trustee by letter to the Certificateholders mailed (a) in the
event such notice is given in connection with the Master Servicer's election to
repurchase, not earlier than the 15th day and not later than the 25th day of the
month next preceding the month of such final distribution or (b) otherwise
during the month of such final distribution on or before the Determination Date
in such month, in each case specifying (i) the Distribution Date upon which
final payment of the Certificates will be made upon presentation and surrender
of Certificates at the office of the Trustee therein designated, (ii) the amount
of any such final payment and (iii) that the Record Date otherwise applicable to
such Distribution Date is not applicable, payments being made only upon
presentation and surrender of the Certificates at the office of the Trustee
therein specified. In the event such notice is given in connection with the
Master Servicer or its designee's election to repurchase, the Master Servicer or
its designee shall deliver to the Trustee for deposit in the Certificate Account
on the Business Day immediately preceding the Distribution Date specified in
such notice an amount equal to the above-described repurchase price payable out
of its own funds. Upon presentation and surrender of the Certificates by the
Certificateholders, the Trustee shall first, pay itself the Trustee's Fees for
such Distribution Date and any other amounts owing to the Trustee under this
Agreement, and second, distribute to the Certificateholders (i) the amount
otherwise distributable on such Distribution Date, if not in connection with the
Master Servicer's election to repurchase, or (ii) if the Master Servicer elected
to so repurchase, an amount determined as follows: with respect to each Regular
Certificate, the outstanding Certificate Principal Balance thereof, plus with
respect to each Regular Certificate (other than the Class P Certificates), one
month's interest thereon at the applicable Pass-Through Rate and any Unpaid
Interest Shortfall Amount, plus with respect to each Mezzanine Certificate, any
unpaid Allocated Realized Loss Amount; and with respect to the Class R
Certificates, the Percentage Interest evidenced thereby multiplied by the
difference, if any, between the above described repurchase price and the
aggregate amount to be distributed to the Holders of the Regular Certificates,
subject to the priorities set forth in Section 4.01. Notwithstanding the
foregoing, by acceptance of the Class R Certificates, the Holders of the Class R
Certificates agree, in connection with any termination hereunder, to assign and
transfer any amounts received in respect of such termination to the Holders of
the Class C Certificates and to pay any such amounts to the Holders of the Class
C Certificates. Upon certification to the Trustee by a Servicing Officer,
following such final deposit, the Trustee shall promptly release the Mortgage
Files as directed by the Master Servicer for the remaining Mortgage Loans, and
the Trustee shall execute all assignments, endorsements and other instruments
required by the Master Servicer as being necessary to effectuate such transfer.

         In the event that all of the Certificateholders shall not surrender
their Certificates for

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cancellation within six months after the time specified in the above-mentioned
notice, the Trustee shall give a second notice to the remaining
Certificateholders to surrender their Certificates for cancellation and receive
the final distribution with respect thereto. If within six months after the
second notice all of the Certificates shall not have been surrendered for
cancellation, the Trustee shall take reasonable steps as directed by the Company
in writing, or appoint an agent to take reasonable steps, to contact the
remaining Certificateholders concerning surrender of their Certificates, and the
cost thereof shall be paid out of the funds and other assets which remain
subject hereto. If within nine months after the second notice all the
Certificates shall not have been surrendered for cancellation, the Class R
Certificateholders shall be entitled to all unclaimed funds and other assets
which remain subject hereto.

         Section 9.02. Termination of REMIC 2.

         REMIC 2 shall be terminated on the earlier of the Final Distribution
Date and the date on which it is deemed to receive the last deemed distributions
on the REMIC 1 Regular Interests and the last distribution due on the REMIC 2
Regular Interests and the Class R Certificates (in respect of the Class R-2
Interest) is made.

         Section 9.03. Additional Termination Requirements.

         (a) In the event the Master Servicer repurchases the Mortgage Loans as
provided in Section 9.01, the Trust Fund shall be terminated in accordance with
the following additional requirements, unless the Master Servicer, at its own
expense, obtains for the Trustee an Opinion of Counsel to the effect that the
failure of the Trust Fund to comply with the requirements of this Section 9.03
will not (i) result in the imposition on the Trust of taxes on "prohibited
transactions," as described in Section 860F of the Code, or (ii) cause either
REMIC 1 or REMIC 2 to fail to qualify as a REMIC at any time that any
Certificate is outstanding:

                  (i) The Trustee shall establish a 90-day liquidation period
for REMIC 1 and REMIC 2, as the case may be, and specify the first day of such
period in a statement attached to the Trust Fund's final Tax Return pursuant to
Treasury regulations Section 1.860F-1. The Trustee also shall satisfy all of the
requirements of a qualified liquidation for REMIC 1 and REMIC 2, as the case may
be, under Section 860F of the Code and regulations thereunder; and

                  (ii) The Master Servicer shall notify the Trustee at the
commencement of such 90-day liquidation period and, at or prior to the time of
making of the final payment on the Certificates, the Trustee shall sell or
otherwise dispose of all of the remaining assets of the Trust Fund in accordance
with the terms hereof.

         (b) Each Holder of a Certificate and the Trustee hereby irrevocably
approves and appoints

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the Master Servicer as its attorney-in-fact to adopt a plan of complete
liquidation for REMIC 1 and REMIC 2 at the expense of the Trust Fund in
accordance with the terms and conditions of this Agreement.

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                                    ARTICLE X

                                REMIC PROVISIONS

         Section 10.01. REMIC Administration.

         (a) The Trustee shall make an election to treat the Trust Fund as three
REMICs under the Code and, if necessary, under applicable state law. Each such
election will be made on Form 1066 or other appropriate federal tax or
information return (including Form 8811) or any appropriate state return for the
taxable year ending on the last day of the calendar year in which the
Certificates are issued. For the purposes of the REMIC elections in respect of
the Trust Fund, (i) the Class R-1 Interest will constitute the sole class of
"residual interest" in REMIC 1, and (ii) the Class R-2 Interest will constitute
the sole class of "residual interest" in REMIC 2, and the Regular Certificates
shall be designated as the "regular interest" in REMIC 2. The Master Servicer
and the Trustee shall not permit the creation of any "interests" (within the
meaning of Section 860G of the Code) in REMIC 1 or REMIC 2 other than the REMIC
1 Regular Interests and the Class R-1 Interest (in the case of REMIC 1), and the
Regular Certificates and the Class R-2 Interest (in the case of REMIC 2). The
Trustee will apply for an Employee Identification Number from the IRS via form
SS-4 or any other acceptable method for each of REMIC 1 and REMIC 2.

         (b) The Closing Date is hereby designated as the "startup day" of the
Trust Fund within the meaning of Section 860G(a)(9) of the Code.

         (c) The Trustee shall pay out of its own funds, without any right of
reimbursement, any and all expenses relating to any tax audit of the REMICs
(including, but not limited to, any professional fees or any administrative or
judicial proceedings with respect to the REMICs that involve the Internal
Revenue Service or state tax authorities), other than the expense of obtaining
any tax-related Opinion of Counsel except as specified herein. The Trustee, as
agent for the REMICs' tax matters person, shall (i) act on behalf of the REMICs
in relation to any tax matter or controversy involving the Trust Fund and (ii)
represent the Trust Fund in any administrative or judicial proceeding relating
to an examination or audit by any governmental taxing authority with respect
thereto. By their acceptance thereof, the Holder of the largest Percentage
Interest of the Class R Certificates hereby agrees to irrevocably appoint the
Trustee or an Affiliate as its agent to perform all of the duties of the tax
matters person for the REMICs.

         (d) The Trustee shall prepare, sign and file all of the Tax Returns
(including Form 8811, which must be filed within 30 days of the Closing Date) in
respect of the REMICs created hereunder. The expenses of preparing and filing
such returns shall be borne by the Trustee without any right of reimbursement
therefor. The Master Servicer shall provide on a timely basis to the Trustee or
its designee such information with respect to the assets of the REMICs as is in
its possession and

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reasonably required by the Trustee to enable it to perform its obligations under
this Article X.

         (e) The Trustee shall perform on behalf of the REMICs all reporting and
other tax compliance duties that are the responsibility of the REMICs under the
Code, the REMIC Provisions or other compliance guidance issued by the Internal
Revenue Service or any state or local taxing authority. Among its other duties,
as required by the Code, the REMIC Provisions or other such compliance guidance,
the Trustee shall provide (i) to any Transferor of a Class R Certificate such
information as is necessary for the application of any tax relating to the
transfer of a Class R Certificate to any Person who is not a Permitted
Transferee, (ii) to the Certificateholders such information or reports as are
required by the Code or the REMIC Provisions including reports relating to
interest, original issue discount and market discount or premium (using the
Prepayment Assumption as required) and (iii) to the Internal Revenue Service the
name, title, address and telephone number of the person who will serve as the
representative of the REMICs. The Master Servicer shall provide on a timely
basis to the Trustee such information with respect to the assets of the REMICs,
including, without limitation, the Mortgage Loans, as is in its possession and
reasonably required by the Trustee to enable it to perform its obligations under
this subsection. In addition, the Company shall provide or cause to be provided
to the Trustee, within ten (10) days after the Closing Date, all information or
data that the Trustee reasonably determines to be relevant for tax purposes as
to the valuations and issue prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flow of
the Certificates.

         (f) The Trustee shall take such action and shall cause the REMICs
created hereunder to take such action as shall be necessary to create or
maintain the status thereof as REMICs under the REMIC Provisions (and the Master
Servicer shall assist it, to the extent reasonably requested by it). The Trustee
shall not take any action, cause the Trust Fund to take any action or fail to
take (or fail to cause to be taken) any action that, under the REMIC Provisions,
if taken or not taken, as the case may be, could (i) endanger the status of the
REMIC 1 or REMIC 2 as REMICs or (ii) result in the imposition of a tax upon the
REMICs (including but not limited to the tax on prohibited transactions as
defined in Section 860F(a)(2) of the Code and the tax on contributions to a
REMIC set forth in Section 860G(d) of the Code) (either such event, an "Adverse
REMIC Event") unless the Trustee has received an Opinion of Counsel, addressed
to the Trustee (at the expense of the party seeking to take such action but in
no event at the expense of the Trustee) to the effect that the contemplated
action will not, with respect to the REMICs created hereunder, endanger such
status or result in the imposition of such a tax, nor shall the Master Servicer
take or fail to take any action (whether or not authorized hereunder) as to
which the Trustee has advised it in writing that it has received an Opinion of
Counsel to the effect that an Adverse REMIC Event could occur with respect to
such action. In addition, prior to taking any action with respect to the REMICs
or the assets of the REMICs, or causing the REMICs to take any action, which is
not contemplated under the terms of this Agreement, the Master Servicer will
consult with the Trustee or its designee, in writing, with respect to whether
such action could cause an Adverse REMIC Event to occur with respect to the

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Trust Fund, and the Master Servicer shall not take any such action or cause the
Trust Fund to take any such action as to which the Trustee has advised it in
writing that an Adverse REMIC Event could occur. The Trustee may consult with
counsel to make such written advice, and the cost of same shall be borne by the
party seeking to take the action not permitted by this Agreement, but in no
event shall such cost be an expense of the Trustee. At all times as may be
required by the Code, the Trustee will ensure that substantially all of the
assets of the REMICs created hereunder will consist of "qualified mortgages" as
defined in Section 860G(a)(3) of the Code and "permitted investments" as defined
in Section 860G(a)(5) of the Code.

         (g) In the event that any tax is imposed on "prohibited transactions"
of the REMICs created hereunder as defined in Section 860F(a)(2) of the Code, on
the "net income from foreclosure property" of the REMICs as defined in Section
860G(c) of the Code, on any contributions to the REMICs after the Startup Day
therefor pursuant to Section 860G(d) of the Code, or any other tax is imposed by
the Code or any applicable provisions of state or local tax laws, such tax shall
be charged (i) to the Trustee pursuant to Section 10.03 hereof, if such tax
arises out of or results from a breach by the Trustee of any of its obligations
under this Article X, (ii) to the Master Servicer pursuant to Section 10.03
hereof, if such tax arises out of or results from a breach by the Master
Servicer of any of its obligations under Article III or this Article X, or
otherwise, (iii) to the Master Servicer as provided in Section 3.05 and (iv)
against amounts on deposit in the Certificate Account and shall be paid by
withdrawal therefrom to the extent not required to be paid by the Master
Servicer or the Trustee pursuant to another provision of this Agreement.

         (h) On or before April 15 of each calendar year, commencing April 15,
2005, the Trustee shall deliver to the Master Servicer and the Rating Agency a
Certificate from a Responsible Officer of the Trustee stating the Trustee's
compliance with this Article X.

         (i) The Trustee shall, for federal income tax purposes, maintain books
and records with respect to the REMICs on a calendar year and on an accrual
basis.

         (j) Following the Startup Day, the Trustee shall not accept any
contributions of assets to the REMICs other than in connection with any
Qualified Substitute Mortgage Loan delivered in accordance with Section 2.04
unless it shall have received an Opinion of Counsel to the effect that the
inclusion of such assets in the REMICs will not cause the REMIC 1 or REMIC 2 to
fail to qualify as REMICs at any time that any Certificates are outstanding or
subject either REMIC 1 or REMIC 2 to any tax under the REMIC Provisions or other
applicable provisions of federal, state and local law or ordinances.

         (k) Neither the Trustee nor the Master Servicer shall enter into any
arrangement by which the REMICs will receive a fee or other compensation for
services nor permit the REMICs to receive any income from assets other than
"qualified mortgages" as defined in Section 860G(a)(3) of the

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Code or "permitted investments" as defined in Section 860G(a)(5) of the Code.

         Section 10.02. Prohibited Transactions and Activities.

         None of the Company, the Master Servicer or the Trustee shall sell,
dispose of or substitute for any of the Mortgage Loans (except in connection
with (i) the foreclosure of a Mortgage Loan, including but not limited to, the
acquisition or sale of a Mortgaged Property acquired by deed in lieu of
foreclosure, (ii) the bankruptcy of the Trust Fund, (iii) the termination of
REMIC 1 or REMIC 2 pursuant to Article IX of this Agreement, (iv) a substitution
pursuant to Article II of this Agreement or (v) a purchase of Mortgage Loans
pursuant to Article II or III of this Agreement), nor acquire any assets for the
Trust Fund (other than REO Property acquired in respect of a defaulted Mortgage
Loan), nor sell or dispose of any investments in the Custodial Account or the
Certificate Account for gain, nor accept any contributions to the REMICs after
the Closing Date (other than a Qualified Substitute Mortgage Loan delivered in
accordance with Section 2.04), unless it has received an Opinion of Counsel,
addressed to the Trustee (at the expense of the party seeking to cause such
sale, disposition, substitution, acquisition or contribution but in no event at
the expense of the Trustee) that such sale, disposition, substitution,
acquisition or contribution will not (a) affect adversely the status of REMIC 1
or REMIC 2 as REMICs or (b) cause the Trust Fund to be subject to a tax on
"prohibited transactions" or "contributions" pursuant to the REMIC Provisions.

         Section 10.03. Master Servicer and Trustee Indemnification.

         (a) The Trustee agrees to indemnify the Trust Fund, the Company, and
the Master Servicer for any taxes and costs including, without limitation, any
reasonable attorneys' fees imposed on or incurred by the Trust Fund, the Company
or the Master Servicer, as a result of a breach of the Trustee's covenants set
forth in this Article X.

         (b) The Master Servicer agrees to indemnify the Trust Fund, the Company
and the Trustee for any taxes and costs including, without limitation, any
reasonable attorneys' fees imposed on or incurred by the Trust Fund, the Company
or the Trustee, as a result of a breach of the Master Servicer's covenants set
forth in Article III or this Article X, in each case with respect to compliance
with the REMIC Provisions.

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                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

         Section 11.01. Amendment.

         This Agreement may be amended from time to time by the Company, the
Master Servicer and the Trustee, without the consent of any of the
Certificateholders, (i) to cure any ambiguity, (ii) to correct or supplement any
provisions herein which may be defective or inconsistent with any other
provisions herein or to correct any error, (iii) to amend this Agreement in any
respect subject to the provisions in clauses (A) and (B) below, or (iv) if such
amendment, as evidenced by an Opinion of Counsel (provided by the Person
requesting such amendment) delivered to the Trustee, is reasonably necessary to
comply with any requirements imposed by the Code or any successor or amendatory
statute or any temporary or final regulation, revenue ruling, revenue procedure
or other written official announcement or interpretation relating to federal
income tax laws or any proposed such action which, if made effective, would
apply retroactively to the Trust Fund at least from the effective date of such
amendment; provided that such action (except any amendment described in (iv)
above) shall not adversely affect in any material respect the interests of any
Certificateholder (other than Certificateholders who shall consent to such
amendment), as evidenced by (A) an Opinion of Counsel (provided by the Person
requesting such amendment) delivered to the Trustee, and (B) a letter from each
Rating Agency, confirming that such amendment shall not cause it to lower its
rating on any of the Certificates.

         This Agreement may also be amended from time to time by the Company,
the Master Servicer and the Trustee and Holders of Certificates entitled to at
least 66-2/3% of the Voting Rights for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this Agreement
or of modifying in any manner the rights of the Holders of Certificates;
provided, however, that no such amendment shall (i) reduce in any manner the
amount of, or delay the timing of, payments received on Mortgage Loans which are
required to be distributed on any Certificate without the consent of the Holder
of such Certificate, (ii) adversely affect in any material respect the interests
of the Holders of any Class of Certificates in a manner other than as described
in (i), without the consent of the Holders of Certificates of such Class
evidencing at least 66-2/3% of the Voting Rights of such Class, or (iii) reduce
the aforesaid percentage of Certificates the Holders of which are required to
consent to any such amendment, without the consent of the Holders of all
Certificates then outstanding. Notwithstanding any other provision of this
Agreement, for purposes of the giving or withholding of consents pursuant to
this Section 11.01, Certificates registered in the name of the Seller or the
Master Servicer or any affiliate thereof shall be entitled to Voting Rights with
respect to matters described in (i), (ii) and (iii) of this paragraph.

         Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to

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<PAGE>

any amendment to this Agreement unless it shall have first received an Opinion
of Counsel (provided by the Person requesting such amendment) to the effect that
such amendment will not result in the imposition of any tax on either REMIC 1 or
REMIC 2 pursuant to the REMIC Provisions or cause either REMIC 1 or REMIC 2 to
fail to qualify as a REMIC at any time that any Certificates are outstanding.

         Promptly after the execution of any such amendment the Trustee shall
furnish a copy of such amendment or a written statement describing the amendment
to each Certificateholder, with a copy to the Rating Agencies.

         It shall not be necessary for the consent of Certificateholders under
this Section 11.01 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.

         Prior to executing any amendment pursuant to this Section, the Trustee
shall be entitled to receive an Opinion of Counsel (provided by the Person
requesting such amendment) to the effect that such amendment is authorized or
permitted by this Agreement. The cost of any Opinion of Counsel delivered
pursuant to this Section 11.01 shall be an expense of the party requesting such
amendment, but in any case shall not be an expense of the Trustee.

         The Trustee may, but shall not be obligated to, enter into any
amendment pursuant to this Section that affects its rights, duties and
immunities under this Agreement or otherwise.

         Section 11.02. Recordation of Agreement; Counterparts.

         To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Master Servicer at the expense of the Certificateholders, but only upon
direction of the Company accompanied by an Opinion of Counsel to the effect that
such recordation materially and beneficially affects the interests of the
Certificateholders.

         For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.

                                      126
<PAGE>

         Section 11.03. Limitation on Rights of Certificateholders.

         The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust Fund, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.

         No Certificateholder shall have any right to vote (except as expressly
provided for herein) or in any manner otherwise control the operation and
management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of the Certificates,
be construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third party by reason of any action taken by the parties to
this Agreement pursuant to any provision hereof.

         No Certificateholder shall have any right by virtue of any provision of
this Agreement to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Agreement, unless such Holder previously
shall have given to the Trustee a notice of an Event of Default, or of a default
by the Seller or the Trustee in the performance of any obligation hereunder, and
of the continuance thereof, as hereinbefore provided, and unless also the
Holders of Certificates entitled to at least 51% of the Voting Rights shall have
made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding. It is
understood and intended, and expressly covenanted by each Certificateholder with
every other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Agreement, except in the manner herein provided and for the equal,
ratable and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section, each and every Certificateholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.

         Section 11.04. Governing Law.

         This Agreement and the Certificates shall be construed in accordance
with the laws of the State of New York and the obligations, rights and remedies
of the parties hereunder shall be determined in accordance with such laws.

                                      127
<PAGE>

         Section 11.05. Notices.

         All demands, notices and direction hereunder shall be in writing and
shall be deemed effective upon receipt when delivered to (a) in the case of the
Company, 1401 Dove Street, Newport Beach, California 92660, Attention: General
Counsel, or such other address as may hereafter be furnished to the other
parties hereto in writing; (b) in the case of Impac Funding, 1401 Dove Avenue,
Newport Beach, California 92660, Attention: General Counsel, or such other
address as may hereafter be furnished to the other parties hereto in writing;
(c) in the case of the Trustee, to its Corporate Trust Office, or such other
address as may hereafter be furnished to the other parties hereto in writing; or
(d) in the case of the Rating Agencies, Standard & Poor's, 55 Water Street, 41st
Floor, New York, NY 10041, Attention: Asset Backed Surveillance Department; and
Moody's, Moody's Investors Service, Inc., Residential Mortgage Monitoring
Department, 99 Church Street, New York, New York 10007. Any notice required or
permitted to be mailed to a Certificateholder shall be given by first class
mail, postage prepaid, at the address of such Holder as shown in the Certificate
Register. Any notice so mailed within the time prescribed in this Agreement
shall be conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.

         Section 11.06. Severability of Provisions.

         If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.

         Section 11.07. Successors and Assigns.

         The provisions of this Agreement shall be binding upon and inure to the
benefit of the respective successors and assigns of the parties hereto, and all
such provisions shall inure to the benefit of the Trustee and the
Certificateholders.

         Section 11.08. Article and Section Headings.

         The article and Section headings herein are for convenience of
reference only, and shall not limit or otherwise affect the meaning hereof.

         Section 11.09. Notice to Rating Agencies.

         The Trustee shall use its best efforts to promptly provide notice to
each Rating Agency

                                      128
<PAGE>

referred to below with respect to each of the following of which it has actual
knowledge:

         1. Any material change or amendment to this Agreement;

         2. The occurrence of any Event of Default that has not been cured;

         3. The resignation or termination of the Master Servicer or the
Trustee;

         4. The repurchase or substitution of Mortgage Loans pursuant to Section
2.04;

         5. The final payment to Certificateholders; and

         6. Any change in the location of the Custodial Account or the
Certificate Account.

         In addition, the Trustee shall promptly furnish to the Rating Agency
copies of each report to Certificateholders described in Section 4.02; and the
Master Servicer shall promptly furnish to the Rating Agency copies of each
annual independent public accountants' servicing report received as described in
Section 3.20.

         Any such notice pursuant to this Section 11.09 shall be in writing and
shall be deemed to have been duly given if personally delivered or mailed by
first class mail, postage prepaid, or by express delivery service to (i) in the
case of Standard & Poor's, 55 Water Street, 41st Floor, New York, New York
10041, Attention: Asset Backed Surveillance Department and (ii) in the case of
Moody's, Residential Mortgage Monitoring Department, 99 Church Street, New York,
New York 10007, or, in each case, such other address as either such Rating
Agency may designate in writing to the parties thereto.

                                      129
<PAGE>

         IN WITNESS WHEREOF, the Company, the Master Servicer and the Trustee
have caused their names to be signed hereto by their respective officers
thereunto duly authorized all as of the day and year first above written.

                                              IMPAC SECURED ASSETS CORP.,
                                              Company

                                              By: /s/ Richard J. Johnson
                                                  ------------------------------
                                              Name:   Richard J. Johnson
                                              Title:  Chief Financial Officer

                                              IMPAC FUNDING CORPORATION,
                                              Master Servicer

                                              By: /s/ Lisa Duehring
                                                  ------------------------------
                                              Name:   Lisa Duehring
                                              Title:  Senior Vice President

                                              DEUTSCHE BANK NATIONAL TRUST
                                              COMPANY,
                                              Trustee

                                              By: /s/ Alan Sueda
                                                  ------------------------------
                                              Name:   Alan Sueda
                                              Title:  Associate

                                              By: /s/ Jeremy Conyers
                                                  ------------------------------
                                              Name:   Jeremy Conyers
                                              Title:  Associate

<PAGE>

STATE OF CALIFORNIA     )
                        ) ss.:
COUNTY OF ORANGE        )

         On the 28th day of May, 2004, before me, a notary public in and for
said State, personally appeared Richard J. Johnson, known to me to be the Chief
Financial Officer of Impac Secured Assets Corp., one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.

 ______________________________
    Notary Public

[Notarial Seal]

<PAGE>

STATE OF CALIFORNIA     )
                        ) ss.:
COUNTY OF ORANGE        )

         On the 28th day of May, 2004, before me, a notary public in and for
said State, personally appeared Lisa Duehring, known to me to be a Senior Vice
President of Impac Funding Corporation, one of the corporations that executed
the within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.

 ______________________________
    Notary Public

[Notarial Seal]

<PAGE>

STATE OF CALIFORNIA     )
                        ) ss.:
COUNTY OF ORANGE        )

         On the 28th day of May, 2004, before me, a notary public in and for
said State, personally appeared ___________________, known to me to be a(n)
_______________ of Deutsche Bank National Trust Company, the entity that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.

 ______________________________
    Notary Public

[Notarial Seal]

<PAGE>

STATE OF CALIFORNIA     )
                        ) ss.:
COUNTY OF ORANGE        )

         On the 28th day of May, 2004, before me, a notary public in and for
said State, personally appeared _________________, known to me to be a(n)
__________________ of Deutsche Bank National Trust Company, the entity that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.

 ______________________________
    Notary Public

[Notarial Seal]

<PAGE>

                                    EXHIBIT A

                         FORM OF CLASS A-__ CERTIFICATE

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

         THIS CERTIFICATE SHALL INITIALLY BE ISSUED AS ONE OR MORE CERTIFICATES
REGISTERED IN THE NAME OF THE DEPOSITORY OR ITS NOMINEE AND, EXCEPT AS PROVIDED
BELOW, REGISTRATION OF SUCH CERTIFICATES MAY NOT BE TRANSFERRED BY THE TRUSTEE
EXCEPT TO ANOTHER DEPOSITORY THAT AGREES TO HOLD SUCH CERTIFICATES FOR THE
RESPECTIVE CERTIFICATE OWNERS WITH OWNERSHIP INTERESTS THEREIN. THE CERTIFICATE
OWNERS SHALL HOLD THEIR RESPECTIVE OWNERSHIP INTERESTS IN AND TO EACH OF SUCH
BOOK-ENTRY CERTIFICATES THROUGH THE BOOK-ENTRY FACILITIES OF THE DEPOSITORY AND,
EXCEPT AS PROVIDED BELOW, SHALL NOT BE ENTITLED TO DEFINITIVE CERTIFICATES IN
RESPECT OF SUCH OWNERSHIP INTERESTS. ALL TRANSFERS BY CERTIFICATE OWNERS OF
THEIR RESPECTIVE OWNERSHIP IN THE BOOK-ENTRY CERTIFICATES SHALL BE MADE IN
ACCORDANCE WITH THE PROCEDURES ESTABLISHED BY THE DEPOSITORY PARTICIPANT OR
BROKERAGE FIRM REPRESENTING SUCH CERTIFICATE OWNER. EACH DEPOSITORY PARTICIPANT
SHALL TRANSFER THE OWNERSHIP INTERESTS ONLY IN THE BOOK-ENTRY CERTIFICATES OF
CERTIFICATE OWNERS IT REPRESENTS OR OF BROKERAGE FIRMS FOR WHICH IT ACTS AS
AGENT IN ACCORDANCE WITH THE DEPOSITORY'S NORMAL PROCEDURES. THE TRUSTEE SHALL
NOT BE REQUIRED TO MONITOR, DETERMINE OR INQUIRE AS TO COMPLIANCE WITH THE
TRANSFER RESTRICTIONS WITH RESPECT TO THE BOOK-ENTRY CERTIFICATES, AND THE
TRUSTEE SHALL HAVE NO LIABILITY FOR TRANSFERS OF OWNERSHIP INTERESTS IN THE
BOOK-ENTRY CERTIFICATES MADE THROUGH THE BOOK-ENTRY FACILITIES OF THE DEPOSITORY
OR BETWEEN OR AMONG DEPOSITORY PARTICIPANTS OR CERTIFICATE OWNERS, MADE IN
VIOLATION OF THE APPLICABLE RESTRICTIONS.

                                       A-1

<PAGE>

<TABLE>
<CAPTION>
<S>                                                 <C>
Certificate No.__                                   _____% Initial Pass-Through Rate
Class A-____

Date of Pooling and Servicing                       Percentage Interest:____%
Agreement and Cut-off Date:
May 1, 2004

First Distribution Date:                            Aggregate Initial [Certificate Principal Balance]
June 25, 2004                                       [Notional Amount] of the Class A-__ Certificates:
                                                    $______________

Master Servicer:                                    Initial [Certificate Principal
Impac Funding Corporation                           Balance] [Notional Amount] of this Certificate:
                                                    $______________

Assumed Final                                       CUSIP:__________
Distribution Date:
August 25, 2034
</TABLE>

                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2004-2

         evidencing a percentage interest in the distributions allocable to the
         Class A- ___ Certificates with respect to a Trust Fund consisting
         primarily of a pool of conforming one- to four-family fixed-rate first
         lien mortgage loans formed and sold by IMPAC SECURED ASSETS CORP.

         This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Impac Secured Assets
Corp., the Master Servicer, the Trustee referred to below or any of their
affiliates. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality or by Impac
Secured Assets Corp., the Master Servicer, the Trustee or any of their
affiliates. None of the Company, the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.

         This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
Initial [Certificate Principal Balance] [Notional Amount] of this Certificate by
the aggregate Initial [Certificate Principal Balance] [Notional Amount] of all
Class A-____ Certificates, both as specified above) in certain distributions
with respect to the Trust Fund consisting primarily of an interest in a pool of
conforming one- to four-family fixed-rate first lien mortgage loans (the
"Mortgage Loans"), formed and sold by Impac Secured Assets Corp. (hereinafter
called the "Company," which term includes any successor entity under the
Agreement referred to below). The Trust Fund was created pursuant to a Pooling
and Servicing Agreement

                                       A-2

<PAGE>

dated as specified above (the "Agreement") among the Company, the Master
Servicer and Deutsche Bank National Trust Company, as trustee (the "Trustee"), a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the last Business Day of the month
immediately preceding the month of such Distribution Date (the "Record Date"),
from the Available Distribution Amount in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount of [interest]
[and principal], if any, required to be distributed to Holders of Class
A-____Certificates on such Distribution Date.

         Distributions on this Certificate will be made either by the Trustee or
by a Paying Agent appointed by the Trustee either in immediately available funds
(by wire transfer or otherwise) for the account of the Person entitled thereto
if such Person shall have so notified the Trustee or such Paying Agent at least
5 Business Days prior to the related Record Date, or by check mailed to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register.

         Notwithstanding the above, the final distribution on this Certificate
will be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in the City and State of New York. The Initial
[Certificate Principal Balance] [Notional Amount] of this Certificate is set
forth above. [The Certificate Principal Balance hereof will be reduced to the
extent of distributions allocable to principal and any Realized Losses allocable
hereto.]

         This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as Mortgage Pass-Through Certificates of
the Series specified hereon (herein collectively called the "Certificates").

         The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders.

                                       A-3

<PAGE>

         As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Trustee, the Company and the Master Servicer of advances
made, or certain expenses incurred, by either of them.

         The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Company, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66-2/3% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee, duly endorsed by, or accompanied
by an assignment in the form below or other written instrument of transfer in
form satisfactory to the Trustee and the Certificate Registrar duly executed by
the Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of authorized denominations evidencing
the same Class and aggregate Percentage Interest will be issued to the
designated transferee or transferees.

         The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Company, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Company, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.

                                       A-4

<PAGE>

         This Certificate shall be governed by and construed in accordance with
the laws of the State of New York.

         The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the purchase by the Holder of at least 50.01% Percentage Interest in the
Class C Certificates (the "Majority Class C Certificateholder") from the Trust
Fund of all remaining Mortgage Loans and each REO Property in respect thereof
remaining in the Trust Fund, thereby effecting early retirement of the
Certificates and (ii) the final payment or other liquidation (or any Advance
with respect thereto) of the last Mortgage Loan remaining in the Trust Fund (or
the disposition of all REO Property in respect thereof). The Agreement permits,
but does not require, the Majority Class C Certificateholder to purchase at a
price determined as provided in the Agreement all remaining Mortgage Loans and
all REO Property; provided, that any such option may only be exercised on the
Distribution Date after the aggregate Stated Principal Balance of the Mortgage
Loans as of the Distribution Date upon which the proceeds of any such purchase
are distributed is less than ten percent of the aggregate Stated Principal
Balance of the Mortgage Loans at the Cut-off Date.

         Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

                                       A-5

<PAGE>

         IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:   May __, 2004                           DEUTSCHE BANK NATIONAL TRUST
                                                COMPANY,
                                                as Trustee

                                                By:_________________________
                                                Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Class A-____ Certificates referred to in the
within-mentioned Agreement.

                                                DEUTSCHE BANK NATIONAL TRUST
                                                COMPANY,
                                                as Trustee

                                                By:_________________________
                                                Authorized Signatory

<PAGE>

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto _____________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.

                  I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:______________________________

________________________________________________________________________________

Dated:                          ____________________________________________
                                    Signature by or on behalf of assignor

                                                _________________________
                                                  Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ___________________________________for the
account of __________________ account number _______________, or, if mailed by
check, to ________________________. Applicable statements should be mailed
to____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________, as its agent.

                                       A-8

<PAGE>

                                   EXHIBIT B-1
                         FORM OF CLASS M-[_] CERTIFICATE

         THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR
CERTIFICATES, [THE CLASS M-1 CERTIFICATES] [AND THE CLASS M-2 CERTIFICATES] AS
DESCRIBED IN THE AGREEMENT (AS DEFINED BELOW).

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

         THIS CERTIFICATE SHALL INITIALLY BE ISSUED AS ONE OR MORE CERTIFICATES
REGISTERED IN THE NAME OF THE DEPOSITORY OR ITS NOMINEE AND, EXCEPT AS PROVIDED
BELOW, REGISTRATION OF SUCH CERTIFICATES MAY NOT BE TRANSFERRED BY THE TRUSTEE
EXCEPT TO ANOTHER DEPOSITORY THAT AGREES TO HOLD SUCH CERTIFICATES FOR THE
RESPECTIVE CERTIFICATE OWNERS WITH OWNERSHIP INTERESTS THEREIN. THE CERTIFICATE
OWNERS SHALL HOLD THEIR RESPECTIVE OWNERSHIP INTERESTS IN AND TO EACH OF SUCH
BOOK-ENTRY CERTIFICATES THROUGH THE BOOK-ENTRY FACILITIES OF THE DEPOSITORY AND,
EXCEPT AS PROVIDED BELOW, SHALL NOT BE ENTITLED TO DEFINITIVE CERTIFICATES IN
RESPECT OF SUCH OWNERSHIP INTERESTS. ALL TRANSFERS BY CERTIFICATE OWNERS OF
THEIR RESPECTIVE OWNERSHIP IN THE BOOK-ENTRY CERTIFICATES SHALL BE MADE IN
ACCORDANCE WITH THE PROCEDURES ESTABLISHED BY THE DEPOSITORY PARTICIPANT OR
BROKERAGE FIRM REPRESENTING SUCH CERTIFICATE OWNER. EACH DEPOSITORY PARTICIPANT
SHALL TRANSFER THE OWNERSHIP INTERESTS ONLY IN THE BOOK-ENTRY CERTIFICATES OF
CERTIFICATE OWNERS IT REPRESENTS OR OF BROKERAGE FIRMS FOR WHICH IT ACTS AS
AGENT IN ACCORDANCE WITH THE DEPOSITORY'S NORMAL PROCEDURES. THE TRUSTEE SHALL
NOT BE REQUIRED TO MONITOR, DETERMINE OR INQUIRE AS TO COMPLIANCE WITH THE
TRANSFER RESTRICTIONS WITH RESPECT TO THE BOOK-ENTRY CERTIFICATES, AND THE
TRUSTEE SHALL HAVE NO LIABILITY FOR TRANSFERS OF OWNERSHIP INTERESTS IN THE
BOOK-ENTRY CERTIFICATES MADE THROUGH THE BOOK-ENTRY FACILITIES OF THE DEPOSITORY
OR BETWEEN OR AMONG DEPOSITORY PARTICIPANTS OR CERTIFICATE OWNERS, MADE IN
VIOLATION OF THE APPLICABLE RESTRICTIONS.

         ANY TRANSFEREE SHALL BE DEEMED TO HAVE MADE THE REPRESENTATION SET
FORTH IN SECTION 5.02(C) OF THE POOLING AND SERVICING AGREEMENT.

                                      B-1-1

<PAGE>

<TABLE>
<CAPTION>
<S>                                                     <C>
Certificate No.______                                   _______% Initial Pass-Through Rate

Class M-[__] Mezzanine                                  Aggregate Initial Certificate Principal
                                                        Balance of the Class M-[__] Certificates:
                                                        $____________

Date of Pooling and Servicing                           Initial Certificate Principal Balance of this
Agreement and Cut-off Date:                             Certificate:
May 1, 2004                                             $__________________

First Distribution Date:                                CUSIP:______________
June 25, 2004

Master Servicer:
Impac Funding Corporation

Assumed Final Distribution Date:
_____________
</TABLE>

                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2004-2

         evidencing a percentage interest in any distributions allocable to the
         Class M-[__] Certificates with respect to the Trust Fund consisting
         primarily of a pool of conforming one- to four-family fixed-rate first
         lien mortgage loans formed and sold by IMPAC SECURED ASSETS CORP.

         This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Impac Secured Assets
Corp., the Master Servicer, the Trustee referred to below or any of their
affiliates. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality or by Impac
Secured Assets Corp., the Master Servicer, the Trustee or any of their
affiliates. None of the Company, the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.

         This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
Initial Certificate Principal Balance of this Certificate by the aggregate
Initial Certificate Principal Balance of all Class M-[__] Certificates, both as
specified above) in certain distributions with respect to a Trust Fund
consisting primarily of a pool of conforming one- to four-family fixed-rate
first lien mortgage loans (the "Mortgage Loans"), formed and sold by Impac
Secured Assets Corp. (hereinafter called the "Company," which term includes any
successor entity under the Agreement referred to below). The Trust Fund was
created pursuant to a Pooling and Servicing Agreement dated as specified above
(the "Agreement") among the Company, the Master Servicer and Deutsche Bank
National Trust Company, as trustee (the

                                      B-1-2

<PAGE>

"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the last Business Day of the month
immediately preceding the month of such Distribution Date (the "Record Date"),
from the Available Distribution Amount in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount of interest and
principal, if any, required to be distributed to Holders of Class
M-[__]Certificates on such Distribution Date.

         Distributions on this Certificate will be made either by the Trustee or
by a Paying Agent appointed by the Trustee either in immediately available funds
(by wire transfer or otherwise) for the account of the Person entitled thereto
if such Person shall have so notified the Trustee or such Paying Agent at least
5 Business Days prior to the related Record Date, or by check mailed to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register.

         Any transferee shall be deemed to have made the representation set
forth in Section 5.02(c) of the Agreement.

         Notwithstanding the above, the final distribution on this Certificate
will be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in the City and State of New York. The Initial
Certificate Principal Balance of this Certificate is set forth above. The
Certificate Principal Balance hereof will be reduced to the extent of the
distributions allocable to principal and any Realized Losses allocable hereto.

         This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as Mortgage Pass-Through Certificates of
the Series specified hereon (herein collectively called the "Certificates").

         The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders.

                                      B-1-3

<PAGE>

         As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Trustee, the Company and the Master Servicer of advances
made, or certain expenses incurred, by either of them.

         The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Company, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66-2/3% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee, duly endorsed by, or accompanied
by an assignment in the form below or other written instrument of transfer in
form satisfactory to the Trustee and the Certificate Registrar duly executed by
the Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of authorized denominations evidencing
the same Class and aggregate Percentage Interest will be issued to the
designated transferee or transferees.

         The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Company, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Company, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.

                                      B-1-4

<PAGE>

         This Certificate shall be governed by and construed in accordance with
the laws of the State of New York.

         The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the purchase by the Holder of at least 50.01% Percentage Interest in the
Class C Certificates (the "Majority Class C Certificateholder") from the Trust
Fund of all remaining Mortgage Loans and each REO Property in respect thereof
remaining in the Trust Fund, thereby effecting early retirement of the
Certificates and (ii) the final payment or other liquidation (or any Advance
with respect thereto) of the last Mortgage Loan remaining in the Trust Fund (or
the disposition of all REO Property in respect thereof). The Agreement permits,
but does not require, the Majority Class C Certificateholder to purchase at a
price determined as provided in the Agreement all remaining Mortgage Loans and
all REO Property; provided, that any such option may only be exercised on the
Distribution Date after the aggregate Stated Principal Balance of the Mortgage
Loans as of the Distribution Date upon which the proceeds of any such purchase
are distributed is less than ten percent of the aggregate Stated Principal
Balance of the Mortgage Loans at the Cut-off Date.

         Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

                                      B-1-5

<PAGE>

         IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:   May __, 2004                           DEUTSCHE BANK NATIONAL TRUST
                                                COMPANY,
                                                as Trustee

                                                By:_________________________
                                                Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Class M-[_] Certificates referred to in the
within-mentioned Agreement.

                                                DEUTSCHE BANK NATIONAL TRUST
                                                COMPANY,
                                                as Trustee

                                                By:_________________________
                                                Authorized Signatory

<PAGE>

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto _____________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.

                  I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:______________________________

________________________________________________________________________________

Dated:                          ____________________________________________
                                    Signature by or on behalf of assignor

                                                _________________________
                                                  Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ___________________________________for the
account of __________________ account number _______________, or, if mailed by
check, to ________________________. Applicable statements should be mailed
to____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________, as its agent.

                                      B-1-8

<PAGE>

                                   EXHIBIT B-2
                          FORM OF CLASS C CERTIFICATES

         THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A,
CLASS M-1, CLASS M-2 AND CLASS M-3 CERTIFICATES AS DESCRIBED IN THE AGREEMENT
(AS DEFINED BELOW).

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS
ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE
CODE OF 1986 (THE "CODE").

         THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE
WITH THE PROCEDURES DESCRIBED HEREIN.

                                     B-2-1

<PAGE>

<TABLE>
<CAPTION>
<S>                                                        <C>
Certificate No. 1

Class C                                                    Aggregate Initial Notional Amount of the
                                                           Class C Certificates:
                                                           $_________________

Date of Pooling and Servicing                              Initial Notional Amount
Agreement and Cut-off Date:                                of this Certificate ("Denomination"):
May1, 2004                                                 $______________

First Distribution Date:                                   Initial Certificate Principal Balance of
June 25, 2004                                              this Certificate ("Denomination"):
                                                           $______________

Master Servicer:                                           CUSIP:
Impac Funding Corporation

Assumed Final Distribution Date:                           Percentage Interest of this Certificate:
______________                                             100.00%
</TABLE>

                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2004-2

         evidencing percentage interest in the distributions allocable to the
         Class C Certificates with respect to a Trust Fund consisting primarily
         of a pool of conforming one- to four- family fixed-rate first lien
         mortgage loans formed and sold by IMPAC SECURED ASSETS CORP.

         This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Impac Secured Assets
Corp., the Master Servicer, the Trustee referred to below or any of their
affiliates. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality or by Impac
Secured Assets Corp., the Master Servicer, the Trustee or any of their
affiliates. None of the Company, the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other or obligation
secured by or payable from payments on the Certificates.

         This certifies that __________ is the registered owner of the
Percentage Interest evidenced by this Class C Certificate (obtained by dividing
the Original Class C Certificate by the Original Class Certificate Principal
Balance) in certain distributions with respect to a Trust consisting primarily
of the Mortgage Loans deposited by Impac Secured Assets Corp. (the "Company").
The Trust was created pursuant to a Pooling and Servicing Agreement dated as of
May 1, 2004 (the "Agreement") among the Company, Impac Funding Corporation, as
master servicer (the "Master Servicer"), and Deutsche Bank National Trust
Company, as Trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement.

                                      B-2-2

<PAGE>

This Class C Certificate is issued under and is subject to the terms, provisions
and conditions of the Agreement, to which Agreement the Holder of this Class C
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the last Business Day of the month
immediately preceding the month of such Distribution Date (the "Record Date"),
from the Available Distribution Amount in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount (of interest
and principal, if any) required to be distributed to Holders of Class C
Certificates on such Distribution Date.

         Distributions on this Certificate will be made either by the Trustee or
by a Paying Agent appointed by the Trustee either in immediately available funds
(by wire transfer or otherwise) for the account of the Person entitled thereto
if such Person shall have so notified the Trustee or such Paying Agent at least
5 Business Days prior to the related Record Date, or by check mailed to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register.

         Notwithstanding the above, the final distribution on this Certificate
will be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in the City and State of New York.

         This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as Mortgage Pass-Through Certificates of
the Series specified hereon (herein collectively called the "Certificates").

         The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders.

         As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Trustee, the Company and the Master Servicer of advances
made, or certain expenses incurred, by either of them.

         No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is

                                      B-2-3

<PAGE>

exempt from the registration requirements under said Act and such laws. In the
event that a transfer is to be made in reliance upon an exemption from the Act
and such laws, in order to assure compliance with the act and such laws, the
Certificateholder desiring to effect such transfer and such Certificateholder's
prospective transferee shall each certify to the Trustee and the Company in
writing the facts surrounding the transfer. In the event that such a transfer is
not to be made pursuant to Rule 144A of the act, there shall be delivered to the
Trustee and the Company of an Opinion of Counsel that such transfer may be made
pursuant to an exemption from the Act, which Opinion of Counsel shall not be
obtained at the expense of the Trustee, the Master Servicer or the Company; or
there shall be delivered to the Trustee and the Company a transferor certificate
by the transferor and an investment letter shall be executed by the transferee.
The Holder hereof desiring to effect such transfer shall, and does hereby agree
to, indemnify the Trustee and the Company against any liability that may result
if the transfer is not so exempt or is not made in accordance with such federal
and state laws.

         No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.

         The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Company, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66-2/3% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee, duly endorsed by, or accompanied
by an assignment in the form below or other written instrument of transfer in
form satisfactory to the Trustee and the Certificate Registrar duly executed by
the Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of authorized denominations evidencing
the same Class and aggregate Percentage Interest will be issued to the
designated transferee or transferees.

         The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized

                                      B-2-4

<PAGE>

denominations evidencing the same Class and aggregate Percentage Interest, as
requested by the Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Company, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Company, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.

         This Certificate shall be governed by and construed in accordance with
the laws of the State of New York.

         The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the purchase by the Holder of at least 50.01% Percentage Interest in the
Class C Certificates (the "Majority Class C Certificateholder") from the Trust
Fund of all remaining Mortgage Loans and each REO Property in respect thereof
remaining in the Trust Fund, thereby effecting early retirement of the
Certificates and (ii) the final payment or other liquidation (or any Advance
with respect thereto) of the last Mortgage Loan remaining in the Trust Fund (or
the disposition of all REO Property in respect, thereof). The Agreement permits,
but does not require, the Majority Class C Certificateholder to purchase at a
price determined as provided in the Agreement all remaining Mortgage Loans and
all REO Property; provided, that any such option may only be exercised on the
Distribution Date after the aggregate Stated Principal Balance of the Mortgage
Loans as of the Distribution Date upon which the proceeds of any such purchase
are distributed is less than ten percent of the aggregate Stated Principal
Balance of the Mortgage Loans at the Cut-off Date.

         Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

                                      B-2-5

<PAGE>

         IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:   May __, 2004                           DEUTSCHE BANK NATIONAL TRUST
                                                COMPANY,
                                                as Trustee

                                                By:_________________________
                                                Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Class C Certificates referred to in the
within-mentioned Agreement.

                                                DEUTSCHE BANK NATIONAL TRUST
                                                COMPANY,
                                                as Trustee

                                                By:_________________________
                                                Authorized Signatory

<PAGE>

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto _____________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.

                  I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:______________________________

________________________________________________________________________________

Dated:                          ____________________________________________
                                    Signature by or on behalf of assignor

                                                _________________________
                                                  Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ___________________________________for the
account of __________________ account number _______________, or, if mailed by
check, to ________________________. Applicable statements should be mailed
to____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________, as its agent.

                                      B-2-8

<PAGE>

                                   EXHIBIT B-3
                           FORM OF CLASS P CERTIFICATE

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").

         THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE
WITH THE PROCEDURES DESCRIBED HEREIN.

                                      B-3-1

<PAGE>

<TABLE>
<CAPTION>
<S>                                                        <C>
Certificate No. 1

Class P                                                    Aggregate Initial Certificate Principal
                                                           Balance of the Class P Certificates:
                                                           $100.00

Date of Pooling and Servicing                              Initial Certificate Principal Balance
Agreement and Cut-off Date:                                of this Certificate ("Denomination"):
May 1, 2004                                                $100.00

First Distribution Date:                                   Percentage Interest of this Certificate:
June 25, 2004                                              100.00%

Master Servicer:                                           CUSIP:
Impac Funding Corporation

Assumed Final Distribution Date:
_______________
</TABLE>

                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2004-2

         evidencing a percentage interest in any distributions allocable to the
         Class P Certificates with respect to the Trust Fund consisting
         primarily of a pool of one- to four-family fixed-rate first lien
         mortgage loans formed and sold by IMPAC SECURED ASSETS CORP.

         This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Impac Secured Assets
Corp., the Master Servicer, the Trustee referred to below or any of their
affiliates. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality or by Impac
Secured Assets Corp., the Master Servicer, the Trustee or any of their
affiliates. None of the Company, the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.

         This certifies that ____________ is the registered owner of the
Percentage Interest evidenced by this Class P Certificate (obtained by dividing
the Denomination of this Class P Certificate by the Original Class Certificate
Principal Balance) in certain distributions with respect to a Trust Fund
consisting primarily of a pool of one- to four-family fixed-rate first lien
mortgage loans (the "Mortgage Loans"), formed and sold by Impac Secured Assets
Corp. (hereinafter called the "Company," which term includes any successor
entity under the Agreement referred to below). The Trust Fund was created
pursuant to a Pooling and Servicing Agreement dated as specified above (the
"Agreement") among the Company, the Master Servicer and Deutsche Bank National
Trust

                                      B-3-2

<PAGE>

Company, as trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement; to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the last Business Day of the month
immediately preceding the month of such Distribution Date (the "Record Date"),
from the Available Distribution Amount in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount (of Prepayment
Charges and principal, if any) required to be distributed to Holders of Class P
Certificates on such Distribution Date.

         Distributions on this Certificate will be made either by the Trustee or
by a Paying Agent appointed by the Trustee either in immediately available funds
(by wire transfer or otherwise) for the account of the Person entitled thereto
if such Person shall have so notified the Trustee or such Paying Agent at least
5 Business Days prior to the related Record Date, or by check mailed to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register.

         Notwithstanding the above, the final distribution on this Certificate
will be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in the City and State of New York. The Initial
Certificate Principal Balance of this Certificate is set forth above. The
Certificate Principal Balance hereof will be reduced to the extent of the
distributions allocable to principal allocable hereto.

         This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as Mortgage Pass-Through Certificates of
the Series specified hereon (herein collectively called the "Certificates").

         The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders.

         As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including

                                      B-3-3

<PAGE>

without limitation reimbursement to the Trustee, the Company and the Master
Servicer of advances made, or certain expenses incurred, by either of them.

         No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Company in writing the facts surrounding the
transfer. In the event that such a transfer is not to be made pursuant to Rule
144A of the Act, there shall be delivered to the Trustee and the Company of an
Opinion of Counsel that such transfer may be made pursuant to an exemption from
the Act, which Opinion of Counsel shall not be obtained at the expense of the
Trustee, the Master Servicer or the Company; or there shall be delivered to the
Trustee and the Company a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Company against any liability that may result if the transfer is
not so exempt or is not made in accordance with such federal and state laws.

         No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.

         The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Company, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66-2/3% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee, duly endorsed by, or accompanied
by an assignment in the form below or other written instrument of transfer in
form satisfactory to the Trustee and the Certificate Registrar duly executed by
the Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of authorized denominations evidencing
the same Class and aggregate Percentage Interest will be issued to the
designated transferee or transferees.

                                      B-3-4

<PAGE>

         The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Company, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Company, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.

         This Certificate shall be governed by and construed in accordance with
the laws of the State of New York.

         The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the purchase by the Holder of at least 50.01% Percentage Interest in the
Class C Certificates (the "Majority Class C Certificateholder") from the Trust
Fund of all remaining Mortgage Loans and each REO Property in respect thereof
remaining in the Trust Fund, thereby effecting early retirement of the
Certificates and (ii) the final payment or other liquidation (or any Advance
with respect thereto) of the last Mortgage Loan remaining in the Trust Fund (or
the disposition of all REO Property in respects hereof). The Agreement permits,
but does not require, the Majority Class C Certificateholder to purchase at a
price determined as provided in the Agreement all remaining Mortgage Loans an
all REO Property; provided, that any such option may only be exercised on the
Distribution Date after the aggregate Stated Principal Balance of the Mortgage
Loans as of the Distribution Date upon which the proceeds of any such purchase
are distributed is less than ten percent of the aggregate Stated Principal
Balance of the Mortgage Loans at the Cut-off Date.

         Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

                                      B-3-5

<PAGE>

         IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:   May __, 2004                           DEUTSCHE BANK NATIONAL TRUST
                                                COMPANY,
                                                as Trustee

                                                By:_________________________
                                                Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Class P Certificates referred to in the
within-mentioned Agreement.

                                                DEUTSCHE BANK NATIONAL TRUST
                                                COMPANY,
                                                as Trustee

                                                By:_________________________
                                                Authorized Signatory

<PAGE>

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto _____________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.

                  I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:______________________________

________________________________________________________________________________

Dated:                          ____________________________________________
                                    Signature by or on behalf of assignor

                                                _________________________
                                                  Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ___________________________________for the
account of __________________ account number _______________, or, if mailed by
check, to ________________________. Applicable statements should be mailed
to____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________, as its agent.

                                      B-3-8

<PAGE>

                                   EXHIBIT B-4
                           FORM OF CLASS R CERTIFICATE

         THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A NON-UNITED
STATES PERSON OR A DISQUALIFIED ORGANIZATION (AS DEFINED BELOW).

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

         NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE
TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 5.02(C) OF THE
AGREEMENT OR AN OPINION OF COUNSEL AS PROVIDED IN SECTION 5.02(C) THAT THE
PURCHASE OF THIS CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT
CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE MASTER SERVICER, THE COMPANY
OR THE TRUSTEE TO ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN
THE POOLING AND SERVICING AGREEMENT (THE "AGREEMENT").

         THIS CLASS R CERTIFICATE HAS NO PRINCIPAL BALANCE, DOES NOT BEAR
INTEREST AND WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS PROVIDED HEREIN.

         ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE MASTER
SERVICER AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) THE UNITED STATES,
ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY
INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE
FOREGOING, (B) ANY ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN SECTION
521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE
CODE, (C) ANY ORGANIZATION DESCRIBED IN SECTION 1381(A)(2)(C) OF THE CODE, (ANY
SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B) OR (C) BEING HEREIN
REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR (D) AN AGENT OF A DISQUALIFIED
ORGANIZATION, (2) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR
COLLECTION OF TAX AND (3) SUCH TRANSFEREE

                                      B-4-1

<PAGE>

SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL CONDITION OF
THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE
REGISTER OR ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS CERTIFICATE TO A
DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH
REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND
SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE
HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE, EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE
SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH.

                                      B-4-2

<PAGE>

<TABLE>
<CAPTION>
<S>                                                        <C>
Certificate No. 1

Class R Senior

Date of Pooling and, Servicing
Agreement and Cut-off Date:
May 1, 2004                                                Percentage Interest:  100.00%

First Distribution Date:
June 25, 2004                                              CUSIP:

Master Servicer:
Impac Funding Corporation

Assumed Final Distribution Date:
________________
</TABLE>

                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2004-2

         evidencing a percentage interest in any distributions allocable to the
         Class R Certificates with respect to a Trust Fund consisting primarily
         of a pool of one- to four-family fixed-rate first lien mortgage loans
         formed and sold by IMPAC SECURED ASSETS CORP.

         This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Impac Secured Assets
Corp., the Master Servicer, the Trustee referred to below or any of their
affiliates. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality or by Impac
Secured Assets Corp., the Master Servicer, the Trustee or any of their
affiliates. None of the Company, the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.

         This certifies that ________________ is the registered owner of the
Percentage Interest evidenced by this Certificate stated above in certain
distributions with respect to a Trust Fund, consisting primarily of a pool of
one- to four-family fixed-rate first lien mortgage loans (the

                                      B-4-3

<PAGE>

"Mortgage Loans"), formed and sold by Impac Secured Assets Corp. (hereinafter
called the "Company," which term includes any successor entity under the
Agreement referred to below). The Trust Fund was created pursuant to a Pooling
and Servicing Agreement dated as specified above (the "Agreement") among the
Company, the Master Servicer and Deutsche Bank National Trust Company, as
trustee (the "Trustee"), a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

         This Certificate does not have a principal balance or pass-through rate
and will be entitled to distributions only to the Patent set forth in the
Agreement. In addition, any distribution of the proceeds of any remaining assets
of the Trust will be made only upon presentment and surrender of this
Certificate at the office or agency maintained by the Trustee.

         This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as Mortgage Pass-Through Certificates of
the Series specified hereon (herein collectively called the "Certificates").

         As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Trustee, the Company and the Master Servicer of advances
made, or certain expenses incurred, by either of them.

         No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Company in writing the facts surrounding the
transfer. In the event that such a transfer is not to be made pursuant to Rule
144A of the Act, there shall be delivered to the Trustee and the Company of an
Opinion of Counsel that such transfer may be made pursuant to an exemption from
the Act, which Opinion of Counsel shall not be obtained at the expense of the
Trustee, the Master Servicer or the Company; or there shall be delivered to the
Trustee and the Company a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Company against any liability that may result if the transfer is
not so exempt or is not made in accordance with such federal and state laws.

                                      B-4-4

<PAGE>

         No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.

         Each Holder of this Certificate will be deemed to have agreed to be
bound by the restrictions of the Agreement, including but not limited to the
restrictions that (i) each person holding or acquiring any Ownership Interest in
this Certificate must be a Permitted Transferee, (ii) no Ownership Interest, in
this Certificate may be transferred without delivery to the Trustee of (a) a
transfer affidavit of the proposed transferee and (b) a transfer certificate of
the transferor, each of such documents to be in the form described in the
Agreement, (iii) each person holding or acquiring any Ownership Interest in this
Certificate must agree to require a transfer affidavit and to deliver a transfer
certificate to the Trustee as required pursuant to the Agreement, (iv) each
person holding or acquiring an Ownership Interest in this Certificate must agree
not to transfer an Ownership Interest in this Certificate if it has actual
knowledge that the proposed transferee is not a Permitted Transferee and (v) any
attempted or purported transfer of any Ownership Interest in this Certificate in
violation of such restrictions will be absolutely null and void and will vest no
rights in the purported transferee. Pursuant to the Agreement, the Trustee will
provide the Internal Revenue Service and any pertinent persons with the
information needed to compute the tax imposed under the applicable tax laws on
transfers of residual interests to disqualified organizations, if any person
other than a Permitted Transferee acquires an Ownership Interest on a Class R
Certificate in violation of the restrictions mentioned above.

         The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Company, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66-2/3% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee, duly endorsed by, or accompanied
by an, assignment in the form below or other written instrument of transfer in
form satisfactory to the Trustee and the Certificate Registrar duly executed by
the Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of authorized denominations evidencing
the same Class and aggregate Percentage Interest will be issued to the
designated transferee or transferees.

                                      B-4-5

<PAGE>

         The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Company, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Company, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.

         This Certificate shall be governed by and construed in accordance with
the laws of the State of New York.

         The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the purchase by the Holder of at least 50.01 % Percentage Interest in the
Class C Certificates (the "Majority Class C Certificateholder") from the Trust
Fund of all remaining Mortgage Loans and each REO Property, in respect thereof
remaining in the Trust Fund, thereby effecting early retirement of the
Certificates and (ii) the final payment or other liquidation (or any Advance
with respect thereto) of the last Mortgage Loan remaining in the Trust Fund (or
the disposition of all REO Property in respect thereof). The Agreement permits,
but does not require, the Majority Class C Certificateholder to purchase at a
price determined as provided in the Agreement all remaining Mortgage Loans and
all REO Property; provided, that any such option may only be exercised on the
Distribution Date after the aggregate Stated Principal Balance of the Mortgage
Loans as of the Distribution Date upon which the proceeds of any such purchase
are distributed is less than ten percent of the aggregate Stated Principal
Balance of the Mortgage Loans at the Cut-off Date.

         Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

                                      B-4-6

<PAGE>

         IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:   May __, 2004                           DEUTSCHE BANK NATIONAL TRUST
                                                COMPANY,
                                                as Trustee

                                                By:_________________________
                                                Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Class R Certificates referred to in the
within-mentioned Agreement.

                                                DEUTSCHE BANK NATIONAL TRUST
                                                COMPANY,
                                                as Trustee

                                                By:_________________________
                                                Authorized Signatory

<PAGE>

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto _____________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.

                  I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:______________________________

________________________________________________________________________________

Dated:                          ____________________________________________
                                    Signature by or on behalf of assignor

                                                _________________________
                                                  Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ___________________________________for the
account of __________________ account number _______________, or, if mailed by
check, to ________________________. Applicable statements should be mailed
to____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________, as its agent.

                                      B-4-9

<PAGE>

                                    EXHIBIT C

                     FORM OF TRUSTEE'S INITIAL CERTIFICATION

                                                    May __, 2004

Impac Funding Corporation
1401 Dove Street
Newport Beach, California 92660

         Re:      Pooling and Servicing Agreement, dated as of May 1, 2004 among
                  Impac Secured Assets Corp., Impac Funding Corporation, and
                  Deutsche Bank National Trust Company, Mortgage Pass-Through
                  Certificates Series 2004-2
                  --------------------------------------------------------------

Ladies and Gentlemen:

         In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or listed on the attachment hereto) it has reviewed the
Mortgage File and the Mortgage Loan Schedule and has determined that: (i) all
documents required to be included in the Mortgage File are in its possession;
(ii) such documents have reviewed by it and appear regular on their face and
relate to such Mortgage Loan; and (iii) based on examination by it, and only as
to such documents, the information set forth in items (iii)(A) and (iv) of the
definition or description of "Mortgage Loan Schedule" is correct.

         The trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representation that any documents specified in clause (vi) of Section 2.01
should be included in any Mortgage File. The Trustee makes no representations as
to and shall not be responsible to verify: (i) the validity, legality,
sufficiency, enforceability, due authorization, recordability or genuineness of
any of the documents contained in each Mortgage File of any of the Mortgage
Loans identified on the Mortgage Loan Schedule, (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan, or (iii)
the existence of any assumption, modification, written assurance or substitution
agreement with respect to any Mortgage File if no such documents appear in the
Mortgage File delivered to the Trustee.

<PAGE>

         Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.

                                                  DEUTSCHE BANK NATIONAL TRUST
                                                  COMPANY

                                                  By:_________________________
                                                  Name:
                                                  Title:

                                       C-2

<PAGE>

                                    EXHIBIT D

                       FORM OF TRUSTEE FINAL CERTIFICATION

                                                     May __, 2004

Impac Funding Corporation
1401 Dove Street
Newport Beach, California 92660

         Re:      Pooling and Servicing Agreement, dated as of May 1, 2004
                  among Impac Secured Assets Corp., Impac Funding Corporation,
                  and Deutsche Bank National Trust Company, Mortgage
                  Pass-Through Certificates Series 2004-2
                  ------------------------------------------------------------

Ladies and Gentlemen:

                  In accordance with Section 2.02 of the above-captioned Pooling
and Servicing Agreement, the undersigned, as Trustee, hereby certifies that as
to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or listed on the attachment hereto) it has received
the documents set forth in Section 2.01.

                  The Trustee has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the above-referenced Pooling and Servicing Agreement. The Trustee
makes no representation that any documents specified in clause (vi) of Section
2.01 should be included in any Mortgage File. The Trustee makes no
representations as to and shall not be responsible to verify: (i) the validity,
legality, sufficiency, enforceability, due authorization, recordability or
genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule, (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan or (iii) the existence of any assumption, modification, written assurance
or substitution agreement with respect to any Mortgage File if no such documents
appear in the Mortgage File delivered to the Trustee.

                  Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Pooling and
Servicing Agreement.

                                                DEUTSCHE BANK NATIONAL TRUST
                                                COMPANY

                                                By:_________________________
                                                Name:
                                                Title:

                                       D-1

<PAGE>

                                    EXHIBIT E

                            FORM OF REMITTANCE REPORT

                             (Provided Upon Request)

<PAGE>

                                   EXHIBIT F-1

                               REQUEST FOR RELEASE
                                  (for Trustee)

Loan Information
----------------

                  Name of Mortgagor:                   _________________________

                  Master Servicer
                  Loan No.:                            _________________________

Trustee
-------

                  Name:                                _________________________

                  Address:                             _________________________

                                                       _________________________

                  Trustee
                  Mortgage File No.:                   _________________________

Request for Requesting Documents (check one):
--------------------------------

1.                Mortgage Loan Liquidated.
                           (The Master Servicer hereby certifies that all
                           proceeds of foreclosure, insurance or other
                           liquidation have been finally received and deposited
                           into the Custodial Account to the extent required
                           pursuant to the Pooling and Servicing Agreement.)

2.                Mortgage Loan in Foreclosure.

3.                Mortgage Loan Repurchased Pursuant to Section 9.01 of the
                  Pooling and Servicing Agreement.

4.                Mortgage Loan Repurchased Pursuant to Article II of the
                  Pooling and Servicing Agreement.
                           (The Master Servicer hereby certifies that the
                           repurchase price has been deposited into the
                           Custodial Account pursuant to the Pooling and
                           Servicing Agreement.)

                                      F-1-1

<PAGE>

5.                Other (explain).

________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________

                  The undersigned Master Servicer hereby acknowledges that it
has received from the Trustee for the Holders of Mortgage Pass-Through
Certificates, Series 2004-2, the documents referred to below (the "Documents").
All capitalized terms not otherwise defined in this Request for Release shall
have the meanings given them in the Pooling and Servicing Agreement, dated as of
May 1, 2004 (the "Pooling and Servicing Agreement"), among Impac Secured Assets
Corp., Impac Funding Corporation and the Trustee.

( )               Promissory Note dated _________________, 200_, in the original
                  principal sum of $__________, made by __________________,
                  payable to, or endorsed to the order of, the Trustee.

( )               Mortgage recorded on _________________________ as instrument
                  no. ___________ in the County Recorders Office of the County
                  of ______________________, State of _____________________ in
                  book/reel/docket of official records at page/image
                  _______________.

( )               Deed of Trust recorded on ____________________ as instrument
                  no._____________ in the County Recorder's Office of the County
                  of ______________________, State of _____________________in
                  book/reel/docket __________________ of official records at
                  page/image ________________.

( )               Assignment of Mortgage or Deed of Trust to the Trustee,
                  recorded on _______________ as instrument no. ______________
                  in the County Recorder's Office of the County of
                  ________________, State of ___________________ in
                  book/reel/docket ____________ of official records at
                  page/image ___________.

( )               Other documents, including any amendments, assignments or
                  other assumptions of the Mortgage Note or Mortgage.

                  ( )      __________________________________

                  ( )      __________________________________

                  ( )      __________________________________

                                      F-1-2

<PAGE>

                  ( )      __________________________________

                  The undersigned Master Servicer hereby acknowledges and agrees
                  as follows:

                           (1) The Master Servicer shall hold and retain
                  possession of the Documents in trust for the benefit of the
                  Trustee, solely for the purposes provided in the Agreement.

                           (2) The Master Servicer shall not cause or knowingly
                  permit the Documents to become subject to, or encumbered by,
                  any claim, liens, security interest, charges, writs of
                  attachment or other impositions nor shall the Master Servicer
                  assert or seek to assert any claims or rights of setoff to or
                  against the Documents or any proceeds thereof.

                           (3) The Master Servicer shall return each and every
                  Document previously requested from the Mortgage File to the
                  Custodian when the need therefor no longer exists, unless the
                  Mortgage Loan relating to the Documents has been liquidated
                  and the proceeds thereof have been remitted to the Custodial
                  Account and except as expressly provided in the Agreement.

                           (4) The Documents and any proceeds thereof, including
                  any proceeds of proceeds, coming into the possession or
                  control of the Master Servicer shall at all times be earmarked
                  for the account of the Trustee, and the Master Servicer shall
                  keep the Documents and any proceeds separate and distinct from
                  all other property in the Master Servicer's possession,
                  custody or control.

                                                     IMPAC FUNDING CORPORATION

                                                     By:________________________
                                                     Title:_____________________

Date: _________________, 200_

                                      F-1-3

<PAGE>

                                   EXHIBIT F-2

                               REQUEST FOR RELEASE
                          [Mortgage Loans Paid in Full]

                     OFFICER'S CERTIFICATE AND TRUST RECEIPT
                       MORTGAGE PASS-THROUGH CERTIFICATES
                                  SERIES 2004-2

_____________________________________ HEREBY CERTIFIES THAT HE/SHE IS AN OFFICER
OF THE MASTER SERVICER, HOLDING THE OFFICE SET FORTH BENEATH HIS/HER SIGNATURE,
AND HEREBY FURTHER CERTIFIES AS FOLLOWS:

WITH RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:

ALL PAYMENTS OF PRINCIPAL, PREMIUM (IF ANY), AND INTEREST HAVE BEEN MADE.

LOAN NUMBER:__________________              BORROWER'S NAME:____________________

COUNTY:

WE HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
WHICH ARE REQUIRED TO BE DEPOSITED IN THE CUSTODIAL ACCOUNT PURSUANT TO SECTION
3.10 OF THE POOLING AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE CREDITED.

_________ ____________                                     DATED:_______________

//       VICE PRESIDENT

//       ASSISTANT VICE PRESIDENT

                                      F-2-1

<PAGE>

                                   EXHIBIT G-1

                     FORM OF INVESTOR REPRESENTATION LETTER

                                                ___________,200__

Impac Secured Assets Corp.
1401 Dove Street
Newport Beach, California 92660

Deutsche Bank National Trust Company
1761 East St. Andrew Place
Santa Ana, California 92705
Attention: Impac Secured Assets Corp. Series 2004-2

         Re:      Impac Secured Assets Corp. Mortgage Pass-Through Certificates
                  Series 2004-2, Class __
                  -------------------------------------------------------------

Ladies and Gentlemen:

         ______________ (the "Purchaser") intends to purchase from
______________ (the "Seller") $_________ Initial Certificate Principal Balance
of Mortgage Pass-Through Certificates, Series 2004-2, Class _____ (the
"Certificates"), issued pursuant to the Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement"), dated as of May 1, 2004 among Impac Secured
Assets Corp., as company (the "Company"), Impac Funding Corporation, as master
servicer and Deutsche Bank National Trust Company, as trustee (the "Trustee").
All terms used herein and not otherwise defined shall have the meanings set
forth in the Pooling and Servicing Agreement. The Purchaser hereby certifies,
represents and warrants to, and covenants with, the Company and the Trustee
that:

                           1. The Purchaser understands that (a) the
                  Certificates have not been and will not be registered or
                  qualified under the Securities Act of 1933, as amended (the
                  "Act") or any state securities law, (b) the Company is not
                  required to so register or qualify the Certificates, (c) the
                  Certificates may be resold only if registered and qualified
                  pursuant to the provisions of the Act or any state securities
                  law, or if an exemption from such registration and
                  qualification is available, (d) the Pooling and Servicing
                  Agreement contains restrictions regarding the transfer of the
                  Certificates and (e) the Certificates will bear a legend to
                  the foregoing effect.

                           2. The Purchaser is acquiring the Certificates for
                  its own account for investment only and not with a view to or
                  for sale in connection with any distribution thereof in any
                  manner that would violate the Act or any applicable state
                  securities laws.

                                      G-1-1

<PAGE>

                           3. The Purchaser is (a) a substantial, sophisticated
                  institutional investor having such knowledge and experience in
                  financial and business matters, and, in particular, in such
                  matters related to securities similar to the Certificates,
                  such that it is capable of evaluating the merits and risks of
                  investment in the Certificates, (b) able to bear the economic
                  risks of such an investment and (c) an "accredited investor"
                  within the meaning of Rule 501 (a) promulgated pursuant to the
                  Act.

                           4. The Purchaser has been furnished with, and has had
                  an opportunity to review (a) [a copy of the Private Placement
                  Memorandum, dated May 28, 2004, relating to the Certificates
                  (b)] a copy of the Pooling and Servicing Agreement and [(b)]
                  [(c)] such other information concerning the Certificates, the
                  Mortgage Loans and the Company as has been requested by the
                  Purchaser from the Company or the Seller and is relevant to
                  the Purchaser's decision to purchase the Certificates. The
                  Purchaser has had any questions arising from such review
                  answered by the Company or the Seller to the satisfaction of
                  the Purchaser. [If the Purchaser did not purchase the
                  Certificates from the Seller in connection with the initial
                  distribution of the Certificates and was provided with a copy
                  of the Private Placement Memorandum (the "Memorandum")
                  relating to the original sale (the "Original Sale") of the
                  Certificates by the Company, the Purchaser acknowledges that
                  such Memorandum was provided to it by the Seller, that the
                  Memorandum was prepared by the Company solely for use in
                  connection with the Original Sale and the Company did not
                  participate in or facilitate in any way the purchase of the
                  Certificates by the Purchaser from the Seller, and the
                  Purchaser agrees that it will look solely to the Seller and
                  not to the Company with respect to any damage, liability,
                  claim or expense arising out of, resulting from or in
                  connection with (a) error or omission, or alleged error or
                  omission, contained in the Memorandum, or (b) any information,
                  development or event arising after the date of the
                  Memorandum.]

                           5. The Purchaser has not and will not nor has it
                  authorized or will it authorize any person to (a) offer,
                  pledge, sell, dispose of or otherwise transfer any
                  Certificate, any interest in any Certificate or any other
                  similar security to any person in any manner, (b) solicit any
                  offer to buy or to accept a pledge, disposition of other
                  transfer of any Certificate, any interest in any Certificate
                  or any other similar security from any person in any manner,
                  (c) otherwise approach or negotiate with respect to any
                  Certificate, any interest in any Certificate or any other
                  similar security with any person in any manner, (d) make any
                  general solicitation by means of general advertising or in any
                  other manner or (e) take any other action, that (as to any of
                  (a) through (e) above) would constitute a distribution of any
                  Certificate under the Act, that would render the disposition
                  of any Certificate a violation of Section 5 of the Act or any
                  state securities law, or that would require registration or
                  qualification pursuant thereto. The Purchaser will not sell or
                  otherwise transfer any of the Certificates, except in
                  compliance with the provisions of the Pooling and Servicing
                  Agreement.

                                      G-1-2

<PAGE>

                                                           Very truly yours,

                                                           _____________________
                                                           (Purchaser)

                                                           By:__________________
                                                           Name:________________
                                                           Title:_______________

                                      G-1-3

<PAGE>

                                   EXHIBIT G-2

                    FORM OF TRANSFEROR REPRESENTATION LETTER

                              ______________,200___

Impac Secured Assets Corp.
1401 Dove Street
Newport Beach, California 92660

Deutsche Bank National Trust Company
1761 East St. Andrew Place
Santa Ana, California 92705
Attention: Impac Secured Assets Corp. Series 2004-2

         Re:      Impac Secured Assets Corp. Mortgage Pass-Through Certificates,
                  Series 2004-2, Class __
                  --------------------------------------------------------------

Ladies and Gentlemen:

         In connection with the sale by ___________ (the "Seller") to ________
(the "Purchaser") of $_________ Initial Certificate Principal Balance of
Mortgage Pass-Through Certificates, Series 2004-2, Class _____ (the
"Certificates"), issued pursuant to the Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement"), dated as of May 1, 2004 among Impac Secured
Assets Corp., as company (the "Company"), Impac Funding Corporation, as master
servicer and Deutsche Bank National Trust Company, as trustee (the "Trustee").
The Seller hereby certifies, represents and warrants to, and covenants with, the
Company and the Trustee that:

         Neither the Seller nor anyone acting on its behalf has (a) offered,
pledged, sold, disposed of or otherwise transferred any Certificate, any
interest in any Certificate or any other similar security to any person in any
manner, (b) has solicited any offer to buy or to accept a pledge, disposition or
other transfer of any Certificate, any interest in any Certificate or any other
similar security from any person in any manner, (c) has otherwise approached or
negotiated with respect to any Certificate, any interest in any Certificate or
any other similar security with any person in any manner, (d) has made any
general solicitation by means of general advertising or in any other manner, or
(e) has taken any other action, that (as to any of (a) through (e) above) would
constitute a distribution of the Certificates under the Securities Act of 1933
(the "Act"), that would render the disposition of any Certificate a violation of
Section 5 of the Act or any state securities law, or that would require
registration or qualification pursuant thereto. The Seller will not act in any
manner set forth in the

                                      G-2-1

<PAGE>

foregoing sentence with respect to any Certificate. The Seller has not and will
not sell or otherwise transfer any of the Certificates, except in compliance
with the provisions of the Pooling and Servicing Agreement.

                                                           Very truly yours,

                                                           (Seller)

                                                           By:__________________
                                                           Name:________________
                                                           Title:_______________

                                      G-2-2

<PAGE>

                                   EXHIBIT G-3

                   FORM OF RULE 144A INVESTMENT REPRESENTATION

             Description of Rule 144A Securities, including numbers:

                           Impac Secured Assets Corp.
                       Mortgage Pass-Through Certificates
                       Series 2004-2, Class ____, No. ____

                  The undersigned seller, as registered holder (the
"Transferor"), intends to transfer the Rule 144A Securities described above to
the undersigned buyer (the "Buyer").

                  1. In connection with such transfer and in accordance with the
agreements pursuant to which the Rule 144A Securities were issued, the
Transferor hereby certifies the following facts: Neither the Transferor nor
anyone acting on its behalf has offered, transferred, pledged, sold or otherwise
disposed of the Rule 144A Securities, any interest in the Rule 144A Securities
or any other similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Rule 144A Securities, or otherwise
approached or negotiated with respect to the Rule 144A Securities, any interest
in the Rule 144A Securities or any other similar security with, any person in
any manner, or made any general solicitation by means of general advertising or
in any other manner, or taken any other action, which would constitute a
distribution of the Rule 144A Securities under the Securities Act of 1933, as
amended (the "1933 Act"), or which would render the disposition of the Rule 144A
Securities a violation of Section 5 of the 1933 Act or require registration
pursuant thereto, and that the Transferor has not offered the Rule 144A
Securities to any person other than the Buyer or another "qualified
institutional buyer" as defined in Rule 144A under the 1933 Act.

                  2. The Buyer warrants and represents to, and covenants with,
the Transferor, the Trustee and the Master Servicer pursuant to Section 5.02 of
the Pooling and Servicing Agreement as follows:

                           a. The Buyer understands that the Rule 144A
                  Securities have not been registered under the 1933 Act or the
                  securities laws of any state.

                           b. The Buyer considers itself a substantial,
                  sophisticated institutional investor having such knowledge and
                  experience in financial and business matters that it is
                  capable of evaluating the merits and risks of investment in
                  the Rule 144A Securities.

                           c. The Buyer has been furnished with all information
                  regarding the Rule 144A Securities that it has requested from
                  the Transferor, the Trustee or the Master Servicer.

                                      G-3-1

<PAGE>

                           d. Neither the Buyer nor anyone acting on its behalf
                  has offered, transferred, pledged, sold or otherwise disposed
                  of the Rule 144A Securities, any interest in the Rule 144A
                  Securities or any other similar security to, or solicited any
                  offer to buy or accept a transfer, pledge or other disposition
                  of the Rule 144A Securities, any interest in the Rule 144A
                  Securities or any other similar security from, or otherwise
                  approached or negotiated with respect to the Rule 144A
                  Securities, any interest in the Rule 144A Securities or any
                  other similar security with, any person in any manner, or made
                  any general solicitation by means of general advertising or in
                  any other manner, or taken any other action, that would
                  constitute a distribution of the Rule 144A Securities under
                  the 1933 Act or that would render the disposition of the Rule
                  144A Securities a violation of Section 5 of the 1933 Act or
                  require registration pursuant thereto, nor will it act, nor
                  has it authorized or will it authorize any person to act, in
                  such manner with respect to the Rule 144A Securities.

                           e. The Buyer is a "qualified institutional buyer" as
                  that term is defined in Rule 144 under the 1933 Act and has
                  completed either of the forms of certification to that effect
                  attached hereto as Annex 1 or Annex 2. The Buyer is aware that
                  the sale to it is being made in reliance on Rule 144A. The
                  Buyer is acquiring the Rule 144A Securities for its own
                  account or the account of other qualified institutional
                  buyers, understands that such Rule 144 Securities may be
                  resold, pledged or transferred only (i) to a person reasonably
                  believed to be a qualified institutional buyer that purchases
                  for its own account or for the account of a qualified
                  institutional buyer to whom notice is given that the resale,
                  pledge or transfer is being made in reliance on Rule 144A, or
                  (ii) pursuant to another exemption from registration under the
                  1933 Act.

                  3. The Buyer warrants and represents to, and covenants with,
the Transferor, the Servicer and the Company that either (1) the Buyer is not an
employee benefit plan within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") ("Plan"), or a plan
within the meaning of Section 4975(e)(1) of the Internal Revenue Code of 1986
(the "Code") (also a "Plan"), and the Buyer is not directly or indirectly
purchasing the Rule 144A Securities on behalf of, as investment manager of, as
named fiduciary of, as trustee of, or with assets of a Plan, or (2) the Buyer
has provided the Trustee with the opinion letter required by section 5.02(c) of
the Pooling and Servicing Agreement.

                  4. This document may be executed in one or more counterparts
and by the different parties hereto on separate counterparts, each of which,
when so executed, shall be deemed to be an original; such counterparts,
together, shall constitute one and the same document.

                                      G-3-2

<PAGE>

                  IN WITNESS WHEREOF, each of the parties has executed this
document as of the date set forth below.

_________________________________                 ______________________________
     Print Name of Transferor                            Print Name of Buyer

By:______________________________                    By:________________________
Name:                                                Name:
Title:                                               Title:

Taxpayer Identification:                             Taxpayer Identification:

No.______________________________                    No.________________________

Date:____________________________                    Date:______________________

                                      G-3-3

<PAGE>

                                                          ANNEX 1 TO EXHIBIT G-3
                                                          ----------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
            --------------------------------------------------------

             [For Buyers Other Than Registered Investment Companies]

         The undersigned hereby certifies as follows in connection with the Rule
144A Investment Representation to which this Certification is attached:

         1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.

         2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because (i) the Buyer owned and/or invested on a
discretionary basis $____________________1 in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A) and (ii)
the Buyer satisfies the criteria in the category marked below.

____     CORPORATION, ETC. The Buyer is a corporation (other than a bank,
         savings and loan association or similar institution), Massachusetts or
         similar business trust, partnership, or charitable organization
         described in Section 501(c)(3) of the Internal Revenue Code.

____     BANK. The Buyer (a) is a national bank or banking institution organized
         under the laws of any State, territory or the District of Columbia, the
         business of which is substantially confined to banking and is
         supervised by the State or territorial banking commission or similar
         official or is a foreign bank or equivalent institution, and (b) has an
         audited net worth of at least $25,000,000 as demonstrated in its latest
         annual financial statement, a copy of which is attached hereto.

____     SAVINGS AND LOAN. The Buyer (a) is a savings and loan association,
         building and loan association, cooperative bank, homestead association
         or similar institution, which is supervised and examined by a State or
         Federal authority having supervision over any such institutions or is a
         foreign savings and loan association or equivalent institution and (b)
         has an audited net worth of at least $25,000,000 as demonstrated in its
         latest annual financial statements.

--------
         1 Buyer must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Buyer is a dealer, and, in that case, Buyer
must own and/or invest on a discretionary basis at least $10,000,000 in
securities.

                                      G-3-4

<PAGE>

____     BROKER-DEALER. The Buyer is a dealer registered pursuant to Section 15
         of the Securities Exchange Act of 1934.

____     INSURANCE COMPANY. The Buyer is an insurance company whose primary and
         predominant business activity is the writing of insurance or the
         reinsuring of risks underwritten by insurance companies and which is
         subject to supervision by the insurance commissioner or a similar
         official or agency of a State, territory or the District of Columbia.

____     STATE OR LOCAL PLAN. The Buyer is a plan established and maintained by
         a State, its political subdivisions, or any agency or instrumentality
         of the State or its political subdivisions, for the benefit of its
         employees.

____     ERISA PLAN. The Buyer is an employee benefit plan within the meaning of
         Title I of the Employee Retirement Income Security Act of 1974.

____     INVESTMENT ADVISER. The Buyer is an investment adviser registered under
         the Investment Advisers Act of 1940.

____     SBIC. The Buyer is a Small Business Investment Company licensed by the
         U.S. Small Business Administration under Section 301(c) or (d) of the
         Small Business Investment Act of 1958.

____     BUSINESS DEVELOPMENT COMPANY. The Buyer is a business development
         company as defined in Section 202(a)(22) of the Investment Advisers Act
         of 1940.

____     TRUST FUND. The Buyer is a trust fund whose trustee is a bank or trust
         company and whose participants are exclusively (a) plans established
         and maintained by a State, its political subdivisions, or any agency or
         instrumentality of the State or its political subdivisions, for the
         benefit of its employees, or (b) employee benefit plans within the
         meaning of Title I of the Employee Retirement Income Security Act of
         1974, but is not a trust fund that includes as participants individual
         retirement accounts or H.R. 10 plans.

         3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i) securities
of issuers that are affiliated with the Buyer, (ii) securities that are part of
an unsold allotment to or subscription by the Buyer, if the Buyer is a dealer,
(iii) bank deposit notes and certificates of deposit, (iv) loan participations,
(v) repurchase agreements, (vi) securities owned but subject to a repurchase
agreement and (vii) currency, interest rate and commodity swaps.

         4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in

                                      G-3-5

<PAGE>

accordance with generally accepted accounting principles and if the investments
of such subsidiaries are managed under the Buyer's direction. However, such
securities were not included if the Buyer is a majority-owned, consolidated
subsidiary of another enterprise and the Buyer is not itself a reporting company
under the Securities Exchange Act of 1934.

         5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.

___      ___               Will the Buyer be purchasing the Rule 144A
Yes      No                Securities only for the Buyer's own account?

         6. If the answer to the foregoing question is "no", the Buyer agrees
that, in connection with any purchase of securities sold to the Buyer for the
account of a third party (including any separate account) in reliance on Rule
144A, the Buyer will only purchase for the account of a third party that at the
time is a "qualified institutional buyer" within the meaning of Rule 144A. In
addition, the Buyer agrees that the Buyer will not purchase securities for a
third party unless the Buyer has obtained a current representation letter from
such third party or taken other appropriate steps contemplated by Rule 144A to
conclude that such third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.

         7. The Buyer will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of Rule 144A Securities will
constitute a reaffirmation of this certification as of the date of such
purchase.

                                                   _____________________________
                                                   Print Name of Buyer

                                                   By:__________________________
                                                   Name:
                                                   Title:

                                                   Date:________________________

                                      G-3-6

<PAGE>

                                                          ANNEX 2 TO EXHIBIT G-3
                                                          ----------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
            --------------------------------------------------------

              [For Buyers That Are Registered Investment Companies]

                  The undersigned hereby certifies as follows in connection with
the Rule 144A Investment Representation to which this Certification is attached:

                  1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.

                  2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment Company Act of
1940, and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used.

____              The Buyer owned $_______________ in securities (other than the
                  excluded securities referred to below) as of the end of the
                  Buyer's most recent fiscal year (such amount being calculated
                  in accordance with Rule 144A).

____              The Buyer is part of a Family of Investment Companies which
                  owned in the aggregate $____________ in securities (other than
                  the excluded securities referred to below) as of the end of
                  the Buyer's most recent fiscal year (such amount being
                  calculated in accordance with Rule 144A).

                  3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein
means two or more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).

                  4. The term "SECURITIES" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) bank deposit notes and certificates
of deposit, (iii) loan participations, (iv) repurchase agreements, (v)
securities owned but subject to a repurchase agreement and (vi) currency,
interest rate and commodity swaps.

                                      G-3-7

<PAGE>

                  5. The Buyer is familiar with Rule 144A and understands that
each of the parties to which this certification is made are relying and will
continue to rely on the statements made herein because one or more sales to the
Buyer will be in reliance on Rule 144A. In addition, the Buyer will only
purchase for the Buyer's own account.

                  6. The undersigned will notify each of the parties to which
this certification is made of any changes in the information and conclusions
herein. Until such notice, the Buyer's purchase of Rule 144A Securities will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.

                                               _________________________________
                                               Print Name of Buyer

                                               By:______________________________
                                               Name:
                                               Title:

                                               IF AN ADVISER:

                                               _________________________________
                                               Print Name of Buyer

                                               Date:____________________________

                                      G-3-8

<PAGE>

                                   EXHIBIT G-4

                         FORM OF TRANSFEROR CERTIFICATE

                              ______________, 200__

Impac Secured Assets Corp.
1401 Dove Street
Newport Beach, California 92660

Deutsche Bank National Trust Company
1761 East St. Andrew Place
Santa Ana, California 92705
Attention: Impac Secured Assets Corp. Series 2004-2

                  Re:      Impac Secured Assets Corp.
                           Mortgage Pass-Through Certificates
                           Series 2004-2, Class R
                           ----------------------------------

Ladies and Gentlemen:

                  This letter is delivered to you in connection with the sale by
________________________ (the "Seller") to _____________________________________
(the "Purchaser") of a ____% Percentage Interest in the Mortgage Pass-Through
Certificates, Series 2004-2, Class R (the "Certificates"), issued pursuant to
Section 5.02 of the Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of May 1, 2004, among Impac Secured Assets Corp., as
company (the "Company"), Impac Funding Corporation, as master servicer and
Deutsche Bank National Trust Company, as trustee (the "Trustee"). All terms used
herein and not otherwise defined shall have the meaning set forth in the Pooling
and Servicing Agreement. The Seller hereby certifies, represents and warrants
to, and covenants with, the Company and the Trustee that:

                  1. No purpose of the Seller relating to the sale of the
Certificates by the Seller to the Purchaser is or will be to impede the
assessment or collection of any tax.

                  2. The Seller understands that the Purchaser has delivered to
the Trustee and the Master Servicer a transfer affidavit and agreement in the
form attached to the Pooling and Servicing Agreement as Exhibit G-5. The Seller
does not know or believe that any representation contained therein is false.

                  3. The Seller has at the time of the transfer conducted a
reasonable investigation of the financial condition of the Purchaser as
contemplated by Treasury Regulations Section 1.860E-

                                      G-4-1

<PAGE>

1(c)(4)(i) and, as a result of that investigation, the Seller has determined
that the Purchaser has historically paid its debts as they have become due and
has found no significant evidence to indicate that the Purchaser will not
continue to pay its debts as they become due in the future. The Seller
understands that the transfer of the Certificates may not be respected for
United States income tax purposes (and the Seller may continue to be liable for
United States income taxes associated therewith) unless the Seller has conducted
such an investigation.

                  4. The Seller has no actual knowledge that the proposed
Transferee is a Disqualified Organization, an agent of a Disqualified
Organization or a Non-United States Person.

                                                   Very truly yours,

                                                   _____________________________
                                                   (Seller)

                                                   By:__________________________
                                                   Name:________________________
                                                   Title:_______________________

                                      G-4-2

<PAGE>

                                   EXHIBIT G-5

                    FORM OF TRANSFER AFFIDAVIT AND AGREEMENT

STATE OF                 )
                 :ss.:
COUNTY OF                )

         ___________________, being first duly sworn, deposes, represents and
warrants:

         1. That he/she is [Title of Officer] of [Name of Owner], a [savings
institution] [corporation] duly organized and existing under the laws of [the
State of __________] [the United States], (the "Owner"), (record or beneficial
owner of the Class R Certificates (the "Class R Certificates") on behalf of
which he/she makes this affidavit and agreement). This Class R Certificates were
issued pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement") dated as of May 1, 2004 among Impac Secured Assets Corp.,
as company, Impac Funding Corporation, as master servicer (the "Master
Servicer"), and Deutsche Bank National Trust Company, as trustee (the
"Trustee").

         2. That the Owner (i) is not and will not be a "disqualified
organization" as of _____________ [date of transfer] within the meaning of
Section 860E(e)(5) of the Internal Revenue Code of 1986, as amended (the
"Code"), (ii) will endeavor to remain other than a disqualified organization for
so long as it retains its ownership interest in the Class R Certificates, and
(iii) is acquiring the Class R Certificates for its own account or for the
account of another Owner from which it has received an affidavit and agreement
in substantially the same form as this affidavit and agreement. (For this
purpose, a "disqualified organization" means the United States, any state or
political subdivision thereof, any agency or instrumentality of any of the
foregoing (other than an instrumentality all of the activities of which are
subject to tax and, except for Freddie Mac, a majority of whose board of
directors is not selected by any such governmental entity) or any foreign
government, international organization or any agency or instrumentality of such
foreign government or organization, any rural electric or telephone cooperative,
or any organization (other than certain farmers' cooperatives) that is generally
exempt from federal income tax unless such organization is subject to the tax on
unrelated business taxable income).

         3. That the Owner is aware (i) of the tax that would be imposed on
transfers of Class R Certificates to disqualified organizations under the Code,
that applies to all transfers of Class R Certificates after March 31, 1988; (ii)
that such tax would be on the transferor, or, if such transfer is through an
agent (which person includes a broker, nominee or middleman) for a disqualified
organization, on the agent; (iii) that the person otherwise liable for the tax
shall be relieved of liability for the tax if the transferee furnishes to such
person an affidavit that the transferee is not a disqualified organization and,
at the time of transfer, such person does not have actual knowledge that the
affidavit is false; and (iv) that the Class R Certificates may be "noneconomic
residual

                                      G-5-1

<PAGE>

interests" within the meaning of Treasury regulations promulgated pursuant to
the Code and that the transferor of a noneconomic residual interest will remain
liable for any taxes due with respect to the income on such residual interest,
unless no significant purpose of the transfer was to impede the assessment or
collection of tax.

         4. That the Owner is aware of the tax imposed on a "pass-through
entity" holding Class R Certificates if at any time during the taxable year of
the pass-through entity a disqualified organization is the record holder of an
interest in such entity. (For this purpose, a "pass through entity" includes a
regulated investment company, a real estate investment trust or common trust
fund, a partnership, trust or estate, and certain cooperatives.)

         5. That the Owner is aware that the Trustee will not register the
transfer of any Class R Certificates unless the transferee, or the transferee's
agent, delivers to it an affidavit and agreement, among other things, in
substantially the same form as this affidavit and agreement. The Owner expressly
agrees that it will not consummate any such transfer if it knows or believes
that any of the representations contained in such affidavit and agreement are
false.

         6. That the Owner has reviewed the restrictions set forth on the face
of the Class R Certificates and the provisions of Section 5.02(f) of the Pooling
and Servicing Agreement under which the Class R Certificates were issued (in
particular, clause (iii)(A) and (iii)(B) of Section 5.02(f) which authorize the
Trustee to deliver payments to a person other than the Owner and negotiate a
mandatory sale by the Trustee in the event the Owner holds such Certificates in
violation of Section 5.02(f)). The Owner expressly agrees to be bound by and to
comply with such restrictions and provisions.

         7. That the Owner consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to constitute
a reasonable arrangement to ensure that the Class R Certificates will only be
owned, directly or indirectly, by an Owner that is not a disqualified
organization.

         8. The Owner's Taxpayer Identification Number is _____________________.

         9. This affidavit and agreement relates only to the Class R
Certificates held by the owner and not to any other holder of the Class R
Certificates. The Owner understands that the liabilities described herein relate
only to the Class R Certificates.

         10. That no purpose of the Owner relating to the transfer of any of the
Class R Certificates by the Owner is or will be to impede the assessment or
collection of any tax.

         11. That the Owner has no present knowledge or expectation that it will
be unable to pay any United States taxes owed by it so long as any of the
Certificates remain outstanding. In this regard, the Owner hereby represents to
and for the benefit of the person from whom it acquired the Class R Certificate
that the Owner intends to pay taxes associated with holding such Class R

                                      G-5-2

<PAGE>

Certificate as they become due, fully understanding that it may incur tax
liabilities in excess of any cash flows generated by the Class R Certificate.

         12. That the Owner has no present knowledge or expectation that it will
become insolvent or subject to a bankruptcy proceeding for so long as any of the
Class R Certificates remain outstanding.

         13. The Owner is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, provided that
with respect to any partnership or other entity treated as a partnership for
United States federal income tax purposes, all persons that own an interest in
such partnership either directly or through any entity that is not a corporation
for United States federal income tax purposes are required by the applicable
operative agreement to be United States Persons, or an estate or trust whose
income from sources without the United States is includible in gross income for
United States federal income tax purposes regardless of its connection with the
conduct of a trade or business within the United States.

         14. (a) The Certificates (i) are not being acquired by, and will not be
transferred to, any employee benefit plan within the meaning of section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA") or
other retirement arrangement, including individual retirement accounts and
annuities, Keogh plans and bank collective investment funds and insurance
company general or separate accounts in which such plans, accounts or
arrangements are invested, that is subject to ERISA or Section 4975 of the
Internal Revenue Code of 1986 (the "Code") (any of the foregoing, a "Plan"),
(ii) are not being acquired with "plan assets" of a Plan within the meaning of
the Department of Labor ("DOL") regulation, 29 C.F.R. ss. 2510.3-101 or
otherwise under ERISA, and (iii) will not be transferred to any entity that is
deemed to be investing in plan assets within the meaning of the DOL regulation,
29 C.F.R. ss. 2510.3-101 or otherwise under ERISA; or

                  (b) The Owner will provide the Trustee with an opinion of
counsel, as specified in Section 5.02(c) of the Pooling and Servicing Agreement,
acceptable to and in form and substance satisfactory to the Trustee to the
effect that the purchase of Certificates is permissible under applicable law,
will not constitute or result in any non-exempt prohibited transaction under
ERISA or Section 4975 of the Code and will not subject the Trustee, the Company
or the Master Servicer to any obligation or liability (including obligations or
liabilities under ERISA or Section 4975 of the Code) in addition to those
undertaken in the Pooling and Servicing Agreement.

         In addition, the Owner hereby certifies, represents and warrants to,
and covenants with, the Company, the Trustee and the Master Servicer that the
Owner will not transfer such Certificates to any Plan or person unless either
such Plan or person meets the requirements set forth in either (a) or (b) above.

         Capitalized terms used but not defined herein shall have the meanings
assigned in the Pooling and Servicing Agreement.

                                      G-5-3

<PAGE>

         IN WITNESS WHEREOF, the Owner has caused this instrument to be executed
on its behalf, by its [Title of Officer] and its corporate seal to be hereunto
attached, attested by its [Assistant] Secretary, this ______ day of
_____________, _____.

                                                  [NAME OF OWNER]

                                                  By:___________________________
                                                          [Name of Officer]
                                                          [Title of Officer]

[Corporate Seal]

ATTEST:

______________________________
[Assistant] Secretary

         Personally appeared before me the above-named [Name of Officer], known
or proved to me to be the same person who executed the foregoing instrument and
to be the [Title of Officer] of the Owner, and acknowledged to me that such
person executed the same as such person's free act and deed and the free act and
deed of the Owner.

         Subscribed and sworn before me this ____ day of ___________, 200__.

                                        _____________________________________
                                                 NOTARY PUBLIC

                                        COUNTY OF_________________________
                                        STATE OF___________________________
                                        My Commission expires the ____ day of
                                        __________, 200__.

                                      G-5-4

<PAGE>

                                    EXHIBIT H

                             MORTGAGE LOAN SCHEDULE

                                (Filed Manually)

(In accordance with Rule 202 of Regulation S-T, this Mortgage Loan Schedule, is
being filed in paper pursuant to a continuing hardship exemption.)

<PAGE>

                                    EXHIBIT I

                      SELLER REPRESENTATIONS AND WARRANTIES

Seller's Representations Assigned by Company to Trustee

         Representations and Warranties. Pursuant to the Mortgage Loan Purchase
Agreement, the Seller has made certain representations and warranties to the
Company. The Seller shall confirm such representations and warranties and shall
deliver a Seller's Warranty Certificate and an Officer's Certificate on the
Closing Date (i) reaffirming such representations and warranties and (ii)
specifically restating and reaffirming the following representations and
warranties as of such date. The following representations are, pursuant to the
Pooling and Servicing Agreement, assigned by the Company to the Trustee for the
benefit of the Certificateholders, together with the related repurchase rights
specified in the Mortgage Loan Purchase Agreement. Pursuant to the Mortgage Loan
Purchase Agreement, the Seller's Warranty Certificate and related Officer's
Certificate, the Seller affirms each such representation and warranty and
agrees, consents to and acknowledges the assignment thereof to the Trustee. All
capitalized terms herein shall have the meanings assigned in the Pooling and
Servicing Agreement and the Seller's Warranty Certificate, as applicable.

         The Seller hereby represents and warrants to the Company and Trustee,
as to each Mortgage Loan, that as of the Closing Date or as of such other date
specifically provided herein:

                           (i) the information set forth in the Mortgage Loan
                  Schedule hereto is true and correct in all material respects;

                           (ii) the terms of the Mortgage Note and the Mortgage
                  have not been impaired, waived, altered or modified in any
                  respect, except by written instruments, (i) if required by law
                  in the jurisdiction where the Mortgaged Property is located,
                  or (ii) to protect the interests of the Trustee on behalf of
                  the Certificateholders;

                           (iii) the Mortgage File for each Mortgage Loan
                  contains a true and complete copy of each of the documents
                  contained in such Mortgage File, including all amendments,
                  modifications and, if applicable, waivers and assumptions that
                  have been executed in connection with such Mortgage Loan;

                           (iv) immediately prior to the transfer to the
                  Purchaser, the Seller was the sole owner of beneficial title
                  and holder of each Mortgage and Mortgage Note relating to the
                  Mortgage Loans and is conveying the same free and clear of any
                  and all liens, claims, encumbrances, participation interests,
                  equities, pledges, charges or security interests of any nature
                  and the Seller has full right and authority to sell or assign
                  the same pursuant to this Agreement;

                                      I-1
<PAGE>

                           (v) each Mortgage is a valid and enforceable first
                  lien on the property securing the related Mortgage Note and
                  each Mortgaged Property is owned by the Mortgagor in fee
                  simple (except with respect to common areas in the case of
                  condominiums, PUDs and de minimis PUDs) or by leasehold for a
                  term longer than the term of the related Mortgage, subject
                  only to (i) the lien of current real property taxes and
                  assessments, (ii) covenants, conditions and restrictions,
                  rights of way, easements and other matters of public record as
                  of the date of recording of such Mortgage, such exceptions
                  being acceptable to mortgage lending institutions generally or
                  specifically reflected in the appraisal obtained in connection
                  with the origination of the related Mortgage Loan or referred
                  to in the lender's title insurance policy delivered to the
                  originator of the related Mortgage Loan and (iii) other
                  matters to which like properties are commonly subject which do
                  not materially interfere with the benefits of the security
                  intended to be provided by such Mortgage;

                           (vi) no payment of principal of or interest on or in
                  respect of any Mortgage Loan is 30 or more days past due;

                           (vii) there is no mechanics' lien or claim for work,
                  labor or material affecting the premises subject to any
                  Mortgage which is or may be a lien prior to, or equal with,
                  the lien of such Mortgage except those which are insured
                  against by the title insurance policy referred to in (xii)
                  below;

                           (viii) as of the Cut-off Date, (i) no Mortgage Loan
                  had been 30 days or more delinquent more than once during the
                  preceding 12 months, (ii) no Mortgage Loan had been delinquent
                  for 60 days or more during the preceding 12 months and (iii)
                  to Seller's knowledge, there was no delinquent tax or
                  assessment lien against the property subject to any Mortgage,
                  except where such lien was being contested in good faith and a
                  stay had been granted against levying on the property;

                           (ix) there is no valid offset, defense or
                  counterclaim to any Mortgage Note or Mortgage, including the
                  obligation of the Mortgagor to pay the unpaid principal and
                  interest on such Mortgage Note;

                           (x) to Seller's knowledge, except to the extent
                  insurance is in place which will over such damage, the
                  physical property subject to any Mortgage is free of material
                  damage and is in good repair and there is no proceeding
                  pending or threatened for the total or partial condemnation of
                  any Mortgaged Property;

                           (xi) each Mortgage Loan complies in all material
                  respects with applicable local, state and federal laws,
                  including, without limitation, usury, equal credit
                  opportunity, real estate settlement procedures, the Federal
                  Truth In Lending Act and disclosure laws, including, but not
                  limited to, any applicable predatory

                                      I-2
<PAGE>

                  lending laws. The consummation of the transactions
                  contemplated hereby, including without limitation, the receipt
                  of interest by the owner of such Mortgage Loan or the holders
                  of Certificates secured thereby, will not involve the
                  violation of any such laws. Each Mortgage Loan is being
                  serviced in all material respects in accordance with
                  applicable local, state and federal laws, including, without
                  limitation, the Federal Truth In Lending Act and other
                  consumer protection laws, real estate settlement procedures,
                  usury, equal credit opportunity and disclosure laws;

                           (xii) a lender's title insurance policy (on an ALTA
                  or CLTA form) or binder, or other assurance of title customary
                  in the relevant jurisdiction therefor in a form acceptable to
                  Fannie Mae or Freddie Mac, was issued on the date that each
                  Mortgage Loan was created by a title insurance company which,
                  to the best of Seller's knowledge, was qualified to do
                  business in the jurisdiction where the related Mortgaged
                  Property is located, insuring the Seller and its successors
                  and assigns that the Mortgage is a first priority lien on the
                  related Mortgaged Property in the original principal amount of
                  the Mortgage Loan. Seller is the sole insured under such
                  lender's title insurance policy, and such policy, binder or
                  assurance is valid and remains in full force and effect, and
                  each such policy, binder or assurance shall contain all
                  applicable endorsements including a negative amortization
                  endorsement, if applicable;

                           (xiii) in the event the Mortgage constitutes a deed
                  of trust, either a trustee, duly qualified under applicable
                  law to serve as such, has been properly designated and
                  currently so serves and is named in the Mortgage or if no duly
                  qualified trustee has been properly designated and so serves,
                  the Mortgage contains satisfactory provisions for the
                  appointment of such trustee by the holder of the Mortgage at
                  no cost or expense to such holder, and no fees or expenses are
                  or will become payable by Purchaser to the trustee under the
                  deed of trust, except in connection with a trustee's sale
                  after default by the mortgagor;

                           (xiv) (i) the Loan-to-Value Ratio of each Mortgage
                  Loan at origination was not more than 100.00%; (ii) except
                  with regard to 0.09% of the Mortgage Loans, each Mortgage Loan
                  with a Loan-to-Value Ratio at origination in excess of 80.00%
                  will be insured by one of the following: (a) a Primary
                  Insurance Policy issued by a private mortgage insurer or (b) a
                  Radian Lender-Paid PMI Policy. Each Primary Insurance Policy
                  will insure against default under each insured Mortgage Note
                  as follows: (i) for which the outstanding principal balance at
                  origination of such Mortgage Loan is greater than or equal to
                  80.01 % and up to and including 90.00% of the lesser of the
                  Appraised Value and the sales price, such Mortgage Loan is
                  covered by a Primary Insurance Policy in an amount equal to at
                  least 12.00% of the Allowable Claim and (ii) for which the
                  outstanding principal balance at origination of such Mortgage
                  Loan exceeded 90.00% of the lesser of the Appraised Value and
                  the sales price, such Mortgage Loan is covered

                                      I-3
<PAGE>

                  by a Primary Insurance Policy in an amount equal to at least
                  30.00% of the Allowable Claim. Each Radian Lender-Paid PMI
                  Policy will insure against default under each insured Mortgage
                  Note related to a covered Mortgage Loan as follows: (i) for
                  which the outstanding principal balance at origination of such
                  Mortgage Loan is at least 80.01% and up to and including
                  95.00% of the lesser of the Appraised Value and the sales
                  price, such Mortgage Loan is covered by such Radian
                  Lender-Paid PMI Policy in an amount equal to at least 22.00%
                  of the Allowable Claim and (ii) for which the outstanding
                  principal balance at origination of such Mortgage Loan is at
                  least 95.01% and up to and including 97.00% of the lesser of
                  the Appraised Value and the sales price, such Mortgage Loan is
                  covered by such Radian Lender-Paid PMI Policy in an amount
                  equal to at least 35.00% of the Allowable Claim. The
                  "Appraised Value" is the appraised value of the related
                  Mortgaged Property at the time of origination of such Mortgage
                  Loan. The "Allowable Claim"for any Mortgage Loan covered by a
                  Primary Insurance Policy or a Radian Lender-Paid PMI Policy is
                  the current principal balance of such Mortgage Loan plus
                  accrued interest and allowable expenses at the time of the
                  claim;

                           (xv) at the time of origination, each Mortgaged
                  Property was the subject of an appraisal which conforms to the
                  Seller's underwriting requirements, and a complete copy of
                  such appraisal is contained in the Mortgage File;

                           (xvi) on the basis of a representation by the
                  borrower at the time of origination of the Mortgage Loans, at
                  least 70.04% of the Mortgage Loans (by aggregate principal
                  balance) will be secured by Mortgages on owner-occupied
                  primary residence properties;

                           (xvii) neither the Seller nor any servicer of the
                  related Mortgage Loans has advanced funds or knowingly
                  received any advance of funds by a party other than the
                  Mortgagor, directly or indirectly, for the payment of any
                  amount required by the Mortgage, except for (i) interest
                  accruing from the date of the related Mortgage Note or date of
                  disbursement of the Mortgage Loan proceeds, whichever is
                  later, to the date which precedes by 30 days the first Due
                  Date under the related Mortgage Note, and (ii) customary
                  advances for insurance and taxes;

                           (xviii) each Mortgage Note, the related Mortgage and
                  other agreements executed in connection therewith are genuine,
                  and each is the legal, valid and binding obligation of the
                  maker thereof, enforceable in accordance with its terms except
                  as such enforcement may be limited by bankruptcy, insolvency,
                  reorganization or other similar laws affecting the enforcement
                  of creditor's rights generally and by general equity
                  principles (regardless of whether such enforcement is
                  considered in a proceeding in equity or at law); and, to the
                  best of Seller's knowledge, all parties to each Mortgage Note
                  and the Mortgage had legal capacity to execute the Mortgage
                  Note and the Mortgage and each Mortgage Note

                                      I-4
<PAGE>

                  and Mortgage has been duly and properly executed by the
                  Mortgagor;

                           (xix) to the extent required under applicable law,
                  each conduit seller and subsequent mortgagee or servicer of
                  the Mortgage Loans was authorized to transact and do business
                  in the jurisdiction in which the related Mortgaged Property is
                  located at all times when it held or serviced the Mortgage
                  Loan; and any obligations of the holder of the related
                  Mortgage Note, Mortgage and other loan documents have been
                  complied with in all material respects; servicing of each
                  Mortgage Loan has been in accordance with the servicing
                  standard set forth in Section 3.01 of the Pooling and
                  Servicing Agreement and the terms of the Mortgage Notes, the
                  Mortgage and other loan documents, whether the creation of
                  such Mortgage Loan and servicing was done by the Seller, its
                  affiliates, or any third party which created the Mortgage Loan
                  on behalf of, or sold the Mortgage Loan to, any of them, or
                  any servicing agent of any of the foregoing;

                           (xx) the related Mortgage Note and Mortgage contain
                  customary and enforceable provisions such as to render the
                  rights and remedies of the holder adequate for the realization
                  against the Mortgaged Property of the benefits of the
                  security, including realization by judicial, or, if
                  applicable, non-judicial foreclosure, and, to Seller's
                  knowledge, there is no homestead or other exemption available
                  to the Mortgagor which would interfere with such right to
                  foreclosure;

                           (xxi) except with respect to holdbacks required by
                  certain Mortgage Loans which holdbacks create a fund for (i)
                  the repair of Mortgaged Property due to damage from adverse
                  weather conditions, or (ii) the completion of new
                  construction, or both, the proceeds of the Mortgage Loans have
                  been fully disbursed, there is no requirement for future
                  advances thereunder and any and all requirements as to
                  completion of any on-site or off-site improvements and as to
                  disbursements of any escrow funds therefor have been complied
                  with; and all costs, fees and expenses incurred in making,
                  closing or recording the Mortgage Loan have been paid, except
                  recording fees with respect to Mortgages not recorded as of
                  the Closing Date;

                           (xxii) as of the Closing Date, the improvements on
                  each Mortgaged Property securing a Mortgage Loan is insured
                  (by an insurer which is acceptable to the Seller) against loss
                  by fire and such hazards as are covered under a standard
                  extended coverage endorsement in the locale in which the
                  Mortgaged Property is located, in an amount which is not less
                  than the lesser of the maximum insurable value of the
                  improvements securing such Mortgage Loan or the outstanding
                  principal balance of the Mortgage Loan, but in no event in an
                  amount less than an amount that is required to prevent the
                  Mortgagor from being deemed to be a co-insurer thereunder; if
                  the improvement on the Mortgaged Property is a condominium
                  unit, it is included under the coverage afforded by a blanket
                  policy for the condominium project; if upon origination of the
                  related Mortgage Loan,

                                      I-5
<PAGE>

                  the improvements on the Mortgaged Property were in an area
                  identified as a federally designated flood area, a flood
                  insurance policy is in effect in an amount representing
                  coverage not less than the least of (i) the outstanding
                  principal balance of the Mortgage Loan, (ii) the restorable
                  cost of improvements located on such Mortgaged Property or
                  (iii) the maximum coverage available under federal law; and
                  each Mortgage obligates the Mortgagor thereunder to maintain
                  the insurance referred to above at the Mortgagor's cost and
                  expense;

                           (xxiii) there is no monetary default existing under
                  any Mortgage or the related Mortgage Note and there is no
                  material event which, with the passage of time or with notice
                  and the expiration of any grace or cure period, would
                  constitute a default, breach or event of acceleration; and
                  neither the Seller, any of its affiliates nor any servicer of
                  any related Mortgage Loan has taken any action to waive any
                  default, breach or event of acceleration; no foreclosure
                  action is threatened or has been commenced with respect to the
                  Mortgage Loan;

                           (xxiv) to Seller's knowledge, no Mortgagor, at the
                  time of origination of the applicable Mortgage, was a debtor
                  in any state or federal bankruptcy or insolvency proceeding;

                           (xxv) each Mortgage Loan was originated or funded by
                  (a) a savings and loan association, savings bank, commercial
                  bank, credit union, insurance company or similar institution
                  which is supervised and examined by a federal or state
                  authority (or originated by (i) a subsidiary of any of the
                  foregoing institutions which subsidiary is actually supervised
                  and examined by applicable regulatory authorities or (ii) a
                  mortgage loan correspondent of any of the foregoing and that
                  was originated pursuant to the criteria established by any of
                  the foregoing) or (b) a mortgagee approved by the Secretary of
                  Housing and Urban Development pursuant to sections 203 and 211
                  of the National Housing Act, as amended;

                           (xxvi) all inspections, licenses and certificates
                  required to be made or issued with respect to all occupied
                  portions of the Mortgaged Property and, with respect to the
                  use and occupancy of the same, including, but not limited to,
                  certificates of occupancy and fire underwriting certificates,
                  have been made or obtained from the appropriate authorities;

                           (xxvii) to Seller's knowledge, the Mortgaged Property
                  and all improvements thereon comply with all requirements of
                  any applicable zoning and subdivision laws and ordinances;

                           (xxviii) no instrument of release or waiver has been
                  executed in connection with the Mortgage Loans, and no
                  Mortgagor has been released, in whole or in part, except in
                  connection with an assumption agreement which has been
                  approved by the primary mortgage guaranty insurer, if any, and
                  which has

                                      I-6
<PAGE>

                  been delivered to the Trustee;

                           (xxix) [Reserved]

                           (xxx) no Mortgage Loan was originated based on an
                  appraisal of the related Mortgaged Property made prior to
                  completion of construction of the improvements thereon unless
                  a certificate of completion was obtained prior to closing of
                  the Mortgage Loan;

                           (xxxi) each of the Mortgaged Properties consists of a
                  single parcel of real property with a detached single-family
                  residence erected thereon, or a two- to four-family dwelling,
                  or an individual condominium unit in a condominium project or
                  a townhouse, a condohotel, an individual unit in a PUD or an
                  individual unit in a de minimis PUD;

                           (xxxii) no Mortgaged Property consists of a single
                  parcel of real property with a cooperative housing development
                  erected thereon. Any condominium unit, PUD or de minimis PUD
                  conforms with Progressive Loan Series Program requirements
                  regarding such dwellings or is covered by a waiver confirming
                  that such condominium unit, PUD or de minimis PUD is
                  acceptable to the Seller;

                           (xxxiii) as of the Cut-off Date, the Mortgage Rate of
                  each Mortgage Loan was not less than 5.75% per annum and not
                  more than 10.70% per annum, and the weighted average Mortgage
                  Rate of the Mortgage Loans was approximately 6.57% per annum;

                           (xxxiv) measured by principal balance, no more than
                  6.91% of the Mortgage Loans are secured by an individual unit
                  in a condominium project or hi-rise, at least 17.39% of the
                  Mortgage Loans are secured by real property with two-to-four
                  family residences, at least 7.28% of the Mortgage Loans are
                  secured by real properties in planned unit developments, at
                  least 0.12% of the Mortgage Loans are secured by real property
                  with a condominium erected thereon; and at least 68.29% of the
                  Mortgage Loans are secured by real property with a detached
                  single-family residence erected thereon, including de minimis
                  PUDs;

                           (xxxv) as of the Cut-off Date, the remaining term to
                  scheduled maturity of each Mortgage Loan is not less than 173
                  months and not more than 360 months;

                           (xxxvi) as of the Cut-off Date, no more than 46.30%
                  (by aggregate principal balance) of the Mortgage Loans are
                  cash-out refinances;

                           (xxxvii) as of the Cut-off Date, no more than 58.92%
                  (by aggregate principal balance) of the Mortgage Loans are
                  rate and term refinances;

                                     I-7
<PAGE>

                           (xxxviii) as of the Cut-off Date, no fewer than
                  41.08% (by aggregate principal balance) of the Mortgage Loans
                  are purchase money loans;

                           (xxxix) as of the Cut-off Date, no more than 40.10%
                  and 18.22% of the Mortgage Loans (by aggregate principal
                  balance) are secured by properties located in the states of
                  California and Florida, respectively;

                           (xl) as of the Cut-off Date, the principal balances
                  of the Mortgage Loans range from approximately $33,271to
                  approximately $1,402,569, and the average unpaid principal
                  balance is $205,392.

                           (xli) with respect to Mortgaged Properties at the
                  time of origination of the related Mortgage Loans, measured by
                  aggregate unpaid principal balance as of the Cut-off Date, at
                  least 70.04% of the Mortgaged Properties are owner occupied
                  primary residences, no more than 3.70% of the Mortgaged
                  Properties are second homes and no more than 26.26% of the
                  Mortgaged Properties are investor owned properties;

                           (xlii) as of the Cut-off Date, none of the Mortgage
                  Loans (by aggregate principal balance) are Buydown Mortgage
                  Loans;

                           (xliii) each Mortgage Loan constitutes a "qualified
                  mortgage" under Section 860G(a)(3 )(A) of the Code and
                  Treasury Regulation Section 1.860G-2(a)(1);

                           (xliv) with respect to each Mortgage Loan directly
                  originated by the Seller (and not through a third-party broker
                  or other third party) as of the Closing Date, to the best of
                  Seller's knowledge, there has been no fraud, misrepresentation
                  or dishonesty with respect to the origination of any Mortgage
                  Loan;

                           (xlv) no selection procedure reasonably believed by
                  the Seller to be adverse to the interests of the
                  Certificateholders was utilized in selecting the Mortgage
                  Loans;

                           (xlvi) no Mortgage Loan is subject to the Home
                  Ownership and Equity Protection Act of 1994 or any comparable
                  state law;

                           (xlvii) no proceeds from any Mortgage Loan were used
                  to finance single-premium credit insurance policies;

                           (xlviii) no Mortgage Loan provides for payment of a
                  Prepayment Charge on Principal Prepayments made more than five
                  years from the date of the first contractual Due Date of the
                  related Mortgage Loan; and

                                      I-8
<PAGE>

                           (xlix) none of the Mortgage Loans is a "high cost
                  home loan" as defined in the Georgia Fair Lending Act, as
                  amended (the "Georgia Act"), the New York Predatory Lending
                  Law, codified as N.Y. Banking Law ss.6-I, N.Y. Gen. Bus. Law
                  ss.771-a, and N.Y. Real Prop. Acts Law ss.1302 (together, the
                  "New York Act"), the Arkansas Home Loan Protection Act, as
                  amended (the "Arkansas Act"), or Kentucky Revised Statutes
                  ss.360.100, as amended (the "Kentucky Act"); and all the
                  Mortgage Loans that are subject to the Georgia Act, the New
                  York Act, the Arkansas Act and the Kentucky Act comply with
                  the requirements of each such act. Each Mortgage Loan for
                  which the related Mortgaged Property is located in the State
                  of Georgia was originated prior to October 1, 2002, or on or
                  after March 9, 2003.

                                      I-9
<PAGE>

                                    EXHIBIT J

      FORM OF NOTICE UNDER SECTION 3.24 OF POOLING AND SERVICING AGREEMENT

May __, 2004

Deutsche Bank National Trust Company
1761 East St. Andrew Place
Santa Ana, California 92705

                  Re:      Impac Secured Assets Corp.
                           Mortgage Pass-Through Certificates
                           Series 2004-2
                           ----------------------------------

                  Pursuant to Section 3.25 of the Pooling and Servicing
Agreement, dated as of May 1, 2004, relating to the Certificates referenced
above, the undersigned does hereby notify you that:

                  (a) The prepayment assumption used in pricing the Certificates
with respect to the Mortgage Loans in Series 2004-2 consisted of a Prepayment
Assumption (the "Prepayment Assumption") of ____% per annum.

                  (b) With respect to each Class of Certificates comprising the
captioned series, set forth below is (i), the first price, as a percentage of
the Certificate Principal Balance or Notional Amount of each Class of
Certificates, at which 10% of the aggregate Certificate Principal Balance or
Notional Amount of each such Class of Certificates was first sold at a single
price, if applicable, or (ii) if more than 10% of a Class of Certificates have
been sold but no single price is paid for at least 10% of the aggregate
Certificate Principal Balance or Notional Amount of such Class of Certificates,
then the weighted average price at which the Certificates of such Class were
sold expressed as a percentage of the Certificate Principal Balance or Notional
Amount of such Class of Certificates, (iii) if less than 10% of the aggregate
Certificate Principal Balance or Notional Amount of a Class of Certificates has
been sold, the purchase price for each such Class of Certificates paid by
Deutsche Bank Securities Inc. (the "Underwriter"), expressed as a percentage of
the Certificate Principal Balance or Notional Amount of such Class of
Certificates calculated by: (1) estimating the fair market value of each such
Class of Certificates as of May 28, 2004; (2) adding such estimated fair market
value to the aggregate purchase prices of each Class of Certificates described
in clause (i) or (ii) above; (3) dividing each of the fair market values
determined in clause (1) by the sum obtained in clause (2); (4) multiplying the
quotient obtained for each Class of Certificates in clause (3) by the purchase
price paid by the Underwriter for all the Certificates purchased by it; and (5)
for each Class of Certificates, dividing the product obtained from such Class of
Certificates in clause (4) by the initial Certificate Principal Balance or
Notional Amount of such Class of Certificates or

                                       J-2

<PAGE>

(iv) the fair market value (but not less than zero) as of the Closing Date of
each Certificate of each Class of Certificates retained by the Company or an
affiliate corporation, or delivered to the seller:

Series 2004-2
-------------
Class A-1:        ____%
Class A-2:        ____%
Class A-3:        ____%
Class A-4:        ____%
Class A-5:        ____%
Class A-6:        ____%
Class M-1:        ____%
Class M-2:        ____%
Class M-3:        ____%
Class P: ____%
Class C:          ____%
Class R:          ____%

                  The prices and values set forth above do not include accrued
interest with respect to periods before the closing.

                                                   IMPAC SECURED ASSETS CORP.

                                                   By:_______________________
                                                   Name:
                                                   Title:

                                       J-3

<PAGE>

                                    EXHIBIT K

                              IMPAC SERVICING GUIDE

                             (Provided Upon Request)

                                       K-1

<PAGE>

                                   EXHIBIT L-1

            FORM CERTIFICATION TO BE PROVIDED BY THE MASTER SERVICER
                                 WITH FORM 10-K

                  Re:      Impac Secured Assets Corp.,
                           Mortgage Pass-Through Certificates, Series 2004-2

                  I, [Identify the certifying individual], certify that:

                  1. I have reviewed this annual report on Form 10-K, and all
reports on Form 8-K containing distribution or servicing reports filed in
respect of periods included in the year covered by this annual report, of Impac
Secured Assets Corp.;

                  2. Based on my knowledge, the information in these reports,
taken as a whole, does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not misleading as of
the last day of the period covered by this annual report;

                  3. Based on my knowledge, the distribution or servicing
information required to be provided to the trustee by the servicer under the
pooling and servicing, or similar, agreement, for inclusion in these reports is
included in these reports;

                  4. I am responsible for reviewing the activities performed by
the servicer under the pooling and servicing, or similar, agreement and based
upon my knowledge and the annual compliance review required under that
agreement, and except as disclosed in the reports, the servicer has fulfilled
its obligations under that agreement; and

                  5. The reports disclose all significant deficiencies relating
to the servicer's compliance with the minimum servicing standards based upon the
report provided by an independent public accountant, after conducting a review
in compliance with the Uniform Single Attestation Program for Mortgage Bankers
or similar procedure, as set forth in the pooling and servicing, or similar,
agreement, that is included in these reports.

         In giving the certifications above, I have reasonably relied on
information provided to me by the following unaffiliated parties: [the Trustee
and Sub-Servicers]

Date: __________________

_______________________
[Signature]
[Title]
[Company]

                                       L-1

<PAGE>

                                   EXHIBIT L-2

                            FORM CERTIFICATION TO BE
              PROVIDED TO MASTER SERVICER BY THE INDENTURE TRUSTEE

                  Re:      Impac Secured Assets Corp.,
                           Mortgage Pass-Through Certificates, Series 2004-2

                  I, [Identify the certifying individual], a [______________] of
Deutsche Bank National Trust Company, as Trustee, hereby certify to Impac
Funding Corporation and its officers, directors and affiliates, and with the
knowledge and intent that they will rely upon this certification, that:

                  1. I have reviewed the annual report on Form 10-K for the
fiscal year [__], and all reports on Form 8-K containing distribution reports
filed in respect of periods included in the year covered by that annual report,
of the Issuer relating to the above-referenced trust;

                  2. Based on my knowledge, the information in these
distribution reports prepared by the Trustee, taken as a whole, does not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading as of the last day of the period
covered by that annual report; and

                  3. Based on my knowledge, the distribution information
required to be provided by the Trustee under the Agreement is included in these
distribution reports.

                  Capitalized terms used but not defined herein have the
meanings ascribed to them in the Pooling and Servicing Agreement, dated May1,
2004 (the "Agreement"), among Impac Secured Assets Corp., as Company, Impac
Funding Corporation, as Master Servicer, and Deutsche Bank National Trust
Company, as Trustee.

                                        DEUTSCHE BANK NATIONAL TRUST
                                        COMPANY, as Trustee

                                        By:__________________________
                                        Name:
                                        Title:
                                        Date:

                                       L-2

<PAGE>

                                   EXHIBIT L-3

                            FORM CERTIFICATION TO BE
                   PROVIDED TO MASTER SERVICER BY THE TRUSTEE

                  Re:      Impac Secured Assets Corp.,
                           Mortgage Pass-Through Certificates, Series 2004-2

                  I, [Identify the certifying individual], a [_________________]
of Deutsche Bank National Trust Company, as Trustee, hereby certify to Impac
Funding Corporation and its officers, directors and affiliates, and with the
knowledge and intent that they will rely upon this certification, that:

                  1. Based on my knowledge, the distribution information
required to be provided by the Trustee under the Agreement is included in these
distribution reports.

         Capitalized terms used but not defined herein have the meanings
ascribed to them in the Pooling and Servicing Agreement, dated May 1, 2004 (the
"Agreement"), among Impac Secured Assets Corp., as Company, Impac Funding
Corporation, as Master Servicer, and Deutsche Bank National Trust Company, as
Trustee.

                                        DEUTSCHE BANK NATIONAL TRUST
                                        COMPANY, as Trustee

                                        By:__________________________
                                        Name:
                                        Title:
                                        Date:

                                       L-3

<PAGE>

                                    EXHIBIT M

                     FORM OF SUBSEQUENT TRANSFER INSTRUMENT

                             [Provided Upon Request]

                                       M-1

<PAGE>

                                    EXHIBIT N

                             FORM OF ADDITION NOTICE

                             [Provided Upon Request]

                                       M-2

<PAGE>

                                    EXHIBIT O

                        SUBSEQUENT MORTGAGE LOAN SCHEDULE

                             [Provided Upon Request]

                                       M-3

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