POOLING AND SERVICING AGREEMENT

Pooling and Servicing Agreement

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IMPAC FUNDING CORPORATION | IMPAC SECURED ASSETS CORP | Moody's Investors Service, Inc | WELLS FARGO BANK, NA

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Title: POOLING AND SERVICING AGREEMENT
Governing Law: New York Date: 1/18/2005

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

IMPAC SECURED ASSETS CORP.,

Company,

IMPAC FUNDING CORPORATION

Master Servicer,

and

wells fargo bank, n.a.

Trustee

POOLING AND SERVICING AGREEMENT

Dated as of December 31, 2004

________________________

Mortgage Pass-Through Certificates

Series 2004-4

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

<PAGE>

TABLE OF CONTENTS

<TABLE>

Page

----

ARTICLE I DEFINITIONS.............................................................................................5

Section 1.01. Defined Terms..........................................................................5

Accrual Period..............................................................................................5

Adjustment Date.............................................................................................5

Advance.....................................................................................................5

Affiliate...................................................................................................5

Aggregate Stated Principal Balance..........................................................................5

Agreement...................................................................................................5

Allocated Realized Loss Amount..............................................................................5

Assignment..................................................................................................5

Available Distribution Amount...............................................................................6

Bankruptcy Code.............................................................................................6

Basic Principal Distribution Amount.........................................................................6

Book-Entry Certificate......................................................................................6

Business Day................................................................................................6

Cash Liquidation............................................................................................6

Certificate.................................................................................................6

Certificate Account.........................................................................................6

Certificate Account Deposit Date............................................................................7

Certificateholder...........................................................................................7

Certificate Owner...........................................................................................7

Certificate Principal Balance...............................................................................7

Certificate Register........................................................................................7

Class.......................................................................................................7

Class 1-A Corridor Contract.................................................................................8

Class 1-A Net WAC Rate......................................................................................8

Class 1-A Principal Distribution Amount.....................................................................8

Class 1-A Principal Distribution Target Amount..............................................................8

Class 1-A-1 Certificate.....................................................................................8

Class 1-A-2 Certificate.....................................................................................8

Class 1-A-3 Certificate.....................................................................................8

Class 2-A Certificate.......................................................................................8

Class 2-A Corridor Contract.................................................................................8

Class 2-A Net WAC Rate......................................................................................9

Class 2-A Principal Distribution Amount.....................................................................9

Class 2-A Principal Distribution Target Amount..............................................................9

Class 2-A-1 Certificate.....................................................................................9

Class 2-A-2 Certificate.....................................................................................9

Class A Principal Distribution Target Amount................................................................9

Class A Certificate........................................................................................10

Class B Certificate........................................................................................10

</TABLE>

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<TABLE>

Class B Principal Distribution Amount......................................................................10

Class C Certificate........................................................................................11

Class C Interest...........................................................................................11

Class M-1 Certificate......................................................................................11

Class M-1 Principal Distribution Amount....................................................................11

Class M-2 Certificate......................................................................................11

Class M-2 Principal Distribution Amount....................................................................11

Class M-3 Certificate......................................................................................12

Class M-3 Principal Distribution Amount....................................................................12

Class M-4 Certificate......................................................................................13

Class M-4 Principal Distribution Amount....................................................................13

Class M-5 Certificate......................................................................................14

Class M-5 Principal Distribution Amount....................................................................14

Class P Certificate........................................................................................15

Class P Interest...........................................................................................15

Class R Certificate........................................................................................15

Class R-X Certificate......................................................................................15

Class R-1 Interest.........................................................................................15

Class R-2 Interest.........................................................................................15

Class R-3 Interest.........................................................................................15

Class R-4 Interest.........................................................................................15

Closing Date...............................................................................................15

Code.......................................................................................................15

Collateral Value...........................................................................................15

Commission.................................................................................................15

Company....................................................................................................15

Compensating Interest......................................................................................15

Corporate Trust Office.....................................................................................16

Corresponding Certificate..................................................................................16

Corridor Contract..........................................................................................16

Corridor Contract Provider.................................................................................16

Corridor Contract Payment Amount...........................................................................16

Credit Enhancement Percentage..............................................................................16

Custodial Account..........................................................................................16

Custodial Agreement........................................................................................16

Custodian..................................................................................................17

Cut-off Date...............................................................................................17

Cut-off Date Balance.......................................................................................17

Defaulted Mortgage Loan....................................................................................17

Deficiency Amount..........................................................................................17

Deficient Valuation........................................................................................17

Definitive Certificate.....................................................................................17

Deleted Mortgage Loan......................................................................................17

Depository.................................................................................................17

Depository Participant.....................................................................................18

Determination Date.........................................................................................18

</TABLE>

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<TABLE>

Disqualified Organization..................................................................................18

Distribution Date..........................................................................................18

Due Date...................................................................................................18

Due Period.................................................................................................18

Eligible Account...........................................................................................18

Event of Default...........................................................................................19

Excess Proceeds............................................................................................19

Exchange Act...............................................................................................19

Extra Principal Distribution Amount........................................................................19

Fannie Mae.................................................................................................19

FDIC.......................................................................................................19

Final Scheduled Distribution Date..........................................................................19

Freddie Mac................................................................................................19

GMAC.......................................................................................................19

GMAC Mortgage Loans........................................................................................19

Gross Margin...............................................................................................19

Group 1 Loan...............................................................................................19

Group 2 Loan...............................................................................................19

Group 2 Sequential Trigger Event...........................................................................20

Index......................................................................................................20

Initial Certificate Principal Balance......................................................................20

Initial Notional Amount....................................................................................20

Insurance Policy...........................................................................................20

Insurance Proceeds.........................................................................................20

Interest Remittance Amount.................................................................................20

Late Collections...........................................................................................20

LIBOR......................................................................................................20

LIBOR Business Day.........................................................................................20

LIBOR Rate Adjustment Date.................................................................................21

Liquidated Mortgage Loan...................................................................................21

Liquidation Proceeds.......................................................................................21

Loan-to-Value Ratio........................................................................................21

Loan Group.................................................................................................21

Loan Group 1...............................................................................................21

Loan Group 2...............................................................................................21

Loan Group Excess Cashflow Allocation Amount...............................................................21

Lost Note Affidavit........................................................................................21

Majority Class C Certificateholder.........................................................................21

Marker Rate................................................................................................21

Master Servicer............................................................................................22

Master Servicer Prepayment Charge Payment Amount...........................................................22

Master Servicing Fees......................................................................................22

Master Servicing Fee Rate..................................................................................22

Maximum Uncertificated Accrued Interest Deferral Amount....................................................23

MERS.......................................................................................................23

MERS(R) System.............................................................................................23

</TABLE>

iii

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<TABLE>

Mezzanine Certificate......................................................................................23

Mezzanine Corridor Contract................................................................................23

Mezzanine Net WAC Rate.....................................................................................24

MIN........................................................................................................24

MOM Loan...................................................................................................24

Monthly Interest Distributable Amount......................................................................24

Monthly Payment............................................................................................24

Monthly Strike Rate........................................................................................24

Moody's....................................................................................................24

Mortgage...................................................................................................24

Mortgage File..............................................................................................24

Mortgage Loan..............................................................................................24

Mortgage Loan Purchase Agreement...........................................................................25

Mortgage Loan Schedule.....................................................................................25

Mortgage Note..............................................................................................26

Mortgage Rate..............................................................................................26

Mortgaged Property.........................................................................................26

Mortgagor..................................................................................................26

Net Liquidation Proceeds...................................................................................26

Net Monthly Excess Cashflow................................................................................26

Net Mortgage Rate..........................................................................................26

Net Prepayment Interest Shortfall..........................................................................26

Net WAC Rate...............................................................................................27

Net WAC Shortfall Amount...................................................................................27

Net WAC Shortfall Reserve Fund.............................................................................27

Net WAC Shortfall Reserve Fund Deposit.....................................................................27

Nonrecoverable Advance.....................................................................................27

Non-United States Person...................................................................................27

Officers' Certificate......................................................................................27

One Month LIBOR............................................................................................27

Opinion of Counsel.........................................................................................27

Optional Termination Date..................................................................................28

OTS........................................................................................................28

Outstanding Mortgage Loan..................................................................................28

Overcollateralization Deficiency Amount....................................................................28

Overcollateralization Floor................................................................................28

Overcollateralization Target Amount........................................................................28

Overcollateralization Target Percentage....................................................................28

Overcollateralized Amount..................................................................................28

Ownership Interest.........................................................................................28

Pass-Through Rate..........................................................................................28

Percentage Interest........................................................................................30

Permitted Investment.......................................................................................30

Permitted Transferee.......................................................................................31

Person.....................................................................................................31

Prepayment Assumption......................................................................................32

</TABLE>

<PAGE>

<TABLE>

Prepayment Charge..........................................................................................32

Prepayment Interest Excess.................................................................................32

Prepayment Interest Shortfall..............................................................................32

Prepayment Period..........................................................................................32

Primary Hazard Insurance Policy............................................................................32

Primary Insurance Policy...................................................................................32

Principal Distribution Amount..............................................................................32

Principal Prepayment.......................................................................................32

Principal Prepayment in Full...............................................................................33

Principal Remittance Amount................................................................................33

Prospectus Supplement......................................................................................33

Purchase Price.............................................................................................33

Qualified Insurer..........................................................................................33

Qualified Substitute Mortgage Loan.........................................................................33

Radian.....................................................................................................34

Radian Insured Loans.......................................................................................34

Radian Lender-Paid PMI Policy..............................................................................34

Radian PMI Policy Rate.....................................................................................34

Rating Agency..............................................................................................34

Realized Loss..............................................................................................34

Record Date................................................................................................35

Regular Certificate........................................................................................35

Relief Act.................................................................................................35

Relief Act Interest Shortfall..............................................................................35

REMIC......................................................................................................35

REMIC 1....................................................................................................35

REMIC 1 Interest Loss Allocation Amount....................................................................35

REMIC 1 Marker Allocation Percentage.......................................................................35

REMIC 1 Overcollateralized Amount..........................................................................36

REMIC 1 Principal Loss Allocation Amount...................................................................36

REMIC 1 Overcollateralization Target Amount................................................................36

REMIC 1 Regular Interest AA................................................................................36

REMIC 1 Regular Interest 1-A-1.............................................................................36

REMIC 1 Regular Interest 1-A-2.............................................................................37

REMIC 1 Regular Interest 1-A-3.............................................................................37

REMIC 1 Regular Interest 2-A-1.............................................................................37

REMIC 1 Regular Interest 2-A-2.............................................................................37

REMIC 1 Regular Interest M-1...............................................................................37

REMIC 1 Regular Interest M-2...............................................................................37

REMIC 1 Regular Interest M-3...............................................................................37

REMIC 1 Regular Interest M-4...............................................................................38

REMIC 1 Regular Interest M-5...............................................................................38

REMIC 1 Regular Interest B.................................................................................38

REMIC 1 Regular Interest 1A................................................................................38

REMIC 1 Regular Interest 1B................................................................................38

REMIC 1 Regular Interest 2A................................................................................38

</TABLE>

<PAGE>

<TABLE>

REMIC 1 Regular Interest 2B................................................................................39

REMIC 1 Regular Interest XX................................................................................39

REMIC 1 Regular Interest P.................................................................................39

REMIC 1 Regular Interest ZZ................................................................................39

REMIC 1 Regular Interests..................................................................................39

REMIC 1 Subordinated Balance Ratio.........................................................................39

REMIC 1 Sub WAC Allocation Percentage......................................................................39

REMIC 2....................................................................................................40

REMIC 2 Certificate........................................................................................40

REMIC 2 Certificateholder..................................................................................40

REMIC 2 Regular Interest...................................................................................40

REMIC 3....................................................................................................40

REMIC 4....................................................................................................40

REMIC 4 Certificate........................................................................................40

REMIC Provisions...........................................................................................40

REMIC Regular Interest.....................................................................................40

Remittance Report..........................................................................................40

REO Acquisition............................................................................................40

REO Disposition............................................................................................40

REO Imputed Interest.......................................................................................41

REO Proceeds...............................................................................................41

REO Property...............................................................................................41

Request for Release........................................................................................41

Residual Interest..........................................................................................41

Responsible Officer........................................................................................41

Seller.....................................................................................................41

Servicing Account..........................................................................................41

Servicing Advances.........................................................................................41

Servicing Guide............................................................................................42

Servicing Officer..........................................................................................42

Single Certificate.........................................................................................42

Standard & Poor's..........................................................................................42

Startup Day................................................................................................42

Stated Principal Balance...................................................................................42

Step-Up Date...............................................................................................42

Stepdown Date..............................................................................................42

Subsequent Recoveries......................................................................................43

Sub-Servicer...............................................................................................43

Sub-Servicer Remittance Date...............................................................................43

Sub-Servicing Account......................................................................................43

Sub-Servicing Agreement....................................................................................43

Sub-Servicing Fees.........................................................................................43

Sub-Servicing Fee Rate.....................................................................................43

Substitution Adjustment....................................................................................43

Tax Returns................................................................................................44

Transfer...................................................................................................44

</TABLE>

<PAGE>

<TABLE>

Transferor.................................................................................................44

Trigger Event..............................................................................................44

Trust Fund.................................................................................................44

Trustee....................................................................................................44

Uncertificated Accrued Interest............................................................................45

Uncertificated Notional Balance............................................................................45

Uncertificated Principal Balance...........................................................................45

Uncertificated REMIC 1 Pass-Through Rate...................................................................45

Uninsured Cause............................................................................................46

United States Person.......................................................................................46

Unpaid Interest Shortfall Amount...........................................................................46

Voting Rights..............................................................................................46

Wells Fargo Mortgage Loans.................................................................................46

Weighted Average Net Mortgage Rate.........................................................................47

Section 1.02. Determination of LIBOR................................................................47

Section 1.03. Allocation of Certain Interest Shortfalls.............................................48

ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES.......................................50

Section 2.01. Conveyance of Mortgage Loans..........................................................50

Section 2.02. Acceptance of the Trust Fund by the Trustee...........................................53

Section 2.03. Representations, Warranties and Covenants of the Master Servicer and the Company......55

Section 2.04. Representations and Warranties of the Seller..........................................57

Section 2.05. Issuance of Certificates; Conveyance of REMIC 1 Regular Interests, Class C Interest,

Class P Interest and Acceptance of REMIC 2, REMIC 3 and REMIC 4 by the Trustee........58

ARTICLE III ADMINISTRATION AND SERVICING OF THE TRUST FUND.......................................................61

Section 3.01. Master Servicer to Act as Master Servicer.............................................61

Section 3.02. Sub-Servicing Agreements Between Master Servicer and Sub-Servicers....................63

Section 3.03. Successor Sub-Servicers...............................................................64

Section 3.04. Liability of the Master Servicer......................................................64

Section 3.05. No Contractual Relationship Between Sub-Servicers and Trustee or Certificateholders...64

Section 3.06. Assumption or Termination of Sub-Servicing Agreements by Trustee......................65

Section 3.07. Collection of Certain Mortgage Loan Payments..........................................65

Section 3.08. Sub-Servicing Accounts................................................................66

Section 3.09. Collection of Taxes, Assessments and Similar Items; Servicing Accounts................67

Section 3.10. Custodial Account.....................................................................67

Section 3.11. Permitted Withdrawals From the Custodial Account......................................68

Section 3.12. Permitted Investments.................................................................69

</TABLE>

vii

<PAGE>

<TABLE>

Section 3.13. Maintenance of Primary Hazard Insurance...............................................70

Section 3.14. Enforcement of Due-on-Sale Clauses; Assumption Agreements.............................72

Section 3.15. Realization Upon Defaulted Mortgage Loans.............................................73

Section 3.16. Trustee to Cooperate; Release of Mortgage Files.......................................74

Section 3.17. Servicing Compensation................................................................75

Section 3.18. Maintenance of Certain Servicing Policies.............................................76

Section 3.19. Annual Statement as to Compliance.....................................................76

Section 3.20. Annual Independent Public Accountants' Servicing Statement............................77

Section 3.21. Access to Certain Documentation.......................................................78

Section 3.22. Title, Conservation and Disposition of REO Property...................................78

Section 3.23. Additional Obligations of the Master Servicer.........................................80

Section 3.24. Additional Obligations of the Company.................................................81

Section 3.25. Exchange Act Reporting................................................................81

ARTICLE IV PAYMENTS TO CERTIFICATEHOLDERS........................................................................84

Section 4.01. Distributions.........................................................................84

Section 4.02. Statements to Certificateholders......................................................89

Section 4.03. Remittance Reports; Advances by the Master Servicer...................................91

Section 4.04. Distributions on the REMIC 1 Regular Interests........................................93

Section 4.05. Allocation of Realized Losses.........................................................94

Section 4.06. Information Reports to Be Filed by the Master Servicer................................96

Section 4.07. Compliance with Withholding Requirements..............................................96

Section 4.08. Net WAC Shortfall Reserve Fund........................................................97

ARTICLE V THE CERTIFICATES.......................................................................................98

Section 5.01. The Certificates......................................................................98

Section 5.02. Registration of Transfer and Exchange of Certificates.................................99

Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates....................................104

Section 5.04. Persons Deemed Owners................................................................105

Section 5.05. Rule 144A Information................................................................105

ARTICLE VI THE COMPANY AND THE MASTER SERVICER..................................................................106

Section 6.01. Liability of the Company and the Master Servicer.....................................106

Section 6.02. Merger, Consolidation or Conversion of the Company or the Master Servicer............106

Section 6.03. Limitation on Liability of the Company, the Master Servicer and Others...............106

Section 6.04. Limitation on Resignation of the Master Servicer.....................................107

Section 6.05. Sale and Assignment of Master Servicing..............................................107

</TABLE>

viii

<PAGE>

<TABLE>

ARTICLE VII DEFAULT.............................................................................................109

Section 7.01. Events of Default....................................................................109

Section 7.02. Trustee to Act; Appointment of Successor.............................................111

Section 7.03. Notification to Certificateholders...................................................112

Section 7.04. Waiver of Events of Default..........................................................112

Section 7.05. List of Certificateholders...........................................................113

ARTICLE VIII CONCERNING THE TRUSTEE.............................................................................114

Section 8.01. Duties of Trustee....................................................................114

Section 8.02. Certain Matters Affecting the Trustee................................................115

Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans................................117

Section 8.04. Trustee May Own Certificates.........................................................117

Section 8.05. Trustee's Fees.......................................................................117

Section 8.06. Eligibility Requirements for Trustee.................................................118

Section 8.07. Resignation and Removal of the Trustee...............................................118

Section 8.08. Successor Trustee....................................................................119

Section 8.09. Merger or Consolidation of Trustee...................................................119

Section 8.10. Appointment of Co-Trustee or Separate Trustee........................................120

ARTICLE IX TERMINATION..........................................................................................122

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

Certificates.........................................................................122

Section 9.02. Termination of REMIC 2...............................................................124

Section 9.03. Additional Termination Requirements..................................................124

ARTICLE X REMIC PROVISIONS......................................................................................126

Section 10.01. REMIC Administration.................................................................126

Section 10.02. Prohibited Transactions and Activities...............................................129

Section 10.03. Master Servicer and Trustee Indemnification..........................................129

ARTICLE XI MISCELLANEOUS PROVISIONS.............................................................................130

Section 11.01. Amendment............................................................................130

Section 11.02. Recordation of Agreement; Counterparts...............................................131

Section 11.03. Limitation on Rights of Certificateholders...........................................131

Section 11.04. Governing Law........................................................................132

Section 11.05. Notices..............................................................................132

Section 11.06. Severability of Provisions...........................................................133

Section 11.07. Successors and Assigns...............................................................133

Section 11.08. Article and Section Headings.........................................................133

Section 11.09. Notice to Rating Agencies............................................................133

</TABLE>

<PAGE>

Signatures

Acknowledgments

Exhibit A Form of Class A Certificate

Exhibit B-1 Form of Class [M][B] Certificate

Exhibit B-2 Form of Class C Certificate

Exhibit B-3 Form of Class P Certificate

Exhibit B-4 Form of Class R Certificate

Exhibit B-5 Form of Class R-X Certificate

Exhibit C Form of Custodian Initial Certification

Exhibit D Form of Custodian Final Certification

Exhibit E Form of Remittance Report

Exhibit F-1 Request for Release

Exhibit F-2 Request for Release for Mortgage Loans Paid in Full

Exhibit G-1 Form of Investor Representation Letter

Exhibit G-2 Form of Transferor Representation Letter

Exhibit G-3 Form of Rule 144A Investment Representation

Exhibit G-4 Transferor Certificate for Transfers of Residual Certificates

Exhibit G-5 Transfer Affidavit and Agreement for Transfers of Residual

Certificates

Exhibit H Mortgage Loan Schedule

Exhibit I Seller Representations and Warranties

Exhibit J Form of Notice Under Section 3.24

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)

<PAGE>

This Pooling and Servicing Agreement, dated and effective as of

December 31, 2004, is entered into among Impac Secured Assets Corp., as company

(the "Company"), Impac Funding Corporation, as master servicer (the "Master

Servicer"), and Wells Fargo Bank, N.A., as trustee (the "Trustee").

PRELIMINARY STATEMENT:

The Company intends to sell pass-through certificates (collectively,

the "Certificates"), to be issued hereunder in multiple classes, which in the

aggregate will evidence the entire beneficial ownership interest in the Trust

Fund created hereunder. The Certificates will consist of fifteen classes of

certificates, designated as (i) the Class 1-A-1 Certificates, (ii) the Class

1-A-2 Certificates, (iii) the Class 1-A-3 Certificates, (iv) the Class 2-A-1

Certificates, (v) the Class 2-A-2 Certificates,(vi) the Class M-1 Certificates,

(vii) the Class M-2 Certificates, (viii) the Class M-3 Certificates, (ix) the

Class M-4 Certificates, (x) the Class M-5 Certificates, (xi) the Class B

Certificates, (xii) the Class P Certificates, (xiii) the Class C Certificates,

(xiv) the Class R Certificates and (xv) the Class R-X Certificates.

REMIC 1

-------

As provided herein, the Trustee will elect to treat the segregated pool

of assets consisting of the Mortgage Loans and certain other related assets

(other than the Net WAC Shortfall Reserve Fund) subject to this Agreement as 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 be the sole class of

"residual interests" in REMIC I for purposes of the REMIC Provisions (as defined

herein). None of the REMIC 1 Regular Interests will be certificated. 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 1 created hereunder:

<PAGE>

<TABLE>

Uncertificated REMIC 1 Initial Uncertificated Assumed Final

Designation Pass-Through Rate Principal Balance Maturity Date(1)

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

AA Variable(2) $ 490,015,427.40 February 25, 2035

1-A-1 Variable(2) $ 1,219,425.00 February 25, 2035

1-A-2 Variable(2) $ 519,865.00 February 25, 2035

1-A-3 Variable(2) $ 445,860.00 February 25, 2035

2-A-1 Variable(2) $ 1,931,995.00 February 25, 2035

2-A-2 Variable(2) $ 483,000.00 February 25, 2035

M-1 Variable(2) $ 75,000.00 February 25, 2035

M-2 Variable(2) $ 62,500.00 February 25, 2035

M-3 Variable(2) $ 50,000.00 February 25, 2035

M-4 Variable(2) $ 50,000.00 February 25, 2035

M-5 Variable(2) $ 75,005.00 February 25, 2035

B Variable(2) $ 62,505.00 February 25, 2035

ZZ Variable(2) $ 5,025,159.84 February 25, 2035

1A Variable(2) $ 3,800.18 February 25, 2035

1B Variable(2) $ 47,503.18 February 25, 2035

2A Variable(2) $ 4,200.07 February 25, 2035

2B Variable(2) $ 52,499.97 February 25, 2035

XX Variable(2) $ 499,907,738.85 February 25, 2035

P 0.00% $ 100.00 February 25, 2035

</TABLE>

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

(1) 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:

<PAGE>

<TABLE>

Initial Certificate Assumed Final

Class Designation Principal Balance Pass-Through Rate Maturity Date(1)

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

Class 1-A-1 $ 243,885,000.00 Variable(2) February 25, 2035

Class 1-A-2 $ 103,973,000.00 Variable(2) February 25, 2035

Class 1-A-3 $ 89,172,000.00 Variable(2) February 25, 2035

Class 2-A-1 $ 386,399,000.00 Variable(2) February 25, 2035

Class 2-A-2 $ 96,600,000.00 Variable(2) February 25, 2035

Class M-1 $ 15,000,000.00 Variable(2) February 25, 2035

Class M-2 $ 12,500,000.00 Variable(2) February 25, 2035

Class M-3 $ 10,000,000.00 Variable(2) February 25, 2035

Class M-4 $ 10,000,000.00 Variable(2) February 25, 2035

Class M-5 $ 15,001,000.00 Variable(2) February 25, 2035

Class B $ 12,501,000.00 Variable(2) February 25, 2035

Class C Interest $ 5,000,484.49 Variable(3) February 25, 2035

Class P Interest $ 100.00 N/A(4) February 25, 2035

</TABLE>

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

(1) 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 Interest will accrue interest at its variable Pass-Through

Rate on the Uncertificated Notional Balance of the Class C Interest

outstanding from time to time which shall equal the Uncertificated

Principal Balance of the REMIC 1 Regular Interests (other than REMIC 1

Regular Interest P). The Class C Interest will not accrue interest on

its Certificate Principal Balance.

(4) The Class P Interest is not entitled to distributions in respect of

interest.

REMIC 3

-------

As provided herein, the Trustee shall make an election to treat the

segregated pool of assets consisting of the Class C Interest as a REMIC for

federal income tax purposes, and such segregated pool of assets will be

designated as "REMIC 3." The Class R-3 Interest represents the sole class of

"residual interests" in REMIC 3 for purposes of the REMIC Provisions.

The following table sets forth (or describes) the Class designation,

Pass-Through Rate and Initial Certificate Principal Balance for the indicated

Class of Certificates that represents a "regular interest" in REMIC 3 created

hereunder:

<TABLE>

Initial Certificate Assumed Final

Class Designation Principal Balance Pass-Through Rate Maturity Date(1)

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

Class C Certificates $5,000,484.49 (2) February 25, 2035

</TABLE>

<PAGE>

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

(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury

regulations, the Distribution Date immediately following the maturity

date for the Mortgage Loan with the latest maturity date has been

designated as the "latest possible maturity date" for the Class C

Certificates.

(2) The Class C Certificates will receive 100% of amounts received in

respect of the Class C Interest.

REMIC 4

As provided herein, the Trustee shall make an election to treat the

segregated pool of assets consisting of the Class P Interest as a REMIC for

federal income tax purposes, and such segregated pool of assets will be

designated as "REMIC 4." The Class R-4 Interest represents the sole class of

"residual interests" in REMIC 4 for purposes of the REMIC Provisions.

The following table sets forth (or describes) the Class designation,

Pass-Through Rate and Initial Certificate Principal Balance for the indicated

Class of Certificates that represents a "regular interest" in REMIC 4 created

hereunder:

<TABLE>

Initial Certificate Assumed Final

Class Designation Principal Balance Pass-Through Rate Maturity Date(1)

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

Class P Certificates $100.00 (2) February 25, 2035

</TABLE>

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

(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury

regulations, the Distribution Date immediately following the maturity

date for the Mortgage Loan with the latest maturity date has been

designated as the "latest possible maturity date" for the Class P

Certificates.

(2) The Class P Certificates will receive 100% of amounts received in

respect of the Class P Interest.

<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, Class M and Class B 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, Class R and Class R-X Certificates do not accrue interest.

"Accrual Period": With respect to each Class of Certificates and the

Distribution Date in February 2005, the period commencing the Closing Date and

ending on the day preceding the Distribution Date in February 2005, and (ii)

with respect to any Distribution Date after the Distribution Date in February

2005, 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.

"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 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.

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

hereof.

"Allocated Realized Loss Amount": With respect to any Distribution Date

and the Class 1-A Certificates, Class 2-A Certificates and any Class of

Mezzanine Certificates, an amount equal to the sum of any Realized Loss

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.

<PAGE>

"Available Distribution Amount": With respect to any Distribution Date,

an amount equal to (a) the sum of (i) the balance on deposit in the Custodial

Account as of the close of business on the Business Day following 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 and (iv) the aggregate amount required

to be deposited by the Master Servicer pursuant to Section 4.01(j), reduced by

(b) the sum, as of the close of business on the Business Day following 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.

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

"Basic Principal Distribution Amount": With respect to any Distribution

Date and each Loan Group, the related Principal Remittance Amount.

"Book-Entry Certificate": Any Certificate registered in the name of the

Depository or its nominee.

"Business Day": Any day other than a Saturday, a Sunday or a day on

which banking institutions in California or New York (and such other state or

states in which the Custodial Account or the Certificate Account are at the time

located) or in the city in which the Corporate Trust Office of the Trustee is

located are authorized or obligated by law or executive order to close.

"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, Class R or Class R-X

Certificate.

"Certificate Account": The trust account or accounts created and

maintained pursuant to Section 4.01, which shall be entitled Wells Fargo Bank,

N.A., in trust for registered holders of Impac Secured Assets Corp., Mortgage

Pass-Through Certificates, Series 2004-4, and which account or accounts must

each be an Eligible Account.

<PAGE>

"Certificate Account Deposit Date": With respect to any Distribution

Date, the 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 1-A-1, Class 1-A-2,

Class 1-A-3, Class 2-A-1, Class 2-A-2, Class M-1, Class M-2, Class M-3, Class

M-4, Class M-5 and Class B Certificates, on any Distribution Date prior to the

Step-Up Date, 0.17%, 0.27%, 0.43%, 0.30%, 0.36%, 0.51%, 0.54%, 0.60%, 0.95%,

1.10% and 1.80% per annum, respectively, and on any Distribution Date on and

after the Step-Up Date, 0.340%, 0.540%, 0.860%, 0.600%, 0.720%, 0.765%, 0.810%,

0.900%, 1.425%, 1.625% and 2.700% 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 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 Class 1-A Certificate, Class 2-A Certificate or Mezzanine Certificate,

any reductions in the Certificate Principal Balance thereof deemed to have

occurred in connection with allocations of Realized Losses pursuant to Section

4.05. 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.

<PAGE>

"Class 1-A Corridor Contract": The Corridor Contract between the Trust

Fund and the Corridor Contract Provider for the benefit of the Class 1-A

Certificates.

"Class 1-A Net WAC Rate": With respect to the Class 1-A Certificates, a

per annum rate equal to the weighted average of the Net Mortgage Rates of the

Group 1 Loans as of the close of business on the first day of the calendar month

preceding the month in which such Distribution Date occurs, multiplied by a

fraction equal to (x) 30 divided by (y) the number of days in the related

Accrual Period.

"Class 1-A Principal Distribution Amount": For any Distribution Date

will equal the product of (x) the Class A Principal Distribution Target Amount

and (y) a fraction, the numerator of which is the Class 1-A Principal

Distribution Target Amount and the denominator of which is the sum of the Class

1-A Principal Distribution Target Amount and Class 2-A Principal Distribution

Target Amount.

"Class 1-A Principal Distribution Target Amount": For any Distribution

Date will equal the excess of:

(1) the Certificate Principal Balance of the Class 1-A

Certificates immediately prior to such Distribution Date, over

(2) the lesser of (x) 84.00% of the aggregate Stated Principal

Balance of the Group 1 Loans for such Distribution Date after giving effect to

distributions to be made on that Distribution Date and (y) the aggregate Stated

Principal Balance of the Group 1 Loans for such Distribution Date after giving

effect to distributions to be made on that Distribution Date minus 0.50% of the

aggregate Stated Principal Balance of the Group 1 Loans as of the Cut-off Date.

"Class 1-A-1 Certificate": Any one of the Class 1-A-1 Certificates as

designated on the face thereof substantially in the form annexed hereto as

Exhibit A, representing the right to distributions as set forth herein and

therein and evidencing a REMIC Regular Interest in REMIC 2.

"Class 1-A-2 Certificate": Any one of the Class 1-A-2 Certificates as

designated on the face thereof substantially in the form annexed hereto as

Exhibit A, representing the right to distributions as set forth herein and

therein and evidencing a REMIC Regular Interest in REMIC 2.

"Class 1-A-3 Certificate": Any one of the Class 1-A-3 Certificates as

designated on the face thereof substantially in the form annexed hereto as

Exhibit A, representing the right to distributions as set forth herein and

therein and evidencing a REMIC Regular Interest in REMIC 2.

"Class 2-A Certificate": Any Class 2-A-1 Certificate or Class 2-A-2

Certificate.

"Class 2-A Corridor Contract": The Corridor Contract between the Trust

Fund and the Corridor Contract Provider for the benefit of the Class 2-A

Certificates.

<PAGE>

"Class 2-A Net WAC Rate": With respect to the Class 2-A Certificates,

a per annum rate equal to the weighted average of the Net Mortgage Rates of the

Group 2 Loans as of the close of business on the first day of the calendar month

preceding the month in which such Distribution Date occurs, multiplied by a

fraction equal to (x) 30 divided by (y) the number of days in the related

Accrual Period. For any Distribution Date will equal the product of (x) the

Class A Principal Distribution Target Amount and (y) a fraction, the numerator

of which is the Class 2-A Principal Distribution Target Amount and the

denominator of which is the sum of the Class 1-A Principal Distribution Target

Amount and Class 2-A Principal Distribution Target Amount.

"Class 2-A Principal Distribution Amount": For any Distribution Date

will equal the product of (x) the Class A Principal Distribution Target Amount

and (y) a fraction, the numerator of which is the Class 2-A Principal

Distribution Target Amount and the denominator of which is the sum of the Class

1-A Principal Distribution Target Amount and Class 2-A Principal Distribution

Target Amount.

"Class 2-A Principal Distribution Target Amount": For any Distribution

Date will equal the excess of:

(1) the Certificate Principal Balance of the Class 2-A

Certificates immediately prior to such Distribution Date, over

(2) the lesser of (x) 84.00% of the aggregate Stated Principal

Balance of the Group 2 Loans for such Distribution Date after giving effect to

distributions to be made on that Distribution Date and (y) the aggregate Stated

Principal Balance of the Group 2 Loans for such Distribution Date after giving

effect to distributions to be made on that Distribution Date minus 0.50% of the

aggregate Stated Principal Balance of the Group 2 Loans as of the Cut-off Date.

"Class 2-A-1 Certificate": Any one of the Class 2-A-1 Certificates as

designated on the face thereof substantially in the form annexed hereto as

Exhibit A, representing the right to distributions as set forth herein and

therein and evidencing a REMIC Regular Interest in REMIC 2.

"Class 2-A-2 Certificate": Any one of the Class 2-A-2 Certificates as

designated on the face thereof substantially in the form annexed hereto as

Exhibit A, representing the right to distributions as set forth herein and

therein and evidencing a REMIC Regular Interest in REMIC 2.

"Class A Principal Distribution Target Amount": For any Distribution

Date will equal the excess of:

(1) the sum of the Certificate Principal Balances of the Class 1-A

Certificates and Class 2-A Certificates immediately prior to such Distribution

Date, over

(2) the lesser of (x) 84.00% of the aggregate Stated Principal

Balance of the Mortgage Loans for such Distribution Date after giving effect to

distributions to be made on that Distribution Date and (y) the aggregate Stated

Principal Balance of the Mortgage Loans for such Distribution Date after giving

effect to distributions to be made on that Distribution Date minus the

Overcollateralization Floor.

<PAGE>

"Class A Certificate": Any one of the Class 1-A-1, Class 1-A-2, Class

1-A-3, Class 2-A-1 or Class 2-A-2 Certificates.

"Class B Certificate": Any one of the Class B Certificates as

designated on the face thereof substantially in the form annexed hereto as

Exhibit B-1, representing the right to distributions as set forth herein and

therein and evidencing a REMIC Regular Interest in REMIC 2.

"Class B Principal Distribution Amount": For any Distribution Date is

the excess of:

(1) the sum of:

(a) the Certificate Principal Balances of the Class 1-A

Certificates and Class 2-A Certificates (after taking into

account distributions of the Class 1-A Principal Distribution

Amount and Class 2-A Principal Distribution Amount for such

Distribution Date);

(b) the Certificate Principal Balance of the Class M-1

Certificates (after taking into account distributions of the

Class M-1 Principal Distribution Amount for such Distribution

Date) immediately prior to such Distribution Date;

Certificates (after taking into account distributions of the

Class M-2 Principal Distribution Amount for such Distribution

Date) immediately prior to such Distribution Date;

(d) the Certificate Principal Balance of the Class M-3

Certificates (after taking into account distributions of the

Class M-3 Principal Distribution Amount for such Distribution

Date) immediately prior to such Distribution Date;

(e) the Certificate Principal Balance of the Class M-4

Certificates (after taking into account distributions of the

Class M-4 Principal Distribution Amount for such Distribution

Date) immediately prior to such Distribution Date;

(f) the Certificate Principal Balance of the Class M-5

Certificates (after taking into account distributions of the

Class M-5 Principal Distribution Amount for such Distribution

Date) immediately prior to such Distribution Date; and

(g) the Certificate Principal Balance of the Class B

Certificates immediately prior to such Distribution Date

OVER

(2) the lesser of (x) 99.00% of the aggregate Stated Principal

Balance of the Mortgage Loans for such Distribution Date after giving effect to

distributions to be made on that Distribution Date and (y) the aggregate Stated

Principal Balance of the Mortgage Loans after giving effect to distributions to

be made on that Distribution Date minus the Overcollateralization Floor;

<PAGE>

provided, however, that if the Class B Certificates are the only Class of

Certificates outstanding on such Distribution Date the Class B Principal

Distribution Amount shall equal 100% of the Principal Distribution Amount on

such Distribution Date.

"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, representing the right to distributions as set forth herein and

therein and evidencing a REMIC Regular Interest in REMIC 3.

"Class C Interest": An uncertificated interest in the Trust Fund held

by the Trustee on behalf of the Holders of the Class C Certificates, evidencing

a REMIC Regular Interest in REMIC 2 for purposes of the REMIC Provisions.

"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, 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 Distribution Date is

the excess of:

(1) the sum of:

(a) the Certificate Principal Balances of the Class 1-A

Certificates and Class 2-A Certificates (after taking into

account distributions of the Class 1-A Principal Distribution

Amount and Class 2-A Principal Distribution Amount for such

Distribution Date); and

(b) the Certificate Principal Balance of the Class M-1

Certificates immediately prior to such Distribution Date

OVER

(2) the lesser of (x) 87.00% of the aggregate Stated Principal

Balance of the Mortgage Loans for such Distribution Date after giving effect to

distributions to be made on that Distribution Date and (y) the aggregate Stated

Principal Balance of the Mortgage Loans after giving effect to distributions to

be made on that Distribution Date minus the Overcollateralization Floor;

provided, however, that if the Class M-1 Certificates are the only Class of

Certificates outstanding on such Distribution Date the Class M-1 Principal

Distribution Amount shall equal 100% of the Principal Distribution Amount on

such Distribution Date.

"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, 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 Distribution Date is

the excess of:

<PAGE>

(1) the sum of:

(a) the Certificate Principal Balances of the Class 1-A

Certificates and Class 2-A Certificates (after taking into

account distributions of the Class 1-A Principal Distribution

Amount and Class 2-A Principal Distribution Amount for such

Distribution Date);

(b) the Certificate Principal Balance of the Class M-1

Certificates (after taking into account distributions of the

Class M-1 Principal Distribution Amount for such Distribution

Date) immediately prior to such Distribution Date; and

Certificates immediately prior to such Distribution Date

OVER

(2) the lesser of (x) 89.50% of the aggregate Stated Principal

Balance of the Mortgage Loans for such Distribution Date after giving effect to

distributions to be made on that Distribution Date and (y) the aggregate Stated

Principal Balance of the Mortgage Loans after giving effect to distributions to

be made on that Distribution Date minus the Overcollateralization Floor;

provided, however, that if the Class M-2 Certificates are the only Class of

Certificates outstanding on such Distribution Date the Class M-2 Principal

Distribution Amount shall equal 100% of the Principal Distribution Amount on

such Distribution Date.

"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, 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 Distribution Date is

the excess of:

(1) the sum of:

(a) the Certificate Principal Balances of the Class 1-A

Certificates and Class 2-A Certificates (after taking into

account distributions of the Class 1-A Principal Distribution

Amount and Class 2-A Principal Distribution Amount for such

Distribution Date);

(b) the Certificate Principal Balance of the Class M-1

Certificates (after taking into account distributions of the

Class M-1 Principal Distribution Amount for such Distribution

Date) immediately prior to such Distribution Date;

Certificates (after taking into account distributions of the

Class M-2 Principal Distribution Amount for such Distribution

Date) immediately prior to such Distribution Date; and

<PAGE>

(d) the Certificate Principal Balance of the Class M-3

Certificates immediately prior to such Distribution Date

OVER

(2) the lesser of (x) 91.50% of the aggregate Stated Principal

Balance of the Mortgage Loans for such Distribution Date after giving effect to

distributions to be made on that Distribution Date and (y) the aggregate Stated

Principal Balance of the Mortgage Loans after giving effect to distributions to

be made on that Distribution Date minus the Overcollateralization Floor;

provided, however, that if the Class M-3 Certificates are the only Class of

Certificates outstanding on such Distribution Date the Class M-3 Principal

Distribution Amount shall equal 100% of the Principal Distribution Amount on

such Distribution Date.

"Class M-4 Certificate": Any one of the Class M-4 Certificates as

designated on the face thereof substantially in the form annexed hereto as

Exhibit B-1, representing the right to distributions as set forth herein and

therein and evidencing a REMIC Regular Interest in REMIC 2.

"Class M-4 Principal Distribution Amount": For any Distribution Date is

the excess of:

(1) the sum of:

(a) the Certificate Principal Balances of the Class 1-A

Certificates and Class 2-A Certificates (after taking into

account distributions of the Class 1-A Principal Distribution

Amount and Class 2-A Principal Distribution Amount for such

Distribution Date);

(b) the Certificate Principal Balance of the Class M-1

Certificates (after taking into account distributions of the

Class M-1 Principal Distribution Amount for such Distribution

Date) immediately prior to such Distribution Date;

Certificates (after taking into account distributions of the

Class M-2 Principal Distribution Amount for such Distribution

Date) immediately prior to such Distribution Date;

(d) the Certificate Principal Balance of the Class M-3

Certificates (after taking into account distributions of the

Class M-3 Principal Distribution Amount for such Distribution

Date) immediately prior to such Distribution Date; and

(e) the Certificate Principal Balance of the Class M-4

Certificates immediately prior to such Distribution Date

OVER

(2) the lesser of (x) 93.50% of the aggregate Stated Principal

Balance of the Mortgage Loans for such Distribution Date after giving effect to

distributions to be made on that

<PAGE>

Distribution Date and (y) the aggregate Stated Principal Balance of the Mortgage

Loans after giving effect to distributions to be made on that Distribution Date

minus (ii) the Overcollateralization Floor;

provided, however, that if the Class M-4 Certificates are the only Class of

Certificates outstanding on such Distribution Date the Class M-4 Principal

Distribution Amount shall equal 100% of the Principal Distribution Amount on

such Distribution Date.

"Class M-5 Certificate": Any one of the Class M-5 Certificates as

designated on the face thereof substantially in the form annexed hereto as

Exhibit B-1, representing the right to distributions as set forth herein and

therein and evidencing a REMIC Regular Interest in REMIC 2.

"Class M-5 Principal Distribution Amount": For any Distribution Date is

the excess of:

(1) the sum of:

(a) the Certificate Principal Balances of the Class 1-A

Certificates and Class 2-A Certificates (after taking into

account distributions of the Class 1-A Principal Distribution

Amount and Class 2-A Principal Distribution Amount for such

Distribution Date);

(b) the Certificate Principal Balance of the Class M-1

Certificates (after taking into account distributions of the

Class M-1 Principal Distribution Amount for such Distribution

Date) immediately prior to such Distribution Date;

Certificates (after taking into account distributions of the

Class M-2 Principal Distribution Amount for such Distribution

Date) immediately prior to such Distribution Date;

(d) the Certificate Principal Balance of the Class M-3

Certificates (after taking into account distributions of the

Class M-3 Principal Distribution Amount for such Distribution

Date) immediately prior to such Distribution Date;

(e) the Certificate Principal Balance of the Class M-4

Certificates (after taking into account distributions of the

Class M-4 Principal Distribution Amount for such Distribution

Date) immediately prior to such Distribution Date; and

(f) the Certificate Principal Balance of the Class M-5

Certificates immediately prior to such Distribution Date

OVER

(2) the lesser of (x) 96.50% of the aggregate Stated Principal

Balance of the Mortgage Loans for such Distribution Date after giving effect to

distributions to be made on that Distribution Date and (y) the aggregate Stated

Principal Balance of the Mortgage Loans after giving effect to distributions to

be made on that Distribution Date minus (ii) the Overcollateralization Floor;

<PAGE>

provided, however, that if the Class M-5 Certificates are the only Class of

Certificates outstanding on such Distribution Date the Class M-5 Principal

Distribution Amount shall equal 100% of the Principal Distribution Amount on

such Distribution Date.

"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, representing the right to distributions as set forth herein and

therein and evidencing a REMIC Regular Interest in REMIC 4.

"Class P Interest": An uncertificated interest in the Trust Fund held

by the Trustee on behalf of the Holders of the Class P Certificates, evidencing

a REMIC Regular Interest in REMIC 2 for purposes of the REMIC Provisions.

"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, evidencing the ownership of the Class R-1 Interest and Class R-2

Interest.

"Class R-X Certificate": Any one of the Class R-X Certificates as

designated on the face thereof substantially in the form annexed hereto as

Exhibit B-5, evidencing the ownership of the Class R-3 Interest and Class R-4

Interest.

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

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

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

"Class R-4 Interest": The uncertificated Residual Interest in REMIC 4.

"Closing Date": December 31, 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.

"Compensating Interest": With respect to any Distribution Date and the

Wells Fargo Mortgage Loans, 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. With

<PAGE>

respect to any Distribution Date and the GMAC Mortgage Loans, an amount equal to

Prepayment Interest Shortfalls resulting from Principal Prepayments during the

related Prepayment Period, but not more than (i) the Subservicing Fees for the

immediately preceding Due Period multiplied by (ii) 50.00%.

"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 (A) for Certificate transfer and surrender

purposes, Wells Fargo Bank, N.A., Sixth Street and Marquette Avenue,

Minneapolis, Minnesota 55479, Attention: Corporate Trust Services -- ISAC

2004-4, and (B) for all other purposes, Wells Fargo Bank, N.A., 9062 Old

Annapolis Road, Columbia, Maryland 21045, Attention: Client Manager -- ISAC

2004-4, or at such other address as the Trustee may designate from time to time

by notice to the Certificateholders, the Depositor and the Master Servicer.

"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": Any of the Class 1-A Corridor Contract, Class 2-A

Corridor Contract or the Mezzanine Corridor Contract.

"Corridor Contract Provider": Bear Stearns Financial Products, Inc.

"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.

"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 (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.

"Custodial Account": The custodial account or accounts created and

maintained pursuant to Section 3.10 in the name of a depository institution, as

custodian for the Holders of the Certificates. Any such account or accounts

shall be an Eligible Account.

"Custodial Agreement": The custodial agreement, dated as December 31,

2004, among the Depositor, the Master Servicer, the Trustee and Deutsche Bank

National Trust Company as Custodian relating to the Mortgage Loans identified in

such custodial agreement.

<PAGE>

"Custodian": Deutsche Bank National Trust Company.

"Cut-off Date": With respect to the Mortgage Loans, January 1, 2005.

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 Aggregate Stated Principal Balance of the

Mortgage Loans as of the Cut-off Date.

"Defaulted Mortgage Loan" means any Mortgage Loan as to which the

Mortgagor has failed to make unexcused three or more consecutive scheduled

Monthly Payments.

"Deficiency Amount": With respect to each Distribution Date prior to

the Final Scheduled Distribution Date and the Class 2-A Certificates, an amount

equal to the sum of (i) the excess, if any, of (a) the aggregate amount of the

Monthly Interest Distributable Amount on the Class 2-A Certificates for that

Distribution Date over (b) the related Available Distribution Amount for that

Distribution Date, and (ii) the excess, if any of (a) the Certificate Principal

Balance of the Class 2-A Certificates over the aggregate Stated Principal

Balance of the Group 2 Loans immediately following such Distribution Date. With

respect to the Final Scheduled Distribution Date and the Class 2-A Certificates,

an amount equal to the sum of (i) the excess, if any, of (a) the aggregate

amount of the Monthly Interest Distributable Amount on the Class 2-A

Certificates for that Distribution Date over (b) the related Available

Distribution Amount for that Distribution Date and (ii) the excess, if any, of

the Certificate Principal Balance of all outstanding Class 2-A Certificates due

on such Final Scheduled Distribution Date to the extent not paid from the

related Available Distribution Amount on that Distribution Date. For the Class

2-A Certificates and any date on which the acceleration of the Certificates has

been directed or consented to by the Certificateholders pursuant to the

Agreement, the amount required to pay the Certificate Principal Balance of the

Class 2-A Certificates in full, together with accrued and unpaid interest

thereon through the date of payment of the Class 2-A Certificates.

"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.

<PAGE>

"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 5th Business Day following the 15th day (or

if such 5th day is not a Business Day, the Business Day immediately preceding

such 5th day) of the month of the related Distribution Date.

"Disqualified Organization": Any organization defined as a

"disqualified organization" under Section 860E(e)(5) of the Code, which includes

any of the following: (i) the United States, any State or political subdivision

thereof, any possession of the United States, or any agency or instrumentality

of any of the foregoing (other than an instrumentality which is a corporation if

all of its activities are subject to tax and, except for the Freddie Mac, a

majority of its board of directors is not selected by such governmental unit),

(ii) a foreign government, any international organization, or any agency or

instrumentality of any of the foregoing, (iii) any organization (other than

certain farmers' cooperatives described in Section 521 of the Code) which is

exempt from the tax imposed by Chapter 1 of the Code (including the tax imposed

by Section 511 of the Code on unrelated business taxable income), (iv) rural

electric and telephone cooperatives described in Section 1381(a)(2)(C) of the

Code and (v) any other Person so designated by the Trustee based upon an Opinion

of Counsel that the holding of an Ownership Interest in a Class R Certificate or

Class R-X Certificate by such Person may cause REMIC 1, REMIC 2, REMIC 3 or

REMIC 4 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 or Class R-X Certificate to such

Person. The terms "United States", "State" and "international organization"

shall have the meanings set forth in Section 7701 of the Code or successor

provisions.

"Distribution Date": The 25th day of any month, or if such 25th day is

not a Business Day, the Business Day immediately following such 25th day,

commencing in February 2005.

"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

<PAGE>

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, Insurance 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.

"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 and Loan Group, the lesser of (x) the Overcollateralization Deficiency

Amount for such Distribution Date multiplied by a fraction, the numerator of

which is the Principal Remittance Amount for such Loan Group and the denominator

of which is the Principal Remittance Amount for both Loan Groups and (y) the

Loan Group Excess Cashflow Allocation Amount for such Distribution Date.

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

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

"Final Scheduled Distribution Date": The Distribution Date occurring in

November 2034.

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

"GMAC": GMAC Mortgage Corporation, or an Affiliate thereof.

"GMAC Mortgage Loans": The Mortgage Loans that are sub-serviced by

GMAC.

"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 this

Agreement.

"Group 1 Loan": A Mortgage Loan in Loan Group 1 as indicated on the

Mortgage Loan Schedule.

"Group 2 Loan": A Mortgage Loan in Loan Group 2 as indicated on the

Mortgage Loan Schedule.

<PAGE>

"Group 2 Sequential Trigger Event": A trigger event in effect on any

Distribution Date if, before the 37th Distribution Date, the aggregate amount of

Realized Losses incurred since the Cut-off Date through the last day of the

related Prepayment Period divided by the aggregate Stated Principal Balance of

the Mortgage Loans as of the Cut-off Date exceeds 3.5% or if, on or after the

37th Distribution Date, a Trigger Event is in effect.

"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 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 Notional Amount": With respect to the Class C Certificate, the

aggregate of the initial Uncertificated Principal Balance of the REMIC 1 Regular

Interests, or with respect to any single Certificate, the Initial Notional

Amount as stated on the face thereof.

"Insurance Policy": With respect to any Mortgage Loan, any insurance

policy (including a Radian Lender-Paid PMI Policy) which is required to be

maintained from time to time under this Agreement in respect of such Mortgage

Loan.

"Insurance Proceeds": Proceeds paid in respect of the Mortgage Loans

pursuant to any Primary Hazard Insurance Policy, any title insurance policy or

any other insurance policy covering a Mortgage Loan, to the extent such proceeds

are not applied to the restoration of the related Mortgaged Property or released

to the Mortgagor in accordance with the procedures that the Master Servicer

would follow in servicing mortgage loans held for its own account.

"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 Certificates and Class M 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.

<PAGE>

"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.

"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 Group Excess Cashflow Allocation Amount": With respect to any

Distribution Date and Loan Group, the product of Net Monthly Excess Cashflow for

such Distribution Date multiplied by a fraction, the numerator of which is the

Principal Remittance Amount for such Loan Group for such Distribution Date and

the denominator of which is the sum of the Principal Remittance Amount for both

Loan Groups.

"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 Interest 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

1-A-1, REMIC 1 Regular Interest 1-A-2, REMIC 1 Regular Interest 1-A-3, REMIC 1

Regular Interest 2-A-1, REMIC 1 Regular Interest 2-A-2, REMIC 1 Regular Interest

M-1, REMIC 1 Regular Interest M-2, REMIC 1 Regular Interest M-3, REMIC 1 Regular

Interest M-4, REMIC 1 Regular Interest M-5, REMIC 1 Regular Interest B and REMIC

1 Regular Interest ZZ, with the rate on REMIC 1 Regular Interest 1-A-1 subject

to a cap equal to the lesser of (x) LIBOR plus 0.17% per annum prior to the

Step-Up Date and 0.34% on or after the Step-Up Date and (y) the related Net WAC

Rate for the purpose of this

<PAGE>

calculation; with the rate on REMIC 1 Regular Interest 1-A-2 subject to a cap

equal to the lesser of (x) LIBOR plus 0.27% per annum prior to the Step-Up Date

and 0.54% on or after the Step-Up Date and (y) the related Net WAC Rate for the

purpose of this calculation; with the rate on REMIC 1 Regular Interest 1-A-3

subject to a cap equal to the lesser of (x) LIBOR plus 0.43% per annum prior to

the Step-Up Date and 0.86% on or after the Step-Up Date and (y) the related Net

WAC Rate for the purpose of this calculation; with the rate on REMIC 1 Regular

Interest 2-A-1 subject to a cap equal to the lesser of (x) LIBOR plus 0.30% per

annum prior to the Step-Up Date and 0.60% on or after the Step-Up Date and (y)

the related Net WAC Rate for the purpose of this calculation; with the rate on

REMIC 1 Regular Interest 2-A-2 subject to a cap equal to the lesser of (x) LIBOR

plus 0.36% per annum prior to the Step-Up Date and 0.72% on or after the Step-Up

Date and (y) the related 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) LIBOR plus 0.51% per annum prior to the Step-Up Date and 0.765% on or

after the Step-Up Date and (y) the related Net WAC Rate for the purpose of this

calculation; with the rate on REMIC 1 Regular Interest M-2 subject to a cap

equal to the lesser of (x) LIBOR plus 0.54% per annum prior to the Step-Up Date

and 0.810% on or after the Step-Up Date and (y) the related Net WAC Rate for the

purpose of this calculation; with the rate on REMIC 1 Regular Interest M-3

subject to a cap equal to the lesser of (x) LIBOR plus 0.60% per annum prior to

the Step-Up Date and 0.90% on or after the Step-Up Date and (y) the related Net

WAC Rate for the purpose of this calculation; with the rate on REMIC 1 Regular

Interest M-4 subject to a cap equal to the lesser of (x) LIBOR plus .95% per

annum and (y) the related Net WAC Rate for the purpose of this calculation; with

the rate on REMIC 1 Regular Interest M-5 subject to a cap equal to the lesser of

(x) LIBOR plus 1.10% per annum and (y) the related Net WAC Rate for the purpose

of this calculation; with the rate on REMIC 1 Regular Interest B subject to a

cap equal to the lesser of (x) LIBOR plus 1.80% per annum and (y) the related

Net WAC Rate for the purpose of this calculation; 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 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 part or 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%.

<PAGE>

"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

1-A-1, with the rate on REMIC 1 Regular Interest 1-A-1 subject to a cap equal to

the lesser of (x) LIBOR plus 0.17% per annum and (y) the related Net WAC Rate,

(II) Uncertificated Accrued Interest on REMIC 1 Regular Interest 1-A-2 with the

rate on REMIC 1 Regular Interest 1-A-2 subject to a cap equal to the lesser of

(x) LIBOR plus 0.27% per annum and (y) the Net WAC Rate, (III) Uncertificated

Accrued Interest on REMIC 1 Regular Interest 1-A-3, with the rate on REMIC 1

Regular Interest 1-A-3 subject to a cap equal to the lesser of (x) LIBOR plus

0.43% per annum and (y) the related Net WAC Rate, (IV) Uncertificated Accrued

Interest on REMIC 1 Regular Interest 2-A-1, with the rate on REMIC 1 Regular

Interest 2-A-1 subject to a cap equal to the lesser of (x) LIBOR plus 0.30% per

annum and (y) the related Net WAC Rate, (V) Uncertificated Accrued Interest on

REMIC 1 Regular Interest 2-A-2, with the rate on REMIC 1 Regular Interest 2-A-2

subject to a cap equal to the lesser of (x) LIBOR plus 0.36% per annum and (y)

the related Net WAC Rate, (VI) 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) LIBOR plus 0.51% per annum and (y) the related

Net WAC Rate, (VII) 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 0.54% per annum and (y) the related Net WAC Rate,

(VIII) 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 0.60% per annum and (y) the related Net WAC Rate, (IX) Uncertificated

Accrued Interest on REMIC 1 Regular Interest M-4, with the rate on REMIC 1

Regular Interest M-4 subject to a cap equal to the lesser of (x) LIBOR plus the

0.95% per annum prior to the Step-Up Date and 1.425% on or after the Step-Up

Date and (y) the related Net WAC Rate, (X) Uncertificated Accrued Interest on

REMIC 1 Regular Interest M-5, with the rate on REMIC 1 Regular Interest M-5

subject to a cap equal to the lesser of (x) LIBOR plus 1.10% per annum prior to

the Step-Up Date and 1.650% on or after the Step-Up Date and (y) the related Net

WAC Rate, and (XI) Uncertificated Accrued Interest on REMIC 1 Regular Interest

B, with the rate on REMIC 1 Regular Interest B subject to a cap equal to the

lesser of (x) LIBOR plus 1.80% per annum prior to the Step-Up Date and 2.70% on

or after the Step-Up Date and (y) the related 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, Class M-2, Class M-3, Class

M-4, Class M-5 or Class B Certificate.

"Mezzanine Corridor Contract": The Corridor Contract between the Trust

Fund and the Corridor Contract Provider for the benefit of the Mezzanine

Certificates.

<PAGE>

"Mezzanine Net WAC Rate": With respect to the Mezzanine Certificates, a

per annum rate equal to the weighted average (weighted in proportion to the

results of subtracting from the aggregate principal balance of each Loan Group

the aggregate Certificate Principal Balance of the related Class A Certificates)

of (i) the weighted average of the Net Mortgage Rates of the Group 1 Loans and

(ii) the weighted average of the Net Mortgage Rates of the Group 2 Loans, in

each case, as of the first day of the month preceding the month in which the

distribution occurs.

"MIN": The Mortgage Identification Number for Mortgage Loans registered

with MERS on 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 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 any 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 and the Custodial

Agreement; provided, that whenever the term "Mortgage File" is used to refer to

documents actually received by the Custodian, 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

<PAGE>

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 December 31, 2004, among Impac Funding Corporation, as

seller, Impac Mortgage Holdings, Inc., as guarantor, and the Company as

purchaser, and all amendments thereof and supplements thereto.

"Mortgage Loan Schedule": As of any date of determination, the schedule

of Mortgage Loans included in the Trust Fund. The schedule of Mortgage Loans

with accompanying information transferred on the Closing Date to the Trustee as

part of the Trust Fund for the Certificates, attached hereto as Exhibit H, 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) the original term to maturity;

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

(v) the first payment date;

(vi) the applicable Loan Group;

(vii) the type of Mortgaged Property;

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

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

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

(xi) the occupancy status;

(xii) the purpose of the Mortgage Loan;

(xiii) the Collateral Value of the Mortgaged Property;

(xiv) the original term to maturity;

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

(xvi) the Master Servicing Fee Rate;

(xvii) the Sub-Servicing Fee Rate;

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

<PAGE>

(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;

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

(xxiii) the Index and the Gross Margin; and

(xxiv) the Adjustment Date frequency and Distribution Date frequency.

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 Monthly Excess Cashflow": With respect to each Distribution Date,

the sum of (a) (x) the Available Distribution Amount 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 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 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.

<PAGE>

"Net WAC Rate": Any of the Class 1-A Net WAC Rate, Class 2-A Net WAC

Rate or Mezzanine Net WAC Rate.

"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.

"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, REMIC 2,

REMIC 3 or REMIC 4 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

<PAGE>

(i) is in fact independent of the Company and the Master Servicer, (ii) does not

have any direct financial interest or any material indirect financial interest

in the Company or the Master Servicer or in an affiliate of either and (iii) is

not connected with the Company or the Master Servicer as an officer, employee,

director or person performing similar functions.

"Optional Termination Date": The first Distribution Date on which the

Majority Class C Certificateholder may opt to terminate the Trust Fund pursuant

to Section 9.01.

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

"Outstanding Mortgage Loan": As to any Due Date, a Mortgage Loan

(including an REO Property) which was not the subject of a Principal Prepayment

in Full, Cash Liquidation or REO Disposition and which was not purchased prior

to such Due Date pursuant to Sections 2.02, 2.04 or 3.14.

"Overcollateralization Deficiency Amount": With respect to any

Distribution Date, the amount, if any, by which the Overcollateralization Target

Amount exceeds the Overcollateralized Amount on such Distribution Date (after

giving effect to distributions in respect of the Basic Principal Distribution

Amount on such Distribution Date).

"Overcollateralization Floor": With respect to any Distribution Date,

0.50% of the Cut-off Date Balance.

"Overcollateralization Target Amount": With respect to any Distribution

Date, 0.50% of the Cut-off Date Balance.

"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).

"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), 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).

"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

<PAGE>

(i) the Class 1-A Certificates, the least of (x) One-Month LIBOR

plus the related Certificate Margin and (y) the Class 1-A Net WAC Rate and (z)

11.25% per annum;

(ii) the Class 2-A Certificates, the least of (x) One-Month LIBOR

plus the related Certificate Margin and (y) the Class 2-A Net WAC Rate and (z)

11.25% per annum;

(iii) the Mezzanine Certificates, the lesser of (x) One-Month LIBOR

plus the related Certificate Margin and (y) the Mezzanine Net WAC Rate and (z)

11.25% per annum; and

(iv) the Class C Interest, a per annum rate equal to the percentage

equivalent of a fraction, the numerator of which is (x) the sum of the amounts

calculated pursuant to clauses (A) through (M) below, and the denominator of

which is (y) the aggregate of the Uncertificated Principal Balances of the REMIC

1 Regular Interests. For purposes of calculating the Pass-Through Rate for the

Class C Interest, 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 1-A-1 minus the Marker Rate, applied to an amount equal

to the Uncertificated Principal Balance of REMIC 1 Regular Interest 1-A-1;

REMIC 1 Regular Interest 1-A-2 minus the Marker Rate, applied to an amount equal

to the Uncertificated Principal Balance of REMIC 1 Regular Interest 1-A-2;

(D) the Uncertificated REMIC 1 Pass-Through Rate for

REMIC 1 Regular Interest 1-A-3 minus the Marker Rate, applied to an amount equal

to the Uncertificated Principal Balance of REMIC 1 Regular Interest 1-A-3;

(E) the Uncertificated REMIC 1 Pass-Through Rate for

REMIC 1 Regular Interest 2-A-1 minus the Marker Rate, applied to an amount equal

to the Uncertificated Principal Balance of REMIC 1 Regular Interest 2-A-1;

(F) the Uncertificated REMIC 1 Pass-Through Rate for

REMIC 1 Regular Interest 2-A-2 minus the Marker Rate, applied to an amount equal

to the Uncertificated Principal Balance of REMIC 1 Regular Interest 2-A-2;

(G) 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 REMIC 1 Regular Interest M-1;

(H) 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;

<PAGE>

(I) 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;

(J) the Uncertificated REMIC 1 Pass-Through Rate for

REMIC 1 Regular Interest M-4 minus the Marker Rate, applied to an amount equal

to the Uncertificated Principal Balance of REMIC 1 Regular Interest M-4;

(K) the Uncertificated REMIC 1 Pass-Through Rate for

REMIC 1 Regular Interest M-5 minus the Marker Rate, applied to an amount equal

to the Uncertificated Principal Balance of REMIC 1 Regular Interest M-5;

(L) the Uncertificated REMIC 1 Pass-Through Rate for

REMIC 1 Regular Interest B minus the Marker Rate, applied to an amount equal to

the Uncertificated Principal Balance of REMIC 1 Regular Interest B; and

(M) 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.

With respect to the Class C Certificates, 100% of the amounts

distributable to the Class C Interest.

The Class P, Class R and Class R-X 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 or Class R-X 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

<PAGE>

remaining maturity of more than 30 days) denominated in United States dollars of

any U.S. depository institution or trust company incorporated under the laws of

the United States or any state thereof or of any domestic branch of a foreign

depository institution or trust company; provided that the debt obligations of

such depository institution or trust company (or, if the only Rating Agency is

Standard & Poor's, in the case of the principal depository institution in a

depository institution holding company, debt obligations of the depository

institution holding company) at the date of acquisition thereof have been rated

by each Rating Agency in its highest short-term rating available; and provided

further that, if the only Rating Agency is Standard & Poor's and if the

depository or trust company is a principal subsidiary of a bank holding company

and the debt obligations of such subsidiary are not separately rated, the

applicable rating shall be that of the bank holding company; and, provided

further that, if the original maturity of such short-term obligations of a

domestic branch of a foreign depository institution or trust company shall

exceed 30 days, the short-term rating of such institution shall be A-1+ in the

case of Standard & Poor's if Standard & Poor's is the Rating Agency;

(iv) commercial paper (having original maturities of not more than

365 days) of any corporation incorporated under the laws of the United States or

any state thereof which on the date of acquisition has been rated by Moody's and

Standard & Poor's 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 Wells Fargo Bank, N.A. or

any affiliate thereof serves as an investment advisor, manager, administrator,

shareholder, servicing agent, and/or custodian or sub-custodian; and

(vi) other obligations or securities that are acceptable to each

Rating Agency as a Permitted Investment hereunder and will not reduce the rating

assigned to any Class of Certificates by such Rating Agency below the lower of

the then-current rating or the rating assigned to such Certificates as of the

Closing Date by such Rating Agency, as evidenced in writing;

provided, however, that no instrument shall be a Permitted Investment if it

represents, either (1) the right to receive only interest payments with respect

to the underlying debt instrument or (2) the right to receive both principal and

interest payments derived from obligations underlying such instrument and the

principal and interest payments with respect to such instrument provide a yield

to maturity greater than 120% of the yield to maturity at par of such underlying

obligations.

"Permitted Transferee": Any transferee of a Residual Certificate other

than a Disqualified Organization, a Non-United States Person or an "electing

large partnership" (as defined in Section 775 of the Code).

"Person": Any individual, corporation, partnership, limited liability

company, joint venture, association, joint-stock company, trust, unincorporated

organization or government or any agency or political subdivision thereof.

<PAGE>

"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 Excess": With respect to any Distribution Date,

for each GMAC Mortgage Loan that was the subject of a Principal Prepayment

during the portion of the Prepayment Period from the related Due Date to the end

of such Prepayment Period, any payment of interest received in connection

therewith (net of any applicable Servicing Fee) representing interest accrued

for any portion of such month of receipt.

"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, with respect to any Wells Fargo Mortgage Loan, a Principal

Prepayment in part or in full during the related Prepayment Period or, with

respect to any GMAC Mortgage Loan, a Principal Prepayment in part or in full

from the beginning of the related Prepayment Period to the related Due Date, 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 (I) for such

Prepayment Period (with respect to a Wells Fargo Mortgage Loan) or (II) from the

beginning of the Prepayment Period to the related Due Date (with respect to a

GMAC Mortgage Loan) to the date of such Principal Prepayment in part or in full.

"Prepayment Period": As to any Distribution Date and any Wells Fargo

Mortgage Loans, the calendar month preceding the month in which such

Distribution Date occurs. As to any Distribution Date and the GMAC Mortgage

Loans, the period beginning with the opening of business on the sixteenth day of

the calendar month preceding the month in which such Distribution Date occurs

(or, with respect to the first Distribution Date, the period from December 31,

2004) and ending on the close of business on the fifteenth day of 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

and any Loan Group, an amount equal to the sum of the related Basic Principal

Distribution Amount plus the related 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.

<PAGE>

"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

and each Loan Group, the sum of (i) each scheduled payment of principal

collected or advanced on the related 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 related 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 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

December 29, 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 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)

<PAGE>

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).

"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.

"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.

<PAGE>

"Record Date": With respect to each Class of Certificates which are

Book-Entry Certificates, the Business Day prior to such Distribution Date. With

respect to each Distribution Date and any 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 Contracts) 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 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 Marker Allocation Percentage": 50% of any amount payable or

loss attributable from the Mortgage Loans, which shall be allocated to REMIC 1

Regular Interest AA, REMIC 1 Regular Interest 1-A-1, REMIC 1 Regular Interest

1-A-2, REMIC 1 Regular Interest 1-A-3, REMIC 1 Regular Interest 2-A-1, REMIC 1

Regular Interest 2-A-2, REMIC 1 Regular Interest M-1, REMIC 1 Regular Interest

M-2, REMIC 1 Regular Interest M-3, REMIC 1 Regular

<PAGE>

Interest M-4, REMIC 1 Regular Interest M-5, REMIC 1 Regular Interest B and REMIC

1 Regular Interest ZZ.

"REMIC 1 Overcollateralized Amount": With respect to any date of

determination, (i) 0.50% of the aggregate Uncertificated Principal Balances of

REMIC 1 Regular Interest AA, REMIC 1 Regular Interest 1-A-1, REMIC 1 Regular

Interest 1-A-2, REMIC 1 Regular Interest 1-A-3, REMIC 1 Regular Interest 2-A-1,

REMIC 1 Regular Interest 2-A-2, REMIC 1 Regular Interest M-1, REMIC 1 Regular

Interest M-2, REMIC 1 Regular Interest M-3, REMIC 1 Regular Interest M-4, REMIC

1 Regular Interest M-5, REMIC Regular Interest B and REMIC 1 Regular Interest

ZZ, minus (ii) the aggregate of the Uncertificated Principal Balances of REMIC 1

Regular Interest 1-A-1, REMIC 1 Regular Interest 1-A-2, REMIC 1 Regular Interest

1-A-3, REMIC 1 Regular Interest 2-A-1, REMIC 1 Regular Interest 2-A-2, REMIC 1

Regular Interest M-1, REMIC 1 Regular Interest M-2, REMIC 1 Regular Interest

M-3, REMIC 1 Regular Interest M-4, REMIC 1 Regular Interest M-5 and REMIC 1

Regular Interest B, 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) 50% 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 1-A-1, REMIC 1 Regular Interest 1-A-2, REMIC 1 Regular

Interest 1-A-3, REMIC 1 Regular Interest 2-A-1, REMIC 1 Regular Interest 2-A-2,

REMIC 1 Regular Interest M-1, REMIC 1 Regular Interest M-2, REMIC 1 Regular

Interest M-3, REMIC 1 Regular Interest M-4, REMIC 1 Regular Interest M-5 and

REMIC 1 Regular Interest B and the denominator of which is the aggregate of the

Uncertificated Principal Balances of REMIC 1 Regular Interest 1-A-1, REMIC 1

Regular Interest 1-A-2, REMIC 1 Regular Interest 1-A-3, REMIC 1 Regular Interest

2-A-1, REMIC 1 Regular Interest 2-A-2, REMIC 1 Regular Interest M-1, REMIC 1

Regular Interest M-2, REMIC 1 Regular Interest M-3, REMIC 1 Regular Interest

M-4, REMIC 1 Regular Interest M-5, REMIC 1 Regular Interest B and REMIC 1

Regular Interest ZZ.

"REMIC 1 Overcollateralization Target Amount": 0.50% of the

Overcollateralization Target Amount.

"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 1-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 1 Regular Interest 1-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.

<PAGE>

"REMIC 1 Regular Interest 1-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 1-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 1-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 1-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 2-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 1 Regular Interest 2-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 2-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 2-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 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 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

<PAGE>

principal, subject to the terms and conditions hereof, in an aggregate amount

equal to its initial Uncertificated Principal Balance as set forth in the

Preliminary Statement hereto.

"REMIC 1 Regular Interest M-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 M-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 M-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 M-5 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 B": 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 B 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 1A": 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 1A 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 1B": 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 1B 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 2A": 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 2A 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.

<PAGE>

"REMIC 1 Regular Interest 2B": 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 2B 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 XX": 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 XX 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 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 1-A-1, REMIC 1 Regular Interest 1-A-2, REMIC 1 Regular Interest

1-A-3, REMIC 1 Regular Interest 2-A-1, REMIC 1 Regular Interest 2-A-2, REMIC 1

Regular Interest M-1, REMIC 1 Regular Interest M-2, REMIC 1 Regular Interest

M-3, REMIC 1 Regular Interest M-4, REMIC 1 Regular Interest M-5, REMIC 1 Regular

Interest B, REMIC 1 Regular Interest ZZ, REMIC 1 Regular Interest P, REMIC 1

Regular Interest 1A, REMIC 1 Regular Interest 1B, REMIC 1 Regular Interest 2A,

REMIC 1 Regular Interest 2B and REMIC 1 Regular Interest XX.

"REMIC 1 Subordinated Balance Ratio": The ratio among the

Uncertificated Principal Balances of each REMIC 1 Regular Interest ending with

the designation "A" (other than REMIC 1 Regular Interest AA), equal to the ratio

among, with respect to each such REMIC 1 Regular Interest, the excess of (x) the

aggregate Stated Principal Balance of the Mortgage Loans in the Group 1 Loans or

the Mortgage Loans in the Group 2 Loans, as applicable over (y) the current

Certificate Principal Balance of related Class A Certificates.

"REMIC 1 Sub WAC Allocation Percentage": 50% of any amount payable or

loss attributable from the Mortgage Loans, which shall be allocated to REMIC 1

Regular Interest 1A, REMIC 1 Regular Interest 1B, REMIC 1 Regular Interest 2A,

REMIC 1 Regular Interest 2B and REMIC 1 Regular Interest XX.

<PAGE>

"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 2 Certificate": Any Regular Certificate (other than the Class C

Certificate and Class P Certificate).

"REMIC 2 Certificateholder": The Holder of any REMIC 2 Certificate.

"REMIC 2 Regular Interest": Any Class A Certificate, Class M

Certificate, Class B Certificate, Class C Interest or Class P Interest.

"REMIC 3": The segregated pool of assets consisting of the Class C

Interest conveyed in trust to the Trustee, for the benefit of the Holders of the

Class C Certificates and the Class R-X Certificate (in respect of the Class R-3

Interest), with respect to which a separate REMIC election is to be made.

"REMIC 3 Certificate": Any Class C Certificate or Class R-X Certificate

(in respect of the Class R-3 Interest).

"REMIC 4": The segregated pool of assets consisting of the Class P

Interest conveyed in trust to the Trustee, for the benefit of the Holders of the

Class P Certificates and the Class R-X Certificate (in respect of the Class R-4

Interest), with respect to which a separate REMIC election is to be made.

"REMIC 4 Certificate": Any Class P Certificate or Class R-X Certificate

(in respect of the Class R-4 Interest).

"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, Class C Interest,

Class P 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 Proceeds and other payments and recoveries (including

proceeds of a final sale)

<PAGE>

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 System, (iii) the management

and liquidation of any REO Property, including reasonable fees paid to any

independent contractor in connection

<PAGE>

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.

"Standard & Poor's": Standard & Poor's Ratings Services, a division of

The McGraw Hill Companies, Inc., or its successor in interest.

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

"Stated Principal Balance": With respect to any Mortgage Loan or

related REO Property at any given time, (i) the principal balance of the

Mortgage Loan outstanding as of the Cut-off Date, after application of principal

payments due on or before such date, whether or not received, minus (ii) the sum

of (a) the principal portion of the Monthly Payments due with respect to such

Mortgage Loan or REO Property during each Due Period ending prior to the most

recent Distribution Date which were received or with respect to which an Advance

was made, and (b) all Principal Prepayments with respect to such Mortgage Loan

or REO Property, and all Insurance Proceeds, Liquidation Proceeds and REO

Proceeds to the extent applied by the Master Servicer as recoveries of principal

in accordance with Section 3.15 with respect to such Mortgage Loan or REO

Property, which were distributed pursuant to Section 4.01 on any previous

Distribution Date, and (c) any Realized Loss with respect thereto allocated

pursuant to Section 4.07 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 Fund 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 February 2008 and (y) the first Distribution Date on which the

aggregate Certificate Principal Balance of the Class A Certificates (calculated

for this 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 84.00% of the Aggregate

Stated Principal Balance of the Mortgage Loans, calculated after giving effect

to scheduled payments of principal due during

<PAGE>

the related Due Period, to the extent received or advanced and unscheduled

collections of principal received during the related Prepayment Period.

"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 Class 1-A Certificates, Class 2-A Certificates or

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 Class 1-A

Certificates, Class 2-A Certificates or Mezzanine Certificates will be increased

by the same amount. Thereafter, such class or classes of Class 1-A Certificates,

Class 2-A Certificates or Mezzanine Certificates will accrue interest on the

increased Certificate Principal Balance.

"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": With respect to the Wells Fargo

Mortgage Loans, the 18th day of each month, or if such day is not a Business

Day, the immediately preceding Business Day. With respect to the GMAC Mortgage

Loans, the 21st day of each month, or if such day is not a Business Day, the

next succeeding 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 part or 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 0.375%.

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

<PAGE>

"Tax Returns": The federal income tax return on Internal Revenue

Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax

Return, including Schedule Q thereto, Quarterly Notice to Residual Interest

Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms,

to be filed on behalf of REMIC 1, REMIC 2, REMIC 3 and REMIC 4 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 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 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 40.00%

multiplied by 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) 1.00% with respect to the

Distribution Date occurring in January 2008, plus an additional 1/12th

of 0.50% for each month thereafter up to and including the Distribution

Date in December 2008, (ii) 1.50% with respect to the Distribution Date

occurring in January 2009, plus an additional 1/12th of 0.50% for each

month thereafter up to and including the Distribution Date in December

2009, (iii) 2.00% with respect to the Distribution Date occurring in

January 2010, plus an additional 1/12th of 0.50% for each month

thereafter up to and including the Distribution Date in December 2010

and (iv) 2.50% with respect to any Distribution Date occurring in

January 2011 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, REMIC 3, REMIC 4 the Corridor Contract

and the Net WAC Shortfall Reserve Fund.

"Trustee": Wells Fargo Bank, N.A., or its successor in interest, or any

successor trustee appointed as herein provided.

<PAGE>

"Trustee Fee": As to each Mortgage Loan and any Distribution Date, a

fee per annum equal to 0.0020% plus any amounts earned on funds in the

Certificate Account.

"Trustee Fee Rate": With respect to each Mortgage Loan, the per annum

rate of 0.0020%.

"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 Notional Balance": With respect to the Class C Interest

and any Distribution Date, the Uncertificated Principal Balance of the REMIC 1

Regular Interests (other than REMIC 1 Regular Interest P) for such Distribution

Date.

"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 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. With respect to the Class C Interest 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 1 Regular

Interests over (B) the then aggregate Certificate Principal Balances of the

Class 1-A Certificates, Class 2-A Certificates, the Class M Certificates, the

Class B Certificates and the Class P Interest then outstanding.

"Uncertificated REMIC 1 Pass-Through Rate": With respect to REMIC 1

Regular Interest AA, REMIC 1 Regular Interest 1-A-1, REMIC 1 Regular Interest

1-A-2, REMIC 1 Regular Interest 1-A-3, REMIC 1 Regular Interest 2-A-1, REMIC 1

Regular Interest 2-A-2, REMIC 1 Regular Interest M-1, REMIC 1 Regular Interest

M-2, REMIC 1 Regular Interest M-3, REMIC 1 Regular Interest M-4, REMIC 1 Regular

Interest M-5, REMIC 1 Regular Interest B, REMIC 1 Regular Interest ZZ, REMIC 1

Regular Interest 1A, REMIC 1 Regular Interest 2A and REMIC 1 Regular Interest XX

and any Distribution Date, a per annum rate equal to the average of the Net

Mortgage Rates of the Mortgage Loans, weighted on the basis of the Stated

Principal Balances thereof as of the close of business on the last day of the

calendar month preceding the month in which such Distribution Date occurs. With

respect to REMIC 1 Regular Interest 1B, the weighted average of the Net Mortgage

Rates of the Mortgage Loans in the Group 1 Loans. With respect to REMIC 1

Regular Interest 2B, the weighted average of the Net Mortgage Rates

<PAGE>

of the Mortgage Loans in the Group 2 Loans. With respect to REMIC 1 Regular

Interest P, 0.00%.

"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.

"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 and Class

R-X 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.

"Wells Fargo Mortgage Loans": The Mortgage Loans that are sub-serviced

by Wells Fargo Bank, N.A.

<PAGE>

"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 Certificates and Mezzanine 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 Certificates and Mezzanine 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 Certificates and Mezzanine

Certificates then outstanding. If no such quotations can be obtained, the rate

will be LIBOR for the prior Distribution Date; provided however, if, under the

priorities described above, LIBOR for a Distribution Date would be based on

LIBOR for the previous Distribution Date for the third consecutive Distribution

Date, the Trustee shall select an alternative comparable index 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 Certificates and Mezzanine Certificates for the

relevant Accrual Period, in the absence of manifest error, will be final and

binding.

<PAGE>

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 Certificates and

Mezzanine 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, Class R and Class R-X 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 REMIC 1 Regular Interests for any Distribution Date, the REMIC

I Marker Allocation Percentage of 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 1-A-1, REMIC 1 Regular Interest 1-A-2, REMIC 1 Regular Interest

1-A-3, REMIC 1 Regular Interest 2-A-1, REMIC 1 Regular Interest 2-A-2, REMIC 1

Regular Interest M-1, REMIC 1 Regular Interest M-2, REMIC 1 Regular Interest

M-3, REMIC 1 Regular Interest M-4, REMIC 1 Regular Interest M-5, REMIC 1 Regular

Interest B 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 Principal Balance of each

such REMIC 1 Regular Interest.

The REMIC 1 Sub WAC Allocation Percentage of the aggregate amount of

any Prepayment Interest Shortfalls (to the extent not covered by payments by the

Subservicer or Master Servicer) and the REMIC 1 Sub WAC Allocation Percentage of

any Relief Act Interest Shortfalls incurred in respect of the Mortgage Loans for

any Distribution Date shall be allocated to Uncertificated Accrued Interest

payable to REMIC 1 Regular Interest 1A, REMIC 1 Regular Interest 1B, REMIC 1

Regular Interest 2A, REMIC 1 Regular Interest 2B and REMIC 1 Regular Interest

XX, 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 Principal Balance of each such REMIC 1 Regular Interest.

<PAGE>

The aggregate amount of any Prepayment Interest Shortfalls (to the

extent not covered by payments by the Subservicer or Master Servicer) and any

Relief Act Interest Shortfalls allocated to the Class C Certificates shall be

deemed allocated to the Class C Interest.

<PAGE>

ARTICLE II

CONVEYANCE OF MORTGAGE LOANS;

ORIGINAL ISSUANCE OF CERTIFICATES

Section 2.01. Conveyance of Mortgage Loans.

The Company, as of the Closing Date, and concurrently with the

execution and delivery hereof, does hereby assign, transfer, sell, set over and

otherwise convey to the Trustee without recourse all the right, title and

interest of the Company in and to the Mortgage Loans identified on the Mortgage

Loan Schedule (exclusive of any prepayment fees and late payment charges

received thereon) and all other assets included or to be included in the Trust

Fund for the benefit of the Certificateholders, 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 Contracts.

In connection with such transfer and assignment, the Company has caused

the Seller to deliver to, and deposit with the Custodian, as described in the

Mortgage Loan Purchase Agreement, with respect to each Mortgage Loan, the

following documents or instruments:

(i) the original Mortgage Note endorsed without recourse, "Wells

Fargo Bank, N.A., as trustee under the Pooling and Servicing Agreement relating

to Impac Secured Assets Corp., Mortgage Pass-Through Certificates, Series

2004-4" 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 Wells Fargo Bank, N.A., as trustee," or to "Wells Fargo Bank,

N.A., as trustee for holders of Impac Secured Assets Corp., Mortgage

Pass-Through Certificates, Series 2004-4";

(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

<PAGE>

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, to deliver to the Custodian: (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 Custodian 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 Custodian pursuant to

clause (iv) above. However, pursuant to the Mortgage Loan Purchase Agreement

with respect to the 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.

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 Custodian 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 Custodian

because of any defect therein, the Seller is required, as described in the

Mortgage Loan Purchase Agreement with respect to the Mortgage Loans, to prepare

a substitute Assignment or cure such defect, as the

<PAGE>

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 Mortgage Loans, to exercise its best reasonable

efforts to deliver or cause to be delivered to the Custodian 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 Custodian 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 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

<PAGE>

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 Custodian or 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 Custodian, with respect to the Mortgage Files held by it,

acknowledges receipt (subject to any exceptions noted in the Initial

Certification described below) on behalf of the Trustee, 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 Custodian agrees, for the benefit of the Certificateholders, to

review or cause to be reviewed on its behalf, each Mortgage File on or before

the Closing Date to ascertain that all documents required to be delivered to it

are in its possession, and the Custodian 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. None

<PAGE>

of the Custodian, the Trustee or 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. None of the Custodian, the

Trustee or 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, or the Custodian on its behalf, 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 Mortgage Loans.

If in the process of reviewing the Mortgage Files and preparing the

certifications referred to above the Custodian finds any document or documents

constituting a part of a Mortgage File to be missing or defective in any

material respect, the Custodian shall promptly notify the Seller, the Master

Servicer, the Trustee (if not the Custodian) 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 Custodian 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 and the Custodian shall have 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.

<PAGE>

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;

(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;

<PAGE>

(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 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.

<PAGE>

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 Custodian, on behalf of 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

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

<PAGE>

Deleted Mortgage Loan. The Company shall amend or cause to be amended the

Mortgage Loan Schedule for the benefit of the Certificateholders to reflect the

removal of such Deleted Mortgage Loan and the substitution of the Qualified

Substitute Mortgage Loan or Loans and the Company shall deliver the amended

Mortgage Loan Schedule to the Trustee. Upon such substitution, the Qualified

Substitute Mortgage Loan or Loans shall be subject to the terms of this

Agreement in all respects, the Seller shall be deemed to have made the

representations and warranties with respect to the Qualified Substitute Mortgage

Loan contained in the Mortgage Loan Purchase Agreement as of the date of

substitution, and the Company shall be deemed to have made with respect to any

Qualified Substitute Mortgage Loan or Loans, as of the date of substitution, the

representations and warranties set forth in Exhibit I hereof (other than

representations (xiv), (xvi), (xxix) and (xxxiii) through (xli)).

In connection with the substitution of one or more Qualified Substitute

Mortgage Loans for one or more Deleted Mortgage Loans, the Master Servicer will

determine the amount (the "Substitution Adjustment"), if any, by which the

aggregate principal balance of all such Qualified Substitute Mortgage Loans as

of the date of substitution is less than the aggregate Stated Principal Balance

of all such Deleted Mortgage Loans (in each case after application of the

principal portion of the Monthly Payments due in the month of substitution that

are to be distributed to Certificateholders in the month of substitution). The

Trustee shall enforce the obligation of the Seller under the Mortgage Loan

Purchase Agreement to provide the Master Servicer on the day of substitution for

immediate deposit into the Custodial Account the amount of such shortfall,

without any reimbursement therefor. In accordance with the Mortgage Loan

Purchase Agreement, the Seller shall give notice in writing to the Trustee of

such event, which notice shall be accompanied by an Officers' Certificate as to

the calculation of such shortfall and by an Opinion of Counsel to the effect

that such substitution will not cause (a) any federal tax to be imposed on REMIC

1, REMIC 2, REMIC 3 or REMIC 4 including without limitation, any federal tax

imposed on "prohibited transactions" under Section 860F(a)(1) of the Code or on

"contributions after the startup date" under Section 860G(d)(1) of the Code or

(b) any portion of REMIC 1, REMIC 2, REMIC 3 or REMIC 4 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 none of the Trustee or the Master

Servicer is under any obligation to discover any breach of the above-mentioned

representations and warranties. It is understood and agreed that the obligation

of the Seller to cure such breach, purchase or to substitute for such Mortgage

Loan as to which such a breach has occurred and is continuing shall constitute

the sole remedy respecting such breach available to Certificateholders or the

Trustee on behalf of Certificateholders.

Section 2.05. Issuance of Certificates; Conveyance of REMIC 1 Regular

Interests, Class C Interest, Class P Interest and

Acceptance of REMIC 2, REMIC 3 and REMIC 4 by the

Trustee.

(a) The Trustee acknowledges the assignment to it of the Mortgage

Loans and the delivery to it or to a Custodian on its behalf 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

<PAGE>

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 (other than the Class C Certificates and Class P

Certificates), the Class C Interest, Class P Interest 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 (other than the Class C Certificates

and Class P Certificates), the Class C Interest, Class P Interest 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

(other than the Class C Certificates and Class P Certificates), the Class C

Interest and Class P Interest, constitute the entire beneficial ownership

interest in REMIC 2.

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 (other than the Class C Certificates and Class P

Certificates) in authorized denominations evidencing (together with the Class

R-2 Interest, Class P Interest and Class C Interest) the entire beneficial

ownership interest in REMIC 2.

(d) 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 Class C Interest for the benefit of the Holders of the Class C

Certificates and Holders of the Class R-X Certificates (as Holders of the Class

R-3 Interest). The Trustee acknowledges receipt of the Class C Interest (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 Class C Certificates and

Holders of the Class R-X Certificates (as Holders of the Class R-3 Interest).

The interest evidenced by the Class R-3 Interest, together with the Class C

Certificates, constitute the entire beneficial ownership interest in REMIC 3.

(e) In exchange for the Class C Interest 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 Class C

Certificates in authorized denominations evidencing (together with the Class R-3

Interest) the entire beneficial ownership interest in REMIC 3.

(f) 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 Class P Interest for the benefit of the Holders of the Class P

Certificates and Holders of the Class R-X Certificates (as Holders of the Class

R-4 Interest). The Trustee acknowledges receipt of the Class P Interest (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 Class P Certificates and

Holders of the Class R-X Certificates (as Holders of the

<PAGE>

Class R-4 Interest). The interest evidenced by the Class R-4 Interest, together

with the Class C Certificates, constitute the entire beneficial ownership

interest in REMIC 4.

(g) In exchange for the Class P Interest 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 Class P

Certificates in authorized denominations evidencing (together with the Class R-4

Interest) the entire beneficial ownership interest in REMIC 4.

(h) Concurrently with (i) the assignment and delivery to the

Trustee of REMIC 1 (including the Residual Interest therein represented by the

Class R-1 Interest) and the acceptance by the Trustee thereof, (ii) the

assignment and delivery to the Trustee of REMIC 2 (including the Residual

Interest therein represented by the Class R-2 Interest), (iii) the assignment

and delivery to the Trustee of REMIC 3 (including the Residual Interest therein

represented by the Class R-3 Interest) (iv) the assignment and delivery to the

Trustee of REMIC 4 (including the Residual Interest therein represented by the

Class R-4 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 and Class R-X Certificates in authorized

denominations evidencing the Class R-1 Interest and Class R-2 Interest and the

Class R-3 Interest and Class R-4 Interest, respectively.

<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

prejudicing 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,

<PAGE>

partial 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, REMIC 2,

REMIC 3 or REMIC 4 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.

<PAGE>

The relationship of the Master Servicer (and of any successor to the

Master Servicer under this Agreement) to the Trustee under this Agreement is

intended by the parties to be that of an independent contractor and not that of

a joint venturer, partner or agent.

Section 3.02. Sub-Servicing Agreements Between Master Servicer and

Sub-Servicers.

(a) The Master Servicer may enter into Sub-Servicing Agreements

with Sub-Servicers for the servicing and administration of the Mortgage Loans

and for the performance of any and all other activities of the Master Servicer

hereunder; provided, however, that such agreements would not result in a

withdrawal or a downgrading by Standard & Poor's of its rating on any Class of

Certificates. Each Sub-Servicer shall be either (i) an institution the accounts

of which are insured by the FDIC or (ii) another entity that engages in the

business of originating or servicing mortgage loans comparable to the Mortgage

Loans, and in either case shall be authorized to transact business in the state

or states in which the related Mortgaged Properties it is to service are

situated, if and to the extent required by applicable law to enable the

Sub-Servicer to perform its obligations hereunder and under the Sub-Servicing

Agreement, and in either case shall be a Freddie Mac or Fannie Mae 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. 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 GMAC.

The Master Servicer has entered into a separate Sub-Servicing Agreement

with each of GMAC and Wells Fargo Bank, N.A. for the servicing and

administration of certain of the Mortgage Loans and may enter into additional

Sub-Servicing Agreements with Sub-Servicers 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

<PAGE>

the related Mortgage Loan or (ii) from a specific recovery of costs, expenses or

attorneys' fees against the party against whom such enforcement is directed.

(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 may be assessed by the

California Franchise Tax Board in connection with the activities of the Trust

under this Agreement.

<PAGE>

Section 3.06. Assumption or Termination of Sub-Servicing Agreements by

Trustee.

(a) If the Trustee or its designee shall assume the master

servicing obligations of the Master Servicer in accordance with Section 7.02

below, the Trustee, to the extent necessary to permit the Trustee to carry out

the provisions of Section 7.02 with respect to the Mortgage Loans, shall succeed

to all of the rights and obligations of the Master Servicer under each of the

Sub-Servicing Agreements. In such event, the Trustee or its designee as the

successor master servicer shall be deemed to have assumed all of the Master

Servicer's rights and obligations therein and to have replaced the Master

Servicer as a party to such Sub-Servicing Agreements to the same extent as if

such Sub-Servicing Agreements had been assigned to the Trustee or its designee

as a successor master servicer, except that the Trustee or its designee as a

successor master servicer shall not be deemed to have assumed any obligations or

liabilities of the Master Servicer arising prior to such assumption (other than

the obligation to make any Advances hereunder) and the Master Servicer shall not

thereby be relieved of any liability or obligations under such Sub-Servicing

Agreements arising prior to such assumption. Nothing in the foregoing shall be

deemed to entitle the Trustee or its designee as a successor master servicer at

any time to receive any portion of the servicing compensation provided under

Section 3.17 except for such portion as the Master Servicer would be entitled to

receive.

(b) In the event that the Trustee or its designee as successor

master servicer for the Trustee assumes the servicing obligations of the Master

Servicer under Section 7.02, upon the reasonable request of the Trustee or such

designee as successor master servicer the Master Servicer shall at its own

expense deliver to the Trustee, or at its written request to such designee,

photocopies of all documents, files and records, electronic or otherwise,

relating to the Sub-Servicing Agreements and the related Mortgage Loans or REO

Property then being serviced and an accounting of amounts collected and held by

it, if any, and will otherwise cooperate and use its reasonable efforts to

effect the orderly and efficient transfer of the Sub-Servicing Agreements, or

responsibilities hereunder to the Trustee, or at its written request to such

designee as successor master servicer.

Section 3.07. Collection of Certain Mortgage Loan Payments.

(a) The Master Servicer will coordinate and monitor remittances by

Sub-Servicers to the Master Servicer with respect to the Mortgage Loans in

accordance with this Agreement.

(b) The Master Servicer shall make its reasonable efforts to

collect or cause to be collected all payments required under the terms and

provisions of the Mortgage Loans and shall follow, and use its reasonable

efforts to cause Sub-Servicers to follow, collection procedures comparable to

the collection procedures of prudent mortgage lenders servicing mortgage loans

for their own account to the extent such procedures shall be consistent with

this Agreement. Consistent with the foregoing, the Master Servicer may in its

discretion (i) waive or permit to be waived any late payment charge, prepayment

charge, assumption fee, or any penalty interest in connection with the

prepayment of a Mortgage Loan and (ii) suspend or reduce or permit to be

suspended or reduced regular monthly payments for a period of up to six months,

or arrange or permit an arrangement with 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

<PAGE>

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.

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 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

<PAGE>

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

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 and, with

respect to the GMAC Mortgage Loans, net of any Prepayment Interest Excess;

(iii) all Insurance Proceeds, other than proceeds that

represent reimbursement of costs and expenses incurred by the Master Servicer or

any Sub-Servicer in connection with presenting claims under the related

Insurance Policies, Liquidation Proceeds and REO Proceeds;

(iv) all proceeds of any Mortgage Loan or REO Property

repurchased or purchased in accordance with Sections 2.02, 2.04, 3.14 or 9.01;

and all amounts required to be

<PAGE>

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;

(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

<PAGE>

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 matur

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