POOLING AND SERVICING AGREEMENT

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


                           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


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<PAGE>


                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                               Page
                                                                                                                ----

<S>    <C>                                                                                                       <C>
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>

<PAGE>


<TABLE>
<CAPTION>
<S>    <C>                                                                                                       <C>
       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>


                                        ii
<PAGE>


<TABLE>
<CAPTION>
<S>    <C>                                                                                                       <C>
      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
<PAGE>


<TABLE>
<CAPTION>
<S>    <C>                                                                                                        <C>
      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>


                                       iv
<PAGE>


<TABLE>
<CAPTION>
<S>    <C>                                                                                                       <C>
      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>


                                        v
<PAGE>


<TABLE>
<CAPTION>
<S>    <C>                                                                                                       <C>
      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>


                                       vi
<PAGE>


<TABLE>
<CAPTION>
<S>    <C>                   <C>                                                                                  <C>
      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>
<CAPTION>
<S>    <C>                   <C>                                                                                   <C>
      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>
<CAPTION>
<S>    <C>                   <C>                                                                                   <C>
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>


                                       ix
<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)










                                        x
<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>
<CAPTION>
                    Uncertificated REMIC 1       Initial Uncertificated           Assumed Final
Designation            Pass-Through Rate             Principal Balance             Maturity Date(1)
-----------            -----------------            -----------------             ----------------
<S>                       <C>                     <C>                             <C>
    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:


                                        2
<PAGE>


<TABLE>
<CAPTION>
                              Initial Certificate                                        Assumed Final
Class Designation               Principal Balance           Pass-Through Rate             Maturity Date(1)
-----------------               -----------------           -----------------             ----------------
<S>                            <C>                              <C>                      <C>
   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>
<CAPTION>
                               Initial Certificate                                          Assumed Final
  Class Designation              Principal Balance            Pass-Through Rate              Maturity Date(1)
  -----------------               -----------------            -----------------              ----------------
<S>                                <C>                               <C>                    <C>
Class C Certificates               $5,000,484.49                     (2)                     February 25, 2035
</TABLE>


                                       3
<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>
<CAPTION>
                             Initial Certificate                                      Assumed Final
Class Designation              Principal Balance             Pass-Through Rate         Maturity Date(1)
-----------------              -----------------             -----------------         ----------------
<S>                                 <C>                             <C>               <C>
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.










                                       4
<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.


                                       5
<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.


                                        6
<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.


                                       7
<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.


                                       8
<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.


                                        9
<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;

                  (c)       the Certificate Principal Balance of the Class M-2
                  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;


                                       10
<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:


                                       11
<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

                  (c)       the Certificate Principal Balance of the Class M-2
                  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;

                   (c)       the Certificate Principal Balance of the Class M-2
                  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


                                       12
<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;

                  (c)       the Certificate Principal Balance of the Class M-2
                  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


                                       13
<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;

                  (c)       the Certificate Principal Balance of the Class M-2
                  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;


                                       14
<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


                                       15
<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.


                                       16
<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.


                                       17
<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


                                       18
<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.


                                        19
<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.


                                       20
<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


                                       21
<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%.


                                       22
<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.


                                       23
<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


                                        24
<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;


                                       25
<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.


                                       26
<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


                                       27
<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


                                       28
<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;

                  (C)       the Uncertificated REMIC 1 Pass-Through Rate for
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;


                                       29
<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


                                       30
<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.


                                       31
<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.


                                       32
<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)


                                       33
<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.


                                       34
<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


                                       35
<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.


                                       36
<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


                                       37
<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.


                                       38
<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.


                                       39
<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)


                                       40
<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


                                       41
<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


                                       42
<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.


                                       43
<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.


                                       44
<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


                                       45
<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.


                                       46
<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.


                                       47
<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.


                                       48
<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.










                                       49
<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


                                       50
<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


                                       51
<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


                                       52
<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


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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.


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         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;


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                  (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.


                                       56
<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


                                       57
<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


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<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.

         (c)       In exchange for the REMIC 1 Regular Interests and,
concurrently with the assignment to the Trustee thereof, pursuant to the written
request of the Company executed by an officer of the Company, the Trustee has
executed, authenticated and delivered to or upon the order of the Company, the
Regular Certificates (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


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<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.


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                                   ARTICLE III

                          ADMINISTRATION AND SERVICING
                                OF THE TRUST FUND

         Section 3.01. Master Servicer to Act as Master Servicer.

         The Master Servicer shall supervise, or take such actions as are
necessary to ensure, the servicing and administration of the Mortgage Loans and
any REO Property in accordance with this Agreement and its normal servicing
practices, which generally shall conform to the standards (i) of the Servicing
Guide, if Impac Funding Corporation is Master Servicer, or (ii) if Impac Funding
Corporation is not the Master Servicer, of an institution prudently servicing
mortgage loans for its own account and shall have full authority to do anything
it reasonably deems appropriate or desirable in connection with such servicing
and administration. To the extent consistent with the foregoing, the Master
Servicer shall waive (or permit a Sub-Servicer to waive) a Prepayment Charge
only 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,


                                       61
<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.


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<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


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the related Mortgage Loan or (ii) from a specific recovery of costs, expenses or
attorneys' fees against the party against whom such enforcement is directed.

         (c)       [Reserved].

         (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.


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

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

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

         Section 3.07. Collection of Certain Mortgage Loan Payments.

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

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


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related Sub-Servicer to make an advance to the same extent as if such
installment were due, owing and delinquent and had not been deferred through
liquidation of the Mortgaged Property; provided, however, that the obligation of
the Master Servicer or related Sub-Servicer to make an Advance shall apply only
to the extent that the Master Servicer believes, in good faith, that such
advances are not Nonrecoverable Advances.

         (c)       On each Determination Date, with respect to each Mortgage Loan
for which during the related Prepayment Period the Master Servicer has
determined that all amounts which it expects to recover from or on account of
each such Mortgage Loan have been recovered and that no further Liquidation
Proceeds will be received in connection therewith, the Master Servicer shall
provide to the Trustee a certificate of a Servicing Officer that such Mortgage
Loan became a Liquidated Mortgage Loan in a Cash Liquidation or REO Disposition.

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

         Section 3.08. Sub-Servicing Accounts.

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


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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


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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


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being limited to late recoveries of the payments for which such advances were
made pursuant to Section 3.01 or Section 3.09 and any other related Late
Collections;

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

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

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

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

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

         Section 3.12. Permitted Investments.

         Any institution maintaining the Custodial Account shall at the
direction of the Master Servicer invest the funds in such account in Permitted
Investments, each of which shall mature not later than (i) the Business Day
immediately preceding the date on which such funds are required to be withdrawn
from such account pursuant to this Agreement