Document:

EXECUTION VERSION

                  WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.,

                        as Depositor and Master Servicer

                                       and

                      DEUTSCHE BANK NATIONAL TRUST COMPANY,

                                   as Trustee

                                       and

                      DEUTSCHE BANK TRUST COMPANY DELAWARE,

                               as Delaware Trustee

                         POOLING AND SERVICING AGREEMENT

                                 $607,568,701.01

                   Washington Mutual Mortgage Securities Corp.

                     WaMu Mortgage Pass-Through Certificates

                                 Series 2004-AR2

                           Cut-Off Date: April 1, 2004

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                                TABLE OF CONTENTS
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                                                                                                               Page

ARTICLE I             ...........................................................................................3

         Section 1.01.         Definitions.......................................................................3

                  Aggregate Certificate Principal Balance........................................................3
                  Appraised Value................................................................................3
                  Assignment of Proprietary Lease................................................................3
                  Authenticating Agent...........................................................................3
                  Authorized Denomination........................................................................3
                  Available Distribution Amount..................................................................4
                  Bankruptcy Coverage............................................................................5
                  Bankruptcy Loss................................................................................5
                  Beneficial Holder..............................................................................5
                  Benefit Plan Opinion...........................................................................5
                  Book-Entry Certificates........................................................................5
                  Business Day...................................................................................5
                  Buydown Agreement..............................................................................5
                  Buydown Fund...................................................................................6
                  Buydown Fund Account...........................................................................6
                  Buydown Loan...................................................................................6
                  Carry-Forward Subsequent Recoveries Amount.....................................................6
                  Certificate....................................................................................6
                  Certificate Account............................................................................6
                  Certificateholder or Holder....................................................................7
                  Certificate Interest Rate......................................................................7
                  Certificate Margin.............................................................................7
                  Certificate of Trust...........................................................................7
                  Certificate Principal Balance..................................................................7
                  Certificate Register and Certificate Registrar.................................................7
                  Class    ......................................................................................7
                  Class A Certificates...........................................................................7
                  Class B Certificates...........................................................................7
                  Class B-1 Certificates.........................................................................7
                  Class B-2 Certificates.........................................................................7
                  Class B-3 Certificates.........................................................................8
                  Class B-4 Certificates.........................................................................8
                  Class B-5 Certificates.........................................................................8
                  Class B-6 Certificates.........................................................................8
                  Class Principal Balance........................................................................8
                  Class R Certificates...........................................................................8
                  Clean-Up Call Percentage.......................................................................8
                  Clearing Agency................................................................................9
                  Closing Date...................................................................................9
                  Code     ......................................................................................9
                  Company  ......................................................................................9
                  Compensating Interest..........................................................................9
                  Cooperative....................................................................................9

                                                                          i
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                  Cooperative Apartment..........................................................................9
                  Cooperative Lease..............................................................................9
                  Cooperative Loans..............................................................................9
                  Cooperative Stock..............................................................................9
                  Cooperative Stock Certificate..................................................................9
                  Corporate Trust Office.........................................................................9
                  Corporation...................................................................................10
                  Cumulative Carry-Forward Subsequent Recoveries Amount.........................................10
                  Curtailment...................................................................................10
                  Curtailment Shortfall.........................................................................10
                  Custodial Account for P&I.....................................................................10
                  Custodial Account for Reserves................................................................10
                  Custodial Agreement...........................................................................11
                  Custodian.....................................................................................11
                  Cut-Off Date..................................................................................11
                  Definitive Certificates.......................................................................11
                  Delaware Trustee..............................................................................11
                  Depositary Agreement..........................................................................11
                  Destroyed Mortgage Note.......................................................................11
                  Determination Date............................................................................11
                  Disqualified Organization.....................................................................11
                  Distribution Amount...........................................................................11
                  Distribution Date.............................................................................14
                  DTC      .....................................................................................14
                  DTC Participant...............................................................................14
                  Due Date .....................................................................................14
                  Eligible Institution..........................................................................14
                  Eligible Investments..........................................................................14
                  ERISA    .....................................................................................16
                  ERISA Restricted Certificate..................................................................16
                  Event of Default..............................................................................16
                  Excess Liquidation Proceeds...................................................................16
                  Excess Subsequent Recoveries..................................................................16
                  FDIC     .....................................................................................16
                  FHA      .....................................................................................16
                  Fannie Mae....................................................................................16
                  Final Maturity Date...........................................................................16
                  Fraud Coverage................................................................................16
                  Fraud Loss....................................................................................17
                  Freddie Mac...................................................................................17
                  Index    .....................................................................................17
                  Indirect DTC Participants.....................................................................17
                  Initial Custodial Agreement...................................................................17
                  Initial Custodian.............................................................................17
                  Insurance Proceeds............................................................................17

                                                                          ii
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                  Interest Distribution Amount..................................................................17
                  Interest Rate Adjustment Date.................................................................18
                  Investment Account............................................................................18
                  Investment Depository.........................................................................18
                  Junior Subordinate Certificates...............................................................18
                  Last Scheduled Distribution Date..............................................................18
                  Lender   .....................................................................................18
                  Liquidated Mortgage Loan......................................................................18
                  Liquidation Principal.........................................................................18
                  Liquidation Proceeds..........................................................................18
                  Loan-to-Value Ratio...........................................................................18
                  Lowest Class B Owner..........................................................................19
                  Master Servicer...............................................................................19
                  Master Servicer Business Day..................................................................19
                  Master Servicing Fee..........................................................................19
                  Master Servicing Fee Rate.....................................................................19
                  MERS     .....................................................................................19
                  MERS Loan.....................................................................................19
                  MERS(R)System.................................................................................19
                  MIN      .....................................................................................19
                  MOM Loan .....................................................................................19
                  Monthly P&I Advance...........................................................................19
                  Monthly Payment...............................................................................19
                  Monthly Payment Adjustment Terms..............................................................20
                  Moody's  .....................................................................................20
                  Mortgage .....................................................................................20
                  Mortgage File.................................................................................20
                  Mortgage Interest Rate........................................................................22
                  Mortgage Loan Margin..........................................................................22
                  Mortgage Loan Schedule........................................................................23
                  Mortgage Loans................................................................................23
                  Mortgage Note.................................................................................23
                  Mortgage Pool.................................................................................23
                  Mortgage Pool Assets..........................................................................23
                  Mortgaged Property............................................................................24
                  Mortgagor.....................................................................................24
                  Negative Amortization Amount..................................................................24
                  Nonrecoverable Advance........................................................................24
                  Non-U.S. Person...............................................................................24
                  Notice Addresses..............................................................................24
                  OTS      .....................................................................................25
                  Officer's Certificate.........................................................................25
                  One-Year MTA..................................................................................25
                  Opinion of Counsel............................................................................25
                  Original Trust Agreement......................................................................25

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                  Original Value................................................................................25
                  Ownership Interest............................................................................25
                  Pass-Through Entity...........................................................................25
                  Pass-Through Rate.............................................................................25
                  Paying Agent..................................................................................26
                  Payoff   .....................................................................................26
                  Payoff Earnings...............................................................................26
                  Payoff Interest...............................................................................26
                  Payoff Period.................................................................................26
                  Percentage Interest...........................................................................26
                  Permitted Transferee..........................................................................27
                  Person   .....................................................................................27
                  Prepaid Monthly Payment.......................................................................27
                  Primary Insurance Policy......................................................................27
                  Principal Balance.............................................................................27
                  Principal Payment.............................................................................28
                  Principal Payment Amount......................................................................28
                  Principal Prepayment..........................................................................28
                  Principal Prepayment Amount...................................................................29
                  Prior Period..................................................................................29
                  Pro Rata Allocation...........................................................................29
                  Prospectus....................................................................................29
                  Purchase Obligation...........................................................................29
                  Purchase Price................................................................................29
                  Qualified Insurer.............................................................................29
                  Rate Ceiling..................................................................................30
                  Rating Agency.................................................................................30
                  Ratings  .....................................................................................30
                  Realized Loss.................................................................................30
                  Recognition Agreement.........................................................................31
                  Record Date...................................................................................31
                  Relief Act Shortfall..........................................................................31
                  REMIC    .....................................................................................31
                  REMIC Provisions..............................................................................31
                  REMIC I  .....................................................................................31
                  REMIC I Assets................................................................................31
                  REMIC I Regular Interests.....................................................................31
                  Residual Certificates.........................................................................32
                  Residual Distribution Amount..................................................................32
                  Responsible Officer...........................................................................32
                  S&P      .....................................................................................32
                  Secretary of State............................................................................32
                  Securities Act................................................................................32
                  Security Agreement............................................................................32
                  Selling and Servicing Contract................................................................32

                                                                          iv
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                  Senior Certificates...........................................................................32
                  Senior Liquidation Amount.....................................................................32
                  Senior Percentage.............................................................................33
                  Senior Prepayment Percentage..................................................................33
                  Senior Principal Distribution Amount..........................................................34
                  Senior Subordinate Certificates...............................................................35
                  Servicer .....................................................................................35
                  Servicing Fee.................................................................................35
                  Servicing Fee Rate............................................................................35
                  Servicing Officer.............................................................................35
                  Special Hazard Coverage.......................................................................35
                  Special Hazard Loss...........................................................................35
                  Special Primary Insurance Policy..............................................................36
                  Special Primary Insurance Premium.............................................................36
                  Statutory Trust Statute.......................................................................36
                  Subordinate Certificates......................................................................36
                  Subordinate Liquidation Amount................................................................36
                  Subordinate Percentage........................................................................36
                  Subordinate Prepayment Percentage.............................................................36
                  Subordinate Principal Distribution Amount.....................................................36
                  Subordinate Principal Prepayments Distribution Amount.........................................37
                  Subordination Level...........................................................................37
                  Subsequent Recoveries.........................................................................37
                  Substitute Mortgage Loan......................................................................37
                  Tax Matters Person............................................................................37
                  Termination Date..............................................................................38
                  Termination Payment...........................................................................38
                  Transfer .....................................................................................38
                  Transferee....................................................................................38
                  Transferee Affidavit and Agreement............................................................38
                  Trust    .....................................................................................38
                  Trustee  .....................................................................................38
                  Uncollected Interest..........................................................................38
                  Uncompensated Interest Shortfall..............................................................38
                  Underwriters..................................................................................38
                  Underwriting Standards........................................................................38
                  Uninsured Cause...............................................................................39
                  U.S. Person...................................................................................39
                  VA       .....................................................................................39
                  Withdrawal Date...............................................................................39

ARTICLE II            Creation of the Trust; Conveyance of the Mortgage Pool Assets; REMIC Election and
                      Designations; Original Issuance of Certificates...........................................39

         Section 2.01.         Creation of the Trust............................................................39

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         Section 2.02.         Restrictions on Activities of the Trust..........................................40

         Section 2.03.         Separateness Requirements........................................................41

         Section 2.04.         Conveyance of Mortgage Pool Assets; Security Interest............................42

         Section 2.05.         Delivery of Mortgage Files.......................................................43

         Section 2.06.         REMIC Election for REMIC I.......................................................45

         Section 2.07.         Acceptance by Trustee............................................................46

         Section 2.08.         Representations and Warranties of the Company Concerning the Mortgage
                               Loans............................................................................48

         Section 2.09.         Acknowledgment of Transfer of Mortgage Pool Assets...............................52

         Section 2.10.         Acknowledgement of Transfer of REMIC I Assets; Authentication of
                               Certificates.....................................................................52

         Section 2.11.         Legal Title......................................................................52

         Section 2.12.         Compliance with ERISA Requirements...............................................53

         Section 2.13.         Additional Representation of the Company Concerning the Mortgage Loans...........53

ARTICLE III           Administration and Servicing of Mortgage Loans............................................53

         Section 3.01.         The Company to Act as Master Servicer............................................53

         Section 3.02.         Custodial Accounts and Buydown Fund Accounts.....................................56

         Section 3.03.         The Investment Account; Eligible Investments.....................................57

         Section 3.04.         The Certificate Account..........................................................58

         Section 3.05.         Permitted Withdrawals from the Certificate Account, the Investment
                               Account and Custodial Accounts for P&I and of Buydown Funds from the
                               Buydown Fund Accounts............................................................59

         Section 3.06.         Maintenance of Primary Insurance Policies; Collections Thereunder................61

         Section 3.07.         Maintenance of Hazard Insurance..................................................61

         Section 3.08.         Enforcement of Due-on-Sale Clauses; Assumption Agreements........................62

         Section 3.09.         Realization Upon Defaulted Mortgage Loans........................................63

         Section 3.10.         Trustee to Cooperate; Release of Mortgage Files..................................65

         Section 3.11.         Compensation to the Master Servicer and the Servicers............................65

         Section 3.12.         Reports to the Trustee; Certificate Account Statement............................66

         Section 3.13.         Annual Statement as to Compliance................................................66

         Section 3.14.         Access to Certain Documentation and Information Regarding the Mortgage
                               Loans............................................................................66

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         Section 3.15.         Annual Independent Public Accountants' Servicing Report..........................67

         Section 3.17.         [Reserved.]......................................................................67

         Section 3.18.         [Reserved.]......................................................................67

         Section 3.19.         [Reserved.]......................................................................67

         Section 3.20.         Assumption or Termination of Selling and Servicing Contracts by Trustee..........67

ARTICLE IV            Payments to Certificateholders; Payment of Expenses.......................................68

         Section 4.01.         Distributions to Certificateholders; Payment of Special Primary Insurance
                               Premiums.........................................................................68

         Section 4.02.         Advances by the Master Servicer; Distribution Reports to the Trustee.............69

         Section 4.03.         Nonrecoverable Advances..........................................................70

         Section 4.04.         Statements to Certificateholders.................................................70

ARTICLE V             The Certificates..........................................................................72

         Section 5.01.         The Certificates.................................................................72

         Section 5.02.         Certificates Issuable in Classes; Distributions of Principal and
                               Interest; Authorized Denominations...............................................78

         Section 5.03.         Registration of Transfer and Exchange of Certificates............................78

         Section 5.04.         Mutilated, Destroyed, Lost or Stolen Certificates................................79

         Section 5.05.         Persons Deemed Owners............................................................79

         Section 5.06.         Temporary Certificates...........................................................79

         Section 5.07.         Book-Entry for Book-Entry Certificates...........................................80

         Section 5.08.         Notices to Clearing Agency.......................................................81

         Section 5.09.         Definitive Certificates..........................................................81

         Section 5.10.         Office for Transfer of Certificates..............................................82

         Section 5.11.         Nature of Certificates...........................................................82

ARTICLE VI            The Company and the Master Servicer ......................................................82

         Section 6.01.         Liability of the Company and the Master Servicer.................................82

         Section 6.02.         Merger or Consolidation of the Company, or the Master Servicer...................82

         Section 6.03.         Limitation on Liability of the Company, the Master Servicer and Others...........82

         Section 6.04.         The Company and the Master Servicer not to Resign................................83

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         Section 6.05.         Trustee Access...................................................................83

ARTICLE VII           Default...................................................................................84

         Section 7.01.         Events of Default................................................................84

         Section 7.02.         Trustee to Act; Appointment of Successor.........................................86

         Section 7.03.         Notification to Certificateholders...............................................87

ARTICLE VIII          Concerning the Trustees...................................................................88

         Section 8.01.         Duties of Trustees...............................................................88

         Section 8.02.         Certain Matters Affecting the Trustees...........................................89

         Section 8.03.         Trustees Not Liable for Certificates or Mortgage Loans...........................90

         Section 8.04.         Trustees May Own Certificates....................................................91

         Section 8.05.         The Master Servicer to Pay Trustees' Fees and Expenses...........................91

         Section 8.06.         Eligibility Requirements for Trustees............................................91

         Section 8.07.         Resignation and Removal of Trustees..............................................91

         Section 8.08.         Successor Trustee................................................................92

         Section 8.09.         Merger or Consolidation of Trustee...............................................93

         Section 8.10.         Appointment of Co-Trustee or Separate Trustee....................................93

         Section 8.11.         Authenticating Agents............................................................94

         Section 8.12.         Paying Agents....................................................................95

         Section 8.13.         Duties of Delaware Trustee.......................................................96

         Section 8.14.         Amendment to Certificate of Trust................................................96

ARTICLE IX            Termination...............................................................................96

         Section 9.01.         Termination Upon Purchase by the Master Servicer or Liquidation of All
                               Mortgage Loans...................................................................96

         Section 9.02.         Additional Termination Requirements..............................................98

         Section 9.03.         Trust Irrevocable................................................................99

ARTICLE X             Miscellaneous Provisions..................................................................99

         Section 10.01.        Amendment........................................................................99

         Section 10.02.        Recordation of Agreement........................................................100

         Section 10.03.        Limitation on Rights of Certificateholders......................................100

         Section 10.04.        Access to List of Certificateholders............................................101

         Section 10.05.        Governing Law...................................................................102

         Section 10.06.        Notices.........................................................................102

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         Section 10.07.        Severability of Provisions......................................................102

         Section 10.08.        Counterpart Signatures..........................................................102

         Section 10.09.        Benefits of Agreement...........................................................102

         Section 10.10.        Notices and Copies to Rating Agencies...........................................102

                                                                         ix
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Exhibit A.........Form of Certificates
Exhibit B.........[Reserved]
Exhibit C.........[Reserved]
Exhibit D.........Mortgage Loan Schedule
Exhibit E.........Selling And Servicing Contract
Exhibit F.........Form of Transferor Certificate For Junior Subordinate Certificates
Exhibit G.........Form of Transferee's Agreement For Junior Subordinate Certificates
Exhibit H.........Form of Additional Matter Incorporated Into The Certificates
Exhibit I.........Transferor Certificate
Exhibit J.........Transferee Affidavit And Agreement
Exhibit K.........[Reserved]
Exhibit L.........Form of Investment Letter
Exhibit M.........Form of Trustee's Certification Pursuant to Section 2.02
Exhibit N.........Officer's Certificate With Respect to ERISA Matters Pursuant to Section 5.01(d)
Exhibit O.........Officer's Certificate With Respect to ERISA Matters Pursuant to Section 5.01(g)

</TABLE>

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<PAGE>

This Pooling and Servicing Agreement, dated and effective as of April 1, 2004
(this "Agreement"), is executed by and among Washington Mutual Mortgage
Securities Corp., as depositor and Master Servicer (the "Company"), Deutsche
Bank National Trust Company, a national banking association with a corporate
trust office at 1761 East St. Andrew Place, Santa Ana, CA 92705, as Trustee (the
"Trustee"), and Deutsche Bank Trust Company Delaware, as Delaware Trustee (the
"Delaware Trustee"). Capitalized terms used in this Agreement and not otherwise
defined have the meanings ascribed to such terms in Article I hereof.

                             PRELIMINARY STATEMENT

The Company at the Closing Date is the owner of the Mortgage Loans and the other
property being conveyed by it to the Trust. On the Closing Date, the Company
will acquire the Certificates from the Trust as consideration for its transfer
to the Trust of the Mortgage Loans and certain other assets and will be the
owner of the Certificates. The Company has duly authorized the execution and
delivery of this Agreement to provide for (i) the conveyance to the Trust of the
Mortgage Loans and certain other assets and (ii) the issuance to the Company of
the Certificates, representing in the aggregate the entire beneficial interest
in REMIC I. The Company is entering into this Agreement, and the Trustee and the
Delaware Trustee are each accepting the trust created hereby, for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged.

The Certificates issued hereunder, other than the Junior Subordinate
Certificates, have been offered for sale pursuant to a Prospectus, dated
February 10, 2004, and a Prospectus Supplement, dated April 26, 2004, of the
Company (together, the "Prospectus"). The Junior Subordinate Certificates have
been offered for sale pursuant to a Private Placement Memorandum, dated April
28, 2004. The Trust created hereunder is intended to be the "Trust" described in
the Prospectus and the Private Placement Memorandum and the Certificates are
intended to be the "Certificates" described therein. The following table sets
forth the designation, type of interest, Certificate Interest Rate, initial
Class Principal Balance and Final Maturity Date for the Certificates:

                                       1
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<TABLE>
<CAPTION>
                                                     REMIC I Interests

    Class Designation for                         Certificate            Initial Class
        each Class of           Type of            Interest                Principal               Final Maturity
        Certificates           Interest            Rate (1)                 Balance                     Date*
  ------------------------    ------------    --------------------    --------------------     ------------------------
  <S>                         <C>             <C>                     <C>                      <C>
  Class A                      Regular            Variable (2)        $   574,152,300.00             April 2044
  Class B-1                    Regular            Variable (2)             13,063,000.00             April 2044
  Class B-2                    Regular            Variable (2)              6,987,000.00             April 2044
  Class B-3                    Regular            Variable (2)              4,253,000.00             April 2044
  Class B-4                    Regular            Variable (2)              3,949,000.00             April 2044
  Class B-5                    Regular            Variable (2)              3,038,000.00             April 2044
  Class B-6                    Regular            Variable (2)              2,126,301.01             April 2044
  Class R (3)                  Residual              2.574%                       100.00             April 2044
</TABLE>

* The Distribution Date in the specified month, which is the month following the
month the latest maturing Mortgage Loan matures. For federal income tax
purposes, for each Class of REMIC I Regular and Residual Interests, the "latest
possible maturity date" shall be the Final Maturity Date.

(1) Interest distributed on each Distribution Date to the Certificates will have
accrued at the applicable per annum Certificate Interest Rate on the applicable
Class Principal Balance outstanding immediately before such Distribution Date.

(2) For each Distribution Date, the Certificate Interest Rate on the Class A
Certificates and each Class of the Class B Certificates shall equal the lesser
of (x) the Index plus the Certificate Margin and (y) the weighted average of the
Pass-Through Rates on the Mortgage Loans as of the second preceding Due Date
(after giving effect to the payments due on the Mortgage Loans on such Due
Date).

(3) The Class R Certificates shall be entitled to receive the Residual
Distribution Amount and any Excess Liquidation Proceeds.

As provided herein, with respect to REMIC I, the Company will cause an election
to be made on behalf of REMIC I to be treated for federal income tax purposes as
a REMIC. The Certificates (other than the Class R Certificates) will be
designated regular interests in REMIC I and the Class R Certificates will be
designated the sole class of residual interest in REMIC I, for purposes of the
REMIC Provisions. As of the Cut-Off Date, the Mortgage Loans have an aggregate
Principal Balance of $607,568,701.01 and the Certificates have an Aggregate
Certificate Principal Balance of $607,568,701.01.

                             W I T N E S S E T H :

WHEREAS, the Company is a corporation duly organized and existing under and by
virtue of the laws of the State of Delaware and has full corporate power and
authority to enter into this Agreement and to undertake the obligations
undertaken by it herein;

WHEREAS, the Trustee is a national banking association duly organized and
existing under the laws of the United States and has full power and authority to
enter into this Agreement;

WHEREAS, the Delaware Trustee is a banking corporation duly organized and
existing under the laws of the State of Delaware and has full power and
authority to enter into this Agreement;

                                       2
<PAGE>

WHEREAS, prior to the execution and delivery hereof, the Company and the
Delaware Trustee have entered into the Original Trust Agreement, and the
Delaware Trustee has filed the Certificate of Trust;

WHEREAS, it is the intention of the Company, the Trustee and the Delaware
Trustee that the Trust created by this Agreement constitute a statutory trust
under the Statutory Trust Statute, that this Agreement constitute the governing
instrument of the Trust, and that this Agreement amend and restate the Original
Trust Agreement;

WHEREAS, the Company is the owner of the Mortgage Loans identified in the
Mortgage Loan Schedule hereto having unpaid Principal Balances on the Cut-Off
Date as stated therein; and

WHEREAS, the Company has been duly authorized to create the Trust to (i) hold
the Mortgage Loans and certain other property and (ii) issue the Certificates.

NOW, THEREFORE, in order to declare the terms and conditions upon which the
Certificates are to be issued, and in consideration of the premises and of the
purchase and acceptance of the Certificates by the Holders thereof, the Company
covenants and agrees with the Trustee and the Delaware Trustee, for the equal
and proportionate benefit of the respective Holders from time to time of the
Certificates, as applicable, as follows:

                                   ARTICLE I

Section 1.01.     Definitions.

Whenever used in this Agreement, the following words and phrases, unless the
context otherwise requires, shall have the following meanings:

Aggregate Certificate Principal Balance: At any given time, the sum of the then
current Class Principal Balances of the Certificates.

Appraised Value: The amount set forth in an appraisal made by or for (a) the
mortgage originator in connection with its origination of each Mortgage Loan
(including a Mortgage Loan originated to refinance mortgage debt), (b) with
respect to a Mortgage Loan originated to refinance mortgage debt, the originator
of the mortgage debt that was refinanced or (c) the Servicer, at any time, in
accordance with the Selling and Servicing Contract.

Assignment of Proprietary Lease: With respect to a Cooperative Loan, the
assignment or mortgage of the related Cooperative Lease from the Mortgagor to
the originator of the Cooperative Loan.

Authenticating Agent: Any authenticating agent appointed by the Trustee pursuant
to Section 8.11.

Authorized Denomination: With respect to each Class of the Certificates, other
than the Class R Certificates, an initial Certificate Principal Balance equal to
$25,000 and multiples of $1 in excess thereof, except that one Certificate of
each Class of the Junior Subordinate Certificates may be issued in an amount
that is not an integral multiple of $1. With respect to the Class R
Certificates, one Certificate with a Percentage Interest equal to 0.01% and one

                                       3
<PAGE>

Certificate with a Percentage Interest equal to 99.99%.

Available Distribution Amount: For any Distribution Date, the sum of the
following amounts with respect to the Mortgage Loans:

(1) the total amount of all cash received by or on behalf of the Master Servicer
with respect to such Mortgage Loans by the Determination Date for such
Distribution Date and not previously distributed, including Monthly P&I Advances
made by Servicers, Liquidation Proceeds and scheduled amounts of distributions
from Buydown Funds respecting Buydown Loans, if any, except:

(a) all scheduled payments of principal and interest collected but due
subsequent to such Distribution Date;

(b) all Curtailments received after the Prior Period;

(c) all Payoffs received after the Payoff Period immediately preceding such
Distribution Date (together with any interest payment received with such Payoffs
to the extent that it represents the payment of interest accrued on the Mortgage
Loans for the period subsequent to the Prior Period), and interest which was
accrued and received on Payoffs received during the period from the 1st to the
14th day of the month of such Distribution Date, which interest shall not be
included in the calculation of the Available Distribution Amount for any
Distribution Date;

(d) Insurance Proceeds, Liquidation Proceeds and Subsequent Recoveries received
on such Mortgage Loans after the Prior Period;

(e) all amounts in the Certificate Account which are due and reimbursable to a
Servicer or the Master Servicer pursuant to the terms of this Agreement;

(f) the sum of the Master Servicing Fee and the Servicing Fee for each such
Mortgage Loan, and any Special Primary Insurance Premium payable on such
Distribution Date with respect to such Mortgage Loan; and

(g) Excess Liquidation Proceeds;

(2) the sum, to the extent not previously distributed, of the following amounts,
to the extent advanced or received, as applicable, by the Master Servicer:

(a) any Monthly P&I Advance made by the Master Servicer to the Trustee with
respect to such Distribution Date relating to such Mortgage Loans; and

(b) Compensating Interest; and

                                       4
<PAGE>

(3) the total amount of any cash received during the Prior Period by the Trustee
or the Master Servicer in respect of a Purchase Obligation under Section 2.07
and Section 2.08 or any permitted purchase of such a Mortgage Loan.

Bankruptcy Coverage: $100,000 less (a) any scheduled or permissible reduction in
the amount of Bankruptcy Coverage pursuant to the second paragraph of this
definition and (b) Bankruptcy Losses allocated to the Certificates.

The Bankruptcy Coverage may be reduced upon written confirmation from the Rating
Agencies that such reduction will not adversely affect the then current ratings
assigned to the Certificates by the Rating Agencies.

Bankruptcy Loss: A loss on a Mortgage Loan arising out of (i) a reduction in the
scheduled Monthly Payment for such Mortgage Loan by a court of competent
jurisdiction in a case under the United States Bankruptcy Code, other than any
such reduction that arises out of clause (ii) of this definition of "Bankruptcy
Loss," including, without limitation, any such reduction that results in a
permanent forgiveness of principal, or (ii) with respect to any Mortgage Loan, a
valuation, by a court of competent jurisdiction in a case under such Bankruptcy
Code, of the related Mortgaged Property in an amount less than the then
outstanding Principal Balance of such Mortgage Loan.

Beneficial Holder: A Person holding a beneficial interest in any Book-Entry
Certificate as or through a DTC Participant or an Indirect DTC Participant or a
Person holding a beneficial interest in any Definitive Certificate.

Benefit Plan Opinion: With respect to any Certificate presented for registration
in the name of any Person, an Opinion of Counsel acceptable to and in form and
substance satisfactory to the Trustee and the Company to the effect that the
purchase or holding of such Certificate is permissible under applicable law,
will not constitute or result in a non-exempt prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code, and will not subject the
Trust, the Trustee, the Delaware Trustee, the Master Servicer or the Company to
any obligation or liability (including obligations or liabilities under Section
406 of ERISA or Section 4975 of the Code) in addition to those undertaken in
this Agreement, which Opinion of Counsel shall not be an expense of the Trust,
the Trustee, the Delaware Trustee, the Master Servicer or the Company.

Book-Entry Certificates: The Class A and Senior Subordinate Certificates,
beneficial ownership and transfers of which shall be made through book entries
as described in Section 5.07.

Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a day on
which banking institutions in Stockton, California, Chicago, Illinois, New York,
New York, Seattle, Washington or any city in which the Corporate Trust Office is
located (which shall initially be Santa Ana, California) are authorized or
obligated by law or executive order to be closed.

Buydown Agreement: An agreement between a Person and a Mortgagor pursuant to
which such Person has provided a Buydown Fund.

                                       5
<PAGE>

Buydown Fund: A fund provided by the originator of a Mortgage Loan or another
Person with respect to a Buydown Loan which provides an amount sufficient to
subsidize regularly scheduled principal and interest payments due on such
Buydown Loan for a period. Buydown Funds may be (i) funded at the par values of
future payment subsidies, or (ii) funded in an amount less than the par values
of future payment subsidies, and determined by discounting such par values in
accordance with interest accruing on such amounts, in which event they will be
deposited in an account bearing interest. Buydown Funds may be held in a
separate Buydown Fund Account or may be held in a Custodial Account for P&I or a
Custodial Account for Reserves and monitored by a Servicer.

Buydown Fund Account: A separate account or accounts created and maintained
pursuant to Section 3.02 (a) with a financial institution approved by the Master
Servicer, (b) within FDIC insured accounts (or other accounts with comparable
insurance coverage acceptable to the Rating Agencies) created, maintained and
monitored by a Servicer or (c) in a separate non-trust account without FDIC or
other insurance in an Eligible Institution (including the Trustee). Such account
or accounts may be non-interest bearing or may bear interest. In the event that
a Buydown Fund Account is established pursuant to clause (b) of the preceding
sentence, amounts held in such Buydown Fund Account shall not exceed the level
of deposit insurance coverage on such account; accordingly, more than one
Buydown Fund Account may be established.

Buydown Loan: A Mortgage Loan for which the Mortgage Interest Rate has been
subsidized through a Buydown Fund provided at the time of origination of such
Mortgage Loan.

Carry-Forward Subsequent Recoveries Amount: For any Distribution Date, the
excess, if any, of (i) the Subsequent Recoveries for such Distribution Date over
(ii) the amount by which the Class Principal Balance of the Class of Subordinate
Certificates with the lowest priority is increased in respect of Subsequent
Recoveries on such Distribution Date pursuant to the definition of "Class
Principal Balance" herein.

Certificate: Any one of the Certificates issued pursuant to this Agreement,
executed by the Trustee and authenticated by or on behalf of the Trustee
hereunder in substantially one of the forms set forth in Exhibit A and B hereto.
The additional matter appearing in Exhibit H shall be deemed incorporated into
Exhibit A as though set forth at the end of such Exhibit.

Certificate Account: The separate trust account created and maintained with the
Trustee, the Investment Depository or any other bank or trust company acceptable
to the Rating Agencies which is incorporated under the laws of the United States
or any state thereof pursuant to Section 3.04, which account shall bear a
designation clearly indicating that the funds deposited therein are held in
trust for the benefit of the Trust or any other account serving a similar
function acceptable to the Rating Agencies. Funds in the Certificate Account may
be invested in Eligible Investments pursuant to Section 3.04(b) and reinvestment
earnings thereon shall be paid to the Master Servicer as additional servicing
compensation. Funds deposited in the Certificate Account (exclusive of the
Master Servicing Fee) shall be held in trust for the Certificateholders and for
the uses and purposes set forth in Section 2.01, Section 3.04, Section 3.05 and
Section 4.01.

                                       6
<PAGE>

Certificateholder or Holder: With respect to the Certificates, the person in
whose name a Certificate is registered in the Certificate Register, except that,
solely for the purposes of giving any consent pursuant to this Agreement, any
Certificate registered in the name of the Company, the Master Servicer or any
affiliate thereof shall be deemed not to be outstanding and the Percentage
Interest evidenced thereby shall not be taken into account in determining
whether the requisite percentage of Percentage Interests necessary to effect any
such consent has been obtained; provided, that the Trustee may conclusively rely
upon an Officer's Certificate to determine whether any Person is an affiliate of
the Company or the Master Servicer.

Certificate Interest Rate: For each Class of Certificates and REMIC I Regular
Interests, the per annum rate set forth as the Certificate Interest Rate for
such Class in the Preliminary Statement hereto.

Certificate Margin: 1.400%; provided, however, that in the event the Index is
replaced, the Certificate Margin will be increased or decreased by the amount by
which the Mortgage Loan Margin for each Mortgage Loan is increased or decreased
(before rounding of the replacement Mortgage Loan Margin pursuant to the related
Mortgage Note).

Certificate of Trust: The certificate of trust filed with respect to the Trust
with the Secretary of State in accordance with Section 3810(a) of the Statutory
Trust Statute.

Certificate Principal Balance: For each Certificate of any Class, the portion of
the related Class Principal Balance, if any, represented by such Certificate.

Certificate Register and Certificate Registrar: The register maintained and the
registrar appointed, respectively, pursuant to Section 5.03.

Class: All Certificates having the same priority and rights to payments on the
Mortgage Loans from the Available Distribution Amount, which Certificates shall
be designated as a separate Class, and which shall be set forth in the
applicable forms of Certificates attached hereto as Exhibit A. Each Class of
Certificates shall be entitled to receive the amounts allocated to such Class
pursuant to the definition of "Distribution Amount" only to the extent of the
Available Distribution Amount for such Distribution Date remaining after
distributions in accordance with prior clauses of the definition of
"Distribution Amount."

Class A Certificates: The Certificates designated as "Class A" on the face
thereof in substantially the form attached hereto as Exhibit A.

Class B Certificates: The Class B-1, Class B-2, Class B-3, Class B-4, Class B-5
and Class B-6 Certificates.

Class B-1 Certificates: The Certificates designated as "Class B-1" on the face
thereof in substantially the form attached hereto as Exhibit A.

Class B-2 Certificates: The Certificates designated as "Class B-2" on the face
thereof in substantially the form attached hereto as Exhibit A.

                                       7
<PAGE>

Class B-3 Certificates: The Certificates designated as "Class B-3" on the face
thereof in substantially the form attached hereto as Exhibit A.

Class B-4 Certificates: The Certificates designated as "Class B-4" on the face
thereof in substantially the form attached hereto as Exhibit A.

Class B-5 Certificates: The Certificates designated as "Class B-5" on the face
thereof in substantially the form attached hereto as Exhibit A.

Class B-6 Certificates: The Certificates designated as "Class B-6" on the face
thereof in substantially the form attached hereto as Exhibit A.

Class Principal Balance: For any Class of Certificates, the applicable initial
Class Principal Balance therefor set forth in the Preliminary Statement hereto,
corresponding to the rights of such Class in payments of principal due to be
passed through to the Certificateholders from principal payments on the Mortgage
Loans, as reduced from time to time by (x) distributions of principal to the
Certificateholders of such Class and (y) the portion of Realized Losses
allocated to the Class Principal Balance of such Class pursuant to the
definition of "Realized Loss" with respect to a given Distribution Date, and as
increased from time to time by the portion of Negative Amortization Amounts
allocated to the Class Principal Balance of such Class pursuant to the
definition of "Negative Amortization Amount" with respect to a given
Distribution Date. For any Distribution Date, the reduction of the Class
Principal Balance of any Class of Certificates pursuant to the definition of
"Realized Loss" and the increase in the Class Principal Balance of any Class of
Certificates pursuant to the definition of "Negative Amortization Amount" shall
be deemed effective after the determination and distribution of principal on
such Class pursuant to the definition of "Distribution Amount."

Notwithstanding the foregoing, any amounts distributed in respect of principal
losses pursuant to paragraph (xxii) of the definition of "Distribution Amount"
shall not cause a reduction in the Class Principal Balances of the Certificates.

In addition to the foregoing, on each Distribution Date, the Class Principal
Balance of the Class of Subordinate Certificates with the lowest priority then
outstanding shall be increased by an amount equal to the lesser of (i) the
Subsequent Recoveries for such Distribution Date and (ii) the amount of Realized
Losses allocated to such Class on previous Distribution Dates (the amount in
this clause (ii) reduced by the amount, if any, by which such Class Principal
Balance has been increased on prior Distribution Dates pursuant to this
paragraph).

The Class Principal Balance for the Class A Certificates shall be referred to as
the "Class A Principal Balance," the Class Principal Balance for the Class B-1
Certificates shall be referred to as the "Class B-1 Principal Balance," and so
on.

Class R Certificates: The Certificates designated as "Class R" on the face
thereof in substantially the form attached hereto as Exhibit A, which Class has
been designated as the sole class of "residual interest" in REMIC I, pursuant to
Section 2.06 for purposes of Section 860G(a)(2) of the Code.

Clean-Up Call Percentage: 5%.

                                       8
<PAGE>

Clearing Agency: An organization registered as a "clearing agency" pursuant to
Section 17A of the Securities Exchange Act of 1934, as amended, which initially
shall be DTC.

Closing Date: April 28, 2004, which is the date of settlement of the sale of the
Certificates to the original purchasers thereof.

Code: The Internal Revenue Code of 1986, as amended.

Company: Washington Mutual Mortgage Securities Corp., a Delaware corporation, or
its successor-in-interest.

Compensating Interest: For any Distribution Date, the lesser of (i) the sum of
(a) the aggregate Master Servicing Fee payable with respect to the Mortgage
Loans on such Distribution Date, (b) the aggregate Payoff Earnings with respect
to the Mortgage Loans for such Distribution Date and (c) the aggregate Payoff
Interest with respect to the Mortgage Loans for such Distribution Date and (ii)
the aggregate Uncollected Interest with respect to the Mortgage Loans for such
Distribution Date.

Cooperative: A private, cooperative housing corporation which owns or leases
land and all or part of a building or buildings, including apartments, spaces
used for commercial purposes and common areas therein and whose board of
directors authorizes, among other things, the sale of Cooperative Stock.

Cooperative Apartment: A dwelling unit in a multi-dwelling building owned or
leased by a Cooperative, which unit the Mortgagor has an exclusive right to
occupy pursuant to the terms of a proprietary lease or occupancy agreement.

Cooperative Lease: With respect to a Cooperative Loan, the proprietary lease or
occupancy agreement with respect to the Cooperative Apartment occupied by the
Mortgagor and relating to the related Cooperative Stock, which lease or
agreement confers an exclusive right to the holder of such Cooperative Stock to
occupy such apartment.

Cooperative Loans: Any of the Mortgage Loans made in respect of a Cooperative
Apartment, evidenced by a Mortgage Note and secured by (i) a Security Agreement,
(ii) the related Cooperative Stock Certificate, (iii) an assignment or mortgage
of the Cooperative Lease, (iv) financing statements and (v) a stock power (or
other similar instrument), and ancillary thereto, a Recognition Agreement, each
of which was transferred and assigned to the Trust pursuant to Section 2.04.

Cooperative Stock: With respect to a Cooperative Loan, the single outstanding
class of stock, partnership interest or other ownership instrument in the
related Cooperative.

Cooperative Stock Certificate: With respect to a Cooperative Loan, the stock
certificate or other instrument evidencing the related Cooperative Stock.

Corporate Trust Office: The corporate trust office of the Trustee in the State
of California, at which at any particular time its corporate trust business with
respect to this Agreement shall be administered, which office at the date of the
execution of this Agreement is located at 1761 East St. Andrew Place, Santa Ana,
CA 92705, Attention: Trust Administration WA04A2.

                                       9
<PAGE>

Corporation: Any Person (other than an individual, partnership, joint venture or
unincorporated organization) incorporated, associated, organized, chartered or
existing under the laws of any state or under the federal laws of the United
States of America; provided, that such Person have indefinite existence under
the law of its domicile.

Cumulative Carry-Forward Subsequent Recoveries Amount: For any Distribution
Date, the sum of (i) the Carry-Forward Subsequent Recoveries Amount for such
Distribution Date and (ii) the Carry-Forward Subsequent Recoveries Amounts for
prior Distribution Dates to the extent such Carry-Forward Subsequent Recoveries
Amounts have not been applied in reduction of Realized Losses on prior
Distribution Dates pursuant to the first paragraph of the definition of
"Realized Loss" herein.

Curtailment: Any payment of principal on a Mortgage Loan, made by or on behalf
of the related Mortgagor, other than a Monthly Payment, a Prepaid Monthly
Payment or a Payoff, which is applied to reduce the outstanding principal
balance of the Mortgage Loan. (Prepayment penalties are not payments of
principal and hence Curtailments do not include prepayment penalties.)

Curtailment Shortfall: For any Distribution Date and for any Curtailment applied
with a Monthly Payment in the Prior Period other than a Prepaid Monthly Payment,
an amount equal to one month's interest on such Curtailment at the applicable
Pass-Through Rate on such Mortgage Loan.

Custodial Account for P&I: The Custodial Account for principal and interest
established and maintained by each Servicer pursuant to its Selling and
Servicing Contract and caused by the Master Servicer to be established and
maintained pursuant to Section 3.02 (a) with a financial institution approved by
the Master Servicer such that the rights of the Master Servicer, the Trust, the
Trustee, the Delaware Trustee and the Certificateholders thereto shall be fully
protected against the claims of any creditors of the applicable Servicer and of
any creditors or depositors of the institution in which such account is
maintained, (b) within FDIC insured accounts (or other accounts with comparable
insurance coverage acceptable to the Rating Agencies) created, maintained and
monitored by a Servicer or (c) in a separate non-trust account without FDIC or
other insurance in an Eligible Institution (including the Trustee). In the event
that a Custodial Account for P&I is established pursuant to clause (b) of the
preceding sentence, amounts held in such Custodial Account for P&I shall not
exceed the level of deposit insurance coverage on such account; accordingly,
more than one Custodial Account for P&I may be established. Any amount that is
at any time not protected or insured in accordance with the first sentence of
this definition of "Custodial Account for P&I" shall promptly be withdrawn from
such Custodial Account for P&I and be remitted to the Investment Account.

Custodial Account for Reserves: The Custodial Account for Reserves established
and maintained by each Servicer pursuant to its Selling and Servicing Contract
and caused by the Master Servicer to be established and maintained pursuant to
Section 3.02 (a) with a financial institution approved by the Master Servicer
such that the rights of the Master Servicer, the Trust, the Trustee, the
Delaware Trustee and the Certificateholders thereto shall be fully protected
against the claims of any creditors of the applicable Servicer and of any
creditors or depositors of the institution in which such account is maintained,

                                       10
<PAGE>

(b) within FDIC insured accounts (or other accounts with comparable insurance
coverage acceptable to the Rating Agencies) created, maintained and monitored by
a Servicer or (c) in a separate non-trust account without FDIC or other
insurance in an Eligible Institution (including the Trustee). In the event that
a Custodial Account for Reserves is established pursuant to clause (b) of the
preceding sentence, amounts held in such Custodial Account for Reserves shall
not exceed the level of deposit insurance coverage on such account; accordingly,
more than one Custodial Account for Reserves may be established. Any amount that
is at any time not protected or insured in accordance with the first sentence of
this definition of "Custodial Account for Reserves" shall promptly be withdrawn
from such Custodial Account for Reserves and be remitted to the Investment
Account.

Custodial Agreement: The agreement, if any, between the Trustee and a Custodian
(or the Trustee, a Custodian and the Master Servicer) providing for the
safekeeping of the Mortgage Files on behalf of the Trust.

Custodian: A custodian which is appointed by the Trustee with the consent of the
Master Servicer, as provided in Article II hereof, pursuant to a Custodial
Agreement. Any Custodian so appointed shall act as agent on behalf of the
Trustee. The reasonable fees and expenses of the Custodian shall be paid by the
Master Servicer. The Trustee shall remain at all times responsible under the
terms of this Agreement, notwithstanding the fact that certain duties have been
assigned to a Custodian.

Cut-Off Date: April 1, 2004.

Definitive Certificates: Certificates in definitive, fully registered and
certificated form.

Delaware Trustee: Deutsche Bank Trust Company Delaware, or its
successor-in-interest as provided in Section 8.09, or any successor trustee
appointed as herein provided.

Depositary Agreement: The Letter of Representations, dated April 27, 2004 by and
among DTC, the Trust and the Trustee. The Trustee is authorized to enter into
the Depositary Agreement on behalf of the Trust.

Destroyed Mortgage Note: A Mortgage Note the original of which (or a portion of
the original of which) was permanently lost or destroyed and has not been
replaced.

Determination Date: A day not later than the 10th day preceding a related
Distribution Date, as determined by the Master Servicer.

Disqualified Organization: Any Person which is not a Permitted Transferee, but
does not include any Pass-Through Entity which owns or holds a Residual
Certificate and of which a Disqualified Organization, directly or indirectly,
may be a stockholder, partner or beneficiary.

Distribution Amount: For any Distribution Date, the Available Distribution
Amount for such Distribution Date shall be distributed to the Certificates in
the following amounts and priority, to the extent of the Available Distribution
Amount for such Distribution Date:

                                       11
<PAGE>

(i) first, to the Class A and Class R Certificates, concurrently, the sum of the
Interest Distribution Amounts for such Classes remaining unpaid from previous
Distribution Dates, pro rata according to their respective shares of such unpaid
amounts;

(ii) second, to the Class A and Class R Certificates, concurrently, the sum of
the Interest Distribution Amounts for such Classes for the current Distribution
Date, pro rata according to their respective Interest Distribution Amounts;

(iii) third, to the Class A and Class R Certificates, as principal, the Senior
Principal Distribution Amount, sequentially, as follows:

(a) first, to the Class R Certificates, until the Class R Principal Balance has
been reduced to zero; and

(b) second, to the Class A Certificates, until the Class A Principal Balance has
been reduced to zero;

(iv) fourth, to the Class B-1 Certificates, the Interest Distribution Amount for
such Class of Certificates remaining unpaid from previous Distribution Dates;

(v) fifth, to the Class B-1 Certificates, the Interest Distribution Amount for
such Class of Certificates for the current Distribution Date;

(vi) sixth, to the Class B-1 Certificates, the portion of the Subordinate
Principal Distribution Amount allocable to such Class of Certificates pursuant
to the definition of "Subordinate Principal Distribution Amount," until the
Class B-1 Principal Balance has been reduced to zero;

(vii) seventh, to the Class B-2 Certificates, the Interest Distribution Amount
for such Class of Certificates remaining unpaid from previous Distribution
Dates;

(viii) eighth, to the Class B-2 Certificates, the Interest Distribution Amount
for such Class of Certificates for the current Distribution Date;

(ix) ninth, to the Class B-2 Certificates, the portion of the Subordinate
Principal Distribution Amount allocable to such Class of Certificates pursuant
to the definition of "Subordinate Principal Distribution Amount," until the
Class B-2 Principal Balance has been reduced to zero;

(x) tenth, to the Class B-3 Certificates, the Interest Distribution Amount for
such Class of Certificates remaining unpaid from previous Distribution Dates;

(xi) eleventh, to the Class B-3 Certificates, the Interest Distribution Amount
for such Class of Certificates for the current Distribution Date;

(xii) twelfth, to the Class B-3 Certificates, the portion of the Subordinate
Principal Distribution Amount allocable to such Class of Certificates pursuant
to the definition of "Subordinate Principal Distribution Amount," until the
Class B-3 Principal Balance has been reduced to zero;

                                       12
<PAGE>

(xiii) thirteenth, to the Class B-4 Certificates, the Interest Distribution
Amount for such Class of Certificates remaining unpaid from previous
Distribution Dates;

(xiv) fourteenth, to the Class B-4 Certificates, the Interest Distribution
Amount for such Class of Certificates for the current Distribution Date;

(xv) fifteenth, to the Class B-4 Certificates, the portion of the Subordinate
Principal Distribution Amount allocable to such Class of Certificates pursuant
to the definition of "Subordinate Principal Distribution Amount," until the
Class B-4 Principal Balance has been reduced to zero;

(xvi) sixteenth, to the Class B-5 Certificates, the Interest Distribution Amount
for such Class of Certificates remaining unpaid from previous Distribution
Dates;

(xvii) seventeenth, to the Class B-5 Certificates, the Interest Distribution
Amount for such Class of Certificates for the current Distribution Date;

(xviii) eighteenth, to the Class B-5 Certificates, the portion of the
Subordinate Principal Distribution Amount allocable to such Class of
Certificates pursuant to the definition of "Subordinate Principal Distribution
Amount," until the Class B-5 Principal Balance has been reduced to zero;

(xix) nineteenth, to the Class B-6 Certificates, the Interest Distribution
Amount for such Class of Certificates remaining unpaid from previous
Distribution Dates;

(xx) twentieth, to the Class B-6 Certificates, the Interest Distribution Amount
for such Class of Certificates for the current Distribution Date;

(xxi) twenty-first, to the Class B-6 Certificates, the portion of the
Subordinate Principal Distribution Amount allocable to such Class of
Certificates pursuant to the definition of "Subordinate Principal Distribution
Amount," until the Class B-6 Principal Balance has been reduced to zero;

(xxii) twenty-second, to the outstanding Classes of Certificates in the order of
seniority (which, from highest to lowest, shall be as follows: the Class A
Certificates, and then Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and
Class B-6 of decreasing seniority) the remaining portion, if any, of the
Available Distribution Amount, up to the amount of unreimbursed Realized Losses
allocable to principal previously allocated to each such Class, if any;
provided, however, that any amounts distributed pursuant to this paragraph
(xxii) of this definition of "Distribution Amount" shall not cause a further
reduction in the Class Principal Balances of any of the Classes of Certificates;
and

(xxiii) twenty-third, to the Class R Certificates, the Residual Distribution
Amount for such Distribution Date.

                                       13
<PAGE>

Distribution Date: With respect to distributions on the Certificates, the 25th
day (or, if such 25th day is not a Business Day, the Business Day immediately
succeeding such 25th day) of each month, with the first such date being May 25,
2004. The "related Due Date" for any Distribution Date is the Due Date
immediately preceding such Distribution Date.

DTC: The Depository Trust Company.

DTC Participant: A broker, dealer, bank, other financial institution or other
Person for whom DTC effects book-entry transfers and pledges of securities
deposited with DTC.

Due Date: The day on which the Monthly Payment for each Mortgage Loan is due.

Eligible Institution: An institution having (i) the highest short-term debt
rating, and one of the two highest long-term debt ratings of the Rating
Agencies, (ii) with respect to any Custodial Account for P&I and special
Custodial Account for Reserves, an unsecured long-term debt rating of at least
one of the two highest unsecured long-term debt ratings of the Rating Agencies,
(iii) with respect to any Buydown Fund Account or Custodial Account which also
serves as a Buydown Fund Account, the highest unsecured long-term debt rating by
the Rating Agencies, or (iv) the approval of the Rating Agencies. Such
institution may be the Servicer if the applicable Selling and Servicing Contract
requires the Servicer to provide the Master Servicer with written notice on the
Business Day following the date on which the Servicer determines that such
Servicer's short-term debt and unsecured long-term debt ratings fail to meet the
requirements of the prior sentence. Notwithstanding the foregoing, Washington
Mutual Bank, FA shall be an "Eligible Institution" if the following conditions
are satisfied: (i) Washington Mutual Bank, FA is acting as Servicer, (ii) if S&P
is a Rating Agency as defined herein, the long-term unsecured debt obligations
of Washington Mutual Bank, FA are rated no lower than "A-" by S&P and the
short-term unsecured debt obligations of Washington Mutual Bank, FA are rated no
lower than "A-2" by S&P, (iii) if Fitch is a Rating Agency as defined herein,
the long-term unsecured debt obligations of Washington Mutual Bank, FA are rated
no lower than "A" by Fitch and the short-term unsecured debt obligations of
Washington Mutual Bank, FA are rated no lower than "F1" by Fitch and (iv) if
Moody's is a Rating Agency as defined herein, the long-term unsecured debt
obligations of Washington Mutual Bank, FA are rated no lower than "A2" by
Moody's and the short-term unsecured debt obligations of Washington Mutual Bank,
FA are rated no lower than "P-1" by Moody's; provided, that if the long-term or
short-term unsecured debt obligations of Washington Mutual Bank, FA are
downgraded by any of the Rating Agencies to a rating lower than the applicable
rating specified in this sentence, Washington Mutual Bank, FA shall cease to be
an "Eligible Institution" ten Business Days after notification of such
downgrade.

Eligible Investments: Any one or more of the obligations or securities listed
below in which funds deposited in the Investment Account, the Certificate
Account, the Custodial Account for P&I and the Custodial Account for Reserves
may be invested:

(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;

                                       14
<PAGE>

(ii) Repurchase agreements on obligations described in clause (i) of this
definition of "Eligible Investments," provided that the unsecured obligations of
the party (including the Trustee in its commercial capacity) agreeing to
repurchase such obligations have at the time one of the two highest short term
debt ratings of the Rating Agencies and provided that such repurchaser's
unsecured long term debt has one of the two highest unsecured long term debt
ratings of the Rating Agencies;

(iii) Federal funds, certificates of deposit, time deposits and bankers'
acceptances of any U.S. bank or trust company incorporated under the laws of the
United States or any state (including the Trustee in its commercial capacity),
provided that the debt obligations of such bank or trust company (or, in the
case of the principal bank in a bank holding company system, debt obligations of
the bank holding company) at the date of acquisition thereof have one of the two
highest short term debt ratings of the Rating Agencies and unsecured long term
debt has one of the two highest unsecured long term debt ratings of the Rating
Agencies;

(iv) Obligations of, or obligations guaranteed by, any state of the United
States or the District of Columbia, provided that such obligations at the date
of acquisition thereof shall have the highest long-term debt ratings available
for such securities from the Rating Agencies;

(v) Commercial paper of any corporation incorporated under the laws of the
United States or any state thereof, which on the date of acquisition has the
highest commercial paper rating of the Rating Agencies, provided that the
corporation has unsecured long term debt that has one of the two highest
unsecured long term debt ratings of the Rating Agencies;

(vi) Securities (other than stripped bonds or stripped coupons) bearing interest
or sold at a discount that are issued by any corporation incorporated under the
laws of the United States or any state thereof and have the highest long-term
unsecured rating available for such securities from the Rating Agencies;
provided, however, that securities issued by any such corporation will not be
investments to the extent that investment therein would cause the outstanding
principal amount of securities issued by such corporation that are then held as
part of the Investment Account or the Certificate Account to exceed 20% of the
aggregate principal amount of all Eligible Investments then held in the
Investment Account and the Certificate Account; and

(vii) Units of taxable money market funds (which may be 12b-1 funds, as
contemplated under the rules promulgated by the Securities and Exchange
Commission under the Investment Company Act of 1940), which funds have the
highest rating available for such securities from the Rating Agencies or which
have been designated in writing by the Rating Agencies as Eligible Investments;

provided, however, that such obligation or security is held for a temporary
period pursuant to Section 1.860G-2(g)(1) of the Treasury Regulations, and that
such period can in no event exceed thirteen months.

                                       15
<PAGE>

In no event shall an instrument be an Eligible Investment if such instrument (a)
evidences a right to receive only interest payments with respect to the
obligations underlying such instrument or (b) has been purchased at a price
greater than the outstanding principal balance of such instrument.

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

ERISA Restricted Certificate: Any Senior Subordinate Certificate.

Event of Default: Any event of default as specified in Section 7.01.

Excess Liquidation Proceeds: With respect to any Distribution Date, the sum of
(i) the excess, if any, of aggregate Liquidation Proceeds received during the
Prior Period over the amount that would have been received if Payoffs had been
made with respect to such Mortgage Loans on the date such Liquidation Proceeds
were received and (ii) any Excess Subsequent Recoveries for such Distribution
Date.

Excess Subsequent Recoveries: For any Distribution Date, the excess, if any, of
(i) amounts received by the Master Servicer during the Prior Period (after
deduction of amounts reimbursable under Section 3.05(a)(i) and (ii)) in
connection with the liquidation of defaulted Mortgage Loans after such Mortgage
Loans became Liquidated Mortgage Loans over (ii) the Subsequent Recoveries for
such Distribution Date.

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

FHA: Federal Housing Administration, or any successor thereto.

Fannie Mae: The entity formerly known as the Federal National Mortgage
Association, or any successor thereto.

Final Maturity Date: With respect to each Class of Certificates, the date set
forth in the table contained in the Preliminary Statement hereto.

Fraud Coverage: During the period prior to the first anniversary of the Cut-Off
Date, 2.00% of the aggregate principal balance of the Mortgage Loans as of the
Cut-Off Date (the "Initial Fraud Coverage"), reduced by Fraud Losses allocated
to the Certificates since the Cut-Off Date; during the period from the first
anniversary of the Cut-Off Date to (but not including) the fifth anniversary of
the Cut-Off Date, the amount of the Fraud Coverage on the most recent previous
anniversary of the Cut-Off Date (calculated in accordance with the second
sentence of this paragraph) reduced by Fraud Losses allocated to the
Certificates since such anniversary; and during the period on and after the
fifth anniversary of the Cut-Off Date, zero. On each anniversary of the Cut-Off
Date, the Fraud Coverage shall be reduced to the lesser of (i) on the first,
second, third and fourth anniversaries of the Cut-Off Date, 1.00% of the
aggregate principal balance of the Mortgage Loans as of the Due Date in the
preceding month and (ii) the excess of the Initial Fraud Coverage over
cumulative Fraud Losses allocated to the Certificates since the Cut-Off Date.

                                       16
<PAGE>

The Fraud Coverage may be reduced upon written confirmation from the Rating
Agencies that such reduction will not adversely affect the then current ratings
assigned to the Certificates by the Rating Agencies.

Fraud Loss: A Realized Loss (or portion thereof) with respect to a Mortgage Loan
arising from any action, event or state of facts with respect to such Mortgage
Loan which, because it involved or arose out of any dishonest, fraudulent,
criminal, negligent or knowingly wrongful act, error or omission by the
Mortgagor, originator (or assignee thereof) of such Mortgage Loan, Lender, a
Servicer or the Master Servicer, would result in an exclusion from, denial of,
or defense to coverage which otherwise would be provided by a Primary Insurance
Policy previously issued with respect to such Mortgage Loan.

Freddie Mac: The entity formerly known as the Federal Home Loan Mortgage
Corporation, or any successor thereto.

Index: For each Mortgage Loan, One-Year MTA. For each Mortgage Loan and each
Interest Rate Adjustment Date, the One-Year MTA figure used to calculate the
Mortgage Interest Rate will be the most recent One-Year MTA figure available as
of fifteen days before such Interest Rate Adjustment Date. In the event One-Year
MTA (or a substitute index) is no longer available, the Master Servicer will
select a substitute index in accordance with the Mortgage Note.

For the Class A and Class B Certificates, One-Year MTA. For each Class of Class
A and Class B Certificates and each Distribution Date, the One-Year MTA figure
used to calculate the Certificate Interest Rate for such Distribution Date will
be the most recent One-Year MTA figure available as of fifteen days before the
beginning of the Prior Period. In the event One-Year MTA (or a substitute index)
is no longer available, the substitute index selected for the Mortgage Loans
will be the substitute index for the Class A and Class B Certificates.

Indirect DTC Participants: Entities such as banks, brokers, dealers or trust
companies, that clear through or maintain a custodial relationship with a DTC
Participant, either directly or indirectly.

Initial Custodial Agreement: The Custodial Agreement, dated the date hereof,
among the Trustee, the Master Servicer and the Initial Custodian.

Initial Custodian: Washington Mutual Bank fsb, which has been designated by the
Company to be appointed by the Trustee to act as Custodian, and whose
appointment has been approved by the Master Servicer.

Insurance Proceeds: Amounts paid or payable by the insurer under any Primary
Insurance Policy or any other insurance policy (including any replacement policy
permitted under this Agreement) covering any Mortgage Loan or Mortgaged
Property, including, without limitation, any hazard insurance policy required
pursuant to Section 3.07, any title insurance policy required pursuant to
Section 2.08 and any FHA insurance policy or VA guaranty.

Interest Distribution Amount: For any Distribution Date, for any Class of
Certificates, the amount of interest accrued during the Prior Period, at the
related Certificate Interest Rate for such Class for such Distribution Date, on

                                       17
<PAGE>

the respective Class Principal Balance immediately before such Distribution
Date, reduced by Negative Amortization Amounts, Uncompensated Interest Shortfall
and the interest portion of Realized Losses allocated to such Class on such
Distribution Date pursuant to the definitions of "Negative Amortization Amount,"
"Uncompensated Interest Shortfall" and "Realized Loss," respectively.

The computation of interest accrued shall be made on the basis of a 360-day year
of twelve 30-day months.

Interest Rate Adjustment Date: As to each Mortgage Loan, the initial Due Date on
which an adjustment to the Mortgage Interest Rate of such Mortgage Loan becomes
effective.

Investment Account: The commingled account (which shall be commingled only with
investment accounts related to series of pass-through certificates with a class
of certificates which has a rating equal to the highest of the Ratings of the
Certificates) maintained by the Master Servicer in the trust department of the
Investment Depository pursuant to Section 3.03 and which bears a designation
acceptable to the Rating Agencies.

Investment Depository: JPMorgan Chase Bank, or another bank or trust company
designated from time to time by the Master Servicer. The Investment Depository
shall at all times be an Eligible Institution.

Junior Subordinate Certificates: The Class B-4, Class B-5 and Class B-6
Certificates.

Last Scheduled Distribution Date: With respect to any Class of Certificates, the
Final Maturity Date for such Class.

Lender: An institution from which the Company purchased any Mortgage Loans
pursuant to a Selling and Servicing Contract.

Liquidated Mortgage Loan: A Mortgage Loan (other than a Mortgage Loan with
respect to which a Payoff has been made) for which the Master Servicer or the
applicable Servicer has determined in accordance with its customary servicing
practices that it has received all amounts which it expects to recover from or
on account of such Mortgage Loan, whether from Insurance Proceeds, Liquidation
Proceeds or otherwise. For purposes of this definition, acquisition of a
Mortgaged Property by the Trust shall not constitute final liquidation of the
related Mortgage Loan.

Liquidation Principal: The principal portion of Liquidation Proceeds received
with respect to each Mortgage Loan which became a Liquidated Mortgage Loan (but
not in excess of the principal balance thereof) during the Prior Period.

Liquidation Proceeds: Amounts after deduction of amounts reimbursable under
Section 3.05(a)(i) and (ii) received and retained in connection with the
liquidation of defaulted Mortgage Loans, whether through foreclosure or
otherwise, other than any Subsequent Recoveries.

Loan-to-Value Ratio: The original principal amount of a Mortgage Loan divided by
the Original Value; provided, however, that references to "current Loan-to-Value
Ratio" or "Loan-to-Value Ratio as of the Cut-Off Date" in Section 2.08 shall be
deemed to mean the then current Principal Balance of a Mortgage Loan divided by
the Original Value.

                                       18
<PAGE>

Lowest Class B Owner: An owner unaffiliated with the Company or the Master
Servicer of (i) a 100% interest in the Class of Class B Certificates with the
lowest priority or (ii) a 100% interest in a class of securities representing
such interest in such Class specified in clause (i) above.

Master Servicer: The Company, or any successor thereto appointed as provided
pursuant to Section 7.02, acting to service and administer the Mortgage Loans
pursuant to Section 3.01.

Master Servicer Business Day: Any day other than a Saturday, a Sunday, or a day
on which banking institutions in Chicago, Illinois are authorized or obligated
by law or executive order to be closed.

Master Servicing Fee: For each Mortgage Loan, the fee charged by the Master
Servicer for supervising the mortgage servicing and advancing certain expenses,
equal to 1/12 of the product of (i) the Master Servicing Fee Rate for such
Mortgage Loan and (ii) the outstanding Principal Balance of such Mortgage Loan,
payable monthly from the Certificate Account, the Investment Account or the
Custodial Account for P&I.

Master Servicing Fee Rate: For each Mortgage Loan, the per annum rate set forth
for such Mortgage Loan in the Mortgage Loan Schedule, equal to 0.050%.

MERS: Mortgage Electronic Registration Systems, Inc., a Delaware corporation, or
any successor thereto.

MERS Loan: Any Mortgage Loan registered on the MERS(R) System for which MERS
appears as the mortgagee of record on the Mortgage or on an assignment thereof.

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

MIN: The Mortgage Identification Number for a MERS Loan.
MOM Loan: A Mortgage Loan that was registered on the MERS(R) System at the time
of origination thereof and for which MERS appears as the mortgagee of record on
the Mortgage.

Monthly P&I Advance: An advance of funds by the Master Servicer pursuant to
Section 4.02 or a Servicer pursuant to its Selling and Servicing Contract to
cover delinquent principal and interest installments.

Monthly Payment: The scheduled payment of principal and interest on a Mortgage
Loan (which scheduled payment may be less than the amount of interest accrued on
such Mortgage Loan due to the related Monthly Payment Adjustment Terms)
(including any amounts due from a Buydown Fund, if any) which is due on the
related Due Date for such Mortgage Loan.

                                       19
<PAGE>

Monthly Payment Adjustment Terms: As to each Mortgage Loan, the terms for
adjusting the amount of the Monthly Payment on such Mortgage Loan, as set forth
in the related Mortgage Note, including the dates on which or the circumstances
under which such adjustments become effective and limitations on the amounts of
such adjustments.

Moody's: Moody's Investors Service, Inc., provided that at any time it be a
Rating Agency.

Mortgage: The mortgage, deed of trust or other instrument securing a Mortgage
Note.

Mortgage File: The following documents or instruments with respect to each
Mortgage Loan transferred and assigned by the Company pursuant to Section 2.04,
(X) with respect to each Mortgage Loan that is not a Cooperative Loan:

(i) The original Mortgage Note endorsed (A) in blank, without recourse, or (B)
to "Deutsche Bank National Trust Company, as Trustee, without recourse" or to
"WaMu Mortgage Pass-Through Certificates Series 2004-AR2 Trust, without
recourse" and all intervening endorsements evidencing a complete chain of
endorsements from the originator to the Trustee or the Trust, as applicable, or,
in the event of any Destroyed Mortgage Note, a copy or a duplicate original of
the Mortgage Note, together with an original lost note affidavit from the
originator of the Mortgage Loan or the Company (or any affiliate of the Company
from which the Company acquired the Mortgage Loan), as applicable, stating that
the original Mortgage Note (or portion thereof, as applicable) was lost,
misplaced or destroyed, together with a copy of the Mortgage Note; provided,
however, that in the event the Company acquired the Mortgage Loan from an
affiliate of the Company, then the Mortgage Note need not be endorsed in blank
or to Deutsche Bank National Trust Company or the Trust as provided above (but,
if not so endorsed, shall be made payable to, or endorsed by the mortgagee named
therein to, such affiliate of the Company);

(ii) The Buydown Agreement, if applicable;

(iii) A Mortgage that is either

(1) (x) the original recorded Mortgage with evidence of recording thereon for
the jurisdiction in which the Mortgaged Property is located (which original
recorded Mortgage, in the case of a MOM Loan, shall set forth the MIN and shall
indicate that the Mortgage Loan is a MOM Loan), (y) unless the Mortgage Loan is
a MERS Loan, an original Mortgage assignment thereof duly executed and
acknowledged in recordable form (A) in blank or (B) to "Deutsche Bank National
Trust Company, as Trustee," or to "WaMu Mortgage Pass-Through Certificates
Series 2004-AR2 Trust," and (z) unless the Mortgage Loan is a MOM Loan, recorded
originals of all intervening assignments evidencing a complete chain of
assignment, from the originator to the name holder or the payee endorsing the
related Mortgage Note (or, in the case of a MERS Loan other than a MOM Loan,
from the originator to MERS); or

                                       20
<PAGE>

(2) (x) a copy (which may be in electronic form) of the Mortgage (which
Mortgage, in the case of a MOM Loan, shall set forth the MIN and shall indicate
that the Mortgage Loan is a MOM Loan) which represents a true and correct
reproduction of the original Mortgage and which has either been certified (i) on
the face thereof by the public recording office in the appropriate jurisdiction
in which the Mortgaged Property is located, or (ii) by the originator, the
related Lender or the escrow or title company which provided closing services in
connection with such Mortgage Loan as a true and correct copy the original of
which has been sent for recordation, (y) unless the Mortgage Loan is a MERS
Loan, an original Mortgage assignment thereof duly executed and acknowledged in
recordable form (A) in blank or (B) to "Deutsche Bank National Trust Company, as
Trustee," or to "WaMu Mortgage Pass-Through Certificates Series 2004-AR2 Trust"
and (z) unless the Mortgage Loan is a MOM Loan, true and correct copies,
certified by the applicable county recorder or by the originator or Lender as
described above, of all intervening assignments evidencing a complete chain of
assignment from the originator to the name holder or the payee endorsing the
related Mortgage Note (or, in the case of a MERS Loan other than a MOM Loan,
from the originator to MERS);

provided, however, that in the event the Company acquired the Mortgage Loan from
an affiliate of the Company, then the Mortgage File need not include a Mortgage
assignment executed in blank or to Deutsche Bank National Trust Company or the
Trust as provided in clause (X)(iii)(1)(y) or (X)(iii)(2)(y) above, as
applicable (but the Mortgage File shall, unless the Mortgage Loan was originated
by such affiliate of the Company, include an intervening Mortgage assignment to
such affiliate as provided in clause (X)(iii)(1)(z) or (X)(iii)(2)(z) above, as
applicable); and

(iv) For any Mortgage Loan that has been modified or amended, the original
instrument or instruments effecting such modification or amendment;

and (Y) with respect to each Cooperative Loan:

(i) the original Mortgage Note endorsed (A) in blank, without recourse, or (B)
to "Deutsche Bank National Trust Company, as Trustee, without recourse" or to
"WaMu Mortgage Pass-Through Certificates Series 2004-AR2 Trust, without
recourse" and all intervening endorsements evidencing a complete chain of
endorsements, from the originator to the Trustee or the Trust, as applicable,
or, in the event of any Destroyed Mortgage Note, a copy or a duplicate original
of the Mortgage Note, together with an original lost note affidavit from the
originator of the Cooperative Loan or the Company (or any affiliate of the
Company from which the Company acquired the Mortgage Loan), as applicable,
stating that the original Mortgage Note (or portion thereof, as applicable) was
lost, misplaced or destroyed, together with a copy of the Mortgage Note;
provided, however, that in the event the Company acquired the Cooperative Loan
from an affiliate of the Company, then the Mortgage Note need not be endorsed in
blank or to Deutsche Bank National Trust Company or the Trust as provided above
(but, if not so endorsed, shall be made payable to, or endorsed by the
originator or successor lender named therein to, such affiliate of the Company);

                                       21
<PAGE>

(ii) A counterpart of the Cooperative Lease and the Assignment of Proprietary
Lease to the originator of the Cooperative Loan;

(iii) The related Cooperative Stock Certificate, representing the related
Cooperative Stock pledged with respect to such Cooperative Loan, together with
an undated stock power (or other similar instrument) executed in blank;

(iv) The Recognition Agreement;

(v) The Security Agreement;

(vi) Copies of the original UCC financing statement, and any continuation
statements, filed by the originator of such Cooperative Loan as secured party,
each with evidence of recording thereof, evidencing the interest of the
originator under the Security Agreement and the Assignment of Proprietary Lease;

(vii) Copies of the filed UCC assignments or amendments of the security interest
referenced in clause (vi) above showing an unbroken chain of title from the
originator to the Trust, each with evidence of recording thereof, evidencing the
interest of the assignee under the Security Agreement and the Assignment of
Proprietary Lease;

(viii) An executed assignment of the interest of the originator in the Security
Agreement, the Assignment of Proprietary Lease and the Recognition Agreement,
showing an unbroken chain of title from the originator to the Trust; and

(ix) For any Cooperative Loan that has been modified or amended, the original
instrument or instruments effecting such modification or amendment;

provided, however, that in the event the Company acquired the Cooperative Loan
from an affiliate of the Company, then the Mortgage File need not include (1) a
UCC assignment or amendment of the security interest referenced in clause
(Y)(vi) above to the Trust as provided in clause (Y)(vii) above (but the
Mortgage File shall, unless the Cooperative Loan was originated by such
affiliate of the Company, include a UCC assignment or amendment of such security
interest to such affiliate) or (2) an assignment of the interest of the
originator in the Security Agreement, the Assignment of Proprietary Lease and
the Recognition Agreement to the Trust as provided in clause (Y)(viii) above
(but the Mortgage File shall, unless the Cooperative Loan was originated by such
affiliate of the Company, include an assignment of such interest to such
affiliate).

Mortgage Interest Rate: For any Mortgage Loan, the per annum rate at which
interest accrues on such Mortgage Loan pursuant to the terms of the related
Mortgage Note.

Mortgage Loan Margin: For each Mortgage Loan, the applicable fixed per annum
percentage rate specified in the applicable Mortgage Note and designated as such
in the Mortgage Loan Schedule; provided, however, that in the event the Index is
replaced, the Mortgage Loan Margin will be increased or decreased pursuant to
the related Mortgage Note.

                                       22
<PAGE>

Mortgage Loan Schedule: The schedule, as amended from time to time, of Mortgage
Loans attached hereto as Exhibit D, which shall set forth as to each Mortgage
Loan the following, among other things:

(i) its loan number,

(ii) the address of the Mortgaged Property,

(iii) the name of the Mortgagor,

(iv) the Original Value of the property subject to the Mortgage,

(v) the Principal Balance as of the Cut-Off Date,

(vi) the Mortgage Interest Rate, as of the Cut-Off Date, borne by the Mortgage
Note and the Rate Ceiling and Mortgage Loan Margin borne by the Mortgage Note,
and the Index, Interest Rate Adjustment Date and Monthly Payment Adjustment
Terms applicable to such Mortgage Loan,

(vii) whether a Primary Insurance Policy is in effect as of the Cut-Off Date,
and, if so, whether such Primary Insurance Policy is a Special Primary Insurance
Policy,

(viii) the maturity of the Mortgage Note,

(ix) the Servicing Fee Rate and the Master Servicing Fee Rate, and

(x) whether it imposes penalties for early prepayments.

Mortgage Loans: The mortgage loans and cooperative loans (if any) listed on the
Mortgage Loan Schedule and transferred and assigned to the Trust pursuant
hereto. With respect to each Mortgage Loan that is a Cooperative Loan, "Mortgage
Loan" shall include, but not be limited to, the Mortgage Note, Security
Agreement, Assignment of Proprietary Lease, Recognition Agreement, Cooperative
Stock Certificate and Cooperative Lease, and, with respect to each Mortgage Loan
other than a Cooperative Loan, "Mortgage Loan" shall include, but not be limited
to the Mortgage Note and the related Mortgage.

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

Mortgage Pool: All of the Mortgage Loans.

Mortgage Pool Assets: (i) The Mortgage Loans (including all Substitute Mortgage
Loans) identified on the Mortgage Loan Schedule, and all rights pertaining
thereto, including the related Mortgage Notes, Mortgages, Cooperative Stock
Certificates, Cooperative Leases, Security Agreements, Assignments of
Proprietary Lease, and Recognition Agreements, and all payments and
distributions with respect to the Mortgage Loans payable on and after the
Cut-Off Date; (ii) the Certificate Account, the Investment Account, and all
money, instruments, investment property, and other property credited thereto,
carried therein, or deposited therein (except amounts constituting the Master
Servicing Fee or the Servicing Fee); (iii) the Custodial Accounts for P&I, the
Custodial Accounts for Reserves, any Buydown Fund Account (to the extent of the
amounts on deposit or other property therein attributable to the Mortgage

                                       23
<PAGE>

Loans), and all money, instruments, investment property, and other property
credited thereto, carried therein, or deposited therein (except amounts
constituting the Master Servicing Fee or the Servicing Fee); (iv) all property
that secured a Mortgage Loan and that has been acquired by foreclosure or deed
in lieu of foreclosure or, in the case of a Cooperative Loan, a similar form of
conversion, after the Cut-Off Date; and (v) each FHA insurance policy, Primary
Insurance Policy, VA guaranty, and other insurance policy related to any
Mortgage Loan, and all amounts paid or payable thereunder and all proceeds
thereof.

Mortgaged Property: With respect to any Mortgage Loan, other than a Cooperative
Loan, the real property, together with improvements thereto, and, with respect
to any Cooperative Loan, the related Cooperative Stock and Cooperative Lease,
securing the indebtedness of the Mortgagor under the related Mortgage Loan.
"Mortgaged Property" shall also refer to property which once secured the
indebtedness of a Mortgagor under the related Mortgage Loan but which was
acquired by the Trust upon foreclosure or other liquidation of such Mortgage
Loan.

Mortgagor: The obligor on a Mortgage Note.

Negative Amortization Amount: For any Due Date for any Mortgage Loan, the
excess, if any, of (i) the amount of interest accrued on such Mortgage Loan,
during the monthly period immediately preceding such Due Date, at the related
Mortgage Interest Rate, over (ii) the Monthly Payment due on such Mortgage Loan
on such Due Date.

For any Distribution Date, (i) the aggregate of Negative Amortization Amounts
with respect to the Mortgage Loans for the Due Date in the calendar month of
such Distribution Date shall be allocated to each Class of Certificates, pro
rata according to the amount of interest accrued on each such Class during the
immediately preceding accrual period, in reduction of the Interest Distribution
Amount for such Class, and (ii) the Class Principal Balance of each Class of
Certificates shall be increased by the amount allocated to such Class in
reduction of the Interest Distribution Amount pursuant to clause (i) of this
sentence.

Nonrecoverable Advance: With respect to any Mortgage Loan, any advance which the
Master Servicer shall determine to be a Nonrecoverable Advance pursuant to
Section 4.03 and which was, or is proposed to be, made by (i) the Master
Servicer or (ii) a Servicer pursuant to its Selling and Servicing Contract.

Non-U.S. Person: A Person that is not a U.S. Person.

Notice Addresses: (a) In the case of the Company, 75 North Fairway Drive, Vernon
Hills, Illinois 60061, Attention: Master Servicing Department (with a copy to:
Washington Mutual Legal Department, 1201 Third Avenue, WMT 1706, Seattle, WA
98101, Attention: WMMSC) or such other address as may hereafter be furnished to
the Trustee in writing by the Company, (b) in the case of the Trustee, at its
Corporate Trust Office, or such other address as may hereafter be furnished to

                                       24
<PAGE>

the Master Servicer in writing by the Trustee, (c) in the case of the Delaware
Trustee, 1011 Centre Road, Suite 200, Wilmington, Delaware 19805-1266, or such
other address as may hereafter be furnished to the Master Servicer in writing by
the Delaware Trustee, (d) in the case of the Trust, c/o Deutsche Bank National
Trust Company, at the Corporate Trust Office, or such other address as may
hereafter be furnished to the Master Servicer in writing by the Trustee, (e) in
the case of the Certificate Registrar, at its Corporate Trust Office, or such
other address as may hereafter be furnished to the Trustee in writing by the
Certificate Registrar, (f) in the case of S&P, 55 Water Street, 41st Floor, New
York, New York 10041-0003, Attention: Frank Raiter, or such other address as may
hereafter be furnished to the Trustee and Master Servicer in writing by S&P and
(g) in the case of Moody's, 99 Church Street, New York, New York 10007,
Attention: Monitoring, or such other address as may hereafter be furnished to
the Trustee and Master Servicer in writing by Moody's.

OTS: The Office of Thrift Supervision, or any successor thereto.

Officer's Certificate: A certificate signed by the Chairman of the Board, the
President, a Vice President, or the Treasurer of the Master Servicer and
delivered to the Trustee or the Delaware Trustee, as applicable.

One-Year MTA: The twelve-month moving average monthly yield on United States
Treasury Securities adjusted to a constant maturity of one year as published by
the Federal Reserve Board in the Federal Reserve Statistical Release "Selected
Interest Rates (H.15)," determined by averaging the monthly yields for the most
recently available twelve months.

Opinion of Counsel: A written opinion of counsel, who shall be reasonably
acceptable to the Trustee or the Delaware Trustee, as applicable, and who may be
counsel (including in-house counsel) for the Company or the Master Servicer.

Original Trust Agreement: The Trust Agreement, dated as of April 1, 2004,
between the Company and the Delaware Trustee, providing for the creation of the
Trust.

Original Value: With respect to any Mortgage Loan other than a Mortgage Loan
originated for the purpose of refinancing an existing mortgage debt, the lesser
of (a) the Appraised Value (if any) of the Mortgaged Property at the time the
Mortgage Loan was originated or (b) the purchase price paid for the Mortgaged
Property by the Mortgagor. With respect to a Mortgage Loan originated for the
purpose of refinancing existing mortgage debt, the Original Value shall be equal
to the Appraised Value of the Mortgaged Property.

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

Pass-Through Entity: Any regulated investment company, real estate investment
trust, common trust fund, partnership, trust or estate, and any organization to
which Section 1381 of the Code applies.

Pass-Through Rate: For each Mortgage Loan, the Mortgage Interest Rate for such
Mortgage Loan less (i) the Servicing Fee Rate for such Mortgage Loan, (ii) the
Master Servicing Fee Rate for such Mortgage Loan and (iii) if such Mortgage Loan
was covered by a Special Primary Insurance Policy on the Closing Date (even if
no longer so covered), the per annum rate at which the applicable Special

                                       25
<PAGE>

Primary Insurance Premium for such Mortgage Loan is calculated. For each
Mortgage Loan, any calculation of monthly interest at such rate shall be based
upon annual interest at such rate (computed on the basis of a 360-day year of
twelve 30-day months) on the unpaid Principal Balance of such Mortgage Loan
divided by twelve, and any calculation of interest at such rate by reason of a
Payoff shall be based upon annual interest at such rate on the outstanding
Principal Balance of such Mortgage Loan multiplied by a fraction, the numerator
of which is the number of days elapsed from the Due Date of the last scheduled
payment of principal and interest to, but not including, the date of such
Payoff, and the denominator of which is (a) for Payoffs received on a Due Date,
360, and (b) for all other Payoffs, 365.

Paying Agent: Any paying agent appointed by the Trustee pursuant to Section
8.12.

Payoff: Any Mortgagor payment of principal on a Mortgage Loan equal to the
entire outstanding Principal Balance of such Mortgage Loan, if received in
advance of the last scheduled Due Date for such Mortgage Loan and accompanied by
an amount of interest equal to accrued unpaid interest on the Mortgage Loan to
the date of such payment-in-full. (Prepayment penalties are not payments of
principal and hence Payoffs do not include prepayment penalties.)

Payoff Earnings: For any Distribution Date with respect to each Mortgage Loan on
which a Payoff was received by the Master Servicer during the Payoff Period, the
aggregate of the interest earned by the Master Servicer from investment of each
such Payoff from the date of receipt of such Payoff until the Business Day
immediately preceding the related Distribution Date (net of investment losses).

Payoff Interest: For any Distribution Date with respect to a Mortgage Loan for
which a Payoff was received on or after the first calendar day of the month of
such Distribution Date and before the 15th calendar day of such month, an amount
of interest thereon at the applicable Pass-Through Rate from the first day of
the month of distribution through the day of receipt thereof; to the extent
(together with Payoff Earnings and the aggregate Master Servicing Fee) not
required to be distributed as Compensating Interest on such Distribution Date,
Payoff Interest shall be payable to the Master Servicer as additional servicing
compensation.

Payoff Period: For the first Distribution Date, the period from the Cut-Off Date
through May 14, 2004, inclusive; and for any Distribution Date thereafter, the
period from the 15th day of the Prior Period through the 14th day of the month
of such Distribution Date, inclusive.

Percentage Interest: (a) With respect to the right of each Certificate of a
particular Class in the distributions allocated to such Class, "Percentage
Interest" shall mean the percentage equal to:

(i) with respect to any Certificate (other than the Residual Certificates), its
Certificate Principal Balance divided by the applicable Class Principal Balance;
and

(ii) with respect to any Residual Certificate, the percentage set forth on the
face of such Certificate.

                                       26
<PAGE>

(b) With respect to the rights of each Certificate in connection with Sections
5.09, 7.01, 8.01(c), 8.02, 8.07, 10.01 and 10.03, "Percentage Interest" shall
mean the percentage equal to:

(i) with respect to any Certificate (other than the Residual Certificates), its
Certificate Principal Balance divided by the Aggregate Certificate Principal
Balance of the Certificates; and

(ii) with respect to any Residual Certificate, zero.

Permitted Transferee: With respect to the holding or ownership of any Residual
Certificate, any Person other than (i) the United States, a State or any
political subdivision thereof, or any agency or instrumentality of any of the
foregoing, (ii) a foreign government, International Organization or any agency
or instrumentality of either of the foregoing, (iii) an organization (except
certain farmers' cooperatives described in Code Section 521) which is exempt
from the taxes imposed by Chapter 1 of the Code (unless such organization is
subject to the tax imposed by Section 511 of the Code on unrelated business
taxable income), (iv) rural electric and telephone cooperatives described in
Code Section 1381(a)(2)(C), (v) any "electing large partnership" as defined in
Section 775(a) of the Code, (vi) any Person from whom the Trustee has not
received an affidavit to the effect that it is not a "disqualified organization"
within the meaning of Section 860E(e)(5) of the Code, and (vii) any other Person
so designated by the Company based upon an Opinion of Counsel that the transfer
of an Ownership Interest in a Residual Certificate to such Person may cause
REMIC I to fail to qualify as a REMIC at any time that the Certificates are
outstanding. The terms "United States," "State" and "International Organization"
shall have the meanings set forth in Code Section 7701 or successor provisions.
A corporation shall not be treated as an instrumentality of the United States or
of any State or political subdivision thereof if all of its activities are
subject to tax, and, with the exception of the Freddie Mac, a majority of its
board of directors is not selected by such governmental unit.

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

Prepaid Monthly Payment: Any Monthly Payment received prior to its scheduled Due
Date, which is intended to be applied to a Mortgage Loan on its scheduled Due
Date and held in the related Custodial Account for P&I until the Withdrawal Date
following its scheduled Due Date.

Primary Insurance Policy: A policy of mortgage guaranty insurance, if any, on an
individual Mortgage Loan or on pools of mortgage loans that include an
individual Mortgage Loan, providing coverage as required by Section 2.08(xi)
(including any Special Primary Insurance Policy).

Principal Balance: Except as used in Sections 2.07, 3.09 and 9.01 and for
purposes of the definition of Purchase Price, at the time of any determination,
the principal balance of a Mortgage Loan remaining to be paid at the close of
business on the Cut-Off Date, after application of all scheduled principal
payments due on or before the Cut-Off Date, whether or not received, reduced by
all amounts distributed or (except when such determination occurs earlier in the
month than the Distribution Date) to be distributed to Certificateholders

                                       27
<PAGE>

through the Distribution Date in the month of determination that are reported as
allocable to principal of such Mortgage Loan, and increased by all Negative
Amortization Amounts for such Mortgage Loan for prior Due Dates.

For purposes of the definition of Purchase Price and as used in Sections 2.07,
3.09 and 9.01, at the time of any determination, the principal balance of a
Mortgage Loan remaining to be paid at the close of business on the Cut-Off Date,
after deduction of all scheduled principal payments due on or before the Cut-Off
Date, whether or not received, reduced by all amounts distributed or to be
distributed to Certificateholders through the Distribution Date in the month of
determination that are reported as allocable to principal of such Mortgage Loan,
and increased by all Negative Amortization Amounts for such Mortgage Loan for
prior Due Dates.

In the case of a Substitute Mortgage Loan, "Principal Balance" shall mean, at
the time of any determination, the principal balance of such Substitute Mortgage
Loan transferred to the Trust, on the date of substitution, reduced by all
amounts distributed or to be distributed to Certificateholders through the
Distribution Date in the month of determination that are reported as allocable
to principal of such Substitute Mortgage Loan, and increased by all Negative
Amortization Amounts for such Substitute Mortgage Loan for prior Due Dates since
the date of substitution.

The Principal Balance of a Mortgage Loan (including a Substitute Mortgage Loan)
shall not be adjusted solely by reason of any bankruptcy or similar proceeding
or any moratorium or similar waiver or grace period. Whenever a Realized Loss
has been incurred with respect to a Mortgage Loan during a calendar month, the
Principal Balance of such Mortgage Loan shall be reduced by the amount of such
Realized Loss as of the Due Date next following the end of such calendar month.
The Principal Balance of each Mortgage Loan shall be increased, as of each Due
Date, by the amount of any Negative Amortization Amount for such Mortgage Loan
for such Due Date.

Principal Payment: Any payment of principal on a Mortgage Loan other than a
Principal Prepayment.

Principal Payment Amount: For any Distribution Date, the sum of (i) the
scheduled principal payments (if any) on the Mortgage Loans due on the related
Due Date, (ii) the principal portion of proceeds received with respect to any
Mortgage Loan which was purchased or repurchased pursuant to a Purchase
Obligation or as permitted by this Agreement during the Prior Period and (iii)
any other unscheduled payments of principal which were received with respect to
any Mortgage Loan during the Prior Period, other than Payoffs, Curtailments,
Liquidation Principal and Subsequent Recoveries.

Principal Prepayment: Any payment of principal on a Mortgage Loan which
constitutes a Payoff or a Curtailment.

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<PAGE>

Principal Prepayment Amount: For any Distribution Date, the sum of (i)
Curtailments received during the Prior Period from the Mortgage Loans and (ii)
Payoffs received during the Payoff Period from the Mortgage Loans.

Prior Period: With respect to any Distribution Date, the calendar month
immediately preceding such Distribution Date.

Pro Rata Allocation: The allocation of the principal portion of Realized Losses
to all Classes of Certificates pro rata according to their respective Class
Principal Balances in reduction thereof, and the allocation of the interest
portion of Realized Losses to all Classes of Certificates pro rata according to
the amount of interest accrued but unpaid on each such Class, in reduction
thereof, and then to such Classes pro rata according to their respective Class
Principal Balances in reduction thereof.

Prospectus: The Prospectus, dated February 10, 2004, and the Prospectus
Supplement, dated April 26, 2004, of the Company.

Purchase Obligation: An obligation of the Company to repurchase Mortgage Loans
under the circumstances and in the manner provided in Section 2.07 or Section
2.08.

Purchase Price: With respect to any Mortgage Loan to be purchased pursuant to a
Purchase Obligation or pursuant to Section 3.01, an amount equal to the sum of
(i) the Principal Balance thereof, (ii) unpaid accrued interest thereon, if any,
during the calendar month in which the date of purchase occurs to the last day
of such month at a rate equal to the applicable Pass-Through Rate and (iii) with
respect to any Mortgage Loan to be purchased pursuant to Section 2.08, any costs
and damages incurred by the Trust in connection with any violation by such
Mortgage Loan of any predatory and abusive lending laws, to the extent such
costs and damages result from a breach of the representation and warranty made
by the Company pursuant to clause (viii) of Section 2.08; provided, however,
that to the extent that such costs and damages constitute a set-off against the
principal balance of the Mortgage Loan, such costs and damages will not be paid
pursuant to this clause (iii), and the amount paid pursuant to clause (i) above
will be calculated without regard to such set-off; provided, further, that no
Mortgage Loan shall be purchased or required to be purchased pursuant to Section
2.08, or more than two years after the Closing Date under Section 2.07, unless
(a) the Mortgage Loan to be purchased is in default, or default is in the
judgment of the Company reasonably imminent, or (b) the Company, at its expense,
delivers to the Trustee an Opinion of Counsel addressed to the Trust and the
Trustee to the effect that the purchase of such Mortgage Loan will not give rise
to a tax on a prohibited transaction, as defined in Section 860F(a) of the Code.

Qualified Insurer: A mortgage guaranty insurance company duly qualified as such
under the laws of the states in which the Mortgaged Properties are located if
such qualification is necessary to issue the applicable insurance policy or
bond, duly authorized and licensed in such states to transact the applicable
insurance business and to write the insurance provided by the Primary Insurance
Policies and approved as an insurer by the Master Servicer. A Qualified Insurer
must have the rating required by the Rating Agencies.

                                       29
<PAGE>

Rate Ceiling: The maximum per annum Mortgage Interest Rate permitted under the
related Mortgage Note.

Rating Agency: Initially, each of S&P and Moody's and thereafter, each
nationally recognized statistical rating organization that has rated the
Certificates at the request of the Company, or their respective successors in
interest.

Ratings: As of any date of determination, the ratings, if any, of the
Certificates as assigned by the applicable Rating Agencies.

Realized Loss: For any Distribution Date, with respect to any Mortgage Loan
which became a Liquidated Mortgage Loan during the related Prior Period, the sum
of (i) the principal balance of such Mortgage Loan remaining outstanding and the
principal portion of Nonrecoverable Advances actually reimbursed with respect to
such Mortgage Loan (the principal portion of such Realized Loss), and (ii) the
accrued interest on such Mortgage Loan remaining unpaid and the interest portion
of Nonrecoverable Advances actually reimbursed with respect to such Mortgage
Loan (the interest portion of such Realized Loss); provided, however, that for
purposes of allocating Realized Losses to the Certificates pursuant to this
definition of "Realized Loss," the aggregate principal portion of Realized
Losses for any Distribution Date shall be reduced by the Cumulative
Carry-Forward Subsequent Recoveries Amount for such Distribution Date. For any
Distribution Date, with respect to any Mortgage Loan which is not a Liquidated
Mortgage Loan, the amount of the Bankruptcy Loss incurred with respect to such
Mortgage Loan as of the related Due Date.

Except for Special Hazard Losses in excess of the Special Hazard Coverage, Fraud
Losses in excess of the Fraud Coverage and Bankruptcy Losses in excess of the
Bankruptcy Coverage, Realized Losses shall be allocated among the Certificates
(i) for Realized Losses allocable to principal (a) first, to the Class B-6
Certificates, until the Class B-6 Principal Balance has been reduced to zero,
(b) second, to the Class B-5 Certificates, until the Class B-5 Principal Balance
has been reduced to zero, (c) third, to the Class B-4 Certificates, until the
Class B-4 Principal Balance has been reduced to zero, (d) fourth, to the Class
B-3 Certificates, until the Class B-3 Principal Balance has been reduced to
zero, (e) fifth, to the Class B-2 Certificates, until the Class B-2 Principal
Balance has been reduced to zero, (f) sixth, to the Class B-1 Certificates,
until the Class B-1 Principal Balance has been reduced to zero, (g) seventh, to
the Class A Certificates, in reduction of the Class A Principal Balance; and
(ii) for Realized Losses allocable to interest (a) first, to the Class B-6
Certificates, in reduction of accrued but unpaid interest thereon and then in
reduction of the Class B-6 Principal Balance, (b) second, to the Class B-5
Certificates, in reduction of accrued but unpaid interest thereon and then in
reduction of the Class B-5 Principal Balance, (c) third, to the Class B-4
Certificates, in reduction of accrued but unpaid interest thereon and then in
reduction of the Class B-4 Principal Balance, (d) fourth, to the Class B-3
Certificates, in reduction of accrued but unpaid interest thereon and then in
reduction of the Class B-3 Principal Balance, (e) fifth, to the Class B-2
Certificates, in reduction of accrued but unpaid interest thereon and then in
reduction of the Class B-2 Principal Balance, (f) sixth, to the Class B-1
Certificates, in reduction of accrued but unpaid interest thereon and then in
reduction of the Class B-1 Principal Balance, (g) seventh, to the Class A
Certificates, in reduction of accrued but unpaid interest thereon and then in
reduction of the Class A Principal Balance.

                                       30
<PAGE>

Special Hazard Losses in excess of the Special Hazard Coverage, Fraud Losses in
excess of the Fraud Coverage and Bankruptcy Losses in excess of the Bankruptcy
Coverage shall be allocated among the Certificates by Pro Rata Allocation.

On each Distribution Date, after giving effect to the principal distributions
and allocations of losses and Negative Amortization Amounts as provided in this
Agreement (without regard to this paragraph), if the aggregate Class Principal
Balance of all outstanding Classes of Certificates (plus any Cumulative
Carry-Forward Subsequent Recoveries Amount for such Distribution Date) exceeds
the aggregate principal balance of the Mortgage Loans remaining to be paid at
the close of business on the Cut-Off Date, after deduction of (i) all principal
payments due on or before the Cut-Off Date in respect of each Mortgage Loan
whether or not paid, and (ii) all amounts of principal in respect of each
Mortgage Loan that have been received or advanced and included in the Available
Distribution Amount and all losses in respect of each Mortgage Loan that have
been allocated to the Certificates on such Distribution Date or prior
Distribution Dates, and after giving effect to all Negative Amortization Amounts
in respect of each Mortgage Loan that have been added to the principal balance
of such Mortgage Loan prior to such Distribution Date, then such excess will be
deemed a principal loss and will be allocated to the most junior Class of Class
B Certificates, in reduction of the Class Principal Balance thereof.

Recognition Agreement: With respect to a Cooperative Loan, the recognition
agreement between the Cooperative and the originator of such Cooperative Loan.

Record Date: The last Business Day of the month immediately preceding the month
of the related Distribution Date.

Relief Act Shortfall: For any Distribution Date for any Mortgage Loan with
respect to which the Servicemembers Civil Relief Act, formerly known as the
Soldiers' and Sailors' Civil Relief Act of 1940, or any comparable state
legislation (collectively, the "Relief Act"), limits the amount of interest
payable by the related Mortgagor, an amount equal to one month's interest on
such Mortgage Loan at an annual interest rate equal to the excess, if any, of
(i) the annual interest rate at which interest otherwise accrued during the
Prior Period under the terms of the related Mortgage Note over (ii) the annual
interest rate at which interest accrued during the Prior Period by application
of the Relief Act.

REMIC: A real estate mortgage investment conduit, as such term is defined in the
Code.

REMIC Provisions: Sections 860A through 860G of the Code, related Code
provisions and regulations promulgated thereunder, as the foregoing may be in
effect from time to time.

REMIC I: The segregated pool of assets of the Trust consisting of the REMIC I
Assets, which shall be a REMIC pursuant to the Code, with respect to which a
separate REMIC election is to be made and the beneficial interests in which
shall be the Certificates.

REMIC I Assets: All of the Mortgage Pool Assets.

REMIC I Regular Interests: The Certificates (other than the Class R
Certificates).

                                       31
<PAGE>

Residual Certificates: The Class R Certificates.

Residual Distribution Amount: For any Distribution Date, any portion of the
Available Distribution Amount remaining after all distributions of the Available
Distribution Amount pursuant to the definition of "Distribution Amount" (other
than the distributions pursuant to the last subclause thereof).

Upon termination of the obligations created by this Agreement and liquidation of
REMIC I, the amounts which remain on deposit in the Certificate Account after
payment to the Holders of the Certificates of the amounts set forth in Section
9.01 of this Agreement, and subject to the conditions set forth therein, shall
be distributed to the Class R Certificates in accordance with the preceding
sentences of this definition as if the date of such distribution were a
Distribution Date.

Responsible Officer: When used with respect to the Trustee or the Delaware
Trustee, any officer assigned to and working in the Corporate Trust Office (in
the case of the Trustee) or its corporate trust office (in the case of the
Delaware Trustee) or, in each case, in a similar group 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.

S&P: Standard & Poor's Ratings Services, a division of The McGraw-Hill
Companies, Inc., provided that at any time it be a Rating Agency.

Secretary of State: The Secretary of State of the State of Delaware.

Securities Act: The Securities Act of 1933, as amended.

Security Agreement: With respect to a Cooperative Loan, the agreement or
mortgage creating a security interest in favor of the originator of the
Cooperative Loan in the related Cooperative Stock.

Selling and Servicing Contract: (a) The contract (including the Washington
Mutual Mortgage Securities Corp. Selling Guide and Washington Mutual Mortgage
Securities Corp. Servicing Guide to the extent incorporated by reference
therein) between the Company and a Person relating to the sale of the Mortgage
Loans to the Company and the servicing of such Mortgage Loans for the benefit of
the Certificateholders, which contract is substantially in the form of Exhibit E
hereto, as such contract may be amended or modified from time to time; provided,
however, that any such amendment or modification shall not materially adversely
affect the interests and rights of Certificateholders or (b) any other similar
contract, including any mortgage loan purchase and servicing agreement or any
assignment, assumption and recognition agreement related to a mortgage loan
purchase and sale agreement, providing substantially similar rights and benefits
as those provided by the forms of contract attached as Exhibit E hereto.

Senior Certificates: The Class A Certificates and the Class R Certificates.

Senior Liquidation Amount: For any Distribution Date, the sum of (A) the
aggregate, for each Mortgage Loan which became a Liquidated Mortgage Loan during
the Prior Period, of the lesser of: (i) the Senior Percentage of the Principal
Balance of such Mortgage Loan and (ii) the Senior Prepayment Percentage of the
Liquidation Principal with respect to such Mortgage Loan and (B) the Senior
Prepayment Percentage of any Subsequent Recoveries for such Distribution Date.

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<PAGE>

Senior Percentage: For any Distribution Date, the aggregate Class Principal
Balance of the Class A and Residual Certificates divided by the aggregate Class
Principal Balance of the Class A, Class B and Residual Certificates, in each
case immediately before such Distribution Date.

Senior Prepayment Percentage: Subject to the immediately succeeding paragraph,
(A) for any Distribution Date prior to the tenth anniversary of the first
Distribution Date, the Senior Prepayment Percentage shall equal 100% and (B) for
any Distribution Date on or after the tenth anniversary of the first
Distribution Date, the Senior Prepayment Percentage shall be calculated as
follows: (1) for any such Distribution Date on or after the tenth anniversary
but before the eleventh anniversary of the first Distribution Date, the Senior
Percentage for such Distribution Date plus 70% of the Subordinate Percentage for
such Distribution Date; (2) for any such Distribution Date on or after the
eleventh anniversary but before the twelfth anniversary of the first
Distribution Date, the Senior Percentage for such Distribution Date plus 60% of
the Subordinate Percentage for such Distribution Date; (3) for any such
Distribution Date on or after the twelfth anniversary but before the thirteenth
anniversary of the first Distribution Date, the Senior Percentage for such
Distribution Date plus 40% of the Subordinate Percentage for such Distribution
Date; (4) for any such Distribution Date on or after the thirteenth anniversary
but before the fourteenth anniversary of the first Distribution Date, the Senior
Percentage for such Distribution Date plus 20% of the Subordinate Percentage for
such Distribution Date; and (5) for any such Distribution Date thereafter, the
Senior Percentage for such Distribution Date; provided, however, that (x) for
any Distribution Date on or prior to the Distribution Date in April 2007, if (i)
the Subordinate Percentage for such Distribution Date is greater than or equal
to twice the Subordinate Percentage as of the Closing Date and (ii) cumulative
Realized Losses on the Mortgage Loans allocated to the Class B Certificates, as
a percentage of the aggregate Class Principal Balance of the Class B
Certificates as of the Closing Date, do not exceed 20%, then the Senior
Prepayment Percentage shall equal the Senior Percentage for such Distribution
Date plus 50% of the Subordinate Percentage for such Distribution Date and (y)
for any Distribution Date after the Distribution Date in April 2007, if (i) the
Subordinate Percentage for such Distribution Date is greater than or equal to
twice the Subordinate Percentage as of the Closing Date and (ii) cumulative
Realized Losses on the Mortgage Loans allocated to the Class B Certificates, as
a percentage of the aggregate Class Principal Balance of the Class B
Certificates as of the Closing Date, do not exceed 30%, then the Senior
Prepayment Percentage shall equal the Senior Percentage for such Distribution
Date.

Notwithstanding the immediately preceding paragraph, (A) for any Distribution
Date, if the Senior Percentage for such Distribution Date is greater than the
Senior Percentage as of the Closing Date, then the Senior Prepayment Percentage
shall equal 100%, (B) for any Distribution Date on or before the tenth
anniversary of the first Distribution Date, if any of the tests specified in
clauses (a) and (b) below is met, then the Senior Prepayment Percentage shall
equal 100% and (C) for any Distribution Date after the tenth anniversary of the
first Distribution Date, if any of the tests specified in clauses (a) and (b)
below is met (unless either (x) the Senior Percentage for such Distribution Date

                                       33
<PAGE>

is greater than the Senior Percentage as of the Closing Date or (y) there is no
Earlier Distribution Date (as defined below), in each of which case the Senior
Prepayment Percentage shall equal 100%), then the Senior Prepayment Percentage
shall be calculated as follows: (1) if the most recent preceding Distribution
Date on which none of the tests specified in clauses (a) and (b) below was met
(such date referred to as the "Earlier Distribution Date") is on or after the
tenth anniversary but before the eleventh anniversary of the first Distribution
Date, then the Senior Prepayment Percentage shall equal the Senior Percentage
for the current Distribution Date plus 70% of the Subordinate Percentage for the
current Distribution Date, (2) if the Earlier Distribution Date is on or after
the eleventh anniversary but before the twelfth anniversary of the first
Distribution Date, then the Senior Prepayment Percentage shall equal the Senior
Percentage for the current Distribution Date plus 60% of the Subordinate
Percentage for the current Distribution Date, (3) if the Earlier Distribution
Date is on or after the twelfth anniversary but before the thirteenth
anniversary of the first Distribution Date, then the Senior Prepayment
Percentage shall equal the Senior Percentage for the current Distribution Date
plus 40% of the Subordinate Percentage for the current Distribution Date, (4) if
the Earlier Distribution Date is on or after the thirteenth anniversary but
before the fourteenth anniversary of the first Distribution Date, then the
Senior Prepayment Percentage shall equal the Senior Percentage for the current
Distribution Date plus 20% of the Subordinate Percentage for the current
Distribution Date, and (5) if the Earlier Distribution Date is on or after the
fourteenth anniversary of the first Distribution Date, then the Senior
Prepayment Percentage shall equal the Senior Percentage for the current
Distribution Date:

(a) the mean aggregate Principal Balance, as of the Distribution Date in each of
the immediately preceding six calendar months, of the Mortgage Loans which were
60 or more days delinquent as of such date (including Mortgage Loans in
bankruptcy or foreclosure and Mortgaged Properties held by REMIC I) is greater
than 50% of the aggregate Class Principal Balance of the Class B Certificates as
of the current Distribution Date, or

(b) cumulative Realized Losses on the Mortgage Loans allocated to the Class B
Certificates, as a percentage of the aggregate Class Principal Balance of the
Class B Certificates as of the Closing Date, are greater than, for any
Distribution Date (1) before the eleventh anniversary of the first Distribution
Date, 30%, (2) on or after the eleventh anniversary but before the twelfth
anniversary of the first Distribution Date, 35%, (3) on or after the twelfth
anniversary but before the thirteenth anniversary of the first Distribution
Date, 40%, (4) on or after the thirteenth anniversary but before the fourteenth
anniversary of the first Distribution Date, 45%, and (5) on or after the
fourteenth anniversary of the first Distribution Date, 50%.

If on any Distribution Date the allocation to the Class A Certificates of
Principal Prepayments in the percentage required would reduce the Class
Principal Balance of such Certificates below zero, the Senior Prepayment
Percentage for such Distribution Date shall be limited to the percentage
necessary to reduce such Class Principal Balance to zero.

Senior Principal Distribution Amount: For any Distribution Date, an amount equal
to the sum of (a) the Senior Percentage of the Principal Payment Amount, (b) the
Senior Prepayment Percentage of the Principal Prepayment Amount and (c) the
Senior Liquidation Amount.

                                       34
<PAGE>

Senior Subordinate Certificates: The Subordinate Certificates other than the
Junior Subordinate Certificates.

Servicer: A mortgage loan servicing institution to which the Master Servicer has
assigned servicing duties with respect to any Mortgage Loan under a Selling and
Servicing Contract; provided, however, the Master Servicer may designate itself
or one or more other mortgage loan servicing institutions as Servicer upon
termination of an initial Servicer's servicing duties.

Servicing Fee: For each Mortgage Loan, the monthly fee paid to the Servicer to
perform primary servicing functions for the Master Servicer with respect to such
Mortgage Loan, equal to 1/12 of the product of (i) the Servicing Fee Rate for
such Mortgage Loan and (ii) the outstanding Principal Balance of such Mortgage
Loan. In addition, any prepayment penalty received on a Mortgage Loan will be
paid as additional servicing compensation to the Master Servicer or the related
Servicer.

Servicing Fee Rate: For each Mortgage Loan, the per annum rate payable to the
Servicer, as set forth for such Mortgage Loan in the Mortgage Loan Schedule,
equal to the related Mortgage Loan Margin as of the Cut-Off Date less the sum of
(a) 1.400% and (b) the Master Servicing Fee Rate.

Servicing Officer: Any officer of the Master Servicer (or of the Servicer, but
only with respect to the Custodial Agreement) involved in, or responsible for,
the administration and servicing of the Mortgage Loans or the Certificates, as
applicable, 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.

Special Hazard Coverage: The Special Hazard Coverage on the most recent
anniversary of the Cut-Off Date (calculated in accordance with the second
sentence of this paragraph) or, if prior to the first such anniversary,
$6,075,687, in each case reduced by Special Hazard Losses allocated to the
Certificates since the most recent anniversary of the Cut-Off Date (or, if prior
to the first such anniversary, since the Cut-Off Date). On each anniversary of
the Cut-Off Date, the Special Hazard Coverage shall be reduced, but not
increased, to an amount equal to the lesser of (1) the greatest of (a) the
aggregate principal balance of the Mortgage Loans located in the single
California zip code area containing the largest aggregate principal balance of
Mortgage Loans, (b) 1.0% of the aggregate unpaid principal balance of the
Mortgage Loans and (c) twice the unpaid principal balance of the largest single
Mortgage Loan, in each case calculated as of the Due Date in the immediately
preceding month, and (2) $6,075,687 as reduced by the Special Hazard Losses
allocated to the Certificates since the Cut-Off Date.

The Special Hazard Coverage may be reduced upon written confirmation from the
Rating Agencies that such reduction will not adversely affect the then current
ratings assigned to the Certificates by the Rating Agencies.

Special Hazard Loss: A Realized Loss (or portion thereof) with respect to a
Mortgage Loan arising from any direct physical loss or damage to a Mortgaged
Property not covered by a standard hazard maintenance policy with extended
coverage which is caused by or results from any cause except: (i) fire,
lightning, windstorm, hail, explosion, riot, riot attending a strike, civil

                                       35
<PAGE>

commotion, vandalism, aircraft, vehicles, smoke, sprinkler leakage, except to
the extent of that portion of the loss which was uninsured because of the
application of a co-insurance clause of any insurance policy covering these
perils; (ii) normal wear and tear, gradual deterioration, inherent vice or
inadequate maintenance of all or part thereof; (iii) errors in design, faulty
workmanship or materials, unless the collapse of the property or a part thereof
ensues and then only for the ensuing loss; (iv) nuclear reaction or nuclear
radiation or radioactive contamination, all whether controlled or uncontrolled
and whether such loss be direct or indirect, proximate or remote or be in whole
or in part caused by, contributed to or aggravated by a peril covered by this
definition of Special Hazard Loss; (v) hostile or warlike action in time of
peace or war, including action in hindering, combating or defending against an
actual, impending or expected attack (a) by any government of sovereign power
(de jure or de facto), or by an authority maintaining or using military, naval
or air forces, (b) by military, naval or air forces, or (c) by an agent of any
such government, power, authority or forces; (vi) any weapon of war employing
atomic fission or radioactive force whether in time of peace or war; (vii)
insurrection, rebellion, revolution, civil war, usurped power or action taken by
governmental authority in hindering, combating or defending against such
occurrence; or (viii) seizure or destruction under quarantine or customs
regulations, or confiscation by order of any government or public authority.

Special Primary Insurance Policy: Any Primary Insurance Policy covering a
Mortgage Loan the premium of which is payable by the Trustee pursuant to Section
4.01(a), if so identified in the Mortgage Loan Schedule. There are no Special
Primary Insurance Policies with respect to any of the Mortgage Loans.

Special Primary Insurance Premium: With respect to any Special Primary Insurance
Policy, the monthly premium payable thereunder.

Statutory Trust Statute: Chapter 38 of Title 12 of the Delaware Code, 12
Del.C.ss.3801 et seq., as the same may be amended form time to time.

Subordinate Certificates:  The Class B Certificates.

Subordinate Liquidation Amount: For any Distribution Date, the excess, if any,
of the sum of (A) the aggregate of Liquidation Principal for all Mortgage Loans
which became Liquidated Mortgage Loans during the Prior Period and (B) any
Subsequent Recoveries for such Distribution Date, over the Senior Liquidation
Amount for such Distribution Date.

Subordinate Percentage: For any Distribution Date, the excess of 100% over the
Senior Percentage for such date.

Subordinate Prepayment Percentage: For any Distribution Date, the excess of 100%
over the Senior Prepayment Percentage for such Distribution Date; provided,
however, that if the aggregate Class Principal Balance of the Class A and
Residual Certificates has been reduced to zero, then the Subordinate Prepayment
Percentage shall equal 100%.

Subordinate Principal Distribution Amount: For any Distribution Date, the sum of
(i) the Subordinate Percentage of the Principal Payment Amount, (ii) the
Subordinate Principal Prepayments Distribution Amount and (iii) the Subordinate
Liquidation Amount.

                                       36
<PAGE>

For any Distribution Date, the Subordinate Principal Distribution Amount shall
be allocated pro rata, by Class Principal Balance, among the Classes of Class B
Certificates and paid in the order of distribution to such Classes pursuant to
the definition of "Distribution Amount" except as otherwise stated in such
definition. Notwithstanding the foregoing, for any Distribution Date prior to
distributions on such date, if the Subordination Level for any Class or Classes
of Class B Certificates is less than such Subordination Level as of the Closing
Date, then the pro rata portion of the Subordinate Principal Prepayments
Distribution Amount, if any, otherwise allocable to such Class or Classes of
Class B Certificates shall be allocated to the more senior Classes of Class B
Certificates, pro rata according to the Class Principal Balances of such
Classes. For purposes of this definition and the definition of "Subordination
Level," the relative seniority, from highest to lowest, of the Class B
Certificates shall be as follows: Class B-1, Class B-2, Class B-3, Class B-4,
Class B-5 and Class B-6.

Subordinate Principal Prepayments Distribution Amount: For any Distribution
Date, the Subordinate Prepayment Percentage of the Principal Prepayment Amount.

Subordination Level: On any specified date, with respect to any Class of Class B
Certificates, the percentage obtained by dividing the aggregate Class Principal
Balance of such Class and the Classes of Class B Certificates which are
subordinate in right of payment to such Class by the aggregate Class Principal
Balance of the Certificates as of such date prior to giving effect to
distributions of principal and interest, allocations of Realized Losses and
allocations of Negative Amortization Amounts on such date.

Subsequent Recoveries: For any Distribution Date, amounts received by the Master
Servicer during the Prior Period (after deduction of amounts reimbursable under
Section 3.05(a)(i) and (ii)) in connection with the liquidation of defaulted
Mortgage Loans after such Mortgage Loans became Liquidated Mortgage Loans, for
each such Mortgage Loan up to the amount of Realized Losses, if any, previously
allocated in respect of such Mortgage Loan in reduction of the Class Principal
Balance of any Class of Certificates.

Substitute Mortgage Loan: A Mortgage Loan which is substituted for another
Mortgage Loan pursuant to and in accordance with the provisions of Section 2.07.

Tax Matters Person: A Holder of a Class R Certificate with a Percentage Interest
of at least 0.01% or any Permitted Transferee of such Class R Certificateholder
designated as succeeding to the position of Tax Matters Person in a notice to
the Trustee signed by authorized representatives of the transferor and
transferee of such Class R Certificate. The Company is hereby appointed to act
as the Tax Matters Person for REMIC I so long as it holds a Class R Certificate
with a Percentage Interest of at least 0.01%. The Company is hereby appointed to
act as agent for the Tax Matters Person for REMIC I, to perform the functions of
such Tax Matters Person as provided herein, so long as the Company is the Master
Servicer hereunder, in the event that the Company ceases to hold a Class R
Certificate with the required Percentage Interest. In the event that the Company
ceases to be the Master Servicer hereunder, the successor Master Servicer is
hereby appointed to act as agent for the Tax Matters Person for REMIC I, to
perform the functions of such Tax Matters Person as provided herein. If the Tax

                                       37
<PAGE>

Matters Person for REMIC I becomes a Disqualified Organization, the last
preceding Holder, that is not a Disqualified Organization, of the Class R
Certificate held by the Disqualified Organization shall be Tax Matters Person
pursuant to and as permitted by Section 5.01(c). If any Person is appointed as
tax matters person by the Internal Revenue Service pursuant to the Code, such
Person shall be Tax Matters Person.

Termination Date: The date upon which final payment of the Certificates will be
made pursuant to the procedures set forth in Section 9.01(b).

Termination Payment: The final payment delivered to the Certificateholders on
the Termination Date pursuant to the procedures set forth in Section 9.01(b).

Transfer: Any direct or indirect transfer or sale of any Ownership Interest in a
Residual Certificate.

Transferee: Any Person who is acquiring by Transfer any Ownership Interest in a
Residual Certificate.

Transferee Affidavit and Agreement: An affidavit and agreement in the form
attached hereto as Exhibit J.

Trust: WaMu Mortgage Pass-Through Certificates Series 2004-AR2 Trust, a Delaware
statutory trust, created pursuant to this Agreement.

Trustee: Deutsche Bank National Trust Company, or its successor-in-interest as
provided in Section 8.09, or any successor trustee appointed as herein provided.

Uncollected Interest: With respect to any Distribution Date for any Mortgage
Loan on which a Payoff was made by a Mortgagor during the related Payoff Period,
except for Payoffs received during the period from the first through the 14th
day of the month of such Distribution Date, an amount equal to one month's
interest at the applicable Pass-Through Rate on such Mortgage Loan less the
amount of interest actually paid by the Mortgagor with respect to such Payoff.

Uncompensated Interest Shortfall: For any Distribution Date, the sum of (i) the
aggregate Relief Act Shortfall for such Distribution Date, (ii) aggregate
Curtailment Shortfall for such Distribution Date and (iii) the excess, if any,
of (a) aggregate Uncollected Interest for such Distribution Date over (b)
Compensating Interest for such Distribution Date.

Uncompensated Interest Shortfall shall be allocated to the Class A and Class B
Certificates, pro rata according to the amount of interest accrued on each such
Class during the immediately preceding accrual period, in reduction thereof.

Underwriters: WaMu Capital Corp. and Greenwich Capital Markets, Inc.

Underwriting Standards: The underwriting standards of the Company, Washington
Mutual Bank, FA, Washington Mutual Bank fsb, or Washington Mutual Bank, a
Washington state chartered savings bank, as applicable.

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<PAGE>

Uninsured Cause: Any cause of damage to a Mortgaged Property, the cost of the
complete restoration of which is not fully reimbursable under the hazard
insurance policies required to be maintained pursuant to Section 3.07.

U.S. Person: A citizen or resident of the United States, a corporation,
partnership or other entity created or organized in or under the laws of the
United States, any state thereof or the District of Columbia, or an estate or
trust that is subject to U.S. federal income tax regardless of the source of its
income.

VA: The Department of Veterans Affairs, formerly known as the Veterans
Administration, or any successor thereto.

Withdrawal Date: Any day during the period commencing on the 18th day of the
month of the related Distribution Date (or if such day is not a Business Day,
the immediately preceding Business Day) and ending on the last Business Day
prior to the 21st day of the month of such Distribution Date. The "related Due
Date" for any Withdrawal Date is the Due Date immediately preceding the related
Distribution Date.

                                   ARTICLE II

Creation of the Trust; Conveyance of the Mortgage Pool Assets; REMIC Election
and Designations; Original Issuance of Certificates

Section 2.01. Creation of the Trust. The Trust is hereby created and shall be
known as "WaMu Mortgage Pass-Through Certificates Series 2004-AR2 Trust". The
purpose of the Trust is, and the Trust shall have the power and authority, to
engage in the following activities, all as provided by and subject to the terms
of this Agreement:

(i) to acquire, hold, lease, manage, administer, control, invest, reinvest,
operate and/or transfer the Mortgage Pool Assets;

(ii) to issue the Certificates;

(iii) to make distributions to the Certificates; and

(iv) to engage in such other activities, including entering into agreements, as
are described in or required by the terms of this Agreement or as are necessary,
suitable or convenient to accomplish the foregoing or incidental thereto.

Deutsche Bank National Trust Company is hereby appointed as a trustee of the
Trust, to have all the rights, duties and obligations of the Trustee with
respect to the Trust hereunder, and Deutsche Bank National Trust Company hereby
accepts such appointment and the Trust created hereby. Deutsche Bank Trust
Company Delaware, is hereby appointed as a Delaware trustee of the Trust, to
have all the rights, duties and obligations of the Delaware Trustee with respect
to the Trust hereunder, and Deutsche Bank Trust Company Delaware, hereby accepts
such appointment and the Trust created hereby. It is the intention of the
Company, the Trustee and the Delaware Trustee that the Trust constitute a

                                       39
<PAGE>

statutory trust under the Statutory Trust Statute, that this Agreement
constitute the governing instrument of the Trust, and that this Agreement amend
and restate the Original Trust Agreement. The parties hereto acknowledge and
agree that, prior to the execution and delivery hereof, the Delaware Trustee has
filed the Certificate of Trust.

The assets of the Trust shall remain in the custody of the Trustee, on behalf of
the Trust, and shall be owned by the Trust except as otherwise expressly set
forth herein. Moneys to the credit of the Trust shall be held by the Trustee and
invested as provided herein. All assets received and held in the Trust will not
be subject to any right, charge, security interest, lien or claim of any kind in
favor of either of Deutsche Bank National Trust Company or Deutsche Bank Trust
Company Delaware in its own right, or any Person claiming through it. Neither
the Trustee nor the Delaware Trustee, on behalf of the Trust, shall have the
power or authority to transfer, assign, hypothecate, pledge or otherwise dispose
of any of the assets of the Trust to any Person, except as permitted herein. No
creditor of a beneficiary of the Trust, of the Trustee, of the Delaware Trustee,
of the Master Servicer or of the Company shall have any right to obtain
possession of, or otherwise exercise legal or equitable remedies with respect
to, the property of the Trust, except in accordance with the terms of this
Agreement.

Section 2.02. Restrictions on Activities of the Trust. Notwithstanding any other
provision of this Agreement and any provision of law that otherwise so empowers
the Trust, so long as any Certificates are outstanding, the Trust shall not, and
none of the Trustee, the Delaware Trustee, the Company or the Master Servicer
shall (except by amendment of this Agreement permitted by Section 10.01)
knowingly cause the Trust to, do any of the following:

(i) engage in any business or activity other than those set forth in Section
2.01;

(ii) incur or assume any indebtedness except for such indebtedness that may be
incurred by the Trust in connection with the execution or performance of this
Agreement or any other agreement contemplated hereby;

(iii) guarantee or otherwise assume liability for the debts of any other party;

(iv) do any act in contravention of this Agreement or any other agreement
contemplated hereby to which the Trust is a party;

(v) do any act which would make it impossible to carry on the ordinary business
of the Trust;

(vi) confess a judgment against the Trust;

(vii) possess or assign the assets of the Trust for other than a Trust purpose;

(viii) cause the Trust to lend any funds to any entity, except as contemplated
by this Agreement; or

(ix) change the purposes and powers of the Trust from those set forth in this
Agreement.

                                       40
<PAGE>

Section 2.03. Separateness Requirements. Notwithstanding any other provision of
this Agreement and any provision of law that otherwise so empowers the Trust, so
long as any Certificates are outstanding, the Trust shall perform the following:

(i) except as expressly permitted by this Agreement, maintain its books,
records, bank accounts and files separate from those of any other Person;

(ii) except as expressly permitted by this Agreement, maintain its assets in its
own separate name and in such a manner that it is not costly or difficult to
segregate, identify, or ascertain such assets;

(iii) consider the interests of the Trust's creditors in connection with its
actions;

(iv) hold itself out to creditors and the public as a legal entity separate and
distinct from any other Person and correct any known misunderstanding regarding
its separate identity and refrain from engaging in any activity that compromises
the separate legal identity of the Trust;

(v) prepare and maintain separate records, accounts and financial statements in
accordance with generally accepted accounting principles, consistently applied,
and susceptible to audit. To the extent it is included in consolidated financial
statements or consolidated tax returns, such financial statements and tax
returns will reflect the separateness of the respective entities and indicate
that the assets of the Trust will not be available to satisfy the debts of any
other Person;

(vi) allocate and charge fairly and reasonably any overhead shared with any
other Person;

(vii) transact all business with affiliates on an arm's-length basis and
pursuant to written, enforceable agreements;

(viii) conduct business solely in the name of the Trust. In that regard all
written and oral communications of the Trust, including, without limitation,
letters, invoices, purchase orders and contracts, shall be made solely in the
name of the Trust (or the Trustee on behalf of the Trust);

(ix) maintain a separate office through which its business shall be conducted,
provided that such office may be an office of the Trustee, which office shall
not be shared with the Company or any affiliates of the Company;

(x) in the event that services have been or are in the future performed or paid
by any Person on behalf of the Trust (other than the Trustee, the Delaware
Trustee, the Master Servicer or the Tax Matters Person as permitted herein),
reimburse such Person, as applicable, for the commercially reasonable value of
such services or expenses provided or incurred by such Person. Accordingly, (i)
the Trust shall reimburse such Person, as applicable, for the commercially
reasonable value of such services or expenses provided or incurred by such

                                       41
<PAGE>

Person; (ii) to the extent invoices for such services are not allocated and
separately billed to the Trust, the amount thereof that was or is to be
allocated and separately billed to the Trust was or will be reasonably related
to the services provided to the Trust; and (iii) any other allocation of direct,
indirect or overhead expenses for items shared between the Trust and any other
Person, was or will be, to the extent practicable, allocated on the basis of
actual use or value of services rendered or otherwise on a basis reasonably
related to actual use or the value of services rendered;

(xi) except as expressly permitted by this Agreement, not commingle its assets
or funds with those of any other Person;

(xii) except as expressly permitted by this Agreement, not assume, guarantee, or
pay the debts or obligations of any other Person;

(xiii) except as expressly permitted by this Agreement, not pledge its assets
for the benefit of any other Person;

(xiv) not hold out its credit or assets as being available to satisfy the
obligations of others;

(xv) pay its liabilities only out of its funds;

(xvi) pay the salaries of its own employees, if any; and

(xvii) cause the agents and other representatives of the Trust, if any, to act
at all times with respect to the Trust consistently and in furtherance of the
foregoing.

None of the Trustee, the Delaware Trustee, the Company or the Master Servicer
shall (except by amendment of this Agreement permitted by Section 10.01) take
any action that is inconsistent with the purposes of the Trust or Section 2.02
or Section 2.03. Neither the Company nor the Master Servicer shall (except by
amendment of this Agreement permitted by Section 10.01) direct the Trustee or
the Delaware Trustee to take any action that is inconsistent with the purposes
of the Trust or Section 2.02 or Section 2.03.

Section 2.04.     Conveyance of Mortgage Pool Assets; Security Interest.

Concurrently with the execution and delivery hereof, the Company does hereby
irrevocably sell, transfer, assign, set over and otherwise convey to the Trust,
without recourse, all the Company's right, title and interest in and to the
Mortgage Pool Assets (such transfer and assignment by the Company to be referred
to herein as the "Conveyance").

It is the express intent of the parties hereto that the Conveyance of the
Mortgage Pool Assets to the Trust by the Company as provided in this Section
2.04 be, and be construed as, an absolute sale of the Mortgage Pool Assets. It
is, further, not the intention of the parties that such Conveyance be deemed the
grant of a security interest in the Mortgage Pool Assets by the Company to the
Trust to secure a debt or other obligation of the Company. However, in the event
that, notwithstanding the intent of the parties, the Mortgage Pool Assets are
held to be the property of the Company, or if for any other reason this
Agreement is held or deemed to create a security interest in the Mortgage Pool
Assets, then

                                       42
<PAGE>

(a) this Agreement shall constitute a security agreement;

(b) the conveyance provided for in this Section 2.04 shall be deemed to be a
grant by the Company to the Trust of, and the Company hereby grants to the
Trust, to secure all of the Company's obligations hereunder, a security interest
in all of the Company's right, title, and interest, whether now owned or
hereafter acquired, in and to:

(I) The Mortgage Pool Assets;

(II) All accounts, chattel paper, deposit accounts, documents, general
intangibles, goods, instruments, investment property, letter-of-credit rights,
letters of credit, money, and oil, gas, and other minerals, consisting of,
arising from, or relating to, any of the foregoing; and

(III) All proceeds of the foregoing.

The Company shall file such financing statements, and the Company and the
Trustee acting on behalf of the Trust at the direction of the Company shall, to
the extent consistent with this Agreement, take such other actions as may be
necessary to ensure that, if this Agreement were found to create a security
interest in the Conveyed Assets, such security interest would be a perfected
security interest of first priority under applicable law and will be maintained
as such throughout the term of the Agreement. In connection herewith, the Trust
shall have all of the rights and remedies of a secured party and creditor under
the Uniform Commercial Code as in force in the relevant jurisdiction.

In the event that a pleading is filed in a court of competent jurisdiction
asserting that this Agreement creates a security interest in the Mortgage Pool
Assets, the Trustee on behalf of the Trust shall take actual possession of the
Mortgage Pool Assets or, at the Company's option, the Trustee on behalf of the
Trust shall be provided an Opinion of Counsel addressed to the Trust and the
Trustee reasonably satisfactory to the Trustee to the effect that such security
interest is a perfected security interest of first priority while the Mortgage
Pool Assets are in the possession of the Company or its affiliates.

Section 2.05.     Delivery of Mortgage Files.

In connection with the sale, transfer and assignment referred to in Section
2.04, the Company, concurrently with the execution and delivery hereof, does
deliver to, and deposit with, or cause to be delivered to and deposited with,
the Trustee or Custodian the Mortgage Files, which shall at all times be
identified in the records of the Trustee or the Custodian, as applicable, as
being held by or on behalf of the Trust.

Concurrently with the execution and delivery hereof, the Company shall cause to
be filed the UCC assignment or amendment referred to in clause (Y)(vii) of the
definition of "Mortgage File." In connection with its servicing of Cooperative
Loans, the Master Servicer will use its best efforts to file timely continuation
statements, if necessary, with regard to each financing statement and assignment
relating to Cooperative Loans.

                                       43
<PAGE>

In instances where the original recorded Mortgage or any intervening assignment
thereof (recorded or in recordable form) required to be included in the Mortgage
File pursuant to the definition of "Mortgage File" relating to a Mortgage Loan
is not included in the Mortgage File delivered to the Trustee (or the Custodian)
prior to or concurrently with the execution and delivery hereof (due to a delay
on the part of the recording office), the Company shall deliver to the Trustee
(or the Custodian) a fully legible reproduction (which may be in electronic
form) of the original Mortgage or intervening assignment provided that the
originator, the related Lender or the escrow or title company which provided
closing services in connection with such Mortgage Loan certifies on the face of
such reproduction(s) or copy as follows: "Certified true and correct copy of
original which has been transmitted for recordation." For purposes hereof,
transmitted for recordation means having been mailed or otherwise delivered for
recordation to the appropriate authority. In all such instances, the Company
shall transmit the original recorded Mortgage and any intervening assignments
with evidence of recording thereon (or a copy of such original Mortgage or
intervening assignment certified by the applicable recording office) (which may
be in electronic form) (collectively, "Recording Documents") to the Trustee (or
the Custodian) within 270 days after the execution and delivery hereof. In
instances where, due to a delay on the part of the recording office where any
such Recording Documents have been delivered for recordation, the Recording
Documents cannot be delivered to the Trustee within 270 days after execution and
delivery hereof, the Company shall deliver to the Trustee within such time
period a certificate (a "Company Officer's Certificate") signed by the Chairman
of the Board, President, any Vice President or Treasurer of the Company stating
the date by which the Company expects to receive such Recording Documents from
the applicable recording office. In the event that Recording Documents have
still not been received by the Company and delivered to the Trustee (or the
Custodian) by the date specified in its previous Company Officer's Certificate
delivered to the Trustee, the Company shall deliver to the Trustee by such date
an additional Company Officer's Certificate stating a revised date by which the
Company expects to receive the applicable Recording Documents. This procedure
shall be repeated until the Recording Documents have been received by the
Company and delivered to the Trustee (or the Custodian).

For Mortgage Loans for which the Company has received a Payoff after the Cut-Off
Date and prior to the date of execution and delivery hereof, the Company, in
lieu of delivering the above documents, herewith delivers to the Trustee a
certification of a Servicing Officer of the nature set forth in Section 3.10.

The Trustee is authorized, with the Master Servicer's consent, to appoint any
bank or trust company approved by each of the Company and the Master Servicer as
Custodian of the documents or instruments referred to above in this Section
2.05, and to enter into a Custodial Agreement for such purpose, provided,
however, that the Trustee shall be and remain liable for the acts of any such
Custodian only to the extent that it is responsible for its own acts hereunder.
Any documents delivered by the Company or the Master Servicer to the Custodian,
if any, shall be deemed to have been delivered to the Trustee for all purposes
hereunder; and any documents held by the Custodian, if any, shall be deemed to
be held by the Trustee for all purposes hereunder. There shall be a written
Custodial Agreement between the Trustee and each Custodian. Each Custodial
Agreement shall contain an acknowledgment by the Custodian that all Mortgage

                                       44
<PAGE>

Pool Assets, Mortgage Files, and related documents and property held by it at
any time are held by it for the benefit of the Trust. Pursuant to the Initial
Custodial Agreement, the Initial Custodian shall perform responsibilities of the
Trustee with respect to the delivery, receipt, examination and custody of the
Mortgage Files on the Trustee's behalf, as provided therein.

On or promptly after the Closing Date, the Master Servicer shall cause the
MERS(R) System to indicate that each MERS Loan, if any, has been assigned to
"Deutsche Bank National Trust Company, as Trustee, without recourse" or "WaMu
Mortgage Pass-Through Certificates Series 2004-AR2 Trust, without recourse" by
including in the MERS(R) System computer files (a) the code necessary to
identify the Trustee and (b) the code necessary to identify the series of the
Certificates issued in connection with such Mortgage Loans; provided, however,
that in the event the Company acquired such Mortgage Loans from an affiliate of
the Company, then the Master Servicer need not cause the MERS(R) System to
indicate such assignment. The Master Servicer shall not alter the codes
referenced in this paragraph with respect to any MERS Loan during the term of
this Agreement except in connection with an assignment of such MERS Loan or
de-registration thereof from the MERS(R) System in accordance with the terms of
this Agreement.

Section 2.06.     REMIC Election for REMIC I.

The Tax Matters Person, shall, on behalf of REMIC I, elect to treat REMIC I as a
REMIC within the meaning of Section 860D of the Code and, if necessary, under
applicable state laws. Such election shall be included in the Form 1066 and any
appropriate state return to be filed on behalf of REMIC I for its first taxable
year.

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

The regular interests (as set forth in the table contained in the Preliminary
Statement hereto) relating to REMIC I are hereby designated as "regular
interests" in REMIC I for purposes of Section 860G(a)(1) of the Code. The Class
R Certificates are hereby designated as the sole class of "residual interest" in
REMIC I for purposes of Section 860G(a)(2) of the Code.

The parties intend that the affairs of REMIC I shall constitute, and that the
affairs of REMIC I shall be conducted so as to qualify REMIC I as a REMIC. In
furtherance of such intention, the Tax Matters Person shall, on behalf of REMIC
I: (a) prepare and file, or cause to be prepared and filed, a federal tax return
using a calendar year as the taxable year and using an accrual method of
accounting for REMIC I when and as required by the REMIC Provisions and other
applicable federal income tax laws; (b) make an election, on behalf of the
trust, for REMIC I to be treated as a REMIC on the federal tax return of REMIC I
for its first taxable year, in accordance with the REMIC Provisions; (c) prepare
and forward, or cause to be prepared and forwarded, to the Certificateholders
and the Trustee, all information reports as and when required to be provided to
them in accordance with the REMIC Provisions, and make available the information
necessary for the application of Section 860E(e) of the Code; (d) conduct the
affairs of REMIC I at all times that any REMIC I Regular Interests are
outstanding so as to maintain the status of REMIC I as a REMIC under the REMIC
Provisions; (e) not knowingly or intentionally take any action or omit to take
any action that would cause the termination of the REMIC status of REMIC I; and
(f) pay the amount of any federal prohibited transaction penalty taxes imposed

                                       45
<PAGE>

on REMIC I when and as the same shall be due and payable (but such obligation
shall not prevent the Company or any other appropriate person from contesting
any such tax in appropriate proceedings and shall not prevent the Company from
withholding payment of such tax, if permitted by law, pending the outcome of
such proceedings); provided, that the Company shall be entitled to be
indemnified by REMIC I for any such prohibited transaction penalty taxes if the
Company's failure to exercise reasonable care was not the primary cause of the
imposition of such prohibited transaction penalty taxes.

The Trustee and the Master Servicer shall promptly provide the Company with such
information in the possession of the Trustee or the Master Servicer,
respectively, as the Company may from time to time request for the purpose of
enabling the Company to prepare tax returns. If so requested by the Tax Matters
Person, the Trustee shall sign tax returns on behalf of REMIC I.

In the event that a Mortgage Loan is discovered to have a defect which, had such
defect been discovered before the startup day, would have prevented such
Mortgage Loan from being a "qualified mortgage" within the meaning of Section
860G(a)(3) of the Code, and the Company does not repurchase such Mortgage Loan
within 90 days of such date, the Master Servicer, on behalf of the Trustee,
shall within 90 days of the date such defect is discovered sell such Mortgage
Loan at such price as the Master Servicer in its sole discretion, determines to
be the greatest price that will result in the purchase thereof within 90 days of
such date, unless the Master Servicer delivers to the Trustee an Opinion of
Counsel to the effect that continuing to hold such Mortgage Loan will not
adversely affect the status of the electing portion of REMIC I as a REMIC for
federal income tax purposes.

In the event that any tax is imposed on "prohibited transactions" of REMIC I as
defined in Section 860F of the Code and not paid by the Company pursuant to
clause (f) of the third preceding paragraph, such tax shall be charged against
amounts otherwise distributable to the Class R Certificates. Notwithstanding
anything to the contrary contained herein, the Trustee is hereby authorized to
retain from amounts otherwise distributable to the Class R Certificates on any
Distribution Date sufficient funds to reimburse the Tax Matters Person (or any
agent therefor appointed in accordance with the definition of "Tax Matters
Person" herein, if applicable), for the payment of such tax (upon the written
request of the Tax Matters Person or its agent, to the extent reimbursable, and
to the extent that the Tax Matters Person or its agent has not been previously
reimbursed therefor).

Section 2.07. Acceptance by Trustee. The Trustee acknowledges receipt (or with
respect to any Mortgage Loan subject to a Custodial Agreement, receipt by the
Custodian thereunder) on behalf of the Trust of the documents (or certified
copies thereof as specified in Section 2.05) referred to in Section 2.05 above,
but without having made the review required to be made within 45 days pursuant
to this Section 2.07. The Trustee acknowledges that all Mortgage Pool Assets,
Mortgage Files, and related documents and property held by it at any time are
held by it in its capacity as Trustee of the Trust for the benefit of the
holders of the Certificates. The Trustee agrees, for the benefit of the Trust,
to review (or cause the Initial Custodian to review) each Mortgage File within
45 days after the Closing Date and deliver to the Company a certification (or
cause the Initial Custodian to deliver to the Company a certification, which

                                       46
<PAGE>

satisfies the applicable requirements of this Agreement) in the form attached as
Exhibit M hereto, to the effect that, except as noted, all documents required
(in the case of instruments described in clauses (X)(ii), (X)(iv) and (Y)(ix) of
the definition of "Mortgage File," known by the Trustee to be required) pursuant
to the definition of "Mortgage File" and Section 2.05 have been executed and
received, and that such documents relate to the Mortgage Loans identified in the
Mortgage Loan Schedule. In performing such review, the Trustee may rely upon the
purported genuineness and due execution of any such document, and on the
purported genuineness of any signature thereon. The Trustee shall not be
required to make any independent examination of any documents contained in each
Mortgage File beyond the review specifically required herein. The Trustee makes
no representations as to: (i) the validity, legality, enforceability or
genuineness of any of the Mortgage Loans identified on the Mortgage Loan
Schedule, or (ii) the collectability, insurability, effectiveness or suitability
of any Mortgage Loan. If the Trustee finds any document or documents
constituting a part of a Mortgage File not to have been executed or received, or
to be unrelated to the Mortgage Loans identified in the Mortgage Loan Schedule,
the Trustee shall promptly so notify the Company. The Company hereby covenants
and agrees that, if any such defect cannot be corrected or cured, the Company
shall, not later than 60 days after the Trustee's notice to it respecting such
defect, within the three-month period commencing on the Closing Date (or within
the two-year period commencing on the Closing Date if the related Mortgage Loan
is a "defective obligation" within the meaning of Section 860G(a)(4)(B)(ii) of
the Code and Treasury Regulation Section 1.860G-2(f)), either (i) repurchase the
related Mortgage Loan from the Trust at the Purchase Price, or (ii) substitute
for any Mortgage Loan to which such defect relates a different mortgage loan (a
"Substitute Mortgage Loan") which is a "qualified replacement mortgage" (as
defined in the Code) and, (iii) after such three-month or two-year period, as
applicable, the Company shall repurchase the Mortgage Loan from the Trust at the
Purchase Price but only if the Mortgage Loan is in default or default is, in the
judgment of the Company, reasonably imminent. If such defect would cause the
Mortgage Loan to be other than a "qualified mortgage" (as defined in the Code),
then notwithstanding the previous sentence or any provision in the definition of
"Purchase Price," the repurchase or substitution must occur within the sooner of
(i) 90 days from the date the defect was discovered or (ii) in the case of
substitution, two years from the Closing Date.

Such Substitute Mortgage Loan shall be an adjustable rate mortgage loan with a
first Interest Rate Adjustment Date occurring on approximately the same date as
the first Interest Rate Adjustment Date for the Mortgage Loan being substituted
for and adjustments monthly thereafter, based on the Index, and with the same
Monthly Payment Adjustment Terms as the Mortgage Loan being substituted for,
mature no later than, and not more than two years earlier than, have a principal
balance and Loan-to-Value Ratio equal to or less than, and have a Pass-Through
Rate on the date of substitution equal to or no more than 1 percentage point
greater than, and a Margin and Rate Ceiling equal to or greater than, the
Mortgage Loan being substituted for. If the aggregate of the principal balances
of the Substitute Mortgage Loans substituted for a Mortgage Loan is less than
the Principal Balance of such Mortgage Loan, the Company shall pay the
difference in cash, together with unpaid accrued interest, if any, on the
difference between the aggregate of the principal balances of the Substitute
Mortgage Loans and the Principal Balance of such Mortgage Loan during the
calendar month in which the substitution occurs to the last day of such month at
a rate equal to the applicable Pass-Through Rate, to the Trustee for deposit

                                       47
<PAGE>

into the Certificate Account, and such payment by the Company shall be treated
in the same manner as proceeds of the repurchase by the Company of a Mortgage
Loan pursuant to this Section 2.07. Furthermore, such Substitute Mortgage Loan
shall otherwise have such characteristics so that the representations and
warranties of the Company set forth in Section 2.08 hereof would not have been
incorrect had such Substitute Mortgage Loan originally been a Mortgage Loan, and
the Company shall be deemed to have made such representations and warranties as
to such Substitute Mortgage Loan. A Substitute Mortgage Loan may be substituted
for a defective Mortgage Loan whether or not such defective Mortgage Loan is
itself a Substitute Mortgage Loan. Notwithstanding anything herein to the
contrary, each Substitute Mortgage Loan shall be deemed to have the same
Pass-Through Rate as the Mortgage Loan for which it was substituted.

The Purchase Price for each purchased or repurchased Mortgage Loan shall be
deposited by the Company in the Certificate Account and, upon receipt by the
Trustee of written notification of such deposit signed by a Servicing Officer,
the Trustee shall (or, if applicable, shall cause the Custodian to) release to
the Company the related Mortgage File and shall execute and deliver (or, in the
event that the Mortgage Files are held in the name of the Custodian, shall cause
the Custodian to execute and deliver) on behalf of the Trust such instruments of
transfer or assignment, in each case without recourse, as shall be necessary to
vest in the Company or its designee or assignee title to any Mortgage Loan
released pursuant hereto. In furtherance of the foregoing, if such Mortgage Loan
is a MERS Loan and as a result of the repurchase thereof such Mortgage Loan
shall cease to be serviced by a servicer that is a member of MERS or if the
Company or its assignee shall so request, the Master Servicer shall cause MERS
to execute and deliver an assignment of the Mortgage in recordable form from
MERS to the Company or its assignee and shall cause the Mortgage Loan to be
removed from registration on the MERS(R) System in accordance with MERS' rules
and procedures. The obligation of the Company to repurchase or substitute any
Mortgage Loan as to which such a defect in a constituent document exists shall
constitute the sole remedy respecting such defect available to the Trust or the
Holders of the Certificates.

Section 2.08. Representations and Warranties of the Company Concerning the
Mortgage Loans. With respect to the conveyance of the Mortgage Loans provided
for in Section 2.04 herein, the Company hereby represents and warrants to the
Trust that as of the Cut-Off Date unless otherwise indicated:

(i) The information set forth in the Mortgage Loan Schedule was true and correct
in all material respects at the date or dates respecting which such information
is furnished;

(ii) As of the Closing Date, each Mortgage is a valid and enforceable (subject
to Section 2.08(xvi)) first lien on an unencumbered estate in fee simple or (if
the related Mortgage Loan is secured by the interest of the Mortgagor as a
lessee under a ground lease) leasehold estate in the related Mortgaged Property
subject only to (a) liens for current real property taxes and special
assessments; (b) covenants, conditions and restrictions, rights of way,
easements and other matters of public record as of the date of recording such
Mortgage, such exceptions appearing of record being acceptable to mortgage
lending institutions generally or specifically reflected in the appraisal
obtained in connection with the origination of the Mortgage Loan; (c) exceptions
set forth in the title insurance policy relating to such Mortgage, such
exceptions being acceptable to mortgage lending institutions generally; and (d)

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other matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to be provided
by the Mortgage;

(iii) Immediately upon the transfer and assignment contemplated herein, the
Trust shall have good title to, and will be the sole legal owner of, each
Mortgage Loan, free and clear of any encumbrance or lien (other than any lien
under this Agreement);

(iv) As of the day prior to the Cut-Off Date, all payments due on each Mortgage
Loan had been made and no Mortgage Loan had been delinquent (i.e., was more than
30 days past due) more than once in the preceding 12 months and any such
delinquency lasted for no more than 30 days;

(v) As of the Closing Date, there is no late assessment for delinquent taxes
outstanding against any Mortgaged Property;

(vi) As of the Closing Date, there is no offset, defense or counterclaim to any
Mortgage Note, including the obligation of the Mortgagor to pay the unpaid
principal or interest on such Mortgage Note except to the extent that the
Buydown Agreement for a Buydown Loan forgives certain indebtedness of a
Mortgagor;

(vii) As of the Closing Date, each Mortgaged Property is free of damage and in
good repair, ordinary wear and tear excepted;

(viii) Each Mortgage Loan at the time it was made complied with all applicable
local, state and federal laws, including, without limitation, usury, equal
credit opportunity, disclosure and recording laws, and predatory and abusive
lending laws applicable to the originating lender;

(ix) Each Mortgage Loan was originated by a savings association, savings bank,
credit union, insurance company, or similar institution which is supervised and
examined by a federal or state authority or by a mortgagee approved by the FHA
and will be serviced by an institution which meets the servicer eligibility
requirements established by the Company;

(x) As of the Closing Date, each Mortgage Loan is covered by an ALTA form or
CLTA form of mortgagee title insurance policy or other form of policy of
insurance which has been issued by, and is the valid and binding obligation of,
a title insurer which, as of the origination date of such Mortgage Loan, was
qualified to do business in the state in which the related Mortgaged Property is
located. Such policy insures the originator of the Mortgage Loan, its successors
and assigns as to the first priority lien of the Mortgage in the original
principal amount of the Mortgage Loan subject to the exceptions set forth in
such policy. Such policy is in full force and effect and inures to the benefit
of the Trust upon the consummation of the transactions contemplated by this
Agreement and no claims have been made under such policy, and no prior holder of
the related Mortgage, including the Company, has done, by act or omission,
anything which would impair the coverage of such policy;

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<PAGE>

(xi) All of the Mortgage Loans with a Loan-to-Value Ratio as of the Cut-Off Date
in excess of 80% were covered by a Primary Insurance Policy or an FHA insurance
policy or a VA guaranty, and such policy or guaranty is valid and remains in
full force and effect;

(xii) As of the Closing Date, all policies of insurance required by this
Agreement or by a Selling and Servicing Contract have been validly issued and
remain in full force and effect, including such policies covering the Company,
the Master Servicer or any Servicer;

(xiii) As of the Closing Date, each insurer issuing a Primary Insurance Policy
holds a rating acceptable to the Rating Agencies;

(xiv) Each Mortgage (exclusive of any riders thereto) was documented by
appropriate Fannie Mae/Freddie Mac mortgage instruments in effect at the time of
origination, or other instruments approved by the Company;

(xv) As of the Closing Date, the Mortgaged Property securing each Mortgage is
improved with a one- to four-family dwelling unit, including units in a duplex,
triplex, fourplex, condominium project, townhouse, a planned unit development or
a de minimis planned unit development;

(xvi) As of the Closing Date, each Mortgage and Mortgage Note is the legal,
valid and binding obligation of the maker thereof and is enforceable in
accordance with its terms, except only as such enforcement may be limited by
laws affecting the enforcement of creditors' rights generally and principles of
equity;

(xvii) As of the date of origination, as to Mortgaged Properties which are units
in condominiums or planned unit developments, all of such units met the
applicable Underwriting Standards, are located in a condominium or planned unit
development projects which have received Fannie Mae or Freddie Mac approval, or
are approvable by Fannie Mae or Freddie Mac or have otherwise been approved by
the Company;

(xviii) None of the Mortgage Loans are Buydown Loans;

(xix) Based solely on representations of the Mortgagors obtained at the
origination of the related Mortgage Loans, approximately 93.76% (by Principal
Balance) of the Mortgage Loans will be secured by owner occupied Mortgaged
Properties which are the primary residences of the related Mortgagors,
approximately 5.28% (by Principal Balance) of the Mortgage Loans will be secured
by owner occupied Mortgaged Properties which were second or vacation homes of
the Mortgagors and approximately 0.96% (by Principal Balance) of the Mortgage
Loans will be secured by Mortgaged Properties which were non-owner occupied
properties;

(xx) Prior to origination or refinancing, an appraisal of each Mortgaged
Property was made by an appraiser on a form satisfactory to Fannie Mae or
Freddie Mac;

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<PAGE>

(xxi) The Mortgage Loans have been underwritten substantially in accordance with
the applicable Underwriting Standards;

(xxii) All of the Mortgage Loans have due-on-sale clauses; however, the due on
sale provisions may not be exercised at the time of a transfer if prohibited by
law or the terms of the related Mortgage Note;

(xxiii) The Company used no adverse selection procedures in selecting the
Mortgage Loans from among the outstanding adjustable rate conventional mortgage
loans purchased by it which were available for inclusion in the Mortgage Pool
and as to which the representations and warranties in this Section 2.08 could be
made;

(xxiv) With respect to any Mortgage Loan as to which an affidavit has been
delivered to the Trustee certifying that the original Mortgage Note is a
Destroyed Mortgage Note, if such Mortgage Loan is subsequently in default, the
enforcement of such Mortgage Loan or of the related Mortgage by or on behalf of
the Trust will not be materially adversely affected by the absence of the
original Mortgage Note (or portion thereof, as applicable);

(xxv) Based upon an appraisal of the Mortgaged Property securing each Mortgage
Loan, approximately 98.37% (by Principal Balance) of the Mortgage Loans had a
current Loan-to-Value Ratio less than or equal to 80%, approximately 1.64% (by
Principal Balance) of the Mortgage Loans had a current Loan-to-Value Ratio
greater than 80% but less than or equal to 90% and none of the Mortgage Loans
had a current Loan-to-Value Ratio greater than 90%;

(xxvi) Approximately 64.27% (by Principal Balance) of the Mortgage Loans were
originated for the purpose of refinancing existing mortgage debt, including
cash-out refinancings; and approximately 35.73% (by Principal Balance) of the
Mortgage Loans were originated for the purpose of purchasing the Mortgaged
Property;

(xxvii) Not less than approximately 30.88% (by Principal Balance) of the
Mortgage Loans were originated under full documentation programs;

(xxviii) Each Mortgage Loan constitutes a qualified mortgage under Section
860G(a)(3)(A) of the Code and Treasury Regulations Section 1.860G-2(a)(1); and

(xxix) No Mortgage Loan is subject to the Home Ownership and Equity Protection
Act of 1994 or Section 226.32 of Regulation Z, is a "high-cost" loan or a
"predatory" loan as defined under any state or local law or regulation
applicable to the originator of such Mortgage Loan or which would result in
liability to the purchaser or assignee of such Mortgage Loan under any predatory
or abusive lending law, or, without limiting the generality of the foregoing, is
a "covered" loan under the laws of the states of California, Colorado or Ohio.

It is understood and agreed that the representations and warranties set forth in
this Section 2.08 shall survive delivery of the respective Mortgage Files to the
Trustee or the Custodian, as the case may be, and shall continue throughout the
term of this Agreement. Upon discovery by any of the Company, the Master
Servicer, the Trustee or the Custodian of a breach of any of the foregoing

                                       51
<PAGE>

representations and warranties which materially and adversely affects the value
of the related Mortgage Loans or the interests of the Trust in the related
Mortgage Loans, the Company, the Master Servicer, the Trustee or the Custodian,
as the case may be, discovering such breach shall give prompt written notice to
the others. Any breach of the representation set forth in clause (xxix) of this
Section 2.08 shall be deemed to materially and adversely affect the value of the
related Mortgage Loans or the interests of the Trust in the related Mortgage
Loans. Within 90 days of its discovery or its receipt of notice of breach, the
Company shall repurchase, subject to the limitations set forth in the definition
of "Purchase Price," or substitute for the affected Mortgage Loan or Mortgage
Loans or any property acquired in respect thereof from the Trust, unless it has
cured such breach in all material respects. After the end of the three-month
period beginning on the "start-up day," any such substitution shall be made only
if the Company provides to the Trustee an Opinion of Counsel addressed to the
Trust and the Trustee reasonably satisfactory to the Trustee that each
Substitute Mortgage Loan will be a "qualified replacement mortgage" within the
meaning of Section 860G(a)(4) of the Code. Such substitution shall be made in
the manner and within the time limits set forth in Section 2.07. Any such
repurchase by the Company shall be accomplished in the manner and at the
Purchase Price, if applicable, but shall not be subject to the time limits, set
forth in Section 2.07. It is understood and agreed that the obligation of the
Company to provide such substitution or to make such repurchase of any affected
Mortgage Loan or Mortgage Loans or any property acquired in respect thereof as
to which a breach has occurred and is continuing shall constitute the sole
remedy respecting such breach available to the Holders of the Certificates or
the Trustee on behalf of the Holders of the Certificates.

Section 2.09. Acknowledgment of Transfer of Mortgage Pool Assets. The Trustee
hereby acknowledges and accepts on behalf of the Trust the transfer and
assignment to the Trust of the Mortgage Pool Assets, but without having made the
review required to be made within 45 days pursuant to Section 2.07, and declares
that as of the Closing Date it (or the Custodian on behalf of the Trustee) holds
and shall hold any documents constituting a part of the Mortgage Pool Assets,
and the Mortgage Pool Assets, as Trustee in trust, upon the trust herein set
forth, for the use and benefit of all present and future Holders of the
Certificates. In connection therewith, as of the Closing Date, in exchange for
the Mortgage Pool Assets, the Trust does hereby issue to the Company the
Certificates.

Section 2.10. Acknowledgement of Transfer of REMIC I Assets; Authentication of
Certificates. The Trustee hereby acknowledges and accepts on behalf of the Trust
the assignment to the Trust of the REMIC I Assets and declares that as of the
Closing Date it holds and shall hold any documents constituting a part of the
REMIC I Assets, and the REMIC I Assets, as Trustee in trust, upon the trust
herein set forth, for the use and benefit of all present and future Holders of
the Certificates. In connection therewith, as of the Closing Date, in exchange
for the REMIC I Assets, the Trustee on behalf of the Trust shall cause to be
authenticated and delivered, upon and pursuant to the order of the Company, the
Certificates in Authorized Denominations.

Section 2.11. Legal Title. Legal title to all assets of the Trust shall be
vested at all times in the Trust as a separate legal entity.

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<PAGE>

Section 2.12. Compliance with ERISA Requirements. For purposes of ensuring
compliance with the requirements of the "underwriter's exemption" (U.S.
Department of Labor Prohibited Transaction Exemption 2002-41, 67 Fed. Reg. 54487
(Aug. 22, 2002)), issued under ERISA, and for the avoidance of any doubt as to
the applicability of other provisions of this Agreement, to the fullest extent
permitted by applicable law and except as contemplated by this Agreement, (1)
the Trust shall not be a party to any merger, consolidation or reorganization,
or liquidate or sell its assets and (2) so long as any Certificates are
outstanding, none of the Company, the Trustee or the Delaware Trustee shall
institute against the Trust, or join in any institution against the Trust of,
any bankruptcy or insolvency proceedings under any federal or state bankruptcy,
insolvency or similar law.

Section 2.13. Additional Representation of the Company Concerning the Mortgage
Loans. The Company hereby represents and warrants to the Trust that it does not
intend for the Mortgage Pool to include any Mortgage Loan that is a "high-cost
home loan" as defined under the New Jersey Home Ownership Security Act of 2002
or the New Mexico Home Loan Protection Act. Based on the foregoing
representation and warranty and on the Company's obligation, pursuant to Section
2.08, to repurchase or substitute for the affected Mortgage Loan in the event of
a breach of the representation set forth in clause (xxix) of Section 2.08, the
other parties hereto agree and understand that it is not intended for the
Mortgage Pool to include any Mortgage Loan that is a "high-cost home loan" as
defined under the New Jersey Home Ownership Security Act of 2002 or the New
Mexico Home Loan Protection Act.

                                  ARTICLE III

                 Administration and Servicing of Mortgage Loans

Section 3.01. The Company to Act as Master Servicer. The Company shall act as
Master Servicer to service and administer the Mortgage Loans on behalf of the
Trust in accordance with the terms hereof, consistent with prudent mortgage loan
servicing practices and (unless inconsistent with prudent mortgage loan
servicing practices) in the same manner in which, and with the same care, skill,
prudence and diligence with which, it services and administers similar mortgage
loans for other portfolios, and shall have full power and authority to do or
cause to be done any and all things in connection with such servicing and
administration which a prudent servicer of mortgage loans would do under similar
circumstances, including, without limitation, the power and authority to bring
actions and defend the Mortgage Pool Assets on behalf of the Trust in order to
enforce the terms of the Mortgage Notes. The Master Servicer may perform its
master servicing responsibilities through agents or independent contractors, but
shall not thereby be released from any of its responsibilities hereunder and the
Master Servicer shall diligently pursue all of its rights against such agents or
independent contractors.

The Master Servicer shall make reasonable efforts to collect or cause to be
collected 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 Primary Insurance Policy, any FHA
insurance policy or VA guaranty, any hazard insurance policy, and federal flood
insurance, cause to be followed such collection procedures as are followed with
respect to mortgage loans comparable to the Mortgage Loans and held in

                                       53
<PAGE>

portfolios of responsible mortgage lenders in the local areas where each
Mortgaged Property is located. The Master Servicer shall enforce "due-on-sale"
clauses with respect to the related Mortgage Loans, to the extent permitted by
law, subject to the provisions set forth in Section 3.08.

Consistent with the foregoing, the Master Servicer may, in accordance with
prudent mortgage loan servicing practices, (i) waive or cause to be waived any
assumption fee or late payment charge in connection with the prepayment of any
Mortgage Loan and (ii) only upon determining that the coverage of any applicable
insurance policy or guaranty related to a Mortgage Loan will not be materially
adversely affected, arrange a schedule, running for no more than 180 days after
the first delinquent Due Date, for payment of any delinquent installment on any
Mortgage Note or for the liquidation of delinquent items. Subject to the fourth
sentence of this paragraph, the Master Servicer shall have the right, but not
the obligation, to purchase any Mortgage Loan delinquent 90 consecutive days or
more for an amount equal to its Purchase Price; provided, however, that the
aggregate Purchase Price of Mortgage Loans so purchased pursuant to this
sentence shall not exceed one-half of one percent (0.50%) of the aggregate
Principal Balance, as of the Cut-Off Date, of all Mortgage Loans. Subject to the
fourth sentence of this paragraph, the Master Servicer shall also have the
right, but not the obligation, to purchase, for an amount equal to its Purchase
Price, any Mortgage Loan delinquent 90 consecutive days or more, for the purpose
of requiring the Person who sold such Mortgage Loan to the Company to repurchase
such Mortgage Loan based on a breach of a representation or warranty made by
such Person in connection with the Company's purchase or acquisition of such
Mortgage Loan. Notwithstanding the immediately preceding two sentences, the
Master Servicer's right to purchase any Mortgage Loan pursuant to either of such
preceding sentences shall be subject to the following additional conditions: (x)
if the date on which the Mortgage Loan first became 90-day delinquent (the
"Initial Delinquency Date") occurred during the first two calendar months of a
calendar quarter, the Master Servicer may exercise the purchase right during the
period commencing on the Initial Delinquency Date and ending on the last Master
Servicer Business Day of such calendar quarter, (y) if the Initial Delinquency
Date occurred during the third calendar month of a calendar quarter, the Master
Servicer may exercise the purchase right during the period commencing on the
first day of the immediately succeeding calendar quarter and ending on the last
Master Servicer Business Day of such succeeding calendar quarter and (z) if the
Master Servicer does not exercise the purchase right with respect to a Mortgage
Loan during the period specified in clause (x) or (y), as applicable, such
Mortgage Loan shall thereafter again become eligible for purchase pursuant to
the preceding two sentences only after the Mortgage Loan ceases to be 90-day
delinquent and thereafter becomes 90-day delinquent again. For purposes of this
paragraph, a Mortgage Loan is considered delinquent for 90 consecutive days if a
Monthly Payment is not received by the first day of the third month following
the month during which such payment was due.

Consistent with the terms of this Section 3.01, the Master Servicer may waive,
modify or vary any term of any Mortgage Loan or consent to the postponement of
strict compliance with any such term or in any manner grant indulgence to any
Mortgagor if it has determined, exercising its good faith business judgment in
the same manner as it would if it were the owner of the related Mortgage Loan,
that the security for, and the timely and full collectability of, such Mortgage
Loan would not be adversely affected by such waiver, modification, postponement
or indulgence; provided, however, that (unless the Mortgagor is in default with
respect to the Mortgage Loan or in the reasonable judgment of the Master
Servicer such default is imminent) the Master Servicer shall not permit any
modification with respect to any Mortgage Loan that would (i) change the
applicable Mortgage Interest Rate, defer or forgive the payment of any principal

                                       54
<PAGE>

or interest, reduce the outstanding principal balance (except for actual
payments of principal) or extend the final maturity date with respect to such
Mortgage Loan, or (ii) be inconsistent with the terms of any applicable Primary
Insurance Policy, FHA insurance policy, VA guaranty, hazard insurance policy or
federal flood insurance policy. Notwithstanding the foregoing, the Master
Servicer shall not permit any modification with respect to any Mortgage Loan
that would both constitute a sale or exchange of such Mortgage Loan within the
meaning of Section 1001 of the Code (including any proposed, temporary or final
regulations promulgated thereunder) (other than in connection with a proposed
conveyance or assumption of such Mortgage Loan that is treated as a Principal
Prepayment or in a default situation) and cause REMIC I to fail to qualify as
such under the Code. The Master Servicer shall be entitled to approve a request
from a Mortgagor for a partial release of the related Mortgaged Property, the
granting of an easement thereon in favor of another Person, any alteration or
demolition of the related Mortgaged Property or other similar matters if it has
determined, exercising its good faith business judgment in the same manner as it
would if it were the owner of the related Mortgage Loan, that the security for,
and the timely and full collectability of, such Mortgage Loan would not be
adversely affected thereby and that REMIC I would not fail to continue to
qualify as a REMIC under the Code as a result thereof and that no tax on
"prohibited transactions" or "contributions" after the startup day would be
imposed on REMIC I as a result thereof.

The Master Servicer is hereby authorized and empowered by the Trust to execute
and deliver or cause to be executed and delivered on behalf of the Holders of
the Certificates, and the Trust or any of them, any and all instruments of
satisfaction or cancellation, or of partial or full release, discharge or
modification, assignments of Mortgages and endorsements of Mortgage Notes in
connection with refinancings (in jurisdictions where such assignments are the
customary and usual standard of practice of mortgage lenders) and all other
comparable instruments, with respect to the Mortgage Loans and with respect to
the Mortgaged Properties. The Master Servicer is hereby further authorized and
empowered by the Trust to execute and deliver or cause to be executed and
delivered on behalf of the Holders of the Certificates and the Trust, or any of
them, such instruments of assignment or other comparable instruments as the
Master Servicer shall, in its sole judgment, deem appropriate in order to
register any Mortgage Loan on the MERS(R) System or to cause the removal of any
Mortgage Loan from registration thereon. Any expenses incurred in connection
with the actions described in the preceding sentence shall be borne by the
Master Servicer with no right of reimbursement; provided, however, that any such
expenses incurred as a result of any termination by MERS of the MERS(R) System
shall be reimbursable to the Master Servicer. The Trustee on behalf of the Trust
shall execute and furnish to the Master Servicer, at the Master Servicer's
direction, any powers of attorney and other documents prepared by the Master
Servicer and determined by the Master Servicer to be necessary or appropriate to
enable the Master Servicer to carry out its supervisory, servicing and
administrative duties under this Agreement.

The Master Servicer shall obtain and maintain, and shall cause each Servicer to
obtain and maintain (in each case, to the extent generally commercially
available), fidelity bond and errors and omissions coverage acceptable to Fannie
Mae or Freddie Mac with respect to its obligations under this Agreement and the
applicable Selling and Servicing Contract, respectively. The Master Servicer
shall establish or cause to be established escrow accounts for, or pay or cause
to be paid when due (by means of an advance), any tax liens in connection with
the Mortgaged Properties that are not paid by the Mortgagors when due to the

                                       55
<PAGE>

extent that any such payment would not constitute a Nonrecoverable Advance when
made.

In connection with the servicing and administering of each Mortgage Loan, the
Master Servicer and any affiliate of the Master Servicer (i) may perform
services such as appraisals, default management and (in the case of affiliates
only) brokerage services that are not customarily provided by servicers of
mortgage loans, and shall be entitled to reasonable compensation therefor and
(ii) may, at its own discretion and on behalf of the Trust, obtain credit
information in the form of a "credit score" from a credit repository.

Section 3.02. Custodial Accounts and Buydown Fund Accounts. The Master Servicer
shall cause to be established and maintained by each Servicer under the Master
Servicer's supervision the Custodial Account for P&I, Buydown Fund Accounts (if
any) and special Custodial Account for Reserves and shall deposit or cause to be
deposited therein daily the following amounts received or advanced by the
Servicer with respect to the Mortgage Loans:

(i) all scheduled payments of principal;

(ii) all scheduled payments of interest, net of the Servicing Fees due the
applicable Servicers;

(iii) all Curtailments and Payoffs; and

(iv) all Insurance Proceeds, Liquidation Proceeds, Excess Liquidation Proceeds
and Subsequent Recoveries;

provided, however, that (x) proceeds received with respect to individual
Mortgage Loans from any title, hazard, or FHA insurance policy, VA guaranty,
Primary Insurance Policy or other insurance policy (other than any Special
Primary Insurance Policy) covering such Mortgage Loans, if required for the
restoration or repair of the related Mortgaged Property, may be deposited either
in the Custodial Account for Reserves or the Custodial Account for P&I and (y)
such proceeds (other than proceeds from any Special Primary Insurance Policy),
if not required for the restoration or repair of the related Mortgaged Property,
and if not released to the Mortgagor in accordance with prudent mortgage loan
servicing practices, shall be deposited in the Custodial Account for P&I, and
shall be applied to the balances of the related Mortgage Loans as payments of
interest and principal.

The Master Servicer is hereby authorized to make withdrawals from and to issue
drafts against the Custodial Accounts for P&I and the Custodial Accounts for
Reserves for the purposes required or permitted by this Agreement. Each
Custodial Account for P&I and each Custodial Account for Reserves shall bear a
designation clearly showing the respective interests of the applicable Servicer,
as trustee, and of the Master Servicer, in substantially one of the following
forms:

(a) With respect to the Custodial Account for P&I: (i) [Servicer's Name], as
agent, trustee and/or bailee of principal and interest custodial account for
Washington Mutual Mortgage Securities Corp., its successors and assigns, for
various owners of interests in Washington Mutual Mortgage Securities Corp.
mortgage-backed pools or (ii) [Servicer's Name] in trust for Washington Mutual
Mortgage Securities Corp.;

                                       56
<PAGE>

(b) With respect to the Custodial Account for Reserves: (i) [Servicer's Name],
as agent, trustee and/or bailee of taxes and insurance custodial account for
Washington Mutual Mortgage Securities Corp., its successors and assigns for
various mortgagors and/or various owners of interests in Washington Mutual
Mortgage Securities Corp. mortgage-backed pools or (ii) [Servicer's Name] in
trust for Washington Mutual Mortgage Securities Corp. and various Mortgagors.

The Master Servicer hereby undertakes to assure remittance to the Certificate
Account of all amounts relating to the Mortgage Loans that have been collected
by any Servicer and are due to the Certificate Account pursuant to Section 4.01
of this Agreement.

Funds held in the Custodial Account for P&I and the Custodial Account for
Reserves may, at the Master Servicer's option, be invested in (i) one or more
Eligible Investments which shall in no event mature later than the Business Day
prior to the related Withdrawal Date (except if such Eligible Investments are
obligations of the Trustee, such Eligible Investments may mature on the
Withdrawal Date), or (ii) such other instruments as shall be required to
maintain the Ratings.

Section 3.03. The Investment Account; Eligible Investments.(a) Not later than
the Withdrawal Date, the Master Servicer shall withdraw or direct the withdrawal
of funds in the Custodial Accounts for P&I, for deposit in the Investment
Account, in an amount representing:

(i) Scheduled installments of principal and interest on the Mortgage Loans
received or advanced by the applicable Servicers which were due on the related
Due Date, net of the Servicing Fees due the applicable Servicers and less any
amounts to be withdrawn later by the applicable Servicers from the applicable
Buydown Fund Accounts;

(ii) Payoffs and the proceeds of other types of liquidations of the Mortgage
Loans received by the applicable Servicer for such Mortgage Loans during the
applicable Payoff Period, with interest to the date of Payoff or liquidation
less any amounts to be withdrawn later by the applicable Servicers from the
applicable Buydown Fund Accounts; and

(iii) Curtailments received by the applicable Servicers in the Prior Period.

At its option, the Master Servicer may invest funds withdrawn from the Custodial
Accounts for P&I, as well as any Buydown Funds, Insurance Proceeds and
Liquidation Proceeds previously received by the Master Servicer (including
amounts paid by the Company in respect of any Purchase Obligation or its
substitution obligations set forth in Section 2.07 or Section 2.08 or in
connection with the exercise of the option to terminate this Agreement pursuant
to Section 9.01) for its own account and at its own risk, during any period
prior to their deposit in the Certificate Account. Such funds, as well as any
funds which were withdrawn from the Custodial Accounts for P&I on or before the

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Withdrawal Date, but not yet deposited into the Certificate Account, shall
immediately be deposited by the Master Servicer with the Investment Depository
in an Investment Account in the name of the Master Servicer and the Trust for
investment only as set forth in this Section 3.03. The Master Servicer shall
bear any and all losses incurred on any investments made with such funds and
shall be entitled to retain all gains realized on such investments as additional
servicing compensation. Not later than the Business Day prior to the
Distribution Date, the Master Servicer shall deposit such funds, net of any
gains (except Payoff Earnings) earned thereon, in the Certificate Account.

(b) Funds held in the Investment Account shall be invested in (i) one or more
Eligible Investments which shall in no event mature later than the Business Day
prior to the related Distribution Date (except if such Eligible Investments are
obligations of the Trustee, such Eligible Investments may mature on the
Distribution Date), or (ii) such other instruments as shall be required to
maintain the Ratings.

Section 3.04.     The Certificate Account.

(a) On or prior to the Closing Date, the Trustee shall establish the Certificate
Account, which shall be entitled "Washington Mutual Mortgage Securities Corp.
Certificate Account under the Pooling and Servicing Agreement, dated as of April
1, 2004, among Washington Mutual Mortgage Securities Corp., as Depositor and
Master Servicer, Deutsche Bank National Trust Company, as the Trustee, and
Deutsche Bank Trust Company Delaware, as the Delaware Trustee, for the benefit
of WaMu Mortgage Pass-Through Certificates Series 2004-AR2 Trust created
pursuant thereto". Promptly after the Closing Date, the Trustee shall
communicate to the Master Servicer the account number and wiring instructions
for the Certificate Account.

Not later than the Business Day prior to the related Distribution Date, the
Master Servicer shall direct the Investment Depository to deposit into the
Certificate Account the amounts previously deposited into the Investment Account
(which may include a deposit of Eligible Investments) to which the Holders of
the Certificates are entitled or which are necessary for payment of any Special
Primary Insurance Premiums. In addition, not later than the Business Day prior
to the Distribution Date, the Master Servicer shall deposit into the Certificate
Account any Monthly P&I Advances or other payments required to be made by the
Master Servicer pursuant to Section 4.02 of this Agreement and any Insurance
Proceeds or Liquidation Proceeds (including amounts paid by the Company in
respect of any Purchase Obligation) not previously deposited in the Custodial
Accounts for P&I or the Investment Account, and any amounts paid by the Master
Servicer in connection with the exercise of its option to terminate this
Agreement pursuant to Section 9.01 or any other purchase of Mortgage Loans
permitted by this Agreement.

(b) Funds held in the Certificate Account shall be invested at the written
direction of the Master Servicer in (i) one or more Eligible Investments which
shall in no event mature later than the Business Day prior to the related
Distribution Date (except if such Eligible Investments are obligations of the
Trustee, such Eligible Investments may mature on the Distribution Date), or (ii)
such other instruments as shall be required to maintain the Ratings. The Master
Servicer shall be entitled to receive any gains earned on such Eligible
Investments and shall bear any losses suffered in connection therewith. If the
Trustee has not received such written investment directions from the Master

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Servicer, the Trustee shall not invest funds held in the Certificate Account.
The Trustee shall have no liability for any losses on investments of funds held
in the Certificate Account.

In the event the Trustee makes such investments, the parties acknowledge that
the Trustee or its affiliates may receive additional compensation (not payable
pursuant to this Agreement) that could be deemed to be in the Trustee's economic
self-interest for (i) serving as investment adviser, administrator, shareholder,
servicing agent, custodian or sub-custodian with respect to certain of the
Eligible Investments, (ii) using affiliates to effect transactions in certain
Eligible Investments and (iii) effecting transactions in certain Eligible
Investments.

Section 3.05. Permitted Withdrawals from the Certificate Account, the Investment
Account and Custodial Accounts for P&I and of Buydown Funds from the Buydown
Fund Accounts.

(a) The Master Servicer is authorized to make withdrawals (or, in the case of
the Certificate Account, to direct the Trustee to make withdrawals), from time
to time, from the Investment Account, the Certificate Account or the Custodial
Accounts for P&I established by the Servicers of amounts deposited therein in
respect of the Certificates (and, to the extent applicable, to make deposits of
the amounts withdrawn), as follows:

(i) To reimburse itself or the applicable Servicer for Monthly P&I Advances made
pursuant to Section 4.02 or a Selling and Servicing Contract, such right to
reimbursement pursuant to this paragraph (i) being limited to amounts received
on particular Mortgage Loans (including, for this purpose, Insurance Proceeds
and Liquidation Proceeds) which represent late recoveries of principal and/or
interest respecting which any such Monthly P&I Advance was made;

(ii) To reimburse itself or the applicable Servicer for amounts expended by or
for the account of the Master Servicer pursuant to Section 3.09 or amounts
expended by such Servicer pursuant to the Selling and Servicing Contracts in
connection with the restoration of property damaged by an Uninsured Cause or in
connection with the liquidation of a Mortgage Loan;

(iii) To pay to itself, with respect to the related Mortgage Loans, the Master
Servicing Fee (net of Compensating Interest reduced by Payoff Earnings and
Payoff Interest) as to which no prior withdrawals from funds deposited by the
Master Servicer have been made;

(iv) To reimburse itself or the applicable Servicer for advances made with
respect to related Mortgage Loans (except for Mortgage Loans purchased pursuant
to a Purchase Obligation or pursuant to the second or third sentence of the
third paragraph of Section 3.01) which the Master Servicer has determined to be
Nonrecoverable Advances;

(v) To pay to itself reinvestment earnings deposited or earned in the Investment
Account and the Certificate Account to which it is entitled and to reimburse
itself for expenses incurred by and reimbursable to it pursuant to Section 6.03;

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(vi) To deposit to the Investment Account amounts in the Certificate Account not
required to be on deposit therein at the time of such withdrawal;

(vii) To deposit in the Certificate Account, not later than the Business Day
prior to the related Distribution Date, the amounts in the Investment Account
specified in Section 3.04(a);

(viii) To pay on behalf of the Trustee any Special Primary Insurance Premium
payable by the Trustee pursuant to Section 4.01(a); provided, the Master
Servicer shall give written notice thereof to the Trustee prior to noon New York
City time two Business Days prior to the applicable Distribution Date; and

after making or providing for the above withdrawals

(ix) To clear and terminate the Investment Account and the Certificate Account
following termination of this Agreement pursuant to Section 9.01.

Since, in connection with withdrawals pursuant to paragraphs (i) and (ii), the
Master Servicer's entitlement thereto is limited to collections or other
recoveries on the related Mortgage Loan, the Master Servicer shall keep and
maintain, or cause the applicable Servicer to keep and maintain, separate
accounting for each Mortgage Loan, for the purpose of justifying any such
withdrawals.

(b) The Master Servicer is authorized to make withdrawals (or to permit the
applicable Servicer, if such Servicer holds and maintains a Buydown Fund
Account, to make withdrawals), from time to time, of Buydown Funds from the
Buydown Fund Account or Custodial Account for P&I established by any Servicer
under its supervision (and, to the extent applicable, to make deposits of the
amounts withdrawn), as follows:

(i) To deposit each month in the Investment Account the amount necessary to
supplement payments received on Buydown Loans;

(ii) In the event of a Payoff of any Mortgage Loan having a related Buydown
Fund, to apply amounts remaining in Buydown Fund Accounts to reduce the required
amount of such principal Payoff (or, if the Mortgagor has made a Payoff, to
refund such remaining Buydown Fund amounts to the Person entitled thereto);

(iii) In the event of foreclosure or liquidation of any Mortgage Loan having a
Buydown Fund, to deposit remaining Buydown Fund amounts in the Investment
Account as Liquidation Proceeds; and

(iv) To clear and terminate the portion of any account representing Buydown
Funds following termination of this Agreement pursuant to Section 9.01;

(c) The Trustee is authorized to make withdrawals from time to time from the
Certificate Account to reimburse itself for advances it has made as successor
Master Servicer pursuant to Section 7.01(a) hereof that it has determined to be
Nonrecoverable Advances.

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(d) The Master Servicer shall authorize each Servicer to retain from funds
deposited by such Servicer in, or to withdraw from, the related Custodial
Account for P&I the Servicing Fee payable to such Servicer with respect to the
related Mortgage Loans. With respect to each Servicer, the Master Servicer shall
(1) either (x) make withdrawals, from time to time, to reimburse such Servicer
for advances and expenses (other than Nonrecoverable Advances) pursuant to
clauses (i) and (ii) of Section 3.05(a) or (y) authorize such Servicer to make
such withdrawals, from time to time, from the related Custodial Account for P&I,
to the same extent that the Master Servicer is authorized to make such
withdrawals pursuant to clauses (i) and (ii) of Section 3.05(a) and (2) make
withdrawals, from time to time, to reimburse such Servicer for Nonrecoverable
Advances pursuant to clause (iv) of Section 3.05(a), in the case of each of
clause (1) and (2), to the extent no prior withdrawals of such amounts have been
made by the Servicer or the Master Servicer, as applicable.

Section 3.06. Maintenance of Primary Insurance Policies; Collections Thereunder.
The Master Servicer shall use commercially reasonable efforts to keep, or to
cause the Servicers to keep, in full force and effect each Primary Insurance
Policy (except any Special Primary Insurance Policy) required with respect to a
Mortgage Loan until no longer required, and the Master Servicer shall use
commercially reasonable efforts to keep in full force and effect each Special
Primary Insurance Policy, if any. Notwithstanding the foregoing, the Master
Servicer shall have no obligation to maintain any Primary Insurance Policy for a
Mortgage Loan for which the outstanding Principal Balance thereof at any time
subsequent to origination was 80% or less of the Appraised Value of the related
Mortgaged Property, unless required by applicable law.

Unless required by applicable law, the Master Servicer shall not cancel or
refuse to renew, or allow any Servicer under its supervision to cancel or refuse
to renew, any Primary Insurance Policy in effect at the date of the initial
issuance of the Certificates that is required to be kept in force hereunder;
provided, however, that neither the Master Servicer nor any Servicer shall
advance funds for the payment of any premium due under (i) any Primary Insurance
Policy (other than a Special Primary Insurance Policy) if it shall determine
that such an advance would be a Nonrecoverable Advance or (ii) any Special
Primary Insurance Policy.

Section 3.07. Maintenance of Hazard Insurance. The Master Servicer shall cause
to be maintained for each Mortgage Loan (other than a Cooperative Loan) fire
insurance with extended coverage in an amount which is not less than the
original principal balance of such Mortgage Loan, except in cases approved by
the Master Servicer in which such amount exceeds the value of the improvements
to the Mortgaged Property. The Master Servicer shall also require fire insurance
with extended coverage in a comparable amount on property acquired upon
foreclosure, or deed in lieu of foreclosure, of any Mortgage Loan (other than a
Cooperative Loan). Any amounts collected under any such policies (other than
amounts to be applied to the restoration or repair of the related Mortgaged
Property) shall be deposited into the Custodial Account for P&I, subject to
withdrawal pursuant to the applicable Selling and Servicing Contract and
pursuant to Section 3.03 and Section 3.05. Any unreimbursed costs incurred in
maintaining any insurance described in this Section 3.07 shall be recoverable as
an advance by the Master Servicer or the applicable Servicer from the related

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Custodial Account for P&I, the Investment Account or the Certificate Account.
Such insurance shall be with insurers approved by the Master Servicer and Fannie
Mae or Freddie Mac. Other additional insurance may be required of a Mortgagor,
in addition to that required pursuant to such applicable laws and regulations as
shall at any time be in force and as shall require such additional insurance.
Where any part of any improvement to the Mortgaged Property (other than a
Mortgaged Property secured by a Cooperative Loan) is located in a federally
designated special flood hazard area and in a community which participates in
the National Flood Insurance Program at the time of origination of the related
Mortgage Loan, the Master Servicer shall cause flood insurance to be provided.
The hazard insurance coverage required by this Section 3.07 may be met with
blanket policies providing protection equivalent to individual policies
otherwise required. The Master Servicer shall be responsible for paying, or
causing the applicable Servicer to pay, any deductible amount on any such
blanket policy. The Master Servicer agrees to present, or cause to be presented,
on behalf of and for the benefit of the Trust, claims under the hazard insurance
policy respecting any Mortgage Loan, and in this regard to take such reasonable
actions as shall be necessary to permit recovery under such policy.

Section 3.08. Enforcement of Due-on-Sale Clauses; Assumption Agreements. When
any Mortgaged Property is about to be conveyed by the Mortgagor, the Master
Servicer shall, to the extent it has knowledge of such prospective conveyance
and prior to the time of the consummation of such conveyance, exercise on behalf
of the Trust the Trust's rights to accelerate the maturity of such Mortgage
Loan, to the extent that such acceleration is permitted by the terms of the
related Mortgage Note, under any "due-on-sale" clause applicable thereto;
provided, however, that the Master Servicer shall not exercise any such right if
the due-on-sale clause, in the reasonable belief of the Master Servicer, is not
enforceable under applicable law or if such exercise would result in
non-coverage of any resulting loss that would otherwise be covered under any
insurance policy. In the event the Master Servicer is prohibited from exercising
such right, the Master Servicer is authorized to take or enter into an
assumption and modification agreement from or with the Person to whom a
Mortgaged Property has been or is about to be conveyed, pursuant to which such
Person becomes liable under the Mortgage Note and, unless prohibited by
applicable state law or unless the Mortgage Note contains a provision allowing a
qualified borrower to assume the Mortgage Note, the Mortgagor remains liable
thereon; provided that the Mortgage Loan shall continue to be covered (if so
covered before the Master Servicer enters such agreement) by any related Primary
Insurance Policy. The Master Servicer is also authorized to enter into a
substitution of liability agreement with such Person, pursuant to which the
original Mortgagor is released from liability and such Person is substituted as
Mortgagor and becomes liable under the Mortgage Note. The Master Servicer shall
not enter into any substitution or assumption with respect to a Mortgage Loan if
such substitution or assumption shall (i) both constitute a "significant
modification" effecting an exchange or reissuance of such Mortgage Loan under
the Code (or Treasury regulations promulgated thereunder) and cause REMIC I to
fail to qualify as a REMIC under the REMIC Provisions or (ii) cause the
imposition of any tax on "prohibited transactions" or "contributions" after the
startup day under the REMIC Provisions. The Master Servicer shall notify the
Trustee that any such substitution or assumption agreement has been completed by
forwarding to the Trustee the original copy of such substitution or assumption
agreement and other documents and instruments constituting a part thereof. In
connection with any such assumption or substitution agreement, the terms of the
related Mortgage Note shall not be changed. Any fee collected by the applicable
Servicer for entering into an assumption or substitution of liability agreement
shall be retained by such Servicer as additional servicing compensation.

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Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Master Servicer shall not be deemed to be in default, breach or
any other violation of its obligations hereunder by reason of any assumption of
a Mortgage Loan by operation of law or any assumption which the Master Servicer
may be restricted by law from preventing, for any reason whatsoever. Section
3.09. Realization Upon Defaulted Mortgage Loans. The Master Servicer shall
foreclose upon or otherwise comparably convert, or cause to be foreclosed upon
or comparably converted, the ownership of any Mortgaged Property securing a
Mortgage Loan which comes into and continues in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments
pursuant to Section 3.01. In lieu of such foreclosure or other conversion, and
taking into consideration the desirability of maximizing net Liquidation
Proceeds after taking into account the effect of Insurance Proceeds upon
Liquidation Proceeds, the Master Servicer may, to the extent consistent with
prudent mortgage loan servicing practices, accept a payment of less than the
outstanding Principal Balance of a delinquent Mortgage Loan in full satisfaction
of the indebtedness evidenced by the related Mortgage Note and release the lien
of the related Mortgage upon receipt of such payment. The Master Servicer shall
not foreclose upon or otherwise comparably convert a Mortgaged Property if the
Master Servicer is aware of evidence of toxic waste, other hazardous substances
or other evidence of environmental contamination thereon and the Master Servicer
determines that it would be imprudent to do so. In connection with such
foreclosure or other conversion, the Master Servicer shall cause to be followed
such practices and procedures as it shall deem necessary or advisable and as
shall be normal and usual in general mortgage servicing activities. The
foregoing is subject to the provision that, in the case of damage to a Mortgaged
Property from an Uninsured Cause, the Master Servicer shall not be required to
advance its own funds towards the restoration of the property unless it shall be
determined in the sole judgment of the Master Servicer, (i) that such
restoration will increase the proceeds of liquidation of the Mortgage Loan to
Certificateholders after reimbursement to itself for such expenses, and (ii)
that such expenses will be recoverable to it through Liquidation Proceeds. The
Master Servicer shall be responsible for all other costs and expenses incurred
by it in any such proceedings; provided, however, that it shall be entitled to
reimbursement thereof (as well as its normal servicing compensation) as an
advance. The Master Servicer shall maintain information required for tax
reporting purposes regarding any Mortgaged Property which is abandoned or which
has been foreclosed or otherwise comparably converted. The Master Servicer shall
report such information to the Internal Revenue Service and the Mortgagor in the
manner required by applicable law.

The Master Servicer may enter into one or more special servicing agreements with
a Lowest Class B Owner, subject to each Rating Agency's acknowledgment that the
Ratings of the Certificates in effect immediately prior to the entering into of
such agreement would not be qualified, downgraded or withdrawn and the
Certificates would not be placed on credit review status (except for possible
upgrading) as a result of such agreement. Any such agreement may contain
provisions whereby such Lowest Class B Owner may (a) instruct the Master
Servicer to instruct a Servicer to the extent permitted under the applicable
Selling and Servicing Contract to commence or delay foreclosure proceedings with
respect to related delinquent Mortgage Loans, provided that the Lowest Class B
Owner deposits a specified amount of cash with the Master Servicer that will be
available for distribution to Certificateholders if Liquidation Proceeds are
less than they otherwise may have been had the Servicer acted pursuant to its
normal servicing procedures, (b) purchase such delinquent Mortgage Loans from

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the Trust immediately prior to the commencement of foreclosure proceedings at a
price equal to the aggregate outstanding Principal Balance of such Mortgage
Loans plus accrued interest thereon at the applicable Mortgage Interest Rate
through the last day of the month in which such Mortgage Loans are purchased
and/or (c) assume all of the servicing rights and obligations with respect to
such delinquent Mortgage Loans so long as (i) the Master Servicer has the right
to transfer the servicing rights and obligations of such Mortgage Loans to
another servicer and (ii) such Lowest Class B Owner will service such Mortgage
Loans in accordance with the applicable Selling and Servicing Contract.

REMIC I shall not acquire any real property (or personal property incident to
such real property) except in connection with a default or imminent default of a
Mortgage Loan. In the event that REMIC I acquires any real property (or personal
property incident to such real property) in connection with a default or
imminent default of a Mortgage Loan, such property shall be disposed of by the
Master Servicer as soon as practicable in a manner that, consistent with prudent
mortgage loan servicing practices, maximizes the net present value of the
recovery to the Trust, but in any event within three years after its acquisition
by the Master Servicer for REMIC I unless the Master Servicer provides to the
Trustee an Opinion of Counsel to the effect that the holding by REMIC I of such
Mortgaged Property subsequent to three years after its acquisition will not
result in the imposition of taxes on "prohibited transactions" of REMIC I as
defined in Section 860F of the Code or under the law of any state in which real
property securing a Mortgage Loan owned by REMIC I is located or cause REMIC I
to fail to qualify as a REMIC for federal income tax purposes or for state tax
purposes under the laws of any state in which real property securing a Mortgage
Loan owned by REMIC I is located at any time that any Certificates are
outstanding. The Master Servicer shall conserve, protect and operate each such
property for the Certificateholders solely for the purpose of its prompt
disposition and sale in a manner which does not cause such property to fail to
qualify as "foreclosure property" within the meaning of Section 860G(a)(8) or
result in the receipt by the REMIC of any "income from non-permitted assets"
within the meaning of Section 860F(a)(2)(B) of the Code or any "net income from
foreclosure property" which is subject to taxation under the REMIC Provisions.
Pursuant to its efforts to sell such property, the Master Servicer shall either
itself or through an agent selected by the Master Servicer protect and conserve
such property in the same manner and to such extent as is customary in the
locality where such property is located and may, incident to its conservation
and protection of the assets of the Trust, rent the same, or any part thereof,
as the Master Servicer deems to be in the best interest of the Master Servicer
and the Trust for the period prior to the sale of such property. Additionally,
the Master Servicer shall perform the tax withholding and shall file information
returns with respect to the receipt of mortgage interests received in a trade or
business, the reports of foreclosures and abandonments of any Mortgaged Property
and the information returns relating to cancellation of indebtedness income with
respect to any Mortgaged Property required by Sections 6050H, 6050J and 6050P,
respectively, of the Code, and deliver to the Trustee an Officers' Certificate
on or before March 31 of each year stating that such reports have been filed.
Such reports shall be in form and substance sufficient to meet the reporting
requirements imposed by Sections 6050H, 6050J and 6050P of the Code.

Notwithstanding any other provision of this Agreement, the Master Servicer and
the Trustee, as applicable, shall comply with all federal withholding
requirements with respect to payments to Certificateholders of interest or
original issue discount that the Master Servicer or the Trustee reasonably
believes are applicable under the Code. The consent of Certificateholders shall
not be required for any such withholding. Without limiting the foregoing, the
Master Servicer agrees that it will not withhold with respect to payments of

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interest or original issue discount in the case of a Certificateholder that has
furnished or caused to be furnished an effective Form W-8 or an acceptable
substitute form or a successor form and who is not a "10 percent shareholder"
within the meaning of Code Section 871(h)(3)(B) or a "controlled foreign
corporation" described in Code Section 881(c)(3)(C) with respect to REMIC I or
the depositor. In the event the Trustee withholds any amount from interest or
original issue discount payments or advances thereof to any Certificateholder
pursuant to federal withholding requirements, the Trustee shall indicate the
amount withheld to such Certificateholder.

Section 3.10. Trustee to Cooperate; Release of Mortgage Files. Upon the Payoff
or scheduled maturity of any Mortgage Loan, the Master Servicer shall cause such
final payment to be immediately deposited in the related Custodial Account for
P&I or the Investment Account. The Master Servicer shall promptly notify the
Trustee thereof by a certification (which certification shall include a
statement to the effect that all amounts received in connection with such
payment which are required to be deposited in either such account have been so
deposited) of a Servicing Officer and shall request delivery to it of the
Mortgage File; provided, however, that such certification shall not be required
if the Mortgage File is held by a Custodian which is also the Servicer of the
Mortgage Loan. Upon receipt of such certification and request, the Trustee
shall, not later than the fifth succeeding Business Day, release, or cause to be
released, the related Mortgage File to the Master Servicer or the applicable
Servicer indicated in such request. With any such Payoff or other final payment,
the Master Servicer is authorized (i) to prepare for and procure from the
trustee or mortgagee under the Mortgage which secured the Mortgage Note a deed
of full reconveyance or other form of satisfaction or assignment of Mortgage and
endorsement of Mortgage Note in connection with a refinancing covering the
Mortgaged Property, which satisfaction, endorsed Mortgage Note or assigning
document shall be delivered by the Master Servicer to the person or persons
entitled thereto, and (ii) with respect to any MERS Loan, to cause the removal
of such Mortgage Loan from registration on the MERS(R) System. No expenses
incurred in connection with such satisfaction or assignment shall be payable to
the Master Servicer by the Trustee or from the Certificate Account, the related
Investment Account or the related Custodial Account for P&I. From time to time
as appropriate for the servicing or foreclosure of any Mortgage Loan, including,
for this purpose, collection under any Primary Insurance Policy, the Trustee
shall, upon request of the Master Servicer and delivery to it of a trust receipt
signed by a Servicing Officer, release not later than the fifth Business Day
following the date of receipt of such request and trust receipt the related
Mortgage File to the Master Servicer or the related Servicer as indicated by the
Master Servicer and shall execute such documents as shall be necessary to the
prosecution of any such proceedings. Such trust receipt shall obligate the
Master Servicer to return the Mortgage File to the Trustee when the need
therefor by the Master Servicer no longer exists, unless the Mortgage Loan shall
be liquidated, in which case, upon receipt of a certificate of a Servicing
Officer similar to that herein above specified, the trust receipt shall be
released by the Trustee to the Master Servicer.

Section 3.11. Compensation to the Master Servicer and the Servicers. As
compensation for its activities hereunder, the Master Servicer shall be entitled
to receive from the Investment Account and the Certificate Account the amounts

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provided for by Section 3.05(a)(iii). The Master Servicer shall be required to
pay all expenses incurred by it in connection with its activities hereunder and
shall not be entitled to reimbursement therefor, except as specifically provided
herein.

As compensation for its activities under the applicable Selling and Servicing
Contract, the applicable Servicer shall be entitled to withhold or withdraw from
the related Custodial Account for P&I the amounts provided for in such Selling
and Servicing Contract to the extent not inconsistent with this Agreement
(including Section 3.05(d)). Each Servicer is required to pay all expenses
incurred by it in connection with its servicing activities under its Selling and
Servicing Contract (including payment of premiums for Primary Insurance
Policies, other than Special Primary Insurance Policies, if required) and shall
not be entitled to reimbursement therefor except as specifically provided in
such Selling and Servicing Contract and not inconsistent with this Agreement.

Section 3.12. Reports to the Trustee; Certificate Account Statement. Not later
than 15 days after each Distribution Date, the Master Servicer shall forward a
statement, certified by a Servicing Officer, to the Trustee setting forth the
status of the Certificate Account as of the close of business on such
Distribution Date and showing, for the period covered by such statement, the
aggregate of deposits into and withdrawals from the Certificate Account for each
category of deposit specified in Section 3.04 and each category of withdrawal
specified in Section 3.05, and stating that all distributions required by this
Agreement have been made (or if any required distribution has not been made,
specifying the nature and amount thereof). The Trustee shall make available such
statements to any Certificateholder upon request at the expense of the Master
Servicer. Such statement shall also, to the extent available, include
information regarding delinquencies on the Mortgage Loans, indicating the number
and aggregate Principal Balance of Mortgage Loans which are one, two, three or
more months delinquent, the number and aggregate Principal Balance of Mortgage
Loans with respect to which foreclosure proceedings have been initiated and the
book value of any Mortgaged Property acquired by the Trust through foreclosure,
deed in lieu of foreclosure or other exercise of the Trust's security interest
in the Mortgaged Property.

Section 3.13. Annual Statement as to Compliance. The Master Servicer shall
deliver to the Trustee, on or before April 30 of each year, beginning with the
first April 30 succeeding the Cut-Off Date by at least six months, an Officer's
Certificate stating as to the signer thereof, that (i) a review of the
activities of the Master Servicer during the preceding calendar year and
performance under this Agreement has been made under such officer's supervision,
and (ii) to the best of such officer's knowledge, based on such review, the
Master Servicer has fulfilled all its obligations under this Agreement
throughout such year, or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officer and the
nature and status thereof. Copies of such statement shall be provided by the
Master Servicer to Certificateholders upon request or by the Trustee (solely to
the extent that such copies are available to the Trustee) at the expense of the
Master Servicer, should the Master Servicer fail to so provide such copies.

Section 3.14. Access to Certain Documentation and Information Regarding the
Mortgage Loans. In the event that the Certificates are legal for investment by
federally-insured savings associations, the Master Servicer shall provide to the
OTS, the FDIC and the supervisory agents and examiners of the OTS and the FDIC
access to the documentation regarding the related Mortgage Loans required by

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applicable regulations of the OTS or the FDIC, as applicable, and shall in any
event provide such access to the documentation regarding such Mortgage Loans to
the Trustee and its representatives, such access being afforded without charge,
but only upon reasonable request and during normal business hours at the offices
of the Master Servicer designated by it.

Section 3.15. Annual Independent Public Accountants' Servicing Report. On or
before April 30 of each year, beginning with the first April 30 succeeding the
Cut-Off Date by at least six months, the Master Servicer, at its expense, shall
furnish to the Trustee a copy of a report delivered to the Master Servicer by a
firm of independent public accountants (who may also render other services to
the Master Servicer or any affiliate thereof) to the effect that, on the basis
of an examination conducted by such firm in accordance with standards
established by the American Institute of Certified Public Accountants, the
Master Servicer has complied with certain minimum residential mortgage loan
servicing standards in its role as Master Servicer with respect to the servicing
of residential mortgage loans (including the Mortgage Loans) during the most
recently completed fiscal year. In rendering its report such firm may rely, (a)
as to matters relating to the Certificates, upon a statistical sampling of
series of mortgage-backed certificates which may include the Certificates and
(b) as to matters relating to the direct servicing of residential mortgage loans
by subservicers, upon comparable reports of firms of independent certified
public accountants rendered on the basis of examinations conducted in accordance
with the same standards (rendered within one year of such report) with respect
to those subservicers.

Section 3.16.     [Reserved.]

Section 3.17.     [Reserved.]

Section 3.18.     [Reserved.]

Section 3.19.     [Reserved.]

Section 3.20. Assumption or Termination of Selling and Servicing Contracts by
Trustee. In the event the Master Servicer, or any successor Master Servicer,
shall for any reason no longer be the Master Servicer (including by reason of an
Event of Default), the Trustee as trustee hereunder or its designee shall
thereupon assume all of the rights and obligations of the Master Servicer under
the Selling and Servicing Contracts with respect to the related Mortgage Loans
unless the Trustee elects to terminate the Selling and Servicing Contracts with
respect to such Mortgage Loans in accordance with the terms thereof. The
Trustee, its designee or the successor servicer for the Trustee shall be deemed
to have assumed all of the Master Servicer's interest therein with respect to
the related Mortgage Loans and to have replaced the Master Servicer as a party
to the Selling and Servicing Contracts to the same extent as if the rights and
duties under the Selling and Servicing Contracts relating to such Mortgage Loans
had been assigned to the assuming party, except that the Master Servicer shall
not thereby be relieved of any liability or obligations under the Selling and
Servicing Contracts with respect to the Master Servicer's duties to be performed
prior to its termination hereunder.

The Master Servicer at its expense shall, upon request of the Trustee, deliver
to the assuming party all documents and records relating to the Selling and
Servicing Contracts and the Mortgage Loans then being master serviced by the

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Master Servicer and an accounting of amounts collected and held by the Master
Servicer and otherwise use its best efforts to effect the orderly and efficient
transfer of the rights and duties under the related Selling and Servicing
Contracts relating to such Mortgage Loans to the assuming party.

                                   ARTICLE IV

              Payments to Certificateholders; Payment of Expenses

Section 4.01. Distributions to Certificateholders; Payment of Special Primary
Insurance Premiums.

(a) On each Distribution Date, the Trustee (or any duly appointed paying agent)
shall (i) subject to Section 3.05(a)(viii), withdraw from the Certificate
Account any Special Primary Insurance Premium payable on such Distribution Date
and pay such amount to the insurer under the applicable Special Primary
Insurance Policy and (ii) withdraw from the Certificate Account the Available
Distribution Amount for such Distribution Date and distribute, from the amount
so withdrawn, to the extent of the Available Distribution Amount, the
Distribution Amount to the Certificateholders, all in accordance with the
written statement received from the Master Servicer pursuant to Section 4.02(b).
Any Special Primary Insurance Premiums distributed pursuant to clause (i) above
shall be distributed by any method specified in the respective Special Primary
Insurance Policy as directed by the related insurer. Amounts distributed to the
Certificateholders pursuant to clause (ii) above shall be distributed by wire
transfer in immediately available funds for the account of, or by check mailed
to, each such Certificateholder of record on the immediately preceding Record
Date (other than as provided in Section 9.01 respecting the final distribution),
as specified by each such Certificateholder and at the address of such Holder
appearing in the Certificate Register.

(b) All reductions in the Certificate Principal Balance of a Certificate
effected by distributions of principal and all allocations of Realized Losses
made on any Distribution Date shall be binding upon all Holders of such
Certificate and of any Certificate issued upon the registration of transfer or
exchange therefor or in lieu thereof, whether or not such distribution is noted
on such Certificate. The final distribution of principal of each Certificate
(and the final distribution upon the Class R Certificates upon (i) the
termination of REMIC I and (ii) the payment, or making provision for payment, of
all liabilities of the Trust) shall be payable in the manner provided above only
upon presentation and surrender thereof on or after the Distribution Date
therefor at the office or agency of the Certificate Registrar specified in the
notice delivered pursuant to Section 4.01(c)(ii) and Section 9.01(b).

(c) Whenever, on the basis of Curtailments, Payoffs and Monthly Payments on the
Mortgage Loans and Insurance Proceeds and Liquidation Proceeds received and
expected to be received during the Payoff Period, the Master Servicer has
notified the Trustee in writing that it believes that the entire remaining
unpaid Class Principal Balance of any Class of Certificates will become
distributable on the next Distribution Date, the Trustee shall, no later than
the 18th day of the month of such Distribution Date, mail or cause to be mailed
to each Person in whose name a Certificate to be so retired is registered at the
close of business on the Record Date and to the Rating Agencies a notice to the
effect that:

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(i) it is expected that funds sufficient to make such final distribution will be
available in the Certificate Account on such Distribution Date, and

(ii) if such funds are available, (A) such final distribution will be payable on
such Distribution Date, but only upon presentation and surrender of such
Certificate at the office or agency of the Certificate Registrar maintained for
such purpose (the address of which shall be set forth in such notice), and (B)
no interest shall accrue on such Certificate after such Distribution Date.

Section 4.02. Advances by the Master Servicer; Distribution Reports to the
Trustee.

(a) To the extent described below, the Master Servicer is obligated to advance
its own funds to the Certificate Account to cover any shortfall between (i)
payments scheduled to be received in respect of Mortgage Loans, and (ii) the
amounts actually deposited in the Certificate Account on account of such
payments (including amounts advanced by a Servicer pursuant to a Selling and
Servicing Contract). The Master Servicer's obligation to make any advance or
advances described in this Section 4.02 is effective only to the extent that
such advance is, in the good faith judgment of the Master Servicer made on or
before the second Business Day prior to each Distribution Date, reimbursable
from Insurance Proceeds or Liquidation Proceeds of the related Mortgage Loans or
recoverable as late Monthly Payments with respect to the related Mortgage Loans
or otherwise.

Prior to the close of business on the second Business Day prior to each
Distribution Date, the Master Servicer shall determine whether or not it will
make a Monthly P&I Advance on the Business Day prior to such Distribution Date
(in the event that the applicable Servicer fails to make such advances) and
shall furnish a written statement to the Trustee, the Paying Agent, if any, and
to any Certificateholder requesting the same, setting forth the aggregate amount
to be advanced on account of principal and interest in respect of the Mortgage
Loans, stated separately.

In the event that the Master Servicer shall be required to make a Monthly P&I
Advance, it shall on the Business Day prior to the related Distribution Date
either (i) deposit in the Certificate Account an amount equal to such Monthly
P&I Advance, (ii) make an appropriate entry in the records of the Certificate
Account that funds in such account being held for future distribution or
withdrawal have been, as permitted by this Section 4.02, used by the Master
Servicer to make such Monthly P&I Advance, or (iii) make advances in the form of
any combination of (i) and (ii) aggregating the amount of such Monthly P&I
Advance. Any funds being held for future distribution to Certificateholders and
so used shall be replaced by the Master Servicer by deposit in the Certificate
Account on the Business Day immediately preceding any future Distribution Date
to the extent that funds in the Certificate Account on such Distribution Date
with respect to the Mortgage Loans shall be less than payments to

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Certificateholders required to be made on such date with respect to the Mortgage
Loans. Under each Selling and Servicing Contract, the Master Servicer is
entitled to receive from the Custodial Accounts for P&I established by the
Servicers amounts received by the applicable Servicers on particular Mortgage
Loans as late payments of principal and interest or as Liquidation or Insurance
Proceeds and respecting which the Master Servicer has made an unreimbursed
advance of principal and interest. The Master Servicer is also entitled to
receive other amounts from the related Custodial Accounts for P&I established by
the Servicers to reimburse itself for prior Nonrecoverable Advances respecting
Mortgage Loans serviced by such Servicers. The Master Servicer shall deposit
these amounts in the Investment Account prior to withdrawal pursuant to Section
3.05.

In accordance with Section 3.05, Monthly P&I Advances are reimbursable to the
Master Servicer from cash in the Investment Account or the Certificate Account
to the extent that the Master Servicer shall determine that any such advances
previously made are Nonrecoverable Advances pursuant to Section 4.03.

(b) Prior to noon New York City time two Business Days prior to each
Distribution Date, the Master Servicer shall provide (x) the Trustee and (y) the
Company (if the Company is no longer acting as Master Servicer) with a statement
in writing of (1) the amount, as applicable, of (i) interest, (ii) the interest
portion, if any, of Realized Losses, (iii) Uncompensated Interest Shortfall,
(iv) scheduled principal, (v) Negative Amortization Amounts, (vi) Principal
Prepayments, (vii) Liquidation Principal, (viii) Subsequent Recoveries, (ix) the
principal portion of Realized Losses (after giving effect to any reduction
thereof by application of any Cumulative Carry-Forward Subsequent Recoveries
Amount), (x) the principal portion of Realized Losses, (xi) the Residual
Distribution Amount and (xii) the Excess Liquidation Proceeds to be distributed
or allocated, as applicable, to each Class of Certificates on such Distribution
Date (such amounts to be determined in accordance with the definition of
"Distribution Amount" and Section 4.01 hereof and other related definitions set
forth in Article I hereof); (2) the applicable Class Principal Balance after
giving effect to such distributions and allocations; (3) the Cumulative
Carry-Forward Subsequent Recoveries Amount for such Distribution Date; and (4)
the amount of any Special Primary Insurance Premium payable on such Distribution
Date.

Section 4.03. Nonrecoverable Advances. Any advance previously made by a Servicer
pursuant to its Selling and Servicing Contract with respect to a Mortgage Loan
or by the Master Servicer that the Master Servicer shall determine in its good
faith judgment not to be ultimately recoverable from Insurance Proceeds or
Liquidation Proceeds or otherwise with respect to such Mortgage Loan or
recoverable as late Monthly Payments with respect to such Mortgage Loan shall be
a Nonrecoverable Advance. The determination by the Master Servicer that it or
the applicable Servicer has made a Nonrecoverable Advance or that any advance
would constitute a Nonrecoverable Advance, shall be evidenced by an Officer's
Certificate of the Master Servicer delivered to the Trustee on the Determination
Date and detailing the reasons for such determination. Notwithstanding any other
provision of this Agreement, any insurance policy relating to the Mortgage
Loans, or any other agreement relating to the Mortgage Loans to which the
Company or the Master Servicer is a party, (a) the Master Servicer and each
Servicer shall not be obligated to, and shall not, make any advance that, after
reasonable inquiry and in its sole discretion, the Master Servicer or such
Servicer shall determine would be a Nonrecoverable Advance, and (b) the Master
Servicer and each Servicer shall be entitled to reimbursement for any advance as
provided in Section 3.05(a)(i), (ii) and (iv) of this Agreement.

Section 4.04. Statements to Certificateholders. With each distribution from the
Certificate Account on a Distribution Date, the Trustee shall send to each
Rating Agency and shall make available to each Certificateholder the statement
required by Section 4.02(b). The Trustee may make available such statement and
certain other information, including, without limitation, information required
to be provided by the Trustee pursuant to Sections 3.12 and 3.13, to
Certificateholders through the Trustee's web site. Such web site is currently

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located at "http://https://www.corporatetrust.db.com/invr." Assistance in using
the web site can currently be obtained by calling the Trustee's investor
relations desk at 800-735-7777. Parties unable to use this distribution method
may request that a paper copy be mailed to them via first class mail by calling
the investor relations desk. The location of such web page and the procedures
used therein are subject to change from time to time at the Trustee's
discretion.

Upon request by any Certificateholder or Rating Agency or the Trustee, the
Master Servicer shall forward to such Certificateholder or Rating Agency and the
Trustee and the Company (if the Company is no longer acting as Master Servicer)
an additional report which sets forth with respect to the Mortgage Loans:

(a) The number and aggregate Principal Balance of the Mortgage Loans delinquent
one, two and three months or more;

(b) The (i) number and aggregate Principal Balance of Mortgage Loans with
respect to which foreclosure proceedings have been initiated, and (ii) the
number and aggregate book value of Mortgaged Properties acquired through
foreclosure, deed in lieu of foreclosure or other exercise of rights respecting
the Trust's security interest in the Mortgage Loans;

(c) The amount of the Special Hazard Coverage available to the Senior
Certificates remaining as of the close of business on the applicable
Determination Date;

(d) The amount of the Bankruptcy Coverage available to the Senior Certificates
remaining as of the close of business on the applicable Determination Date;

(e) The amount of the Fraud Coverage available to the Senior Certificates
remaining as of the close of business on the applicable Determination Date; and

(f) The cumulative amount of Realized Losses allocated to the related
Certificates since the Cut-Off Date.

Upon request by any Certificateholder, the Master Servicer, as soon as
reasonably practicable, shall provide the requesting Certificateholder with such
information as is necessary and appropriate, in the Master Servicer's sole
discretion, for purposes of satisfying applicable reporting requirements under
Rule 144A of the Securities Act.

The Company may make available any reports, statements or other information to
Certificateholders through the Company's home page on the world wide web. As of
the Closing Date, such web page is located at "www.wamumsc.com" and information
is available by clicking on "Investor Information."

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                                   ARTICLE V

                                The Certificates

Section 5.01.     The Certificates.

(a) The Certificates shall be substantially in the forms set forth in Exhibit A
with the additional insertion from Exhibit H attached hereto, and shall be
executed by the Trustee on behalf of the Trust, authenticated by the Trustee (or
any duly appointed Authenticating Agent) and delivered (i) upon and pursuant to
the order of the Company and (ii) upon receipt by the Trustee of the documents
specified in Section 2.01. The Certificates shall be issuable in Authorized
Denominations. Certificates shall be executed by manual or facsimile signature
on behalf of the Trust by authorized officers of the Trustee. Certificates
bearing the manual or facsimile signatures of individuals who were at the time
of execution the proper officers of the Trustee shall bind the Trust,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates or did not
hold such offices at the date of such Certificates. No Certificate shall be
entitled to any benefit under this Agreement, or be valid for any purpose,
unless there appears on such Certificate a certificate of authentication
substantially in the form provided for herein executed by the Trustee or any
Authenticating Agent by manual signature, and such certificate upon any
Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication.

(b) The following definitions apply for purposes of this Section 5.01:
"Disqualified Organization" means any Person which is not a Permitted
Transferee, but does not include any "Pass-Through Entity" which owns or holds a
Residual Certificate and of which a Disqualified Organization, directly or
indirectly, may be a stockholder, partner or beneficiary; "Pass-Through Entity"
means any regulated investment company, real estate investment trust, common
trust fund, partnership, trust or estate, and any organization to which Section
1381 of the Code applies; "Ownership Interest" means, with respect to any
Residual Certificate, any ownership or security interest in such Residual
Certificate, including any interest in a Residual Certificate as the Holder
thereof and any other interest therein whether direct or indirect, legal or
beneficial, as owner or as pledgee; "Transfer" means any direct or indirect
transfer or sale of, or directly or indirectly transferring or selling any
Ownership Interest in a Residual Certificate; and "Transferee" means any Person
who is acquiring by Transfer any Ownership Interest in a Residual Certificate.

(c) Restrictions on Transfers of the Residual Certificates to Disqualified
Organizations are set forth in this Section 5.01(c).

(i) Each Person who has or who acquires any Ownership Interest in a Residual
Certificate shall be deemed by the acceptance or acquisition of such Ownership
Interest to have agreed to be bound by the following provisions and to have
irrevocably authorized the Trustee or its designee under clause (iii)(A) below
to deliver payments to a Person other than such Person and to negotiate the

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terms of any mandatory sale under clause (iii)(B) below and to execute all
instruments of transfer and to do all other things necessary in connection with
any such sale. The rights of each Person acquiring any Ownership Interest in a
Residual Certificate are expressly subject to the following provisions:

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

(B) In connection with any proposed Transfer of any Ownership Interest in a
Residual Certificate to a U.S. Person, the Trustee shall require delivery to it,
and shall not register the Transfer of any Residual Certificate until its
receipt of (1) an affidavit and agreement (a "Transferee Affidavit and
Agreement") attached hereto as Exhibit J from the proposed Transferee, in form
and substance satisfactory to the Company, representing and warranting, among
other things, that it is not a Non-U.S. Person, that such transferee is a
Permitted Transferee, that it is not acquiring its Ownership Interest in the
Residual Certificate that is the subject of the proposed Transfer as a nominee,
trustee or agent for any Person who is not a Permitted Transferee, that for so
long as it retains its Ownership Interest in a Residual Certificate, it will
endeavor to remain a Permitted Transferee, and that it has reviewed the
provisions of this Section 5.01(c) and agrees to be bound by them, and (2) a
certificate, attached hereto as Exhibit I, from the Holder wishing to transfer
the Residual Certificate, in form and substance satisfactory to the Company,
representing and warranting, among other things, that no purpose of the proposed
Transfer is to allow such Holder to impede the assessment or collection of tax.

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

(D) Each Person holding or acquiring any Ownership Interest in a Residual
Certificate agrees by holding or acquiring such Ownership Interest (i) to
require a Transferee Affidavit and Agreement from any other Person to whom such
Person attempts to transfer its Ownership Interest and to provide a certificate
to the Trustee in the form attached hereto as Exhibit J; (ii) to obtain the
express written consent of the Company prior to any transfer of such Ownership
Interest, which consent may be withheld in the Company's sole discretion; and
(iii) to provide a certificate to the Trustee in the form attached hereto as
Exhibit I.

(ii) The Trustee shall register the Transfer of any Residual Certificate only if
it shall have received the Transferee Affidavit and Agreement, a certificate of
the Holder requesting such transfer in the form attached hereto as Exhibit J and
all of such other documents as shall have been reasonably required by the
Trustee as a condition to such registration.

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(iii) (A) If any "disqualified organization" (as defined in Section 860E(e)(5)
of the Code) shall become a holder of a Residual Certificate, then the last
preceding Permitted Transferee shall be restored, to the extent permitted by
law, to all rights and obligations as Holder thereof retroactive to the date of
registration of such Transfer of such Residual Certificate. If any Non-U.S.
Person shall become a holder of a Residual Certificate, then the last preceding
holder which is a U.S. Person shall be restored, to the extent permitted by law,
to all rights and obligations as Holder thereof retroactive to the date of
registration of the Transfer to such Non-U.S. Person of such Residual
Certificate. If a transfer of a Residual Certificate is disregarded pursuant to
the provisions of Treasury Regulations Section 1.860E-1 or Section 1.860G-3,
then the last preceding Permitted Transferee shall be restored, to the extent
permitted by law, to all rights and obligations as Holder thereof retroactive to
the date of registration of such Transfer of such Residual Certificate. Neither
the Trust nor the Trustee shall be under any liability to any Person for any
registration of Transfer of a Residual Certificate that is in fact not permitted
by this Section 5.01(c) or for making any payments due on such Certificate to
the holder thereof or for taking any other action with respect to such holder
under the provisions of this Agreement.

(B) If any purported Transferee shall become a Holder of a Residual Certificate
in violation of the restrictions in this Section 5.01(c) and to the extent that
the retroactive restoration of the rights of the Holder of such Residual
Certificate as described in clause (iii)(A) above shall be invalid, illegal or
unenforceable, then the Company shall have the right, without notice to the
Holder or any prior Holder of such Residual Certificate, to sell such Residual
Certificate to a purchaser selected by the Company on such terms as the Company
may choose. Such purported Transferee shall promptly endorse and deliver each
Residual Certificate in accordance with the instructions of the Company. Such
purchaser may be the Company itself or any affiliate of the Company. The
proceeds of such sale, net of the commissions (which may include commissions
payable to the Company or its affiliates), expenses and taxes due, if any, shall
be remitted by the Company to such purported Transferee. The terms and
conditions of any sale under this clause (iii)(B) shall be determined in the
sole discretion of the Company, and the Company shall not be liable to any
Person having an Ownership Interest in a Residual Certificate as a result of its
exercise of such discretion.

(iv) The Company, on behalf of the Trustee, shall make available, upon written
request from the Trustee, all information necessary to compute any tax imposed
(A) as a result of the Transfer of an Ownership Interest in a Residual
Certificate to any Person who is not a Permitted Transferee, including the
information regarding "excess inclusions" of such Residual Certificates required
to be provided to the Internal Revenue Service and certain Persons as described
in Treasury Regulation Section 1.860D-1(b)(5), and (B) as a result of any
regulated investment company, real estate investment trust, common trust fund,
partnership, trust, estate or organizations described in Section 1381 of the

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Code having as among its record holders at any time any Person who is not a
Permitted Transferee. Reasonable compensation for providing such information may
be required by the Company from such Person.

(v) The provisions of this Section 5.01 set forth prior to this Section (v) may
be modified, added to or eliminated by the Company and the Trustee, provided
that there shall have been delivered to the Trustee the following:

(A) written notification from each of the Rating Agencies to the effect that the
modification, addition to or elimination of such provisions will not cause such
Rating Agency to downgrade its then-current Ratings of the Certificates; and

(B) an Opinion of Counsel, in form and substance satisfactory to the Company (as
evidenced by a certificate of the Company), to the effect that such
modification, addition to or absence of such provisions will not cause REMIC I
to cease to qualify as a REMIC and will not create a risk that (1) REMIC I may
be subject to an entity-level tax caused by the Transfer of any Residual
Certificate to a Person which is not a Permitted Transferee or (2) a
Certificateholder or another Person will be subject to a REMIC-related tax
caused by the Transfer of a Residual Certificate to a Person which is not a
Permitted Transferee.

(vi) The following legend shall appear on all Residual Certificates:

ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY
IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE COMPANY AND THE
TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT EITHER (A) THE UNITED STATES, ANY STATE
OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL
ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING, (B) ANY
ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE)
WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH
ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE, (C) ANY
ORGANIZATION DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE (ANY SUCH PERSON
DESCRIBED IN THE FOREGOING CLAUSES (A), (B), OR (C) BEING HEREINAFTER REFERRED
TO AS A "DISQUALIFIED ORGANIZATION"), OR (D) AN AGENT OF A DISQUALIFIED
ORGANIZATION AND (2) NO PURPOSE OF SUCH TRANSFER IS TO ENABLE THE TRANSFEROR TO
IMPEDE THE ASSESSMENT OR COLLECTION OF TAX. SUCH AFFIDAVIT SHALL INCLUDE CERTAIN
REPRESENTATIONS AS TO THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE.
NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE REGISTER OF ANY TRANSFER,
SALE OR OTHER DISPOSITION OF THIS CLASS R CERTIFICATE TO A DISQUALIFIED
ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL
BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT

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BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT
NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF
THE CLASS R CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO
HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH.

(vii) The Tax Matters Person for each of REMIC I, while not a Disqualified
Organization, shall be the tax matters person for REMIC I within the meaning of
Section 6231(a)(7) of the Code and Treasury Regulation Section 1.860F-4(d).

(d) In the case of any Junior Subordinate Certificate presented for registration
in the name of any Person, the Trustee shall require (i) an officer's
certificate substantially in the form of Exhibit N attached hereto acceptable to
and in form and substance satisfactory to the Trustee and the Company, which
officer's certificate shall not be an expense of the Trust, the Trustee, the
Master Servicer or the Company, and (ii) only if such officer's certificate
indicates that a Benefit Plan Opinion is delivered in connection therewith, a
Benefit Plan Opinion.

In the case of any Residual Certificate presented for registration in the name
of any Person, the Trustee shall require (i) a Transferee Affidavit and
Agreement which includes the representation set forth in paragraph 19 of the
form attached hereto as Exhibit J and (ii) only if the representation set forth
in such paragraph 19 indicates that a Benefit Plan Opinion is delivered in
connection therewith, a Benefit Plan Opinion.

(e) No transfer, sale, pledge or other disposition of a Junior Subordinate
Certificate shall be made unless such transfer, sale, pledge or other
disposition is made in accordance with this Section 5.01(e) or Section 5.01(f).
Each Person who, at any time, acquires any ownership interest in any Junior
Subordinate Certificate shall be deemed by the acceptance or acquisition of such
ownership interest to have agreed to be bound by the following provisions of
this Section 5.01(e) and Section 5.01(f), as applicable. No transfer of a Junior
Subordinate Certificate shall be deemed to be made in accordance with this
Section 5.01(e) unless such transfer is made pursuant to an effective
registration statement under the Securities Act or unless the Trustee is
provided with the certificates and an Opinion of Counsel, if required, on which
the Trustee may conclusively rely, to the effect that such transfer is exempt
from the registration requirements under the Securities Act, as follows: In the
event that a transfer is to be made in reliance upon an exemption from the
Securities Act, the Trustee shall require, in order to assure compliance with
the Securities Act, that the Certificateholder desiring to effect such transfer
certify to the Trustee in writing, in substantially the form attached hereto as
Exhibit F, the facts surrounding the transfer, with such modifications to such
Exhibit F as may be appropriate to reflect the actual facts of the proposed
transfer, and that the Certificateholder's proposed transferee certify to the
Trustee in writing, in substantially the form attached hereto as Exhibit G, the
facts surrounding the transfer, with such modifications to such Exhibit G as may
be appropriate to reflect the actual facts of the proposed transfer. If such
certificate of the proposed transferee does not contain substantially the
substance of Exhibit G, the Trustee shall require an Opinion of Counsel that
such transfer may be made without registration, which Opinion of Counsel shall
not be obtained at the expense of the Trustee, the Trust or the Company. Such
Opinion of Counsel shall allow for the forwarding, and the Trustee shall
forward, a copy thereof to the Rating Agencies. Notwithstanding the foregoing,
any Junior Subordinate Certificate may be transferred, sold, pledged or
otherwise disposed of in accordance with the requirements set forth in Section
5.01(f).

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(f) To effectuate a Certificate transfer of a Junior Subordinate Certificate in
accordance with this Section 5.01(f), the proposed transferee of such
Certificate must provide the Trustee and the Company with an investment letter
substantially in the form of Exhibit L attached hereto, which investment letter
shall not be an expense of the Trust, the Trustee or the Company, and which
investment letter states that, among other things, such transferee (i) is a
"qualified institutional buyer" as defined under Rule 144A, acting for its own
account or the accounts of other "qualified institutional buyers" as defined
under Rule 144A, and (ii) is aware that the proposed transferor intends to rely
on the exemption from registration requirements under the Securities Act
provided by Rule 144A. Notwithstanding the foregoing, the proposed transferee of
such Certificate shall not be required to provide the Trustee or the Company
with Annex 1 or Annex 2 to the form of Exhibit L attached hereto if the Company
so consents prior to each such transfer. Such transfers shall be deemed to have
complied with the requirements of this Section 5.01(f). The Holder of a
Certificate desiring to effect such transfer does hereby agree to indemnify the
Trust, the Trustee, the Company, and the Certificate Registrar against any
liability that may result if transfer is not made in accordance with this
Agreement.

(g) (1) In the case of any ERISA Restricted Certificate presented for
registration in the name of any Person, the prospective transferee shall be
required to provide the Trustee and the Company (A) an officer's certificate
substantially in the form of Exhibit O attached hereto acceptable to and in form
and substance satisfactory to the Trustee and the Company, which officer's
certificate shall not be an expense of the Trust, the Trustee, the Master
Servicer or the Company, and (B) only if such officer's certificate indicates
that a Benefit Plan Opinion is delivered in connection therewith, a Benefit Plan
Opinion.

(2) Notwithstanding the foregoing, a certification (and, if applicable, a
Benefit Plan Opinion) as described in Section 5.01(g)(1) above will not be
required with respect to the transfer of any ERISA Restricted Certificate to a
Clearing Agency, or for any subsequent transfer of any interest in a ERISA
Restricted Certificate for so long as such Certificate is a Book-Entry
Certificate (each such ERISA Restricted Certificate, a "Book-Entry ERISA
Restricted Certificate"). Any transferee of a Book-Entry ERISA Restricted
Certificate will be deemed to have represented, by virtue of its acquisition or
holding of such Certificate (or interest therein), that either (i) such
transferee is not an employee benefit or other plan subject to the prohibited
transaction provisions of ERISA or Section 4975 of the Code, or any person
(including an investment manager, a named fiduciary or a trustee of any such
plan) acting, directly or indirectly, on behalf of or purchasing such
Certificate with "plan assets" of any such plan (a "Plan Investor"), (ii) such
transferee is an insurance company, the source of funds to be used by it to
acquire or hold such Certificate is an "insurance company general account"
(within the meaning of Department of Labor Prohibited Transaction Class
Exemption ("PTCE") 95-60), and the conditions in Section I and III of PTCE 95-60
have been satisfied (each entity that satisfies this clause (ii), a "Complying
Insurance Company") or (iii) such Certificate was rated "BBB-" or better (or its
equivalent) by at least one of the Rating Agencies at the time of such
transferee's acquisition of such Certificate (or interest therein).

(3) If any Book-Entry ERISA Restricted Certificate (or any interest therein) is
acquired or held in violation of the provisions of Section 5.01(g)(2) above,
then the last preceding transferee that either (i) is not a Plan Investor, (ii)
is a Complying Insurance Company or (iii) acquired such Certificate at a time
when such Certificate was rated "BBB-" or better (or its equivalent) by at least

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one of the Rating Agencies shall be restored, to the extent permitted by law, to
all rights and obligations as Beneficial Holder thereof retroactive to the date
of transfer of such Certificate by such preceding transferee. Neither the Trust
nor the Trustee shall be under any liability to any Person for making any
payments due on such Certificate to such preceding transferee.

(4) Any purported Beneficial Holder whose acquisition or holding of any
Book-Entry ERISA Restricted Certificate (or interest therein) was effected in
violation of the restrictions in this Section 5.01(g) shall indemnify and hold
harmless the Company, the Trustee, the Master Servicer, the Trust and the
Underwriters from and against any and all liabilities, claims, costs or expenses
incurred by such parties as a result of such acquisition or holding.

Section 5.02. Certificates Issuable in Classes; Distributions of Principal and
Interest; Authorized Denominations. The aggregate principal amount of the
Certificates that may be authenticated and delivered under this Agreement is
limited to the aggregate Principal Balance of the Mortgage Loans as of the
Cut-Off Date, as specified in the Preliminary Statement to this Agreement,
except for Certificates authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Certificates pursuant to
Section 5.03. Such aggregate principal amount shall be allocated among one or
more Classes having designations, types of interests, initial per annum
Certificate Interest Rates, initial Class Principal Balances and Final Maturity
Dates as specified in the Preliminary Statement to this Agreement. The aggregate
Percentage Interest of each Class of Certificates of which the Class Principal
Balance equals zero as of the Cut-Off Date that may be authenticated and
delivered under this Agreement is limited to 100%. Certificates shall be issued
in Authorized Denominations.

Section 5.03. Registration of Transfer and Exchange of Certificates. The Trustee
shall cause to be maintained at one of its offices or at its designated agent, a
Certificate Register in which there shall be recorded the name and address of
each Certificateholder. Subject to such reasonable rules and regulations as the
Trustee may prescribe, the Certificate Register shall be amended from time to
time by the Trustee or its agent to reflect notice of any changes received by
the Trustee or its agent pursuant to Section 10.06. The Trustee hereby appoints
itself as the initial Certificate Registrar.

Upon surrender for registration of transfer of any Certificate to the Trustee at
the office of the Trustee's agent at DTC Transfer Agent Services, 55 Water
Street, Jeanette Park Entrance, New York, New York 10041, or at DB Services
Tennessee, Inc., 648 Grassmere Park Road, Nashville, TN 37211, Attention:
Transfer Department, or such other address or agency as may hereafter be
provided to the Master Servicer in writing by the Trustee, the Trustee shall
execute, and the Trustee or any Authenticating Agent shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Certificates of Authorized Denominations. At the option of the
Certificateholders, Certificates may be exchanged for other Certificates in
Authorized Denominations of like Certificate Principal Balance or Percentage
Interest, as applicable, upon surrender of the Certificates to be exchanged at
any such office or agency. Whenever any Certificates are so surrendered for
exchange, the Trustee on behalf of the Trust shall execute, and the Trustee, or
any Authenticating Agent, shall authenticate and deliver, the Certificates which
the Certificateholder making the exchange is entitled to receive. Every

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Certificate presented or surrendered for transfer shall (if so required by the
Trustee or any Authenticating Agent) be duly endorsed by, or be accompanied by a
written instrument of transfer in form satisfactory to the Trustee or any
Authenticating Agent and duly executed by, the Holder thereof or such Holder's
attorney duly authorized in writing.

A reasonable service charge may be made for any such exchange or transfer of
Certificates, and the Trustee may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
exchange or transfer of Certificates.

All Certificates surrendered for exchange or transfer shall be cancelled by the
Trustee or any Authenticating Agent.

Section 5.04. Mutilated, Destroyed, Lost or Stolen Certificates. If (i) any
mutilated Certificate is surrendered to the Trustee or any Authenticating Agent,
or (ii) the Trustee or any Authenticating Agent receives evidence to their
satisfaction of the destruction, loss or theft of any Certificate, and there is
delivered to the Trustee or any Authenticating Agent such security or indemnity
as may be required by them to save each of them and the Trust harmless, then, in
the absence of notice to the Trustee or any Authenticating Agent that such
Certificate has been acquired by a protected purchaser, the Trustee shall
execute and the Trustee or any Authenticating Agent shall authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like Certificate Principal Balance or
Percentage Interest as applicable. Upon the issuance of any new Certificate
under this Section 5.04, the Trustee or any Authenticating Agent may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses (including the fees
and expenses of the Trustee or any Authenticating Agent) connected therewith.
Any replacement Certificate issued pursuant to this Section 5.04 shall
constitute complete and indefeasible evidence of ownership in REMIC I (or with
respect to the Class R Certificates, the residual ownership interests in REMIC
I) as if originally issued, whether or not the lost or stolen Certificate shall
be found at any time.

Section 5.05. Persons Deemed Owners. The Company, the Master Servicer, the
Trust, the Trustee, the Delaware Trustee and any agent of any of them may treat
the Person in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions pursuant to Section 4.01
and for all other purposes whatsoever, and neither the Company, the Master
Servicer, the Trust, the Trustee, the Delaware Trustee, the Certificate
Registrar nor any agent of the Company, the Master Servicer, the Trust, the
Trustee or the Delaware Trustee shall be affected by notice to the contrary.

Section 5.06. Temporary Certificates. Upon the initial issuance of the
Certificates, the Trustee on behalf of the Trust may execute, and the Trustee or
any Authenticating Agent shall authenticate and deliver, temporary Certificates
which are printed, lithographed, typewritten or otherwise produced, in any
Authorized Denomination, of the tenor of the definitive Certificates in lieu of
which they are issued and with such variations in form from the forms of the
Certificates set forth as Exhibits A, B and H hereto as the Trustee's officers

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executing such Certificates may determine, as evidenced by their execution of
the Certificates. Notwithstanding the foregoing, the Certificates may remain in
the form of temporary Certificates.

If temporary Certificates are issued, the Trustee shall cause definitive
Certificates to be prepared within ten Business Days after the Closing Date or
as soon as practicable thereafter. After preparation of definitive Certificates,
the temporary Certificates shall be exchangeable for definitive Certificates
upon surrender of the temporary Certificates at the office or agency of the
Trustee to be maintained as provided in Section 5.10 hereof, without charge to
the holder. Any tax or governmental charge that may be imposed in connection
with any such exchange shall be borne by the Master Servicer. Upon surrender for
cancellation of any one or more temporary Certificates, the Trustee on behalf of
the Trust shall execute and the Trustee or any Authenticating Agent shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Certificates of Authorized Denominations. Until so exchanged, the
temporary Certificates shall in all respects be entitled to the same benefits
under this Agreement as definitive Certificates.

Section 5.07. Book-Entry for Book-Entry Certificates. Notwithstanding the
foregoing, the Book-Entry Certificates, upon original issuance, shall be issued
in the form of one or more typewritten Certificates of Authorized Denomination
representing the Book-Entry Certificates, to be delivered to DTC, the initial
Clearing Agency, by, or on behalf of, the Company. The Book-Entry Certificates
shall initially be registered on the Certificate Register in the name of Cede &
Co., the nominee of DTC, as the initial Clearing Agency, and no Beneficial
Holder shall receive a definitive certificate representing such Beneficial
Holder's interest in any Class of Book-Entry Certificate, except as provided
above and in Section 5.09. Each Book-Entry Certificate shall bear the following
legend:

Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company or its
agent for registration of transfer, exchange, or payment, and any Certificate
issued is registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.

Unless and until definitive, fully registered Book-Entry Certificates (the
"Definitive Certificates") have been issued to the Beneficial Holders pursuant
to Section 5.09:

(a) the provisions of this Section 5.07 shall be in full force and effect with
respect to the Book-Entry Certificates;

(b) the Master Servicer and the Trustee may deal with the Clearing Agency for
all purposes with respect to the Book-Entry Certificates (including the making
of distributions on the Book-Entry Certificates) as the sole Certificateholder;

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(c) to the extent that the provisions of this Section 5.07 conflict with any
other provisions of this Agreement, the provisions of this Section 5.07 shall
control; and

(d) the rights of the Beneficial Holders shall be exercised only through the
Clearing Agency and the DTC Participants and shall be limited to those
established by law and agreements between such Beneficial Holders and the
Clearing Agency and/or the DTC Participants. Pursuant to the Depositary
Agreement, unless and until Definitive Certificates are issued pursuant to
Section 5.09, the initial Clearing Agency will make book-entry transfers among
the DTC Participants and receive and transmit distributions of principal and
interest on the related Class of Book-Entry Certificates to such DTC
Participants.

For purposes of any provision of this Agreement requiring or permitting actions
with the consent of, or at the direction of, Holders of Book-Entry Certificates
evidencing a specified Percentage Interest, such direction or consent may be
given by the Clearing Agency at the direction of Beneficial Holders owning
Book-Entry Certificates evidencing the requisite Percentage Interest represented
by the Book-Entry Certificates. The Clearing Agency may take conflicting actions
with respect to the Book-Entry Certificates to the extent that such actions are
taken on behalf of the Beneficial Holders.

Section 5.08. Notices to Clearing Agency. Whenever notice or other communication
to the Certificateholders is required under this Agreement, unless and until
Definitive Certificates shall have been issued to the related Certificateholders
pursuant to Section 5.09, the Trustee shall give all such notices and
communications specified herein to be given to Holders of the Book-Entry
Certificates to the Clearing Agency which shall give such notices and
communications to the related DTC Participants in accordance with its applicable
rules, regulations and procedures.

Section 5.09. Definitive Certificates. If (a) the Clearing Agency or the Master
Servicer notifies the Trustee in writing that the Clearing Agency is no longer
willing or able to discharge properly its responsibilities under the Depositary
Agreement with respect to the Book-Entry Certificates and the Trustee or the
Master Servicer is unable to locate a qualified successor, (b) the Master
Servicer, with the consent of the applicable DTC Participants, advises the
Trustee in writing that it elects to terminate the book-entry system with
respect to the Book-Entry Certificates through the Clearing Agency or (c) after
the occurrence of an Event of Default, Certificateholders holding Book-Entry
Certificates evidencing Percentage Interests aggregating not less than 66?% of
the aggregate Class Principal Balance of such Certificates advise the Trustee
and the Clearing Agency through DTC Participants in writing that the
continuation of a book-entry system with respect to the Book-Entry Certificates
through the Clearing Agency is no longer in the best interests of the
Certificateholders with respect to such Certificates, the Trustee shall notify
all Certificateholders of Book-Entry Certificates of the occurrence of any such
event and of the availability of Definitive Certificates. Upon surrender to the
Trustee of the Book-Entry Certificates by the Clearing Agency, accompanied by
registration instructions from the Clearing Agency for registration, the Trustee
on behalf of the Trust shall execute and the Trustee or any Authenticating Agent
shall authenticate and deliver the Definitive Certificates. Neither the Company,
the Master Servicer, the Trust nor the Trustee shall be liable for any delay in
delivery of such instructions and may conclusively rely on, and shall be

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protected in relying on, such instructions. Upon the issuance of Definitive
Certificates for all of the Certificates all references herein to obligations
imposed upon or to be performed by the Clearing Agency shall be deemed to be
imposed upon and performed by the Trustee, to the extent applicable with respect
to such Definitive Certificates, and the Trustee shall recognize the Holders of
Definitive Certificates as Certificateholders hereunder.

Section 5.10. Office for Transfer of Certificates. The Trustee shall maintain in
New York, New York an office or agency where Certificates may be surrendered for
registration of transfer or exchange. The office of the Trustee's agent at DTC
Transfer Agent Services, 55 Water Street, Jeanette Park Entrance, New York, New
York 10041, is initially designated for said purposes.

Section 5.11. Nature of Certificates. The Certificates shall be personal
property giving only the rights specifically set forth therein and in this
Agreement. The Certificates shall have no preemptive or similar rights and when
issued and delivered to the Holders against payment of the purchase price
therefor will be fully paid and nonassessable by the Trust. The Holders of the
Certificates, in their capacities as such, shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware. THE RECEIPT AND ACCEPTANCE OF A CERTIFICATE OR ANY INTEREST THEREIN
BY OR ON BEHALF OF A HOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE OR
FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE
BY THE HOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH CERTIFICATE OF
ALL THE TERMS AND PROVISIONS OF THIS AGREEMENT, AND SHALL CONSTITUTE THE
AGREEMENT OF THE TRUST, SUCH HOLDER AND SUCH OTHERS THAT THE TERMS AND
PROVISIONS OF THIS AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS
BETWEEN THE TRUST AND SUCH HOLDER AND SUCH OTHERS.

                                   ARTICLE VI

                      The Company and the Master Servicer

Section 6.01. Liability of the Company and the Master Servicer. The Company and
the Master Servicer shall be liable in accordance herewith only to the extent of
the obligations specifically imposed upon and undertaken by the Company or the
Master Servicer, as applicable, herein.

Section 6.02. Merger or Consolidation of the Company, or the Master Servicer.
Any Corporation into which the Company or the Master Servicer may be merged or
consolidated, or any Corporation resulting from any merger, conversion or
consolidation to which the Company or the Master Servicer shall be a party, or
any Corporation succeeding to the business of the Company or the Master
Servicer, shall be the successor of the Company or the Master Servicer
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding.

Section 6.03. Limitation on Liability of the Company, the Master Servicer and
Others. Neither the Company nor the Master Servicer nor any of the directors,
officers, employees or agents of the Company or the Master Servicer shall be

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under any liability to the Trust or the Certificateholders for any action taken
by such Person or by a Servicer or for such Person's or Servicer's refraining
from the taking of any action in good faith pursuant to this Agreement, or for
errors in judgment; provided, however, that this provision shall not protect the
Company, the Master Servicer or any such Person against any liability which
would otherwise be imposed by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of reckless disregard of
duties and obligations hereunder. The Company, the Master Servicer and any
director, officer, employee or agent of the Company or the Master Servicer may
rely in good faith on any document of any kind properly executed and submitted
by any Person respecting any matters arising hereunder. The Company, the Master
Servicer and any director, officer, employee or agent of the Company or the
Master Servicer shall be indemnified by the Trust and held harmless against any
loss, liability or expense incurred in connection with any legal action relating
to this Agreement or the Certificates, other than any loss, liability or expense
relating to any Mortgage Loan (other than as otherwise permitted in this
Agreement) or incurred by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder. The Company and the Master
Servicer shall not be under any obligation to appear in, prosecute or defend any
legal action which is not incidental to its duties to service the Mortgage Loans
in accordance with this Agreement and which in its opinion may involve it in any
expense or liability; provided, however, that the Company or the Master Servicer
may in its discretion undertake any such action which it may deem necessary or
desirable with respect to the Mortgage Loans, this Agreement, the Certificates
or the rights and duties of the parties hereto and the interests of the
Certificateholders hereunder. In such event, the legal expenses and costs of
such action and any liability resulting therefrom shall be expenses, costs and
liabilities of the Trust and the Company and the Master Servicer shall be
entitled to be reimbursed therefor out of the Certificate Account, as provided
by Section 3.05.

Section 6.04. The Company and the Master Servicer not to Resign. The Company
shall not resign from the obligations and duties (including, without limitation,
its obligations and duties as initial Master Servicer) hereby imposed on it
except upon determination that its duties hereunder are no longer permissible
under applicable law. Any successor Master Servicer shall not resign from the
obligations and duties hereby imposed on it except upon determination that its
duties hereunder are no longer permissible under applicable law. Any such
determination permitting the resignation of the Company or any successor Master
Servicer shall be evidenced by an Opinion of Counsel to such effect delivered to
the Trustee. No such resignation shall become effective until the Trustee or a
successor Master Servicer shall have assumed the Master Servicer's
responsibilities and obligations in accordance with Section 7.02 hereof.

If the Company is no longer acting as Master Servicer, then the successor Master
Servicer shall give prompt written notice to the Company of any information
received by such successor Master Servicer which affects or relates to an
ongoing obligation or right of the Company under this Agreement.

Section 6.05. Trustee Access. The Master Servicer shall afford the Company and
the Trustee, upon reasonable notice, during normal business hours access to all
records maintained by the Master Servicer, in respect of the Mortgage Loans and
in respect of its rights and obligations hereunder and access to such of its
officers as are responsible for such obligations. Upon reasonable request, the

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Master Servicer, shall furnish the Company and the Trustee with its most recent
financial statements (or, for so long as the Company is the Master Servicer, the
most recent consolidated financial statements for the Company appearing in the
audited financial statements of Washington Mutual, Inc., or the entity with
whose financial statements the financial statements of the Company are
consolidated) and such other information as it possesses, and which it is not
prohibited by law or, to the extent applicable, binding obligations to third
parties with respect to confidentiality from disclosing, regarding its business,
affairs, property and condition, financial or otherwise.

                                  ARTICLE VII

                                    Default

Section 7.01. Events of Default. (a) In case one or more of the following Events
of Default by the Master Servicer or by a successor Master Servicer shall occur
and be continuing, that is to say:

(i) Any failure by the Master Servicer to deposit into the Certificate Account
any payment required to be deposited therein by the Master Servicer under the
terms of this Agreement which continues unremedied for a period of five Business
Days after the date upon which written notice of such failure, requiring the
same to be remedied, shall have been given to the Master Servicer by the Trustee
or to the Master Servicer and the Trustee by the Holders of Certificates
evidencing Percentage Interests aggregating not less than 25% of REMIC I; or

(ii) Failure on the part of the Master Servicer duly to observe or perform in
any material respect any other of the covenants or agreements on the part of the
Master Servicer contained in the Certificates or in this Agreement which
continues unremedied for a period of 60 days after the date on which written
notice of such failure, requiring the same to be remedied, shall have been given
to the Master Servicer by the Trustee, or to the Master Servicer and the Trustee
by the Holders of Certificates evidencing Percentage Interests aggregating not
less than 25% of REMIC I; or

(iii) A decree or order of a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a trustee in bankruptcy,
conservator or receiver or liquidator in any bankruptcy, insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, shall have
been entered against the Master Servicer and such decree or order shall have
remained in force undischarged or unstayed for a period of 60 days; or

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

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

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(vi) Any failure of the Master Servicer to make any Monthly P&I Advance (other
than a Nonrecoverable Advance) which continues unremedied at the opening of
business on the Distribution Date in respect of which such Monthly P&I Advance
was to have been made;

then, and in each and every such case, so long as an Event of Default shall not
have been remedied, either the Trustee or the Holders of Certificates evidencing
Percentage Interests aggregating not less than 25% of REMIC I, by notice in
writing to the Company and the Master Servicer (and to the Trustee if given by
the Certificateholders, in which case such notice shall set forth evidence
reasonably satisfactory to the Trustee that such Event of Default has occurred
and shall not have been remedied) may terminate all of the rights (other than
its right to reimbursement for advances) and obligations of the Master Servicer,
including its right to the Master Servicing Fee, under this Agreement and in and
to the Mortgage Loans and the proceeds thereof, if any. Such determination shall
be final and binding. On or after the receipt by the Master Servicer of such
written notice, all authority and power of the Master Servicer under this
Agreement, whether with respect to the Certificates or the Mortgage Loans or
otherwise, shall pass to and be vested in the Trustee pursuant to and under this
Section 7.01; and, without limitation, the Trustee is hereby authorized and
empowered to execute and deliver, on behalf of the Master Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise. The Master Servicer agrees to cooperate with the Trustee in effecting
the termination of the Master Servicer's responsibilities and rights hereunder,
including, without limitation, the transfer to the Trustee for administration by
it of all cash amounts which shall at the time be credited by the Master
Servicer to the Certificate Account or thereafter be received with respect to
the Mortgage Loans.

Notwithstanding the foregoing, if an Event of Default described in clause (vi)
of this Section 7.01(a) shall occur, the Trustee shall, by notice in writing to
the Master Servicer, which may be delivered by telecopy, immediately suspend all
of the rights and obligations of the Master Servicer thereafter arising under
this Agreement, but without prejudice to any rights it may have as a
Certificateholder or to reimbursement of Monthly P&I Advances and other advances
of its own funds, and the Trustee shall act as provided in Section 7.02 to carry
out the duties of the Master Servicer, including the obligation to make any
Monthly P&I Advance the nonpayment of which was an Event of Default described in
clause (vi) of this Section 7.01(a). Any such action taken by the Trustee must
be prior to the distribution on the relevant Distribution Date. If the Master
Servicer shall within two Business Days following such suspension remit to the
Trustee the amount of any Monthly P&I Advance the nonpayment of which by the
Master Servicer was an Event of Default described in clause (vi) of this Section
7.01(a), the Trustee, subject to the last sentence of this paragraph, shall
permit the Master Servicer to resume its rights and obligations as Master
Servicer hereunder. The Master Servicer agrees that it will reimburse the
Trustee for actual, necessary and reasonable costs incurred by the Trustee
because of action taken pursuant to clause (vi) of this Section 7.01(a). The
Master Servicer agrees that if an Event of Default as described in clause (vi)

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of this Section 7.01(a) shall occur more than two times in any twelve month
period, the Trustee shall be under no obligation to permit the Master Servicer
to resume its rights and obligations as Master Servicer hereunder.

(b) In case one or more of the following Events of Default by the Company shall
occur and be continuing, that is to say:

(i) Failure on the part of the Company duly to observe or perform in any
material respect any of the covenants or agreements on the part of the Company
contained in the Certificates or in this Agreement which continues unremedied
for a period of 60 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Company by the
Trustee, or to the Company and the Trustee by the Holders of Certificates
evidencing Percentage Interests aggregating not less than 25% of REMIC I; or

(ii) A decree or order of a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a trustee in bankruptcy,
conservator or receiver or liquidator in any bankruptcy, insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, shall have
been entered against the Company and such decree or order shall have remained in
force undischarged or unstayed for a period of 60 days; or

(iii) The Company shall consent to the appointment of a trustee in bankruptcy,
conservator or receiver or liquidator in any bankruptcy, insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings of or relating to the Company or of or relating to all or
substantially all of its property; or

(iv) The Company shall admit in writing its inability to pay its debts generally
as they become due, file a petition to take advantage of any applicable
bankruptcy, insolvency or reorganization statute, make an assignment for the
benefit of creditors, or voluntarily suspend payment of its obligations;

then, and in each and every such case, so long as such Event of Default shall
not have been remedied, the Holders of Certificates evidencing Percentage
Interests aggregating not less than 25% of REMIC I, by notice in writing to the
Company and the Trustee, may direct the Trustee in accordance with Section 10.03
to institute an action, suit or proceeding in its own name as Trustee hereunder
to enforce the Company's obligations hereunder.

(c) In any circumstances in which this Agreement states that Certificateholders
owning Certificates evidencing a certain percentage Percentage Interest in REMIC
I may take certain action, such action shall be taken by the Trustee, but only
if the requisite percentage of Certificateholders required under this Agreement
for taking like action or giving like instruction to the Trustee under this
Agreement shall have so directed the Trustee in writing.

Section 7.02.     Trustee to Act; Appointment of Successor.

(a) On and after the date on which the Master Servicer receives a notice of
termination pursuant to Section 7.01 or the Master Servicer resigns pursuant to
Section 6.04, the Trustee shall be the successor in all respects to the Master

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Servicer under this Agreement and under the Selling and Servicing Contracts with
respect to the Mortgage Loans in the Mortgage Pool and with respect to the
transactions set forth or provided for herein and shall have all the rights and
powers and be subject to all the responsibilities, duties and liabilities
relating thereto arising on or after such date of termination or resignation
placed on the Master Servicer by the terms and provisions hereof and thereof,
and shall have the same limitations on liability herein granted to the Master
Servicer; provided, that the Trustee shall not under any circumstances be
responsible for any representations and warranties or any Purchase Obligation of
the Company or any liability incurred by the Master Servicer prior to such date
of termination or resignation and the Trustee shall not be obligated to make a
Monthly P&I Advance if it is prohibited by law from so doing. As compensation
therefor, the Trustee shall be entitled to all funds relating to the Mortgage
Loans which the Master Servicer would have been entitled to retain or to
withdraw from the Certificate Account if the Master Servicer had continued to
act hereunder, except for those amounts due to the Master Servicer as
reimbursement for advances previously made or amounts previously expended and
are otherwise reimbursable hereunder. Notwithstanding the above, the Trustee
may, if it shall be unwilling to so act, or shall if it is unable to so act,
appoint, or petition a court of competent jurisdiction to appoint, any
established housing and home finance institution having a net worth of not less
than $10,000,000 as the successor to the Master Servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Master Servicer hereunder. Pending any such appointment, the Trustee is
obligated to act in such capacity. In connection with such appointment and
assumption, the Trustee may make such arrangements for the compensation of such
successor out of payments on Mortgage Loans as it and such successor shall
agree; provided, however, that no such compensation shall, together with the
compensation to the Trustee, be in excess of that permitted the Master Servicer
hereunder. The Trustee and such successor shall take such actions, consistent
with this Agreement, as shall be necessary to effectuate any such succession.

(b) In connection with any termination or resignation of the Master Servicer
hereunder, in the event that any of the Mortgage Loans are MERS Loans, either
(i) the successor Master Servicer (including the Trustee if the Trustee is
acting as successor Master Servicer) shall represent and warrant that it is a
member of MERS in good standing and shall agree to comply in all material
respects with the rules and procedures of MERS in connection with the servicing
of the MERS Loans, in which case the predecessor Master Servicer shall cooperate
with the successor Master Servicer in registering the transfer of servicing of
the MERS Loans to the successor Master Servicer on the MERS(R) System in
accordance with MERS' rules and procedures, or (ii) if the successor Master
Servicer is not a member of MERS, the predecessor Master Servicer shall
cooperate with the successor Master Servicer in (A) de-registering the MERS
Loans from the MERS(R) System and (B) causing MERS to execute and deliver an
assignment from MERS to the Trust of the Mortgage securing each MERS Loan in
recordable form and in the form otherwise provided under clause (X)(iii) of the
definition of "Mortgage File" herein and to execute and deliver such other
notices, documents and other instruments as may be necessary or desirable to
effect such de-registration and assignment. The predecessor Master Servicer
shall bear any and all fees of MERS and all fees and costs of preparing and
recording any assignments of Mortgages as required under this Section 7.02(b).

Section 7.03. Notification to Certificateholders. Upon any such termination or
appointment of a successor to the Master Servicer, the Trustee shall give prompt
written notice thereof to the Certificateholders at their respective addresses
appearing in the Certificate Register.

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                                  ARTICLE VIII

                            Concerning the Trustees

Section 8.01.     Duties of Trustees.

(a) The Trustee, prior to the occurrence of an Event of Default and after the
curing of all Events of Default which may have occurred, undertakes to perform
such duties and only such duties as are specifically set forth in this
Agreement. In case an Event of Default has occurred (which has not been cured or
waived) the Trustee shall exercise such of the rights and powers vested in it by
this Agreement, and use the same degree of care and skill in its exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.

(b) The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to it which
are specifically required to be furnished pursuant to any provision of this
Agreement, shall examine them to determine whether they are in the form required
by this Agreement; provided, however, that the Trustee shall not be responsible
for the accuracy or content of any such certificate, statement, opinion, report,
or other order or instrument furnished by the Company or Master Servicer to the
Trustee pursuant to this Agreement.

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

(i) Prior to the occurrence of an Event of Default and after the curing of all
such Events of Default which may have occurred, the duties and obligations of
the Trustee shall be determined solely by the express provisions of this
Agreement,

(ii) Neither the Trustee nor the Delaware Trustee shall be liable except for the
performance of such duties and obligations as are specifically set forth in this
Agreement, no implied covenants or obligations shall be read into this Agreement
against the Trustee or the Delaware Trustee, and, in the absence of bad faith on
the part of the Trustee or the Delaware Trustee, such trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to such trustee
and conforming to the requirements of this Agreement; and

(iii) Neither the Trustee nor the Delaware Trustee shall be personally liable
with respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Certificateholders holding Certificates
which evidence Percentage Interests aggregating not less than 25% of REMIC I
relating to the time, method and place of conducting any proceeding for any
remedy available to such trustee, or relating to the exercise of any trust or
power conferred upon such trustee under this Agreement.

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(d) Within ten Business Days after the occurrence of any Event of Default known
to the Trustee, the Trustee shall transmit by mail to the Rating Agencies notice
of each Event of Default. Within 90 days after the occurrence of any Event of
Default known to the Trustee, the Trustee shall transmit by mail to all
Certificateholders (with a copy to the Rating Agencies) notice of each Event of
Default, unless such Event of Default shall have been cured or waived; provided,
however, the Trustee shall be protected in withholding such notice if and so
long as a Responsible Officer of the Trustee in good faith determines that the
withholding of such notice is in the best interests of the Certificateholders;
and provided, further, that in the case of any Event of Default of the character
specified in Section 7.01(i) and Section 7.01(ii) no such notice to
Certificateholders or to the Rating Agencies shall be given until at least 30
days after the occurrence thereof.

(e) The immediately following sentence shall constitute the Trustee's notice
required by the U.S. Patriot Act. In order to comply with its duties under the
U.S. Patriot Act, the Trustee shall obtain and verify certain information and
documentation from the other parties to this Agreement including, but not
limited to, each such party's name, address, and other identifying information.

Section 8.02. Certain Matters Affecting the Trustees. Except as otherwise
provided in Section 8.01:

(i) Each of the Trustee and the Delaware Trustee may request and rely upon and
shall be protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond or other paper or document believed by it to be genuine and to
have been signed or presented by the proper party or parties;

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

(iii) Neither the Trustee nor the Delaware Trustee shall be personally liable
for any action taken or omitted by it in good faith and reasonably believed by
it to be authorized or within the discretion or rights or powers conferred upon
it by this Agreement;

(iv) Prior to the occurrence of an Event of Default hereunder and after the
curing of all Events of Default which may have occurred, neither the Trustee nor
the Delaware Trustee shall be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond or other paper or
document, unless requested in writing to do so by the Holders of Certificates
evidencing Percentage Interests aggregating not less than 25% of REMIC I;
provided, however, that if the payment within a reasonable time to the Trustee

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or the Delaware Trustee of the costs, expenses or liabilities likely to be
incurred by it in the making of such investigation is, in the opinion of such
trustee, not reasonably assured to such trustee by the security, if any,
afforded to it by the terms of this Agreement, such trustee may require
reasonable indemnity against such expense or liability as a condition to
proceeding;

(v) Each of the Trustee and the Delaware Trustee may execute the trust or any of
the powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys selected by it with reasonable care or (as in the
case of the Initial Custodian) designated by the Company;

(vi) Neither the Trustee nor the Delaware Trustee shall be deemed to have
knowledge or notice of any matter, including without limitation an Event of
Default, unless actually known by a Responsible Officer, or unless written
notice thereof referencing this Agreement or the Certificates is received at the
Notice Address of such trustee;

(vii) In no event shall the Trustee or the Delaware Trustee be held liable for
acts or omissions of the Master Servicer (excepting the Trustee's own actions as
Master Servicer). No provision of this Agreement shall require the Trustee or
the Delaware Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder (except
for the giving of required notices), or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing the repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it; and

(viii) When the Trustee is acting as Master Servicer pursuant to Section 7.02,
and to the extent permitted under applicable law, the Trustee is hereby
authorized, in making or disposing of any investment permitted hereunder, to
deal with itself (in its individual capacity) or with any one or more of its
affiliates, whether it or its affiliate is acting as an agent of the Trustee or
of any third person or dealing as principal for its own account.

Section 8.03. Trustees Not Liable for Certificates or Mortgage Loans. The
recitals contained herein (other than those relating to the due organization,
power and authority of the Trustee and the Delaware Trustee) and in the
Certificates (other than the execution of, and certificate of authentication on,
the Certificates) shall be taken as the statements of the Company and neither
the Trustee nor the Delaware Trustee assumes any responsibility for their
correctness. Neither the Trustee nor the Delaware Trustee makes any
representations as to the validity or sufficiency of this Agreement or of the
Certificates or any Mortgage Loan. Neither the Trustee nor the Delaware Trustee
shall be accountable for the use or application by the Company of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Master Servicer, the Servicers or the
Company in respect of the Mortgage Loans or deposited into the Custodial
Accounts for P&I, any Buydown Fund Account, or the Custodial Accounts for P&I by
any Servicer or into the Investment Account, or the Certificate Account by the
Master Servicer or the Company.

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Section 8.04. Trustees May Own Certificates. The Trustee, the Delaware Trustee
or any agent or affiliate of such trustee, in its individual or any other
capacity, may become the owner or pledgee of Certificates with the same rights
it would have if it were not trustee.

Section 8.05. The Master Servicer to Pay Trustees' Fees and Expenses. Subject to
separate written agreements with the Trustee and the Delaware Trustee, the
Master Servicer covenants and agrees to, and the Master Servicer shall, pay each
of the Trustee and the Delaware Trustee from time to time, and such trustee
shall be entitled to payment, for all services rendered by it in the execution
of the trust hereby created and in the exercise and performance of any of the
powers and duties hereunder of such trustee. Except as otherwise expressly
provided herein, the Master Servicer shall pay or reimburse each of the Trustee
and the Delaware Trustee upon such trustee's request for all reasonable expenses
and disbursements incurred or made by such trustee in accordance with any of the
provisions of this Agreement and indemnify such trustee from any loss, liability
or expense incurred by it hereunder (including the reasonable compensation and
the expenses and disbursements of its counsel and of all persons not regularly
in its employ) except any such expense or disbursement as may arise from its
negligence or bad faith. Such obligation shall survive the termination of this
Agreement or resignation or removal of the Trustee or the Delaware Trustee. The
Tax Matters Person shall, at its expense, prepare or cause to be prepared all
federal and state income tax and franchise tax and information returns relating
to REMIC I required to be prepared or filed by the Trustee or the Delaware
Trustee and shall indemnify the Trustee and the Delaware Trustee for any
liability of such trustees arising from any error in such returns.

Section 8.06. Eligibility Requirements for Trustees. The Trustee hereunder shall
at all times be (i) an institution insured by the FDIC, (ii) a Corporation
organized and doing business under the laws of the United States of America or
of any state, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of not less than $50,000,000 and subject
to supervision or examination by federal or state authority and (iii) acceptable
to the Rating Agencies. If such Corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of any aforementioned
supervising or examining authority, then for the purposes of this Section 8.06,
the combined capital and surplus of such Corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. The Delaware Trustee hereunder shall at all times have its
principal place of business in the State of Delaware and shall satisfy the
applicable requirements under the laws of the State of Delaware authorizing it
to act as the Delaware trustee of the Trust. In case at any time the Trustee or
the Delaware Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.06, such trustee shall resign immediately in the
manner and with the effect specified in Section 8.07.

Section 8.07. Resignation and Removal of Trustees. Each of the Trustee and the
Delaware Trustee may at any time resign and be discharged from the trust hereby
created by giving written notice thereof to the Master Servicer. Upon receiving
such notice of resignation, the Master Servicer shall promptly appoint a
successor trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning trustee and one copy to the
successor trustee. If no successor trustee shall have been so appointed and
shall have accepted appointment within 30 days after the giving of such notice
of resignation, the resigning trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.

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

The Holders of Certificates evidencing Percentage Interests aggregating more
than 50% of REMIC I may at any time remove the Trustee or the Delaware Trustee
and appoint a successor trustee by written instrument or instruments, in
triplicate, signed by such Holders or their attorneys in-fact duly authorized,
one complete set of which instruments shall be delivered to the Master Servicer,
one complete set to the Trustee so removed and one complete set to the successor
so appointed.

Any resignation or removal of the Trustee or the Delaware Trustee and
appointment of a successor trustee pursuant to any of the provisions of this
Section 8.07 shall become effective upon acceptance of appointment by the
successor trustee as provided in Section 8.08. Any expenses associated with the
resignation of the Trustee or the Delaware Trustee shall be borne by such
trustee, and any expenses associated with the removal of the Trustee or the
Delaware Trustee shall be borne by the Master Servicer.

Section 8.08. Successor Trustee. Any successor trustee appointed as provided in
Section 8.07 shall execute, acknowledge and deliver to the Master Servicer and
to its predecessor trustee an instrument accepting such appointment hereunder,
and thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if originally
named as Trustee or Delaware Trustee herein. The predecessor shall deliver to
the successor trustee all Mortgage Files, related documents, statements and all
other property held by it hereunder, and the Master Servicer and the predecessor
trustee shall execute and deliver such instruments and do such other things as
may reasonably be required for more fully and certainly vesting and confirming
in the successor trustee all such rights, powers, duties and obligations.

No successor trustee shall accept appointment as provided in this Section 8.08
unless at the time of such appointment such successor trustee shall be eligible
under the provisions of Section 8.06.

Upon acceptance of appointment by a successor trustee as provided in this
Section 8.08, the Master Servicer shall mail notice of the succession of such
trustee hereunder to (i) all Certificateholders at their addresses as shown in
the Certificate Register and (ii) the Rating Agencies. If the Master Servicer

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fails to mail such notice within ten days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed.

Section 8.09. Merger or Consolidation of Trustee. Any Corporation into which the
Trustee or the Delaware Trustee may be merged or converted or with which it may
be consolidated, or any Corporation resulting from any merger, conversion or
consolidation to which the Trustee or the Delaware Trustee shall be a party, or
any Corporation succeeding to the corporate trust business of such trustee,
shall be the successor of such trustee hereunder, provided such resulting or
successor Corporation shall be eligible under the provisions of Section 8.06,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding.

Section 8.10. Appointment of Co-Trustee or Separate Trustee. Notwithstanding any
other provisions hereof, at any time, for the purpose of meeting any legal
requirements of any jurisdiction in which any part of the assets of the Trust
may at the time be located, the Master Servicer and the Trustee or the Delaware
Trustee, as applicable, acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by such
trustee to act as co-trustee or co-trustees, jointly with such trustee, or
separate trustee or separate trustees, of all or any part of the assets of the
Trust and to vest in such Person or Persons, in such capacity, such title to the
assets of the Trust, or any part thereof, and, subject to the other provisions
of this Section 8.10, such powers, duties, obligations, rights and trusts as the
Master Servicer and the Trustee or the Delaware Trustee, as applicable, may
consider necessary or desirable; provided, that the Trustee or the Delaware
Trustee, as applicable, shall remain liable for all of its obligations and
duties under this Agreement. If the Master Servicer shall not have joined in
such appointment within 15 days after the receipt by it of a request so to do,
or in case an Event of Default shall have occurred and be continuing, the
Trustee or the Delaware Trustee, as applicable, alone shall have the power to
make such appointment; provided, that such trustee shall remain liable for all
of its obligations and duties under this Agreement. No co-trustee or separate
trustee hereunder shall be required to meet the terms of eligibility as a
successor trustee under Section 8.06 hereunder and no notice to
Certificateholders of the appointment of co-trustee(s) or separate trustee(s)
shall be required under Section 8.08 hereof.

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

Any notice, request or other writing given to the Trustee or the Delaware
Trustee shall be deemed to have been given to each of the then related separate
trustee(s) and co-trustee(s), as effectively as if given to each of them. Every

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instrument appointing any separate trustee(s) or co-trustee(s) shall refer to
this Agreement and the conditions of this Article VIII. Each separate trustee
and co-trustee, upon its acceptance of the trusts conferred, shall be vested
with the estates or property specified in its instrument of appointment, either
jointly with the Trustee or the Delaware Trustee, as applicable, or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee or the
Delaware Trustee, as applicable. Every such instrument shall be filed with the
Trustee or the Delaware Trustee, as applicable.

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

Section 8.11. Authenticating Agents. The Trustee may appoint one or more
Authenticating Agents which shall be authorized to act on behalf of the Trustee
in authenticating Certificates. Wherever reference is made in this Agreement to
the authentication of Certificates by the Trustee or the Trustee's certificate
of authentication, such reference shall be deemed to include authentication on
behalf of the Trustee by an Authenticating Agent and a certificate of
authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent must be acceptable to the Master Servicer and must be
a corporation, trust company or banking association organized and doing business
under the laws of the United States of America or of any state, having a
principal office and place of business in New York, New York, having a combined
capital and surplus of at least $15,000,000, authorized under such laws to do a
trust business and subject to supervision or examination by federal or state
authorities.

Any corporation into which any Authenticating Agent may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which any Authenticating Agent shall be a
party, or any corporation succeeding to the corporate agency business of any
Authenticating Agent, shall continue to be the Authenticating Agent so long as
it shall be eligible in accordance with the provisions of the first paragraph of
this Section 8.11 without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.

Any Authenticating Agent may at any time resign by giving written notice of
resignation to the Trustee and the Master Servicer. The Trustee may, upon prior
written approval of the Master Servicer, at any time terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Master Servicer. Upon receiving a notice of
resignation or upon such a termination, or in case at any time any
Authenticating Agent shall cease to be eligible in accordance with the
provisions of the first paragraph of this Section 8.11, the Trustee may appoint,
upon prior written approval of the Master Servicer, a successor Authenticating
Agent, shall give written notice of such appointment to the Master Servicer and

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shall mail notice of such appointment to all Certificateholders. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers, duties and responsibilities of its
predecessor hereunder, with like effect as if originally named as Authenticating
Agent. Any reasonable compensation paid to an Authenticating Agent shall be a
reimbursable expense pursuant to Section 8.05 if paid by the Trustee.

Section 8.12. Paying Agents. The Trustee may appoint one or more Paying Agents
which shall be authorized to act on behalf of the Trustee in making withdrawals
from the Certificate Account, and distributions to Certificateholders as
provided in Section 4.01(a) and Section 9.01(b) to the extent directed to do so
by the Master Servicer. Wherever reference is made in this Agreement to the
withdrawal from the Certificate Account by the Trustee, such reference shall be
deemed to include such a withdrawal on behalf of the Trustee by a Paying Agent.
Whenever reference is made in this Agreement to a distribution by the Trustee or
the furnishing of a statement to Certificateholders by the Trustee, such
reference shall be deemed to include such a distribution or furnishing on behalf
of the Trustee by a Paying Agent. Each Paying Agent shall provide to the Trustee
such information concerning the Certificate Account as the Trustee shall request
from time to time. Each Paying Agent must be reasonably acceptable to the Master
Servicer and must be a corporation, trust company or banking association
organized and doing business under the laws of the United States of America or
of any state, having a principal office and place of business in New York, New
York, having a combined capital and surplus of at least $15,000,000, authorized
under such laws to do a trust business and subject to supervision or examination
by federal or state authorities.

Any corporation into which any Paying Agent may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which any Paying Agent shall be a party, or any
corporation succeeding to the corporate agency business of any Paying Agent,
shall continue to be the Paying Agent provided that such corporation after the
consummation of such merger, conversion, consolidation or succession meets the
eligibility requirements of this Section 8.12.

Any Paying Agent may at any time resign by giving written notice of resignation
to the Trustee and to the Master Servicer; provided, that the Paying Agent has
returned to the Certificate Account or otherwise accounted, to the reasonable
satisfaction of the Master Servicer, for all amounts it has withdrawn from the
Certificate Account. The Trustee may, upon prior written approval of the Master
Servicer, at any time terminate the agency of any Paying Agent by giving written
notice of termination to such Paying Agent and to the Master Servicer. Upon
receiving a notice of resignation or upon such a termination, or in case at any
time any Paying Agent shall cease to be eligible in accordance with the
provisions of the first paragraph of this Section 8.12, the Trustee may appoint,
upon prior written approval of the Master Servicer, a successor Paying Agent,
shall give written notice of such appointment to the Master Servicer and shall
mail notice of such appointment to all Certificateholders. Any successor Paying
Agent upon acceptance of its appointment hereunder shall become vested with all
the rights, powers, duties and responsibilities of its predecessor hereunder,
with like effect as if originally named as Paying Agent. Any reasonable
compensation paid to any Paying Agent shall be a reimbursable expense pursuant
to Section 8.05 if paid by the Trustee.

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Section 8.13.     Duties of Delaware Trustee.

(a) The Delaware Trustee is appointed to serve as the trustee of the Trust in
the State of Delaware for the sole purpose of satisfying the requirement of
Section 3807(a) of the Statutory Trust Statute that the Trust have at least one
trustee with a principal place of business in Delaware. It is understood and
agreed by the parties hereto that the Delaware Trustee shall have none of the
duties or liabilities of the Trustee.

(b) The duties of the Delaware Trustee shall be limited to (i) accepting legal
process served on the Trust in the State of Delaware, (ii) the execution of any
certificates with respect to the Trust required to be filed with the Secretary
of State which the Delaware Trustee is required to execute under Section 3811 of
the Statutory Trust Statute and (iii) such other duties as are set forth in this
Article VIII. To the extent that, at law or in equity, the Delaware Trustee has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or the Holders of the Certificates, it is hereby understood and agreed by
the parties hereto that such duties and liabilities are replaced by the duties
and liabilities of the Delaware Trustee expressly set forth in this Agreement.

Section 8.14. Amendment to Certificate of Trust. If at any time required by
Section 3810 of the Statutory Trust Statute, the Trustee, the Delaware Trustee
and any other trustee of the Trust shall cause an amendment to the Certificate
of Trust to be filed with the Secretary of State in accordance with the
provisions of such Section 3810.

                                   ARTICLE IX

                                  Termination

Section 9.01. Termination Upon Purchase by the Master Servicer or Liquidation of
All Mortgage Loans.

(a) Except as otherwise set forth in this Article IX, including, without
limitation, the obligation of the Master Servicer to make payments to
Certificateholders as hereafter set forth, the Trust and the respective
obligations and responsibilities of the Company, the Master Servicer, the
Trustee and the Delaware Trustee created hereby shall terminate in accordance
with Section 3808 of the Statutory Trust Statute upon (i) the purchase by the
Master Servicer pursuant to the following paragraph of this Section 9.01(a) of
all Mortgage Loans (other than Liquidated Mortgage Loans), all property acquired
in respect of any Mortgage Loan remaining in the Trust and all other property
included in the REMIC formed under this Agreement at a price equal, after the
deduction of related advances, to the sum of (x) the excess of (A) 100% of the
aggregate outstanding Principal Balance of such Mortgage Loans (other than
Liquidated Mortgage Loans) plus accrued interest at the applicable Pass-Through
Rate with respect to such Mortgage Loan (other than a Liquidated Mortgage Loan)
through the last day of the month of such purchase, over (B) with respect to any
Mortgage Loan which is not a Liquidated Mortgage Loan, the amount of the
Bankruptcy Loss incurred with respect to such Mortgage Loan as of the date of
such purchase by the Master Servicer to the extent that the Principal Balance of
such Mortgage Loan has not been previously reduced by such Bankruptcy Loss, and
(y) the appraised fair market value as of the effective date of the termination
of the Trust of (A) all property in the Trust which secured a Mortgage Loan and
which was acquired by foreclosure or deed in lieu of foreclosure after the
Cut-Off Date, including related Insurance Proceeds, and (B) all other property
included in the REMIC formed under this Agreement, any such appraisal to be

                                       96
<PAGE>

conducted by an appraiser mutually agreed upon by the Master Servicer and the
Trustee, or (ii) the later of the final payment or other liquidation (or any
advance with respect thereto) of the last Mortgage Loan remaining in the Trust
or the disposition of all property acquired upon foreclosure in respect of any
Mortgage Loan, and the payment to the Certificateholders of all amounts required
to be paid to them hereunder; provided, however, that in no event shall the
Trust continue beyond the expiration of 21 years from the death of the survivor
of the issue of Joseph P. Kennedy, the late ambassador of the United States to
the Court of St. James, living on the date hereof.

On any Distribution Date after the first date on which the aggregate Principal
Balance of the Mortgage Loans is less than the Clean-Up Call Percentage of the
aggregate Principal Balance of the Mortgage Loans as of the Cut-Off Date, the
Master Servicer may purchase the outstanding Mortgage Loans (other than
Liquidated Mortgage Loans), all property acquired in respect of any Mortgage
Loan remaining in the Trust and all other property included in the REMIC formed
under this Agreement at the price stated in clause (i) of the preceding
paragraph; provided, that the Master Servicer may not so purchase the
outstanding Mortgage Loans (other than Liquidated Mortgage Loans), all property
acquired in respect of any Mortgage Loan remaining in the Trust and all other
property included in the REMIC formed under this Agreement if the price stated
in clause (i) of the preceding paragraph exceeds the fair market value,
determined in accordance with prudent industry practices, of all outstanding
Mortgage Loans (other than Liquidated Mortgage Loans), all property acquired in
respect of any Mortgage Loan remaining in the Trust and all other property
included in the REMIC formed under this Agreement. If such right is exercised,
the Master Servicer shall provide to the Trustee (and to the Company, if the
Company is no longer acting as Master Servicer) the written certification of an
officer of the Master Servicer (which certification shall include a statement to
the effect that all amounts required to be paid in order to purchase the
Mortgage Loans have been deposited in the Certificate Account) and the Trustee
on behalf of the Trust shall promptly execute all instruments as may be
necessary to release and assign to the Master Servicer the Mortgage Files and
any foreclosed Mortgaged Property pertaining to the Trust.

In no event shall the Master Servicer be required to expend any amounts other
than those described in the first paragraph of this Section 9.01(a) in order to
terminate the Trust or purchase the Mortgage Loans under this Section 9.01, and
in no event shall the Company be required to expend any amounts in connection
with such termination or purchase.

(b) In the event that the Master Servicer elects to exercise its purchase option
as provided in Section 9.01(a), the Master Servicer shall provide to the Trustee
and the Delaware Trustee (and to the Company, if the Company is no longer acting
as Master Servicer) notice thereof not less than 40 days prior to the date of
the final distribution to Certificateholders. Notice of such purchase,
specifying the date upon which the Certificateholders may surrender their
Certificates to the Trustee for payment and cancellation, shall be given
promptly by letter from the Trustee to Certificateholders mailed not less than
30 days prior to such final distribution, specifying (i) the date upon which

                                       97
<PAGE>

final payment of the Certificates will be made upon presentation and surrender
of Certificates at the office of the Certificate Registrar therein designated
(the "Termination Date"), (ii) the amount of such final payment (the
"Termination Payment") and (iii) that the Record Date otherwise applicable to
the Distribution Date upon which the Termination Date occurs is not applicable,
payments being made only upon presentation and surrender of the Certificates at
the office of the Certificate Registrar therein specified. Upon any such notice,
the Certificate Account shall terminate subject to the Master Servicer's
obligation to hold all amounts payable to Certificateholders in trust without
interest pending such payment.

In the event that all of the Certificateholders shall not surrender their
Certificates for cancellation within six months after the Termination Date, the
Master Servicer shall give a second written notice to the remaining
Certificateholders to surrender their Certificates for cancellation and receive
the Termination Payment with respect thereto. If within one year after the
second notice all the Certificates shall not have been surrendered for
cancellation, the Master Servicer may take appropriate steps to contact the
remaining Certificateholders concerning surrender of their Certificates, and the
cost thereof shall be paid out of the funds and other assets which remain in
trust hereunder.

Upon the completion of winding up of the Trust, including the payment or the
making reasonable provision for payment of all obligations of the Trust in
accordance with Section 3808(e) of the Statutory Trust Statute, the Trustee, the
Delaware Trustee and any other trustee hereunder shall file a certificate of
cancellation with the Secretary of State in accordance with Section 3810 of the
Statutory Trust Statute, at which time the Trust and this Agreement shall
terminate. The Master Servicer shall act as the liquidator of the Trust and
shall be responsible for taking all actions in connection with winding up the
Trust, in accordance with the requirements of this Agreement (including Section
9.02) and applicable law.

Section 9.02.     Additional Termination Requirements.

(a) In the event the Master Servicer exercises its purchase option as provided
in Section 9.01, REMIC I shall be terminated in accordance with the following
additional requirements, unless the Master Servicer, at its own expense, obtains
for the Trustee an Opinion of Counsel to the effect that the failure of REMIC I
to comply with the requirements of this Section 9.02 will not (i) result in the
imposition of taxes on "prohibited transactions" of REMIC I as described in
Section 860F of the Code, or (ii) cause REMIC I to fail to qualify as a REMIC at
any time that any Certificates are outstanding:

(i) Within 90 days prior to the final Distribution Date set forth in the notice
given by the Trustee under Section 9.01, the Tax Matters Person shall prepare
the documentation required and the Tax Matters Person and the Trustee shall
adopt a plan of complete liquidation on behalf of REMIC I meeting the
requirements of a qualified liquidation under Section 860F of the Code and any
regulations thereunder, as evidenced by an Opinion of Counsel obtained at the
expense of the Master Servicer, on behalf of REMIC I; and

(ii) At or after the time of adoption of such a plan of complete liquidation and
at or prior to the final Distribution Date, the Master Servicer on behalf of the
Trust shall sell all of the assets of REMIC I to the Master Servicer for cash in
the amount specified in Section 9.01.

                                       98
<PAGE>

(b) By its acceptance of any Residual Certificate, the Holder thereof hereby
agrees to authorize the Tax Matters Person and the Trustee to adopt such a plan
of complete liquidation and to take such other action in connection therewith as
may be reasonably necessary.

Section 9.03. Trust Irrevocable. Except as expressly provided herein, the trust
created hereby is irrevocable.

                                   ARTICLE X

                            Miscellaneous Provisions

Section 10.01.    Amendment.

(a) This Agreement may be amended from time to time by the Master Servicer, the
Company and the Trustee, without the consent of any of the Certificateholders:

(i) to cure any ambiguity;

(ii) to correct or supplement any provision herein which may be defective or
inconsistent with any other provisions herein;

(iii) to comply with any requirements imposed by the Code or any regulations
thereunder;

(iv) to correct the description of any property at any time included in REMIC I,
or to assure the conveyance to the Trust of any property included in REMIC I;

(v) pursuant to Section 5.01(c)(v); and

(vi) to add any provision to, or amend any provision in, this Agreement,
provided that such amendment or addition does not adversely affect in any
material respect the interests of any Certificateholder;

provided, however, that any such amendment which modifies the rights or
obligations of the Delaware Trustee hereunder shall require the consent of the
Delaware Trustee. No such amendment (other than one entered into pursuant to
clause (iii) of the preceding sentence) shall change the powers of the Master
Servicer. Prior to entering into any amendment (other than one entered into
pursuant to clause (iii) of the second preceding sentence) without the consent
of Certificateholders pursuant to this paragraph, the Trustee shall require an
Opinion of Counsel addressed to the Trust and the Trustee to the effect that
such amendment is permitted under this Agreement and has no material adverse
effect on the interests of the Certificateholders; provided, however, that no
such Opinion of Counsel shall be required if the Company obtains a letter from
each Rating Agency stating that the amendment would not result in the
downgrading or withdrawal of the respective ratings then assigned to the

                                       99
<PAGE>

Certificates. Prior to entering into any amendment pursuant to clause (iii) of
the third preceding sentence without the consent of Certificateholders pursuant
to this paragraph, the Trustee shall require an Opinion of Counsel to the effect
that such action is necessary or helpful to comply with the requirements imposed
by the Code or any regulations thereunder and shall not cause the REMIC formed
under this Agreement to fail to qualify as such under the Code.

(b) This Agreement may also be amended from time to time by the Master Servicer,
the Company and the Trustee with the consent of the Holders of Certificates
evidencing Percentage Interests aggregating not less than 66% of REMIC I for the
purpose of adding any provisions to, or changing in any manner or eliminating
any of the provisions of, this Agreement or of modifying in any manner the
rights of the Certificateholders; provided, however, that no such amendment
shall, without the consent of the Holder of each Certificate affected thereby
(i) reduce in any manner the amount of, or delay the timing of, distributions of
principal or interest required to be made hereunder or reduce the
Certificateholder's Percentage Interest, the Certificate Interest Rate or the
Termination Payment with respect to any of the Certificates, (ii) reduce the
percentage of Percentage Interests specified in this Section 10.01 which are
required to amend this Agreement, (iii) create or permit the creation of any
lien against any part of REMIC I, or (iv) modify any provision in any way which
would permit an earlier retirement of the Certificates; provided, further, that
any such amendment which modifies the rights or obligations of the Delaware
Trustee hereunder shall require the consent of the Delaware Trustee.

Promptly after the execution of any such amendment, the Trustee shall furnish
written notification of the substance of such amendment to the Delaware Trustee
and each Certificateholder. Any failure to provide such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any
such amendment.

It shall not be necessary for the consent of Certificateholders under this
Section 10.01 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.

Section 10.02. Recordation of Agreement. To the extent permitted by applicable
law, this Agreement is subject to recordation in all appropriate public offices
for real property records in all the counties or the comparable jurisdictions in
which any Mortgaged Property is situated, and in any other appropriate public
recording office or elsewhere, such recordation to be effected by the Company
and at its expense only if such recordation is reasonably necessary or required
to effectuate the duties and powers of the Master Servicer provided to it under
this Agreement.

Section 10.03. Limitation on Rights of Certificateholders. The death or
incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding-up of the Trust, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.

No Certificateholder shall have any right to vote or in any manner otherwise to
control the operation and management of the Trust or the obligations of the
parties hereto (except as provided in Section 5.09, Section 7.01, Section 8.01,
Section 8.02, Section 8.07, Section 10.01 and this Section 10.03), nor shall
anything herein set forth, or contained in the terms of the Certificates, be

                                      100
<PAGE>

construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.

No Certificateholder shall have any right by virtue or by availing of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of default
and of the continuance thereof, as hereinbefore provided, and unless also the
Holders of Certificates evidencing Percentage Interests aggregating not less
than 25% of REMIC I shall have made written request upon the Trustee to
institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee such reasonable indemnity as it may
require against the costs, expenses and liabilities to be incurred therein or
thereby, and the Trustee, for 60 days after its receipt of such notice, request
and offer of indemnity, shall have neglected or refused to institute any such
action, suit or proceeding. However, the Trustee is under no obligation to
exercise any of the extraordinary trusts or powers vested in it by this
Agreement or to make any investigation of matters arising hereunder or to
institute, conduct or defend any litigation hereunder or in relation hereto at
the request, order or direction of any of the Certificateholders unless such
Certificateholders have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which may be incurred therein or
thereby. It is understood and intended, and expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more Holders of Certificates shall have any right in any manner whatever
by virtue or by availing of any provision of this Agreement to affect, disturb
or prejudice the rights of the Holders of any other of such Certificates, or to
obtain or seek to obtain priority over or preference to any other such Holder,
or to enforce any right under this Agreement, except in the manner herein
provided and for the equal, ratable and common benefit of all
Certificateholders. For the protection and enforcement of the provisions of this
Section 10.03, each and every Certificateholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.

Section 10.04. Access to List of Certificateholders. The Certificate Registrar
shall furnish or cause to be furnished to the Trustee, within 30 days after
receipt of a request by the Trustee in writing, a list, in such form as the
Trustee may reasonably require, of the names and addresses of the
Certificateholders as of the most recent Record Date for payment of
distributions to such Certificateholders.

If three or more Certificateholders (hereinafter referred to as "applicants")
apply in writing to the Trustee, and such application states that the applicants
desire to communicate with other Certificateholders with respect to their rights
under this Agreement or under the Certificates and is accompanied by a copy of
the communication which such applicants propose to transmit, then the Trustee
shall, within five Business Days after the receipt of such list from the
Certificate Registrar, afford such applicants access during normal business
hours to the most recent list of Certificateholders held by the Trustee. If such
a list is as of a date more than 90 days prior to the date of receipt of such
applicants' request, the Trustee shall promptly request from the Certificate
Registrar a current list as provided above, and shall afford such applicants
access to such list promptly upon receipt.

                                      101
<PAGE>

Every Certificateholder, by receiving and holding the same, agrees with the
Master Servicer, the Trust, the Trustee and the Delaware Trustee that none of
the Master Servicer, the Trust, the Trustee or the Delaware Trustee shall be
held accountable by reason of the disclosure of any such information as to the
names and addresses of the Certificateholders hereunder, regardless of the
source from which such information was derived.

Section 10.05. Governing Law. This Agreement shall be construed in accordance
with the laws of the State of Delaware without giving effect to its conflict of
law provisions and the obligations, rights and remedies of the parties hereunder
shall be determined in accordance with such laws without giving effect to
conflict of laws provisions.

Section 10.06. Notices. All demands, notices and communications hereunder shall
be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by registered or certified mail to the applicable Notice
Address. Notices to the Rating Agencies shall also be deemed to have been duly
given if mailed by first class mail, postage prepaid, to the above listed
addresses of the Rating Agencies. Any notice required or permitted to be mailed
to a Certificateholder shall be given by first class mail, postage prepaid, at
the address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder receives
such notice.

Section 10.07. Severability of Provisions. If any one or more of the covenants,
agreements, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions
or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the Holders thereof.
Section 10.08. Counterpart Signatures. For the purpose of facilitating the
recordation of this Agreement as herein provided and for other purposes, this
Agreement may be executed simultaneously in any number of counterparts, each of
which counterparts shall be deemed to be an original, and such counterparts
shall constitute but one and the same instrument.

Section 10.09. Benefits of Agreement. Nothing in this Agreement or in any
Certificate, expressed or implied, shall give to any Person, other than the
parties hereto and their respective successors hereunder, any separate trustee
or co-trustee appointed under Section 8.10 and the Certificateholders, any
benefit or any legal or equitable right, remedy or claim under this Agreement.

Section 10.10.    Notices and Copies to Rating Agencies.

(a) The Trustee shall notify the Rating Agencies of the occurrence of any of the
following events, in the manner provided in Section 10.06:

(i) the occurrence of an Event of Default pursuant to Section 7.01, subject to
the provisions of Section 8.01(d); and

(ii) the appointment of a successor Master Servicer pursuant to Section 7.02;

                                      102
<PAGE>

(b) The Master Servicer shall notify the Rating Agencies of the occurrence of
any of the following events, or in the case of clauses (iii), (iv), (vii) and
(viii) promptly upon receiving notice thereof, in the manner provided in Section
10.06:

(i) any amendment of this Agreement pursuant to Section 10.01;

(ii) the appointment of a successor Trustee or successor Delaware Trustee
pursuant to Section 8.08;

(iii) the filing of any claim under or the cancellation or modification of any
fidelity bond and errors and omissions coverage pursuant to Section 3.01 and
Section 3.06 with respect to the Master Servicer or any Servicer;

(iv) any change in the location of the Certificate Account, any Custodial
Account for P&I or any Custodial Account for Reserves;

(v) the purchase of any Mortgage Loan pursuant to a Purchase Obligation or as
permitted by this Agreement or the purchase of the outstanding Mortgage Loans
pursuant to Section 9.01;

(vi) the occurrence of the final Distribution Date or the termination of the
trust pursuant to Section 9.01(a)(ii);

(vii) the failure of the Master Servicer to make a Monthly P&I Advance following
a determination on the Determination Date that the Master Servicer would make
such advance pursuant to Section 4.02; and

(viii) the failure of the Master Servicer to make a determination on the
Determination Date regarding whether it would make a Monthly P&I Advance when a
shortfall exists between (x) payments scheduled to be received in respect of the
Mortgage Loans and (y) the amounts actually deposited in the Certificate Account
on account of such payments, pursuant to Section 4.02.

The Master Servicer shall provide copies of the statements pursuant to Section
4.02, Section 4.04, Section 3.12, Section 3.13 or Section 3.15 or any other
statements or reports to the Rating Agencies in such time and manner that such
statements or determinations are required to be provided to Certificateholders.
With respect to the reports described in the second paragraph of Section 4.04,
the Master Servicer shall provide such reports to the Rating Agencies in respect
of each Distribution Date, without regard to whether any Certificateholder or
the Trustee or the Delaware Trustee has requested such report for such
Distribution Date.

                                      103
<PAGE>

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

                              WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.

                              By: /s/ Barbara Loper
                                   Name:  Barbara Loper
                                   Title: Vice President

                              DEUTSCHE BANK NATIONAL TRUST COMPANY,
                              as Trustee

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

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

                              DEUTSCHE BANK TRUST COMPANY DELAWARE,
                              as Delaware Trustee

                              By: /s/ Elizabeth B. Ferry
                                   Name:  Elizabeth B. Ferry
                                   Title: Assistant Vice President

   [Signature page to Pooling and Servicing Agreement for WaMu Series 2004-AR2]

<PAGE>

                                                               Exhibit A
                                                               CUSIP 92922F NW 4

                     WaMu MORTGAGE PASS-THROUGH CERTIFICATE

                                     Class A

Evidencing a beneficial interest in a pool of assets consisting of, among other
things, conventional one- to four-family mortgage loans formed and administered
by

                   WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.

This Certificate is issued by WaMu Mortgage Pass-Through Certificates Series
2004-AR2 Trust. This Certificate represents ownership of a "regular interest" in
a "real estate mortgage investment conduit," as those terms are defined in
Sections 860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended. The issue date of this Certificate is April 28, 2004.

Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company or its
agent for registration of transfer, exchange, or payment, and any Certificate
issued is registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.

         Series                     2004-AR2 Portion of the Class A Principal
                                    Balance as of the Cut-Off Date Evidenced by
                                    this Certificate:
                                    $-------------------

Class A Certificate Interest Rate: Variable

Cut-Off Date: April 1, 2004

First Distribution Date: May 25, 2004

Last Scheduled Distribution Date: April 25, 2044

Class A Principal Balance
as of the Cut-Off Date: $574,152,300.00

                                   Cede & Co.
                                Registered Owner
                               Certificate No. ___

                                      A-1
<PAGE>

                                                               Exhibit A
                                                               CUSIP 92922F NX 2

                     WaMu MORTGAGE PASS-THROUGH CERTIFICATE

                                    Class B-1

Evidencing a beneficial interest in a pool of assets consisting of, among other
things, conventional one- to four-family mortgage loans formed and administered
by

                   WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.

This Certificate is issued by WaMu Mortgage Pass-Through Certificates Series
2004-AR2 Trust. This Certificate represents ownership of a "regular interest" in
a "real estate mortgage investment conduit," as those terms are defined in
Sections 860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended (the "Code"). The issue date of this Certificate is April 28, 2004.

Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company or its
agent for registration of transfer, exchange, or payment, and any Certificate
issued is registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.

NO TRANSFER OF THIS CLASS B-1 CERTIFICATE WILL BE MADE UNLESS THE TRUSTEE HAS
RECEIVED (I) AN OFFICER'S CERTIFICATE IN THE FORM DESCRIBED IN SECTION 5.01(g)
OF THE POOLING AGREEMENT AND (II) IF SO INDICATED IN SUCH OFFICER'S CERTIFICATE,
AN OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE SATISFACTORY TO
THE TRUSTEE AND THE COMPANY TO THE EFFECT THAT THE PURCHASE AND HOLDING OF THIS
CERTIFICATE ARE PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT
IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION
4975 OF THE CODE, AND WILL NOT SUBJECT THE TRUST, THE TRUSTEE, THE MASTER
SERVICER OR THE COMPANY TO ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR
LIABILITIES UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE) IN ADDITION
TO THOSE UNDERTAKEN IN THE POOLING AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT
BE AN EXPENSE OF THE TRUST, THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY.

NOTWITHSTANDING THE FOREGOING PARAGRAPH, WITH RESPECT TO THE TRANSFER OF THIS
CLASS B-1 CERTIFICATE TO DTC OR ANY OTHER CLEARING AGENCY OR ANY SUBSEQUENT
TRANSFER OF ANY INTEREST IN THIS CERTIFICATE FOR SO LONG AS THIS CERTIFICATE IS
HELD BY DTC OR ANY OTHER CLEARING AGENCY, (I) AN OFFICER'S CERTIFICATE (AND, IF
APPLICABLE, A BENEFIT PLAN OPINION), AS DESCRIBED IN THE FOREGOING PARAGRAPH,
SHALL NOT BE REQUIRED, AND (II) THE FOLLOWING CONDITIONS SHALL APPLY:

                  1. ANY TRANSFEREE OF THIS CERTIFICATE WILL BE DEEMED TO HAVE
         REPRESENTED, BY VIRTUE OF ITS ACQUISITION OR HOLDING OF THIS
         CERTIFICATE (OR INTEREST HEREIN), THAT EITHER (A) SUCH TRANSFEREE IS
         NOT AN EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO THE PROHIBITED
         TRANSACTION PROVISIONS OF ERISA OR SECTION 4975 OF THE CODE, OR ANY
         PERSON (INCLUDING AN INVESTMENT MANAGER, A NAMED FIDUCIARY OR A TRUSTEE
         OF ANY SUCH PLAN) ACTING, DIRECTLY OR INDIRECTLY, ON BEHALF OF OR
         PURCHASING THIS CERTIFICATE WITH "PLAN ASSETS" OF ANY SUCH PLAN (A
         "PLAN INVESTOR"), (B) SUCH TRANSFEREE IS AN INSURANCE COMPANY, THE
         SOURCE OF FUNDS TO BE USED BY IT TO ACQUIRE OR HOLD THIS CERTIFICATE IS
         AN "INSURANCE COMPANY GENERAL ACCOUNT" (WITHIN THE MEANING OF
         DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE")
         95-60), AND THE CONDITIONS IN SECTION I AND III OF PTCE 95-60 HAVE BEEN
         SATISFIED (EACH ENTITY THAT SATISFIES THIS CLAUSE (B), A "COMPLYING
         INSURANCE COMPANY") OR (C) THIS CERTIFICATE WAS RATED "BBB-" OR BETTER
         (OR ITS EQUIVALENT) BY AT LEAST ONE OF THE RATING AGENCIES AT THE TIME
         OF SUCH TRANSFEREE'S ACQUISITION OF THIS CERTIFICATE (OR INTEREST
         HEREIN); AND

                  2. IF THIS CERTIFICATE (OR ANY INTEREST HEREIN) IS ACQUIRED OR
         HELD IN VIOLATION OF THE PROVISIONS OF THE PRECEDING PARAGRAPH, THEN
         THE LAST PRECEDING TRANSFEREE THAT EITHER (I) IS NOT A PLAN INVESTOR,
         (II) IS A COMPLYING INSURANCE COMPANY OR (III) ACQUIRED THIS
         CERTIFICATE AT A TIME WHEN THIS CERTIFICATE WAS RATED "BBB-" OR BETTER
         (OR ITS EQUIVALENT) BY AT LEAST ONE OF THE RATING AGENCIES SHALL BE
         RESTORED, TO THE EXTENT PERMITTED BY LAW, TO ALL RIGHTS AND OBLIGATIONS
         AS BENEFICIAL HOLDER THEREOF RETROACTIVE TO THE DATE OF TRANSFER OF
         THIS CERTIFICATE BY SUCH PRECEDING TRANSFEREE. NEITHER THE TRUST NOR

                                      A-2
<PAGE>

         THE TRUSTEE SHALL BE UNDER ANY LIABILITY TO ANY PERSON FOR MAKING ANY
         PAYMENTS DUE ON THIS CERTIFICATE TO SUCH PRECEDING TRANSFEREE.

ANY PURPORTED BENEFICIAL HOLDER WHOSE ACQUISITION OR HOLDING OF THIS CERTIFICATE
(OR INTEREST HEREIN) WAS EFFECTED IN VIOLATION OF THE RESTRICTIONS IN SECTION
5.01(g) OF THE POOLING AGREEMENT SHALL INDEMNIFY AND HOLD HARMLESS THE COMPANY,
THE TRUSTEE, THE MASTER SERVICER, THE TRUST AND THE UNDERWRITERS FROM AND
AGAINST ANY AND ALL LIABILITIES, CLAIMS, COSTS OR EXPENSES INCURRED BY SUCH
PARTIES AS A RESULT OF SUCH ACQUISITION OR HOLDING.

The Class B-1 Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as described in the
Pooling Agreement.

Series               2004-AR2 Portion of the Class B-1 Principal Balance as of
                     the Cut-Off Date Evidenced by this Certificate:
                     $13,063,000.00

Class B-1 Certificate Interest Rate: Variable

Cut-Off Date: April 1, 2004

First Distribution Date: May 25, 2004

Last Scheduled Distribution Date: April 25, 2044

Class B-1 Principal Balance
as of the Cut-Off Date: $13,063,000.00

                                   Cede & Co.
                                Registered Owner

                                      A-3
<PAGE>
                                                           Exhibit A
                                                           CUSIP 92922F NY 0

                     WaMu MORTGAGE PASS-THROUGH CERTIFICATE

                                    Class B-2

Evidencing a beneficial interest in a pool of assets consisting of, among other
things, conventional one- to four-family mortgage loans formed and administered
by

                   WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.

This Certificate is issued by WaMu Mortgage Pass-Through Certificates Series
2004-AR2 Trust. This Certificate represents ownership of a "regular interest" in
a "real estate mortgage investment conduit," as those terms are defined in
Sections 860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended (the "Code"). The issue date of this Certificate is April 28, 2004.

Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company or its
agent for registration of transfer, exchange, or payment, and any Certificate
issued is registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.

NO TRANSFER OF THIS CLASS B-2 CERTIFICATE WILL BE MADE UNLESS THE TRUSTEE HAS
RECEIVED (I) AN OFFICER'S CERTIFICATE IN THE FORM DESCRIBED IN SECTION 5.01(g)
OF THE POOLING AGREEMENT AND (II) IF SO INDICATED IN SUCH OFFICER'S CERTIFICATE,
AN OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE SATISFACTORY TO
THE TRUSTEE AND THE COMPANY TO THE EFFECT THAT THE PURCHASE AND HOLDING OF THIS
CERTIFICATE ARE PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT
IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION
4975 OF THE CODE, AND WILL NOT SUBJECT THE TRUST, THE TRUSTEE, THE MASTER
SERVICER OR THE COMPANY TO ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR
LIABILITIES UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE) IN ADDITION
TO THOSE UNDERTAKEN IN THE POOLING AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT
BE AN EXPENSE OF THE TRUST, THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY.

NOTWITHSTANDING THE FOREGOING PARAGRAPH, WITH RESPECT TO THE TRANSFER OF THIS
CLASS B-2 CERTIFICATE TO DTC OR ANY OTHER CLEARING AGENCY OR ANY SUBSEQUENT
TRANSFER OF ANY INTEREST IN THIS CERTIFICATE FOR SO LONG AS THIS CERTIFICATE IS
HELD BY DTC OR ANY OTHER CLEARING AGENCY, (I) AN OFFICER'S CERTIFICATE (AND, IF
APPLICABLE, A BENEFIT PLAN OPINION), AS DESCRIBED IN THE FOREGOING PARAGRAPH,
SHALL NOT BE REQUIRED, AND (II) THE FOLLOWING CONDITIONS SHALL APPLY:

                  1. ANY TRANSFEREE OF THIS CERTIFICATE WILL BE DEEMED TO HAVE
         REPRESENTED, BY VIRTUE OF ITS ACQUISITION OR HOLDING OF THIS
         CERTIFICATE (OR INTEREST HEREIN), THAT EITHER (A) SUCH TRANSFEREE IS
         NOT AN EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO THE PROHIBITED
         TRANSACTION PROVISIONS OF ERISA OR SECTION 4975 OF THE CODE, OR ANY
         PERSON (INCLUDING AN INVESTMENT MANAGER, A NAMED FIDUCIARY OR A TRUSTEE
         OF ANY SUCH PLAN) ACTING, DIRECTLY OR INDIRECTLY, ON BEHALF OF OR
         PURCHASING THIS CERTIFICATE WITH "PLAN ASSETS" OF ANY SUCH PLAN (A
         "PLAN INVESTOR"), (B) SUCH TRANSFEREE IS AN INSURANCE COMPANY, THE
         SOURCE OF FUNDS TO BE USED BY IT TO ACQUIRE OR HOLD THIS CERTIFICATE IS
         AN "INSURANCE COMPANY GENERAL ACCOUNT" (WITHIN THE MEANING OF
         DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE")
         95-60), AND THE CONDITIONS IN SECTION I AND III OF PTCE 95-60 HAVE BEEN
         SATISFIED (EACH ENTITY THAT SATISFIES THIS CLAUSE (B), A "COMPLYING
         INSURANCE COMPANY") OR (C) THIS CERTIFICATE WAS RATED "BBB-" OR BETTER
         (OR ITS EQUIVALENT) BY AT LEAST ONE OF THE RATING AGENCIES AT THE TIME
         OF SUCH TRANSFEREE'S ACQUISITION OF THIS CERTIFICATE (OR INTEREST
         HEREIN); AND

                  2. IF THIS CERTIFICATE (OR ANY INTEREST HEREIN) IS ACQUIRED OR
         HELD IN VIOLATION OF THE PROVISIONS OF THE PRECEDING PARAGRAPH, THEN
         THE LAST PRECEDING TRANSFEREE THAT EITHER (I) IS NOT A PLAN INVESTOR,

                                      A-4
<PAGE>

         (II) IS A COMPLYING INSURANCE COMPANY OR (III) ACQUIRED THIS
         CERTIFICATE AT A TIME WHEN THIS CERTIFICATE WAS RATED "BBB-" OR BETTER
         (OR ITS EQUIVALENT) BY AT LEAST ONE OF THE RATING AGENCIES SHALL BE
         RESTORED, TO THE EXTENT PERMITTED BY LAW, TO ALL RIGHTS AND OBLIGATIONS
         AS BENEFICIAL HOLDER THEREOF RETROACTIVE TO THE DATE OF TRANSFER OF
         THIS CERTIFICATE BY SUCH PRECEDING TRANSFEREE. NEITHER THE TRUST NOR
         THE TRUSTEE SHALL BE UNDER ANY LIABILITY TO ANY PERSON FOR MAKING ANY
         PAYMENTS DUE ON THIS CERTIFICATE TO SUCH PRECEDING TRANSFEREE.

ANY PURPORTED BENEFICIAL HOLDER WHOSE ACQUISITION OR HOLDING OF THIS CERTIFICATE
(OR INTEREST HEREIN) WAS EFFECTED IN VIOLATION OF THE RESTRICTIONS IN SECTION
5.01(g) OF THE POOLING AGREEMENT SHALL INDEMNIFY AND HOLD HARMLESS THE COMPANY,
THE TRUSTEE, THE MASTER SERVICER, THE TRUST AND THE UNDERWRITERS FROM AND
AGAINST ANY AND ALL LIABILITIES, CLAIMS, COSTS OR EXPENSES INCURRED BY SUCH
PARTIES AS A RESULT OF SUCH ACQUISITION OR HOLDING.

The Class B-2 Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as described in the
Pooling Agreement.

Series                2004-AR2 Portion of the Class B-2 Principal Balance as of
                      the Cut-Off Date Evidenced by this Certificate:
                      $6,987,000.00

Class B-2 Certificate Interest Rate: Variable

Cut-Off Date: April 1, 2004

First Distribution Date: May 25, 2004

Last Scheduled Distribution Date: April 25, 2044

Class B-2 Principal Balance
as of the Cut-Off Date: $6,987,000.00

                                   Cede & Co.
                                Registered Owner

                                      A-5
<PAGE>

                                                          Exhibit A
                                                          CUSIP 92922F NZ 7

                     WaMu MORTGAGE PASS-THROUGH CERTIFICATE

                                    Class B-3

Evidencing a beneficial interest in a pool of assets consisting of, among other
things, conventional one- to four-family mortgage loans formed and administered
by

                   WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.

This Certificate is issued by WaMu Mortgage Pass-Through Certificates Series
2004-AR2 Trust. This Certificate represents ownership of a "regular interest" in
a "real estate mortgage investment conduit," as those terms are defined in
Sections 860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended (the "Code"). The issue date of this Certificate is April 28, 2004.

Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company or its
agent for registration of transfer, exchange, or payment, and any Certificate
issued is registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.

NO TRANSFER OF THIS CLASS B-3 CERTIFICATE WILL BE MADE UNLESS THE TRUSTEE HAS
RECEIVED (I) AN OFFICER'S CERTIFICATE IN THE FORM DESCRIBED IN SECTION 5.01(g)
OF THE POOLING AGREEMENT AND (II) IF SO INDICATED IN SUCH OFFICER'S CERTIFICATE,
AN OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE SATISFACTORY TO
THE TRUSTEE AND THE COMPANY TO THE EFFECT THAT THE PURCHASE AND HOLDING OF THIS
CERTIFICATE ARE PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT
IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION
4975 OF THE CODE, AND WILL NOT SUBJECT THE TRUST, THE TRUSTEE, THE MASTER
SERVICER OR THE COMPANY TO ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR
LIABILITIES UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE) IN ADDITION
TO THOSE UNDERTAKEN IN THE POOLING AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT
BE AN EXPENSE OF THE TRUST, THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY.

NOTWITHSTANDING THE FOREGOING PARAGRAPH, WITH RESPECT TO THE TRANSFER OF THIS
CLASS B-3 CERTIFICATE TO DTC OR ANY OTHER CLEARING AGENCY OR ANY SUBSEQUENT
TRANSFER OF ANY INTEREST IN THIS CERTIFICATE FOR SO LONG AS THIS CERTIFICATE IS
HELD BY DTC OR ANY OTHER CLEARING AGENCY, (I) AN OFFICER'S CERTIFICATE (AND, IF
APPLICABLE, A BENEFIT PLAN OPINION), AS DESCRIBED IN THE FOREGOING PARAGRAPH,
SHALL NOT BE REQUIRED, AND (II) THE FOLLOWING CONDITIONS SHALL APPLY:

                  1. ANY TRANSFEREE OF THIS CERTIFICATE WILL BE DEEMED TO HAVE
         REPRESENTED, BY VIRTUE OF ITS ACQUISITION OR HOLDING OF THIS
         CERTIFICATE (OR INTEREST HEREIN), THAT EITHER (A) SUCH TRANSFEREE IS
         NOT AN EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO THE PROHIBITED
         TRANSACTION PROVISIONS OF ERISA OR SECTION 4975 OF THE CODE, OR ANY
         PERSON (INCLUDING AN INVESTMENT MANAGER, A NAMED FIDUCIARY OR A TRUSTEE
         OF ANY SUCH PLAN) ACTING, DIRECTLY OR INDIRECTLY, ON BEHALF OF OR
         PURCHASING THIS CERTIFICATE WITH "PLAN ASSETS" OF ANY SUCH PLAN (A
         "PLAN INVESTOR"), (B) SUCH TRANSFEREE IS AN INSURANCE COMPANY, THE
         SOURCE OF FUNDS TO BE USED BY IT TO ACQUIRE OR HOLD THIS CERTIFICATE IS
         AN "INSURANCE COMPANY GENERAL ACCOUNT" (WITHIN THE MEANING OF
         DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE")
         95-60), AND THE CONDITIONS IN SECTION I AND III OF PTCE 95-60 HAVE BEEN
         SATISFIED (EACH ENTITY THAT SATISFIES THIS CLAUSE (B), A "COMPLYING
         INSURANCE COMPANY") OR (C) THIS CERTIFICATE WAS RATED "BBB-" OR BETTER
         (OR ITS EQUIVALENT) BY AT LEAST ONE OF THE RATING AGENCIES AT THE TIME
         OF SUCH TRANSFEREE'S ACQUISITION OF THIS CERTIFICATE (OR INTEREST
         HEREIN); AND

                  2. IF THIS CERTIFICATE (OR ANY INTEREST HEREIN) IS ACQUIRED OR
         HELD IN VIOLATION OF THE PROVISIONS OF THE PRECEDING PARAGRAPH, THEN
         THE LAST PRECEDING TRANSFEREE THAT EITHER (I) IS NOT A PLAN INVESTOR,
         (II) IS A COMPLYING INSURANCE COMPANY OR (III) ACQUIRED THIS
         CERTIFICATE AT A TIME WHEN THIS CERTIFICATE WAS RATED "BBB-" OR BETTER
         (OR ITS EQUIVALENT) BY AT LEAST ONE OF THE RATING AGENCIES SHALL BE
         RESTORED, TO THE EXTENT PERMITTED BY LAW, TO ALL RIGHTS AND OBLIGATIONS

                                      A-6
<PAGE>

         AS BENEFICIAL HOLDER THEREOF RETROACTIVE TO THE DATE OF TRANSFER OF
         THIS CERTIFICATE BY SUCH PRECEDING TRANSFEREE. NEITHER THE TRUST NOR
         THE TRUSTEE SHALL BE UNDER ANY LIABILITY TO ANY PERSON FOR MAKING ANY
         PAYMENTS DUE ON THIS CERTIFICATE TO SUCH PRECEDING TRANSFEREE.

ANY PURPORTED BENEFICIAL HOLDER WHOSE ACQUISITION OR HOLDING OF THIS CERTIFICATE
(OR INTEREST HEREIN) WAS EFFECTED IN VIOLATION OF THE RESTRICTIONS IN SECTION
5.01(g) OF THE POOLING AGREEMENT SHALL INDEMNIFY AND HOLD HARMLESS THE COMPANY,
THE TRUSTEE, THE MASTER SERVICER, THE TRUST AND THE UNDERWRITERS FROM AND
AGAINST ANY AND ALL LIABILITIES, CLAIMS, COSTS OR EXPENSES INCURRED BY SUCH
PARTIES AS A RESULT OF SUCH ACQUISITION OR HOLDING.

The Class B-3 Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as described in the
Pooling Agreement.

Series 2004-AR2           Portion of the Class B-3 Principal Balance as of the
                          Cut-Off Date Evidenced by this
                          Certificate:
                          $4,253,000.00

Class B-3 Certificate Interest Rate: Variable

Cut-Off Date: April 1, 2004

First Distribution Date: May 25, 2004

Last Scheduled Distribution Date: April 25, 2044

Class B-3 Principal Balance
as of the Cut-Off Date: $4,253,000.00

                                   Cede & Co.
                                Registered Owner

                                      A-7
<PAGE>

                                                          Exhibit A
                                                          CUSIP 92922F PB 8

                     WaMu MORTGAGE PASS-THROUGH CERTIFICATE

                                    Class B-4

Evidencing a beneficial interest in a pool of assets consisting of, among other
things, conventional one- to four-family mortgage loans formed and administered
by

                   WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.

This Certificate is issued by WaMu Mortgage Pass-Through Certificates Series
2004-AR2 Trust. This Certificate represents ownership of a "regular interest" in
a "real estate mortgage investment conduit," as those terms are defined in
Sections 860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended (the "Code"). The issue date of this Certificate is April 28, 2004.

     NO TRANSFER OF THIS CLASS B-4 CERTIFICATE WILL BE MADE UNLESS THE TRUSTEE
     HAS RECEIVED (I) AN OFFICER'S CERTIFICATE IN THE FORM DESCRIBED IN SECTION
     5.01(d) OF THE POOLING AGREEMENT AND (II) IF SO INDICATED IN SUCH OFFICER'S
     CERTIFICATE, AN OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE
     SATISFACTORY TO THE TRUSTEE AND THE COMPANY TO THE EFFECT THAT THE PURCHASE
     AND HOLDING OF THIS CERTIFICATE ARE PERMISSIBLE UNDER APPLICABLE LAW, WILL
     NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER
     SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE, AND WILL NOT SUBJECT THE
     TRUST, THE TRUSTEE, THE DELAWARE TRUSTEE, THE MASTER SERVICER OR THE
     COMPANY TO ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR
     LIABILITIES UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE) IN
     ADDITION TO THOSE UNDERTAKEN IN THE POOLING AGREEMENT, WHICH OPINION OF
     COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUST, THE TRUSTEE, THE MASTER
     SERVICER OR THE COMPANY.

     THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
     UNDER THE SECURITIES ACT OF 1933. THESE SECURITIES MAY NOT BE OFFERED,
     SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF REGISTRATION
     OR THE AVAILABILITY OF AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
     ACT OF 1933 AND EXCEPT IN ACCORDANCE WITH SECTION 5.01(e) OF THE POOLING
     AGREEMENT.

The Class B-4 Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as described in the
Pooling Agreement.

Series 2004-AR2           Portion of the Class B-4  Principal  Balance as of
                          the  Cut-Off  Date  Evidenced  by this
                          Certificate:
                          $3,949,000.00

Class B-4 Certificate Interest Rate: Variable

Cut-Off Date: April 1, 2004

First Distribution Date: May 25, 2004

Last Scheduled Distribution Date: April 25, 2044

Class B-4 Principal Balance
as of the Cut-Off Date: $3,949,000.00

                              ---------------------
                                Registered Owner

                                      A-8
<PAGE>

                                                           Exhibit A
                                                           CUSIP 92922F PC 6

                     WaMu MORTGAGE PASS-THROUGH CERTIFICATE

                                    Class B-5

Evidencing a beneficial interest in a pool of assets consisting of, among other
things, conventional one- to four-family mortgage loans formed and administered
by

                   WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.

This Certificate is issued by WaMu Mortgage Pass-Through Certificates Series
2004-AR2 Trust. This Certificate represents ownership of a "regular interest" in
a "real estate mortgage investment conduit," as those terms are defined in
Sections 860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended (the "Code"). The issue date of this Certificate is April 28, 2004.

     NO TRANSFER OF THIS CLASS B-5 CERTIFICATE WILL BE MADE UNLESS THE TRUSTEE
     HAS RECEIVED (I) AN OFFICER'S CERTIFICATE IN THE FORM DESCRIBED IN SECTION
     5.01(d) OF THE POOLING AGREEMENT AND (II) IF SO INDICATED IN SUCH OFFICER'S
     CERTIFICATE, AN OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE
     SATISFACTORY TO THE TRUSTEE AND THE COMPANY TO THE EFFECT THAT THE PURCHASE
     AND HOLDING OF THIS CERTIFICATE ARE PERMISSIBLE UNDER APPLICABLE LAW, WILL
     NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER
     SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE, AND WILL NOT SUBJECT THE
     TRUST, THE TRUSTEE, THE DELAWARE TRUSTEE, THE MASTER SERVICER OR THE
     COMPANY TO ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR
     LIABILITIES UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE) IN
     ADDITION TO THOSE UNDERTAKEN IN THE POOLING AGREEMENT, WHICH OPINION OF
     COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUST, THE TRUSTEE, THE MASTER
     SERVICER OR THE COMPANY.

     THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
     UNDER THE SECURITIES ACT OF 1933. THESE SECURITIES MAY NOT BE OFFERED,
     SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF REGISTRATION
     OR THE AVAILABILITY OF AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
     ACT OF 1933 AND EXCEPT IN ACCORDANCE WITH SECTION 5.01(e) OF THE POOLING
     AGREEMENT.

The Class B-5 Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as described in the
Pooling Agreement.

Series 2004-AR2           Portion of the Class B-5  Principal  Balance as of the
                          Cut-Off  Date  Evidenced  by this
                          Certificate:
                          $3,038,000.00

Class B-5 Certificate Interest Rate: Variable

Cut-Off Date: April 1, 2004

First Distribution Date: May 25, 2004

Last Scheduled Distribution Date: April 25, 2044

Class B-5 Principal Balance
as of the Cut-Off Date: $3,038,000.00

                              ---------------------
                                Registered Owner

                                      A-9
<PAGE>

                                                            Exhibit A
                                                            CUSIP 92922F PD 4

                     WaMu MORTGAGE PASS-THROUGH CERTIFICATE

                                    Class B-6

Evidencing a beneficial interest in a pool of assets consisting of, among other
things, conventional one- to four-family mortgage loans formed and administered
by

                   WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.

This Certificate is issued by WaMu Mortgage Pass-Through Certificates Series
2004-AR2 Trust. This Certificate represents ownership of a "regular interest" in
a "real estate mortgage investment conduit," as those terms are defined in
Sections 860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended (the "Code"). The issue date of this Certificate is April 28, 2004.

     NO TRANSFER OF THIS CLASS B-6 CERTIFICATE WILL BE MADE UNLESS THE TRUSTEE
     HAS RECEIVED (I) AN OFFICER'S CERTIFICATE IN THE FORM DESCRIBED IN SECTION
     5.01(d) OF THE POOLING AGREEMENT AND (II) IF SO INDICATED IN SUCH OFFICER'S
     CERTIFICATE, AN OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE
     SATISFACTORY TO THE TRUSTEE AND THE COMPANY TO THE EFFECT THAT THE PURCHASE
     AND HOLDING OF THIS CERTIFICATE ARE PERMISSIBLE UNDER APPLICABLE LAW, WILL
     NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER
     SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE, AND WILL NOT SUBJECT THE
     TRUST, THE TRUSTEE, THE DELAWARE TRUSTEE, THE MASTER SERVICER OR THE
     COMPANY TO ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR
     LIABILITIES UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE) IN
     ADDITION TO THOSE UNDERTAKEN IN THE POOLING AGREEMENT, WHICH OPINION OF
     COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUST, THE TRUSTEE, THE MASTER
     SERVICER OR THE COMPANY.

     THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
     UNDER THE SECURITIES ACT OF 1933. THESE SECURITIES MAY NOT BE OFFERED,
     SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF REGISTRATION
     OR THE AVAILABILITY OF AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
     ACT OF 1933 AND EXCEPT IN ACCORDANCE WITH SECTION 5.01(e) OF THE POOLING
     AGREEMENT.

The Class B-6 Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as described in the
Pooling Agreement.

Series 2004-AR2           Portion of the Class B-6  Principal  Balance as of the
                          Cut-Off  Date  Evidenced  by this
                          Certificate:
                          $2,126,301.01

Class B-6 Certificate Interest Rate: Variable

Cut-Off Date: April 1, 2004

First Distribution Date: May 25, 2004

Last Scheduled Distribution Date: April 25, 2044

Class B-6 Principal Balance
as of the Cut-Off Date: $2,126,301.01

                              ---------------------
                                Registered Owner

                                      A-10
<PAGE>

                                                        Exhibit A
                                                        CUSIP 92922F PA 0

                     WaMu MORTGAGE PASS-THROUGH CERTIFICATE

                                     Class R

Evidencing a Percentage Interest in certain distributions with respect to a pool
of conventional one- to four-family mortgage loans formed and administered by

                   WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.

ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY
IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE COMPANY AND THE
TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT EITHER (A) THE UNITED STATES, ANY STATE
OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL
ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING, (B) ANY
ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE)
WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH
ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE, (C) ANY
ORGANIZATION DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE (ANY SUCH PERSON
DESCRIBED IN THE FOREGOING CLAUSES (A), (B), OR (C) BEING HEREINAFTER REFERRED
TO AS A "DISQUALIFIED ORGANIZATION"), OR (D) AN AGENT OF A DISQUALIFIED
ORGANIZATION AND (2) NO PURPOSE OF SUCH TRANSFER IS TO ENABLE THE TRANSFER TO
IMPEDE THE ASSESSMENT OR COLLECTION OF TAX. SUCH AFFIDAVIT SHALL INCLUDE CERTAIN
REPRESENTATIONS AS TO THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE.
NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE REGISTER OF ANY TRANSFER,
SALE OR OTHER DISPOSITION OF THIS CLASS R CERTIFICATE TO A DISQUALIFIED
ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL
BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT
BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT
NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF
A CLASS R CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE
CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH.

IN THE CASE OF ANY CLASS R CERTIFICATE PRESENTED FOR REGISTRATION IN THE NAME OF
ANY PERSON, THE TRUSTEE SHALL REQUIRE (I) AN OFFICER'S CERTIFICATE IN THE FORM
DESCRIBED IN SECTION 5.01(d) OF THE POOLING AGREEMENT AND (II) IF SO INDICATED
IN SUCH OFFICER'S CERTIFICATE, AN OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM
AND SUBSTANCE SATISFACTORY TO THE TRUSTEE AND THE COMPANY TO THE EFFECT THAT THE
PURCHASE AND HOLDING OF A CLASS R CERTIFICATE ARE PERMISSIBLE UNDER APPLICABLE
LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER
SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE TRUST, THE
TRUSTEE, THE MASTER SERVICER OR THE COMPANY TO ANY OBLIGATION OR LIABILITY
(INCLUDING OBLIGATIONS OR LIABILITIES UNDER SECTION 406 OF ERISA OR SECTION 4975
OF THE CODE) IN ADDITION TO THOSE UNDERTAKEN IN THE POOLING AGREEMENT, WHICH
OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUST, THE TRUSTEE, THE MASTER
SERVICER OR THE COMPANY.

This Certificate is issued by WaMu Mortgage Pass-Through Certificates Series
2004-AR2 Trust. Solely for U.S. federal income tax purposes, this Certificate
represents a "residual interest" in a "real estate mortgage investment conduit,"
as those terms are defined in Sections 860G and 860D, respectively, of the
Internal Revenue Code of 1986, as amended.

Series                   2004-AR2 Percentage Interest evidenced by this Class R
                         Certificate in the distributions to be made with
                         respect to the Class R Certificates: __________%

Class R Certificate  Interest Rate:  2.574%.  Additionally
the  Class  R   Certificates   are   entitled   to  Excess
Liquidation   Proceeds  and  the   Residual   Distribution
Amount as defined in the Pooling Agreement.

Cut-Off Date: April 1, 2004

First Distribution Date: May 25, 2004

Last Scheduled Distribution Date: April 25, 2044

Class R Principal Balance as of the Cut-Off Date: $100.00

                               ------------------
                                Registered Owner
                               Certificate No. ___

                                      B-1
<PAGE>

                                                                   Exhibit B

                                   [Reserved]

                                      B-2
<PAGE>
                                                                  Exhibit C

                                   [Reserved]

                                      C-1
<PAGE>
                                                                 Exhibit D

                             Mortgage Loan Schedule

Copies of the Mortgage Loan Schedule (which has been intentionally omitted from
this filing) may be obtained from Washington Mutual Mortgage Securities Corp. or
Deutsche Bank National Trust Company by contacting:

in the case of Washington Mutual Mortgage Securities Corp.,

Laura Kelsey
Master Servicing Department
Washington Mutual Mortgage Securities Corp.
75 N. Fairway Drive, VHF2A01
Vernon Hills, IL 60061
Telephone:        (847) 393-5198
Facsimile:        (847) 549-2997

in the case of Deutsche Bank National Trust Company,

Alan Sueda
Trust Administrator
Deutsche Bank National Trust Company
1761 E. St. Andrew Place
Santa Ana, CA   15197: 92705
Telephone:        (714) 247-6315
Facsimile:        (714) 247-6329

                                      D-1

<PAGE>

                                                                Exhibit E

                              SELLING AND SERVICING

                                    CONTRACT

This Selling and Servicing Contract (this "Agreement") is made and entered into
by Washington Mutual Mortgage Securities Corp. and its successors and assigns
("Washington Mutual Mortgage") and the entity identified below and its
successors and assigns (the "Company").

                                   WITNESSETH:

         WHEREAS, this Company wishes to sell first lien residential mortgage
loans to, and service first lien residential mortgage loans on behalf of,
Washington Mutual Mortgage; and

         WHEREAS, the Company has submitted a Seller Application to Washington
Mutual Mortgage and has been approved by Washington Mutual Mortgage for
participation in the Washington Mutual Mortgage Purchase Programs; and

         WHEREAS, the Company has received and reviewed the Washington Mutual
Mortgage Purchase Programs Seller Guide (the "Seller Guide"), as well as the
Washington Mutual Mortgage Servicing Guide (the "Servicing Guide" and, together
with the Seller Guide, the "Guides"), and understands each and every provision
thereof;

         NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, Washington Mutual Mortgage and the Company hereby
agree as follows:

         1. Guides. The Guides, which set forth the terms and conditions under
which Washington Mutual Mortgage may elect to purchase mortgage loans from the
Company, and the Company shall service mortgage loans on behalf of Washington
Mutual Mortgage, are a supplement to this Agreement and such Guides, as may be
amended or supplemented from time to time by Washington Mutual Mortgage, are
incorporated into this Agreement in full by reference and made a part hereof as
fully as if set forth at length herein. All capitalized terms used and not
defined herein have the meanings ascribed to them in the Guides.

         2. Company's Duties. The Company shall diligently perform all duties
incident to the origination, sale and servicing of the mortgage loans subject to
this Agreement. In the performance of its servicing duties, the Company shall
exercise the same degree of care it exercises when servicing mortgage loans for
its own account, but in no event shall the Company exercise less care than a
reasonable prudent servicer would exercise under similar circumstances. In
addition, the Company shall comply with all of the provisions of the Guides and
with all other requirements and instructions of Washington Mutual Mortgage. The
Company shall perform such duties at its sole expense, except as otherwise
expressly provided in the Guides.

         3. Representations, Warranties and Covenants of the Company; Remedies
of Washington Mutual Mortgage. With respect to each mortgage loan sold by the
Company to Washington Mutual Mortgage pursuant to the terms of this Agreement,
the Company shall make all of the representations, warranties and covenants set
forth in the Guide and, in the event of the breach of any of such
representations, warranties and covenants, Washington Mutual Mortgage shall have
all of the remedies available at law or in equity, as well as all of the
remedies set forth in the Guide, including, but not limited to, repurchase and
indemnification. The representations and warranties made by the Company with
respect to any mortgage loan subject to this Agreement, as well as the remedies
available to Washington Mutual Mortgage upon the breach thereof, shall survive:

                                      E-1
<PAGE>

(a) any investigation regarding the mortgage loan conducted by Washington Mutual
Mortgage, its assignees or designees, (b) the liquidation of the mortgage loan,
(c) the purchase of the mortgage loan by Washington Mutual Mortgage, its
assignee or designee, (d) the repurchase of the mortgage loan by the Company and
(e) the termination of this Agreement.

         4. Compensation. The Company shall be compensated for its services
hereunder as specified in the Guides.

         5. No Assignment. This Agreement may not be assigned by the Company
without the prior written consent of Washington Mutual Mortgage. The Company
hereby consents to the assignment by Washington Mutual Mortgage of all or any
part of its rights and obligations under this Agreement to any affiliate
designated by Washington Mutual Mortgage. Any other transfer by Washington
Mutual Mortgage will be allowed and be effective upon written notice by
Washington Mutual Mortgage to the Company.

         6. Prior Agreements. This Agreement supersedes any prior agreements and
understandings between Washington Mutual Mortgage and the Company governing the
subject matter hereof; provided, however, the Company shall not be released from
any responsibility or liability that may have arisen under such agreements and
understanding.

         7. Effective Date of Agreement. This Agreement is not effective until
it is executed and accepted by Washington Mutual Mortgage at its home office in
Illinois.

         8. Notices. All notices, requests, demands or other communications that
are to be given under this Agreement shall be in writing, addressed to the
appropriate parties, and shall be sent by certified mail, return receipt
requested, postage prepaid, if to the Company, at the address below and, if to
Washington Mutual Mortgage, to the appropriate address or facsimile number
specified in the Guides. Any such notice, request, demand or other communication
shall be deemed effective upon receipt.

         9. Independent Contractor. At no time shall the Company represent that
it is acting as an agent, partner or joint venturer of Washington Mutual
Mortgage. The Company shall at all times act as an independent contracting
party.

         10. Amendment. This Agreement may not be amended or modified orally,
and no provision of this Agreement may be waived or amended, except in writing
signed by the party against whom enforcement is sought. Such a written waiver or
amendment must expressly reference this Agreement. However, by their terms the
Guides may be amended or supplemented by Washington Mutual Mortgage from time to
time. Any such amendment(s) to the Guides shall be in writing and be binding
upon the parties hereto on and after the effective date specified therein.

         11. Miscellaneous. This Agreement, including all documents incorporated
by reference herein, constitutes the entire understanding between the parties
hereto and supersedes all other agreements, covenants, representations,
warranties, understandings and communications between the parties, whether
written or oral, with respect to the transactions contemplated by this
Agreement. All section headings contained herein are for convenience only and
shall not be construed as part of this Agreement. Any provision of this
Agreement that is prohibited or unenforceable in any jurisdiction shall as to
such jurisdiction be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining portions hereof or affecting

                                      E-2
<PAGE>

the validity or enforceability of such provision in any other jurisdiction, and
to this end, the provisions hereof are severable. This Agreement shall be
governed by, and construed and enforced in accordance with, applicable federal
laws and laws of the State of Illinois, without reference to conflict of laws
principles. This Agreement may be executed in one or more counterparts, each of
which shall constitute an original and all of which shall constitute the same
Agreement.

         IN WITNESS WHEREOF, the parties have executed this Agreement by proper
officials duly authorized on the dates hereinafter set forth. This Agreement
shall take effect as of the date of its execution in original or facsimile
signature by a duly authorized officer of Washington Mutual Mortgage.

------------------------------------------       ------------------------------
Name of the Company                              Company I.D. Number
------------------------------------------       ------------------------------
Type of organization                             Organized under laws of
--------------------------------------------------------------------------------
Principal place of business:  street address, city, state, zip code
--------------------------------------------------------------------------------
Typed name and title of the Company's authorized officer
-------------------------------------------------------    --------------------
Signature of the Company's authorized officer              Date

Agreed to and accepted by Washington Mutual Mortgage Securities Corp.
--------------------------------------------------------------------------------
Typed name and title of authorized representative
-------------------------------------------------------    --------------------
Signature of authorized representative                     Date

                                      E-3
<PAGE>

                                                                   Exhibit F

                       FORM OF TRANSFEROR CERTIFICATE FOR
                         JUNIOR SUBORDINATE CERTIFICATES

                                     [Date]

Deutsche Bank National Trust Company, as Trustee
1761 East St. Andrew Place
Santa Ana, CA 92705
Attn: Trust Administration WA04A2

Re:  Purchase of Washington Mutual Mortgage Securities Corp. WaMu Mortgage
     Pass-Through Certificates Series 2004-AR2, Class [ ] (the "Certificates")

Ladies and Gentlemen:

         In connection with our disposition of the above Certificates we certify
that (a) we understand the Certificates have not been registered under the
Securities Act of 1933, as amended (the "Act") and are being disposed by us in a
transaction that is exempt from the registration requirements of the Act, and
(b) we have not offered or sold any certificates to, or solicited offers to buy
any Certificates from, any person, or otherwise approached or negotiated with
any person with respect thereto, or taken any other action which would result in
a violation of Section 5 of the Act.

                                            Very truly yours,

                                            [Name of Transferor]

                                            By:
                                               --------------------------------
                                               Authorized Officer

                                      F-1
<PAGE>

<PAGE>

                                                                  Exhibit G

                       FORM OF TRANSFEREE'S AGREEMENT FOR
                         JUNIOR SUBORDINATE CERTIFICATES

                                     [Date]

Deutsche Bank National Trust Company, as Trustee
1761 East St. Andrew Place
Santa Ana, CA 92705
Attn: Trust Administration WA04A2

Washington Mutual Mortgage Securities Corp.
75 N. Fairway Drive
Vernon Hills, Illinois  60061

The undersigned (the "Purchaser") proposes to purchase Washington Mutual
Mortgage Securities Corp. WaMu Mortgage Pass-Through Certificates, Series
2004-AR2, Class [ ] (the "Purchased Certificates") in the principal amount of
$______________. In doing so, the Purchaser hereby acknowledges and agrees as
follows:

Section 1. Definitions. Each capitalized term used herein and not otherwise
defined herein shall have the meaning ascribed to it in the Pooling and
Servicing Agreement, dated as of April 1, 2004 (the "Pooling Agreement"), by and
among Washington Mutual Mortgage Securities Corp. ("Washington Mutual"),
Deutsche Bank National Trust Company, as trustee (the "Trustee"), and Deutsche
Bank Trust Company Delaware, as Delaware trustee, of the Washington Mutual
Mortgage Securities Corp. WaMu Mortgage Pass-Through Certificates, Series
2004-AR2.

Section 2. Representations and Warranties of the Purchaser. In connection with
the proposed transfer, the Purchaser represents and warrants to Washington
Mutual, the Trustee and the Trust that:

(a) The Purchaser is duly organized, validly existing and in good standing under
the laws of the jurisdiction in which the Purchaser is organized, is authorized
to invest in the Purchased Certificates, and to enter into this Agreement, and
duly executed and delivered this Agreement;

(b) The Purchaser is acquiring the Purchased Certificates for its own account as
principal and not with a view to the distribution thereof, in whole or in part;

(c) The Purchaser is an "accredited investor" as such term is defined in
paragraph (a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) of Section 501 of Regulation
D under the Securities Act of 1933, as amended (the "Act"), has knowledge of
financial and business matters and is capable of evaluating the merits and risks
of an investment in the Purchased Certificates; the Purchaser has sought such
accounting, legal and tax advice as it has considered necessary to make an
informed investment decision; and the Purchaser is able to bear the economic
risk of an investment in the Purchased Certificates and can afford a complete
loss of such investment;

(d) The Purchaser is not affiliated with the Trustee;

                                      G-1
<PAGE>

(e) The Purchaser confirms that Washington Mutual has made available to the
Purchaser the opportunity to ask questions of, and receive answers from
Washington Mutual concerning the trust created pursuant to the Pooling Agreement
(the "Trust"), the purchase by the Purchaser of the Purchased Certificates and
all matters relating thereto that Washington Mutual possesses or can acquire
without unreasonable effort or expense; and

(f) If applicable, the Purchaser has complied, and will continue to comply, with
the guidelines established by Thrift Bulletin 13a issued April 23, 1998, by the
Office of Regulatory Activities of the Federal Home Loan Bank System.

Section 3.Transfer of Purchased Certificates.

(a) The Purchaser understands that the Purchased Certificates have not been
registered under the Act, or any state securities laws and that no transfer may
be made unless the Purchased Certificates are registered under the Act and under
applicable state law or unless an exemption from registration is available. The
Purchaser further understands that neither Washington Mutual nor the Trust is
under any obligation to register the Purchased Certificates or make an exemption
available. In the event that such a transfer is to be made within two years from
the Closing Date without registration under the Act or applicable state
securities laws, (i) the Trustee shall require, in order to assure compliance
with such laws, that the Certificateholder's prospective transferee each certify
to Washington Mutual, the Trustee and the Trust as to the factual basis for the
registration or qualification exemption relied upon, and (ii) the Trustee or
Washington Mutual may require an Opinion of Counsel that such transfer may be
made pursuant to an exemption from the Act and state securities laws, which
Opinion of Counsel shall not be an expense of the Trust, the Trustee or
Washington Mutual. Any such Certificateholder desiring to effect such transfer
shall, and does hereby agree to, indemnify the Trust, the Trustee and Washington
Mutual against any liability that may result if the transfer is not so exempt or
is not made in accordance with such federal and state laws.

(b) No transfer of a Purchased Certificate shall be made unless the transferee
provides Washington Mutual and the Trustee with (i) a Transferee's Agreement,
substantially in the form of this Agreement, (ii) an affidavit substantially in
the form of Exhibit N to the Pooling Agreement and (iii) if so indicated in such
affidavit, a Benefit Plan Opinion (as defined in Section 1.01 of the Pooling
Agreement).

(c) The Purchaser acknowledges that its Purchased Certificates bear a legend
setting forth the applicable restrictions on transfer.

                                      G-2
<PAGE>

IN WITNESS WHEREOF, the undersigned has caused this Agreement to be validly
executed by its duly authorized representative as of the day and the year first
above written.

                                          [Purchaser]

                                          By:
                                              --------------------------------
                                          Its:

                                      G-3
<PAGE>

                                                                  Exhibit H

                   FORM OF ADDITIONAL MATTER INCORPORATED INTO
                          THE FORM OF THE CERTIFICATES

         This Certificate does not represent an obligation of or interest in
Washington Mutual Mortgage Securities Corp. or any of its affiliates. Neither
this Certificate nor the underlying Mortgage Loans are guaranteed by any agency
or instrumentality of the United States.

         This certifies that the above-named Registered Owner is the registered
owner of certain interests in a pool of assets ("REMIC I") consisting of, among
other things, conventional one- to four-family mortgage loans (the "Mortgage
Loans"), formed and administered by Washington Mutual Mortgage Securities Corp.
(the "Company"), which term includes any successor entity under the Pooling
Agreement referred to below. REMIC I was created pursuant to a Pooling and
Servicing Agreement, dated as of the Cut-Off Date stated above (the "Pooling
Agreement"), among the Company, Deutsche Bank National Trust Company, as Trustee
(the "Trustee"), and Deutsche Bank Trust Company Delaware, as Delaware Trustee,
a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Pooling Agreement. Nothing herein shall be
deemed inconsistent with such meanings, and in the event of any conflict between
the Pooling Agreement and the terms of this Certificate, the Pooling Agreement
shall control. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Pooling Agreement, to which Pooling Agreement
the Holder of this Certificate, by virtue of the acceptance hereof, assents and
by which such Holder is bound.

         Distributions will be made, pursuant to the Pooling Agreement, on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last day (or if such last day is
not a Business Day, the Business Day immediately preceding such last day) of the
month immediately preceding the month of such distribution (the "Record Date"),
to the extent of such Certificateholder's Percentage Interest represented by
this Certificate in the portion of the Available Distribution Amount for such
Distribution Date then distributable on the Certificates of this Class, as
specified in Section 4.01 of the Pooling Agreement.

         Distributions on this Certificate will be made by the Trustee by wire
transfer or check mailed to the address of the Person entitled thereto, as such
name and address shall appear on the Certificate Register. Notwithstanding the
above, the final distribution on this Certificate will be made after due notice
by the Trustee of the pendency of such distribution and only upon presentation
and surrender of this Certificate to the Certificate Registrar.

         Reference is hereby made to the further provisions of this Certificate
set forth below, which further provisions shall for all purposes have the same
effect as if set forth at this place.

         Unless the certificate of authentication hereon has been executed by or
on behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling Agreement or be valid for any purpose.

                                      H-1
<PAGE>

         IN WITNESS WHEREOF, the Trust has caused this Certificate to be duly
executed.

                                      WaMu MORTGAGE PASS-THROUGH CERTIFICATES
                                      SERIES 2004-AR2 TRUST

                                      By: DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                          as Trustee

                                      By:
                                          ------------------------------------

                    (TRUSTEE'S CERTIFICATE OF AUTHENTICATION)

                  This is one of the Certificates referred to in the
within-mentioned Pooling Agreement.

DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee

By:
    ----------------------------------------

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

                                      H-2
<PAGE>

                   WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
                     WaMu MORTGAGE PASS-THROUGH CERTIFICATE

         This Certificate is one of a duly authorized issue of Certificates
designated as WaMu Mortgage Pass-Through Certificates of the Series and Class
specified hereon (herein called the "Certificates") and representing certain
interests in REMIC I.

         The Certificates do not represent an obligation of, or an interest in,
the Company or any of its affiliates and are not insured or guaranteed by any
governmental agency. The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Pooling Agreement. In the event funds
are advanced with respect to any Mortgage Loan, such advance is reimbursable to
the Master Servicer from the related recoveries on such Mortgage Loan or from
other cash deposited in the Certificate Account to the extent that such advance
is not otherwise recoverable.

         As provided in the Pooling Agreement, withdrawals from the Certificate
Account may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement to the Master Servicer
of advances made, or certain expenses incurred, by it.

         The Pooling Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Certificateholders under the
Pooling Agreement at any time by the Company, the Master Servicer and the
Trustee with the consent of the Holders of the Certificates evidencing
Percentage Interests aggregating not less than 66% of REMIC I. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Pooling Agreement
also permits the amendment thereof, in certain limited circumstances, without
the consent of the Holders of any of the Certificates.

         As provided in the Pooling Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices of the Certificate Registrar or the office maintained by
the Trustee in the City and State of New York, duly endorsed by, or accompanied
by an assignment in the form below or other written instrument of transfer in
form satisfactory to the Trustee or any Authenticating Agent duly executed by,
the Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of Authorized Denominations evidencing
the same Percentage Interest set forth hereinabove will be issued to the
designated transferee or transferees.

         [to be used only in the case of the Junior Subordinate Certificates:]
[No transfer of a Certificate will be made unless such transfer is exempt from
or is made in accordance with the registration requirements of the Securities
Act of 1933, as amended (the "Securities Act") and any applicable state
securities laws. In the event that a transfer is to be made without registration
or qualification under applicable laws, (i) in the event such transfer is made
pursuant to Rule 144A under the Securities Act, the Company and the Trustee
shall require the transferee to execute an investment letter in substantially
the form attached as Exhibit L to the Pooling Agreement, which investment letter
shall not be an expense of the Company, the Master Servicer, the Trust or the
Trustee and (ii) in the event that such a transfer is not made pursuant to Rule
144A under the Securities Act, the Trustee may require an Opinion of Counsel

                                      H-3
<PAGE>

satisfactory to the Trustee that such transfer may be made without such
registration or qualification, which Opinion of Counsel shall not be an expense
of the Company, the Master Servicer, the Trust or the Trustee. Neither the
Company nor the Trust will register the Certificate under the Securities Act,
qualify the Certificate under any state securities law or provide registration
rights to any purchaser. Any Holder desiring to effect such transfer shall, and
does hereby agree to, indemnify the Trust, the Trustee, the Company and the
Master Servicer against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal and state laws.]

         The Certificates are issuable only as registered Certificates without
coupons in Authorized Denominations specified in the Pooling Agreement. As
provided in the Pooling Agreement and subject to certain limitations therein set
forth, Certificates are exchangeable for new Certificates of Authorized
Denominations of like Certificate Principal Balance or Percentage Interest, as
applicable, as requested by the Holder surrendering the same.

         A reasonable service charge may be made for any such registration of
transfer or exchange, and the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.

         The Company, the Trustee and the Certificate Registrar and any agent of
the Company, the Trustee or the Certificate Registrar may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and neither the Company, the Trustee, the Certificate Registrar nor any such
agent shall be affected by notice to the contrary.

         The obligations created by the Pooling Agreement and the Trust created
thereby shall terminate upon (i) the later of the maturity or other liquidation
(including purchase by the Master Servicer) of the last Mortgage Loan remaining
in the Trust or the disposition of all property acquired upon foreclosure or
deed in lieu of foreclosure of any Mortgage Loan, and (ii) the payment to
Certificateholders of all amounts held by the Trustee and required to be paid to
them pursuant to the Pooling Agreement. In the event that the Company or the
Master Servicer purchases any Mortgage Loan pursuant to the Pooling Agreement,
the Pooling Agreement generally requires that the Trustee distribute to the
Certificateholders in the aggregate an amount equal to 100% of the unpaid
Principal Balance of such Mortgage Loan, plus unpaid accrued interest thereon at
the applicable Pass-Through Rate to the last day of the month in which such
purchase occurs. The Pooling Agreement permits, but does not require, the Master
Servicer to purchase from the Trust all Mortgage Loans at the time subject
thereto and all property acquired in respect of any Mortgage Loan upon payment
to the Certificateholders of the amounts specified in the Pooling Agreement. The
exercise of such right will effect early retirement of the Certificates, the
Master Servicer's right to purchase being subject to the aggregate Principal
Balance of the Mortgage Loans at the time of purchase being less than the
Clean-Up Call Percentage of the aggregate Principal Balance of the Mortgage
Loans as of the Cut-Off Date.

                                      H-4
<PAGE>

                                   ASSIGNMENT

         FOR VALUE RECEIVED the undersigned hereby sell(s) and assign(s) and
transfer(s) unto____________________________________________________________
(Please print or typewrite name and address, including postal
zip code of assignee. Please insert social security or other identifying number
of assignee.)

the within WaMu Mortgage Pass-Through Certificate and hereby irrevocably
constitutes and appoints
____________________________________________________________________________

Attorney to transfer said Certificate on the Certificate Register, with full
power of substitution in the premises.

Dated:
       --------------------         -----------------------------------------
                                    Signature Guaranteed

_____________________________________________________________________________
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular, without
alteration or enlargement or any change whatever. This Certificate does not
represent an obligation of or an interest in Washington Mutual Mortgage
Securities Corp. or any of its affiliates. Neither this Certificate nor the
underlying Mortgage Loans are guaranteed by any agency or instrumentality of the
United States.

                                      H-5

<PAGE>

                                                                     Exhibit I

                             TRANSFEROR CERTIFICATE

                                     [Date]

Deutsche Bank National Trust Company, as Trustee
1761 East St. Andrew Place
Santa Ana, CA 92705
Attn: Trust Administration WA04A2

Re:  Washington Mutual Mortgage Securities Corp. WaMu Mortgage Pass-Through
     Certificates, Series 2004-AR2, Class R

Ladies and Gentlemen:

This letter is delivered to you in connection with the sale from (the "Seller")
to (the "Purchaser") of $____________________ initial Certificate Principal
Balance of WaMu Mortgage Pass-Through Certificates, Series 2004-AR2, Class R
(the "Certificate"), pursuant to Section 5.01 of the Pooling and Servicing
Agreement (the "Pooling Agreement"), dated as of April 1, 2004 among Washington
Mutual Mortgage Securities Corp., as depositor and master servicer (the
"Company"), Deutsche Bank National Trust Company, as trustee (the "Trustee"),
and Deutsche Bank Trust Company Delaware, as Delaware trustee. All terms used
herein and not otherwise defined shall have the meanings set forth in the
Pooling Agreement. The Seller hereby certifies, represents and warrants to, and
covenants with, the Company, the Trustee and the Trust that:

1. No purpose of the Seller relating to the sale of the Certificate by the
Seller to the Purchaser is or will be to enable the Seller to impede the
assessment or collection of tax.

2. The Seller understands that the Purchaser has delivered to the Trustee and
the Company a transferee affidavit and agreement in the form attached to the
Pooling Agreement as Exhibit J. The Seller does not know or believe that any
representation contained therein is false.

3. The Seller has no actual knowledge that the proposed Transferee is not a
Permitted Transferee.

4. The Seller has no actual knowledge that the Purchaser would be unwilling or
unable to pay taxes due on its share of the taxable income attributable to the
Certificates.

5. The Seller has conducted a reasonable investigation of the financial
condition of the Purchaser and, as a result of the investigation, found that the
Purchaser has historically paid its debts as they came due, and found no
significant evidence to indicate that the Purchaser will not continue to pay its
debts as they come due in the future.

                                      I-1

<PAGE>

6. The Purchaser has represented to the Seller that, if the Certificates
constitute a noneconomic residual interest, it (i) understands that as holder of
a noneconomic residual interest it may incur tax liabilities in excess of any
cash flows generated by the interest, and (ii) intends to pay taxes associated
with its holding of the Certificates as they become due.

                            Very truly yours,

                            [Seller]

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

                                      I-2

<PAGE>
                                                                   Exhibit J

                       TRANSFEREE AFFIDAVIT AND AGREEMENT

STATE OF         )
                 )   ss:
COUNTY OF        )

  [NAME OF OFFICER], being first duly sworn, deposes and says:

  1. That he is [Title of Officer] of [Name of Owner] (record or beneficial
  owner of the Class R Certificate (the "Owner")), a [savings institution]
  [corporation] duly organized and existing under the laws of [the State of ]
  [the United States], on behalf of which he makes this affidavit and agreement.

  2. That the Owner (i) is not and will not be a "disqualified organization" as
  of [date of transfer] within the meaning of Section 860E(e)(5) of the Internal
  Revenue Code of 1986, as amended (the "Code") and will endeavor to remain
  other than a disqualified organization for so long as it retains its ownership
  interest in the Class R Certificates, and (ii) is acquiring the Class R
  Certificates for its own account or for the account of another Owner from
  which it has received an affidavit and agreement in substantially the same
  form as this affidavit and agreement. (For this purpose, a disqualified
  organization" means the United States, any state or political subdivision
  thereof, or any agency or instrumentality of any of the foregoing (other than
  an instrumentality all of the activities of which are subject to tax and,
  except for the Federal Home Loan Mortgage Corporation, a majority of whose
  board of directors is not selected by any such governmental entity), or any
  foreign government or international organization, or any agency or
  instrumentality of such foreign government or organization, any rural electric
  or telephone cooperative, or any organization (other than certain farmers'
  cooperatives) that is generally exempt from federal income tax unless such
  organization is subject to the tax on unrelated business taxable income).

  3. That the Owner is aware (i) of the tax that would be imposed on transfers
  of the Class R Certificates after March 31, 1988; (ii) that such tax would be
  on the transferor, or, if such transfer is through an agent (which person
  includes a broker, nominee or middle-man) for a disqualified organization, on
  the agent; (iii) that the person otherwise liable for the tax shall be
  relieved of liability for the tax if the transferee furnishes to such person
  an affidavit that the transferee is not a disqualified organization and, at
  the time of transfer, such person does not have actual knowledge that the
  affidavit is false; and (iv) that the Class R Certificates may be a
  "noneconomic residual interest" within the meaning of Treasury regulations
  promulgated pursuant to the Code and that the transferor of a noneconomic
  residual interest will remain liable for any taxes due with respect to the
  income on such residual interest, if a significant purpose of the transfer was
  to enable the transferor to impede the assessment or collection of tax.

  4. That the Owner is aware of the tax imposed on a "pass-through entity"
  holding the Class R Certificates if at any time during the taxable year of the
  pass-through entity a disqualified organization is the record holder of an
  interest in such entity. (For this purpose, a "pass through entity" includes a
  regulated investment company, a real estate investment trust or common trust
  fund, a partnership, trust or estate, and certain cooperatives.)

                                      J-1
<PAGE>

  5. That the Owner is aware that the Trustee will not register the Transfer of
  the Class R Certificates unless the transferee, or the transferees' agent,
  delivers to it an affidavit and agreement, among other things, in
  substantially the same form as this affidavit and agreement. The Owner
  expressly agrees that it will not consummate any such transfer if it knows or
  believes that any of the representations contained in such affidavit and
  agreement are false.

  6. That the Owner has reviewed the restrictions set forth on the face of the
  Class R Certificates and the provisions of Section 5.01 of the Pooling
  Agreement under which the Class R Certificates were issued (in particular,
  clauses (iii)(A) and (iii)(B) of Section 5.01(c) which authorize the Trustee
  to deliver payments to a person other than the Owner and negotiate a mandatory
  sale by the Trustee in the event the Owner holds such Certificates in
  violation of Section 5.01). The Owner expressly agrees to be bound by and to
  comply with such restrictions and provisions.

  7. That the Owner consents to any additional restrictions or arrangements that
  shall be deemed necessary upon advice of counsel to constitute a reasonable
  arrangement to ensure that the Class R Certificates will only be owned,
  directly or indirectly, by an Owner that is not a disqualified organization.

  8. The Owner's Taxpayer Identification Number is .

  9. That no purpose of the Owner relating to the purchase of the Class R
  Certificates by the Owner is or will be to enable the transferor to impede the
  assessment or collection of tax, and that in making this representation, the
  Owner warrants that the Owner is familiar with Treasury Regulation 1.860E-1(c)
  and with the preamble to the adoption of amendments to that regulation as of
  July 19, 2002, attached hereto as Exhibit 1.

  10. That the Owner anticipates that it will, so long as it holds the Class R
  Certificates, have sufficient assets to pay any taxes owed by the holder of
  such Certificates, and hereby represents to and for the benefit of the person
  from whom it acquired the Class R Certificates that the Owner intends to pay
  taxes associated with holding such Certificates as they become due, fully
  understanding that it may incur tax liabilities in excess of any cash flows
  generated by the Class R Certificates. That the Owner has provided financial
  statements or other financial information requested by the transferor in
  connection with the transfer of the Class R Certificates to permit the
  transferor to assess the financial capability of the Owner to pay such taxes.

  11. That the Owner has no present knowledge or expectation that it will be
  unable to pay any United States taxes owed by it so long as any of the Class R
  Certificates remain outstanding.

  12. That the Owner has no present knowledge or expectation that it will become
  insolvent or subject to a bankruptcy proceeding for so long as any of the
  Class R Certificates remain outstanding.

  13. That the Owner is familiar with Treasury Regulation 1.860E-1(c) and with
  the preamble to the adoption of amendments to that regulation as of July 19,
  2002, attached hereto as Exhibit 1, and that no purpose of the Owner relating
  to any sale of the Class R Certificates by the Owner will be to impede the
  assessment or collection of tax.

  14. The Owner is a citizen or resident of the United States, a corporation,
  partnership or other entity treated as a partnership or corporation for U.S.
  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, or an estate
  or trust whose income from sources without the United States is includible in
  gross income for United States federal income tax purposes regardless of its
  connection with the conduct of a trade or business within the United States.

                                      J-2
<PAGE>

  15. The Owner hereby agrees that it will not cause income from the Class R
  Certificates to be attributable to a foreign permanent establishment or fixed
  base (within the meaning of an applicable income tax treaty) of the Owner or
  another United States taxpayer.

  16. The Owner hereby agrees to cooperate with the Company and to take any
  action required of it by the Code or Treasury regulations thereunder (whether
  now or hereafter promulgated) in order to create or maintain the REMIC status
  of REMIC I and REMIC II (the "REMICs").

  17. The Owner hereby agrees that it will not take any action that could
  endanger the REMIC status of the REMICs or result in the imposition of tax on
  the REMICs unless counsel for, or acceptable to, the Company has provided an
  opinion that such action will not result in the loss of such REMIC status or
  the imposition of such tax, as applicable.

  18. The Owner as transferee of the Class R Certificates has represented to the
  transferor that, if the Class R Certificates constitute a noneconomic residual
  interest, the Owner (i) understands that as holder of a noneconomic residual
  interest it may incur tax liabilities in excess of any cash flows generated by
  the interest, and (ii) intends to pay taxes associated with its holding of the
  Class R Certificates as they become due.

  19. That the Owner satisfies the condition in the paragraph marked
  below [mark one paragraph only]:

  ___ The Owner is not an employee benefit or other plan subject to the
  prohibited transaction provisions of the Employee Retirement Income Security
  Act of 1974, as amended, or Section 4975 of the Internal Revenue Code of 1986,
  as amended (a "Plan"), or any other person (including an investment manager, a
  named fiduciary or a trustee of any Plan) acting, directly or indirectly, on
  behalf of, or purchasing the Class R Certificates with "plan assets" of, any
  Plan within the meaning of the Department of Labor ("DOL") regulation at 29
  C.F.R. Section 2510.3-101.

  ___ The Owner has delivered a Benefit Plan Opinion (as defined in Section 1.01
  of the Pooling Agreement under which the Class R Certificates were issued).

  IN WITNESS WHEREOF, the Owner has caused this instrument to be executed on its
  behalf, pursuant to the authority of its Board of Directors, by its [Title of
  Officer] and its corporate seal to be hereunto attached, attested by its
  [Assistant] Secretary, this day of , 20 __ .

                                 [Name of Owner]

                                 By:
                                    ------------------------------------------
                                 [Name of Officer]
                                 [Title of Officer]

[Corporate Seal]

ATTEST:

                                      J-3
<PAGE>

[Assistant] Secretary

         Personally appeared before me the above-named [Name of Officer], known
or proved to me to be the same person who executed the foregoing instrument and
to be the [Title of Officer] of the Owner, and Acknowledged to me that he
executed the same as his free act and deed and the free act and deed of the
Owner.

         Subscribed and sworn before me this ___ day of ________________, 20__.

                                        NOTARY PUBLIC

                                        COUNTY OF
                                        STATE OF
                                        My Commission expires the     day
                                        of                , 20
                                           --------------     ----

                                      J-4
<PAGE>
                                              Exhibit 1 to Transferee Affidavit

DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 1 and 602
[TD 9004]
RIN 1545-AW98

Real Estate Mortgage Investment Conduits

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final regulations.

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

SUMMARY: This document contains final regulations relating to safe harbor
transfers of noneconomic residual interests in real estate mortgage investment
conduits (REMICs). The final regulations provide additional limitations on the
circumstances under which transferors may claim safe harbor treatment.

DATES:   Effective Date: These regulations are effective July 19, 2002.
Applicability Date: For dates of applicability, see Sec. 1.860E-
(1)(c)(10).

FOR FURTHER INFORMATION CONTACT: Courtney Shepardson at (202) 622-3940 (not a
toll-free number).

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

The collection of information in this final rule has been reviewed and, pending
receipt and evaluation of public comments, approved by the Office of Management
and Budget (OMB) under 44 U.S.C. 3507 and assigned control number 1545-1675. The
collection of information in this regulation is in Sec. 1.860E-1(c)(5)(ii). This
information is required to enable the IRS to verify that a taxpayer is complying
with the conditions of this regulation. The collection of information is
mandatory and is required. Otherwise, the taxpayer will not receive the benefit
of safe harbor treatment as provided in the regulation. The likely respondents
are businesses and other for-profit institutions.

Comments on the collection of information should be sent to the Office of
Management and Budget, Attn: Desk Officer for the Department of the Treasury,
Office of Information and Regulatory Affairs, Washington, DC, 20503, with copies
to the Internal Revenue Service, Attn: IRS Reports Clearance Officer,
W:CAR:MP:FP:S, Washington, DC 20224. Comments on the collection of information
should be received by September 17, 2002. Comments are specifically requested
concerning:

Whether the collection of information is necessary for the proper performance of
the functions of the Internal Revenue Service, including whether the information
will have practical utility;

                                      J-1-1
<PAGE>

The accuracy of the estimated burden associated with the collection
of information (see below);

How the quality, utility, and clarity of the information to be collected may be
enhanced;

How the burden of complying with the collection of information may be minimized,
including through the application of automated collection techniques or other
forms of information technology; and

Estimates of capital or start-up costs and costs of operation, maintenance, and
purchase of service to provide information.

An agency may not conduct or sponsor, and a person is not required to respond
to, a collection of information unless it displays a valid control number
assigned by the Office of Management and Budget.

The estimated total annual reporting burden is 470 hours, based on an estimated
number of respondents of 470 and an estimated average annual burden hours per
respondent of one hour.

Books or records relating to a collection of information must be retained as
long as their contents may become material in the administration of any internal
revenue law. Generally, tax returns and tax return information are confidential,
as required by 26 U.S.C. 6103.

Background

This document contains final regulations regarding the proposed amendments to 26
CFR part 1 under section 860E of the Internal Revenue Code (Code). The
regulations provide the circumstances under which a transferor of a noneconomic
REMIC residual interest meeting the investigation and representation
requirements may avail itself of the safe harbor by satisfying either the
formula test or the asset test.

Final regulations governing REMICs, issued in 1992, contain rules governing the
transfer of noneconomic REMIC residual interests. In general, a transfer of a
noneconomic residual interest is disregarded for all tax purposes if a
significant purpose of the transfer is to enable the transferor to impede the
assessment or collection of tax. A purpose to impede the assessment or
collection of tax (a wrongful purpose) exists if the transferor, at the time of
the transfer, either knew or should have known that the transferee would be
unwilling or unable to pay taxes due on its share of the REMIC's taxable income.

Under a safe harbor, the transferor of a REMIC noneconomic residual interest is
presumed not to have a wrongful purpose if two requirements are satisfied: (1)
the transferor conducts a reasonable investigation of the transferee's financial
condition (the investigation requirement); and (2) the transferor secures a
representation from the transferee to the effect that the transferee understands
the tax obligations associated with holding a residual interest and intends to
pay those taxes (the representation requirement).

The IRS and Treasury have been concerned that some transferors of noneconomic
residual interests claim they satisfy the safe harbor even in situations where
the economics of the transfer clearly indicate the transferee is unwilling or
unable to pay the tax associated with holding the interest. For this reason, on
February 7, 2000, the IRS published in the Federal Register (65 FR 5807) a
notice of proposed rulemaking (REG-100276-97; REG-122450-98) designed to clarify
the safe harbor by adding the "formula test," an economic test. The proposed
regulation provides that the safe harbor is unavailable unless the present value

                                     J-1-2
<PAGE>

of the anticipated tax liabilities associated with holding the residual interest
does not exceed the sum of: (1) The present value of any consideration given to
the transferee to acquire the interest; (2) the present value of the expected
future distributions on the interest; and (3) the present value of the
anticipated tax savings associated with holding the interest as the REMIC
generates losses.

The notice of proposed rulemaking also contained rules for FASITs. Section
1.860H-6(g) of the proposed regulations provides requirements for transfers of
FASIT ownership interests and adopts a safe harbor by reference to the safe
harbor provisions of the REMIC regulations.

In January 2001, the IRS published Rev. Proc. 2001-12 (2001-3 I.R.B. 335) to set
forth an alternative safe harbor that taxpayers could use while the IRS and the
Treasury considered comments on the proposed regulations. Under the alternative
safe harbor, if a transferor meets the investigation requirement and the
representation requirement but the transfer fails to meet the formula test, the
transferor may invoke the safe harbor if the transferee meets a two-prong test
(the asset test). A transferee generally meets the first prong of this test if,
at the time of the transfer, and in each of the two years preceding the year of
transfer, the transferee's gross assets exceed $100 million and its net assets
exceed $10 million. A transferee generally meets the second prong of this test
if it is a domestic, taxable corporation and agrees in writing not to transfer
the interest to any person other than another domestic, taxable corporation that
also satisfies the requirements of the asset test. A transferor cannot rely on
the asset test if the transferor knows, or has reason to know, that the
transferee will not comply with its written agreement to limit the restrictions
on subsequent transfers of the residual interest.

Rev. Proc. 2001-12 provides that the asset test fails to be satisfied in the
case of a transfer or assignment of a noneconomic residual interest to a foreign
branch of an otherwise eligible transferee. If such a transfer or assignment
were permitted, a corporate taxpayer might seek to claim that the provisions of
an applicable income tax treaty would resource excess inclusion income as
foreign source income, and that, as a consequence, any U.S. tax liability
attributable to the excess inclusion income could be offset by foreign tax
credits. Such a claim would impede the assessment or collection of U.S. tax on
excess inclusion income, contrary to the congressional purpose of assuring that
such income will be taxable in all events. See, e.g., sections 860E(a)(1), (b),
(e) and 860G(b) of the Code.

The Treasury and the IRS have learned that certain taxpayers transferring
noneconomic residual interests to foreign branches have attempted to rely on the
formula test to obtain safe harbor treatment in an effort to impede the
assessment or collection of U.S. tax on excess inclusion income. Accordingly,
the final regulations provide that if a noneconomic residual interest is
transferred to a foreign permanent establishment or fixed base of a U.S.
taxpayer, the transfer is not eligible for safe harbor treatment under either
the asset test or the formula test. The final regulations also require a
transferee to represent that it will not cause income from the noneconomic
residual interest to be attributable to a foreign permanent establishment or
fixed base.

Section 1.860E-1(c)(8) provides computational rules that a taxpayer may use to
qualify for safe harbor status under the formula test. Section 1.860E-1(c)(8)(i)
provides that the transferee is presumed to pay tax at a rate equal to the
highest rate of tax specified in section 11(b). Some commentators were concerned
that this presumed rate of taxation was too high because it does not take into
consideration taxpayers subject to the alternative minimum tax rate. In light of
the comments received, this provision has been amended in the final regulations
to allow certain transferees that compute their taxable income using the
alternative minimum tax rate to use the alternative minimum tax rate applicable
to corporations.

Additionally, Sec. 1.860E-1(c)(8)(iii) provides that the present values in the
formula test are to be computed using a discount rate equal to the applicable
Federal short-term rate prescribed by section 1274(d). This is a change from the
proposed regulation and Rev. Proc. 2001-12. In those publications the provision
stated that "present values are computed using a discount rate equal to the
applicable Federal rate prescribed in section 1274(d) compounded semiannually"
and that "[a] lower discount rate may be used if the transferee can demonstrate
that it regularly borrows, in the course of its trade or business, substantial

                                     J-1-3
<PAGE>

funds at such lower rate from an unrelated third party." The IRS and the
Treasury Department have learned that, based on this provision, certain
taxpayers have been attempting to use unrealistically low or zero interest rates
to satisfy the formula test, frustrating the intent of the test. Furthermore,
the Treasury Department and the IRS believe that a rule allowing for a rate
other than a rate based on an objective index would add unnecessary complexity
to the safe harbor. As a result, the rule in the proposed regulations that
permits a transferee to use a lower discount rate, if the transferee can
demonstrate that it regularly borrows substantial funds at such lower rate, is
not included in the final regulations; and the Federal short-term rate has been
substituted for the applicable Federal rate. To simplify taxpayers'
computations, the final regulations allow use of any of the published short-term
rates, provided that the present values are computed with a corresponding period
of compounding. With the exception of the provisions relating to transfers to
foreign branches, these changes generally have the proposed applicability date
of February 4, 2000, but taxpayers may choose to apply the interest rate formula
set forth in the proposed regulation and Rev. Proc. 2001-12 for transfers
occurring before August 19, 2002.

It is anticipated that when final regulations are adopted with respect to
FASITs, Sec. 1.860H-6(g) of the proposed regulations will be adopted in
substantially its present form, with the result that the final regulations
contained in this document will also govern transfers of FASIT ownership
interests with substantially the same applicability date as is contained in this
document.

Effect on Other Documents

Rev. Proc. 2001-12 (2001-3 I.R.B. 335) is obsolete for transfers of noneconomic
residual interests in REMICs occurring on or after August 19, 2002.

Special Analyses

It is hereby certified that these regulations will not have a significant
economic impact on a substantial number of small entities. This certification is
based on the fact that it is unlikely that a substantial number of small
entities will hold REMIC residual interests. Therefore, a Regulatory Flexibility
Analysis under the Regulatory Flexibility Act (5 U.S.C. chapter 6) is not
required. It has been determined that this Treasury decision is not a
significant regulatory action as defined in Executive Order 12866. Therefore, a
regulatory assessment is not required. It also has been determined that sections
553(b) and 553(d) of the Administrative Procedure Act (5 U.S.C. chapter 5) do
not apply to these regulations.

Drafting Information

The principal author of these regulations is Courtney Shepardson. However, other
personnel from the IRS and Treasury Department participated in their
development.

List of Subjects

26 CFR Part 1

Income taxes, Reporting and record keeping requirements.

26 CFR Part 602

Reporting and record keeping requirements.

Adoption of Amendments to the Regulations

                                     J-1-4
<PAGE>

Accordingly, 26 CFR parts 1 and 602 are amended as follows:

PART 1--INCOME TAXES

Paragraph 1. The authority citation for part 1 continues to read in part as
follows:

    Authority: 26 U.S.C. 7805 * * *

                                     J-1-5
<PAGE>
                                                                 Exhibit K

                                   [Reserved]

                                      K-1

<PAGE>

                                                                   Exhibit L

                  [FORM OF RULE 144A INVESTMENT REPRESENTATION]

             Description of Rule 144A Securities, including numbers:

                          ___________________________
                          ___________________________
                          ___________________________

The undersigned seller, as registered holder (the "Seller"), intends to transfer
the Rule 144A Securities described above to the undersigned buyer (the "Buyer").

1. In connection with such transfer and in accordance with the agreements
pursuant to which the Rule 144A Securities were issued, the Seller hereby
certifies the following facts: Neither the Seller nor anyone acting on its
behalf has offered, transferred, pledged, sold or otherwise disposed of the Rule
144A Securities, any interest in the Rule 144A Securities or any other similar
security to, or solicited any offer to buy or accept a transfer, pledge or other
disposition of the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security from, or otherwise approached or
negotiated with respect to the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security with, any person in any manner, or
made any general solicitation by means of general advertising or in any other
manner, or taken any other action, that would constitute a distribution of the
Rule 144A Securities under the Securities Act of 1933, as amended (the "1933
Act"), or that would render the disposition of the Rule 144A Securities a
violation of Section 5 of the 1933 Act or require registration pursuant thereto,
and that the Seller has not offered the Rule 144A Securities to any person other
than the Buyer or another "qualified institutional buyer" as defined in Rule
144A under the 1933 Act.

2. The Buyer warrants and represents to, and covenants with, the Seller, the
Trustee, the Trust and the Master Servicer (as defined in Section 1.01 of the
Pooling and Servicing Agreement (the "Agreement") dated as of April 1, 2004
among Washington Mutual Mortgage Securities Corp., as Depositor and Master
Servicer, Deutsche Bank National Trust Company, as Trustee, and Deutsche Bank
Trust Company Delaware, as Delaware Trustee) pursuant to Section 5.01(f) of the
Agreement, as follows:

a. The Buyer understands that the Rule 144A Securities have not been registered
under the 1933 Act or the securities laws of any state.

b. The Buyer considers itself a substantial, sophisticated institutional
investor having such knowledge and experience in financial and business matters
that it is capable of evaluating the merits and risks of investment in the Rule
144A Securities.

c. The Buyer has received and reviewed the Private Placement Memorandum dated as
of April 28, 2004 relating to the Rule 144A Securities and has been furnished
with all information regarding the Rule 144A Securities that it has requested
from the Seller, the Trustee, the Company or the Master Servicer.

                                     L-1
<PAGE>

d. Neither the Buyer nor anyone acting on its behalf has offered, transferred,
pledged, sold or otherwise disposed of the Rule 144A Securities, any interest in
the Rule 144A Securities or any other similar security to, or solicited any
offer to buy or accept a transfer, pledge or other disposition of the Rule 144A
Securities, any interest in the Rule 144A Securities or any other similar
security from, or otherwise approached or negotiated with respect to the Rule
144A Securities, any interest in the Rule 144A Securities or any other similar
security with, any person in any manner, or made any general solicitation by
means of general advertising or in any other manner, or taken any other action,
that would constitute a distribution of the Rule 144A Securities under the 1933
Act or that would render the disposition of the Rule 144A Securities a violation
of Section 5 of the 1933 Act or require registration pursuant thereto, nor will
it act, nor has it authorized or will it authorize any person to act, in such
manner with respect to the Rule 144A Securities.

e. The Buyer is a "qualified institutional buyer" as that term is defined in
Rule 144A under the 1933 Act and has (1) completed either of the forms of
certification to that effect attached hereto as Annex 1 or Annex 2, or (2)
obtained the waiver of the Company with respect to Annex 1 and Annex 2 pursuant
to Section 5.01(f) of the Agreement. The Buyer is aware that the sale to it is
being made in reliance on Rule 144A. The Buyer is acquiring the Rule 144A
Securities for its own account or the accounts of other qualified institutional
buyers, understands that such Rule 144A Securities may be resold, pledged or
transferred only (i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, or (ii) pursuant to another
exemption from registration under the 1933 Act.

f. The Buyer is not affiliated with (i) the Trustee or (ii) any Rating Agency
that rated the Rule 144A Securities.

g. If applicable, the Buyer has complied, and will continue to comply, with the
guidelines established by Thrift Bulletin 13a issued April 23, 1998, by the
Office of Regulatory Activities of the Federal Home Loan Bank System.

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

IN WITNESS WHEREOF, each of the parties has executed this document as of the
date set forth below.

    _______________________________       _______________________________
          Print Name of Seller                  Print Name of Buyer

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

                                     L-2
<PAGE>

Taxpayer Identification:____________    Taxpayer Identification:_________

No.:                                    No.:
     ---------------------------------       -------------------------------
Date:                                   Date:
      --------------------------------        ------------------------------

                                      L-3

<PAGE>

                                                         Annex 1 to Exhibit L

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

             [For Buyers Other Than Registered Investment Companies]

The undersigned hereby certifies as follows in connection with the Rule 144A
Investment Representation to which this Certification is attached:

1. As indicated below, the undersigned is the President, Chief Financial
Officer, Senior Vice President or other executive officer of the Buyer.

2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because (i) the Buyer owned and/or invested on a
discretionary basis $______________________ (the Buyer must own and/or invest on
a discretionary basis at least $100,000,000 in securities unless the Buyer is a
dealer, and, in that case, the Buyer must own and/or invest on a discretionary
basis at least $10,000,000 in securities) in securities (except for the excluded
securities referred to below) as of the end of the Buyer's most recent fiscal
year (such amount being calculated in accordance with Rule 144A) and (ii) the
Buyer satisfies the criteria in the category marked below.

___ Corporation, etc. The Buyer is a corporation (other than a bank, savings and
loan association or similar institution), Massachusetts or similar business
trust, partnership, or charitable organization described in Section 501(c)(3) of
the Internal Revenue Code.

___ Bank. The Buyer (a) is a national bank or banking institution organized
under the laws of any State, territory or the District of Columbia, the business
of which is substantially confined to banking and is supervised by the State or
territorial banking commission or similar official or is a foreign bank or
equivalent institution, and (b) has an audited net worth of at least $25,000,000
as demonstrated in its latest annual financial statements, a copy of which is
attached hereto.

___ Savings and Loan. The Buyer (a) is a savings and loan association, building
and loan association, cooperative bank, homestead association or similar
institution, which is supervised and examined by a State or Federal authority
having supervision over any such institutions or is a foreign savings and loan
association or equivalent institution and (b) has an audited net worth of at
least $25,000,000 as demonstrated in its latest annual financial statements.

___      Broker-Dealer.  The Buyer is a dealer registered  pursuant to Section
15 of the Securities Exchange Act of 1934.

___ Insurance Company. The Buyer is an insurance company whose primary and
predominant business activity is the writing of insurance or the reinsuring of
risks underwritten by insurance companies and which is subject to supervision by
the insurance commissioner or a similar official or agency of a State or
territory or the District of Columbia.

___ State or Local Plan. The Buyer is a plan established and maintained by a
State, its political subdivisions, or any agency or instrumentality of the State
or its political subdivisions, for the benefit of its employees.

                                     L-1-1
<PAGE>

___ ERISA Plan. The Buyer is an employee benefit plan within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") and is subject to the fiduciary responsibility provisions of ERISA.

___      Investment  Adviser.  The Buyer is an investment adviser  registered
under the Investment  Advisers Act of 1940.

___      SBIC.  The  Buyer  is  a  Small  Business   Investment   Company
licensed  by  the  U.S.  Small  Business Administration under Section 301(c) or
(d) of the Small Business Investment Act of 1958.

___      Business  Development  Company.  The  Buyer is a  business  development
company  as  defined  in  Section 202(a)(22) of the Investment Advisers Act
of 1940.

___ Trust Fund. The Buyer is a trust fund whose trustee is a bank or trust
company and whose participants are exclusively (a) plans established and
maintained by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the benefit of
its employees, or (b) employee benefit plans within the meaning of Title I of
the Employee Retirement Income Security Act of 1974, but is not a trust fund
that includes as participants individual retirement accounts or H.R. 10 plans.

3. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer, (ii) securities that are part of an
unsold allotment to or subscription by the Buyer, if the Buyer is a dealer,
(iii) bank deposit notes and certificates of deposit, (iv) loan participations,
(v) repurchase agreements, (vi) securities owned but subject to a repurchase
agreement and (vii) currency, interest rate and commodity swaps.

4. For purposes of determining the aggregate amount of securities owned and/or
invested on a discretionary basis by the Buyer, the Buyer used the cost of such
securities to the Buyer and did not include any of the securities referred to in
the preceding paragraph. Further, in determining such aggregate amount, the
Buyer may have included securities owned by subsidiaries of the Buyer, but only
if such subsidiaries are consolidated with the Buyer in its financial statements
prepared in accordance with generally accepted accounting principles and if the
investments of such subsidiaries are managed under the Buyer's direction.
However, such securities were not included if the Buyer is a majority-owned,
consolidated subsidiary of another enterprise and the Buyer is not itself a
reporting company under the Securities Exchange Act of 1934.

5. The Buyer acknowledges that it is familiar with Rule 144A and understands
that the seller to it and other parties related to the Certificates are relying
and will continue to rely on the statements made herein because one or more
sales to the Buyer may be in reliance on Rule 144A.

                                     L-1-2
<PAGE>

                                   Will the Buyer be purchasing the Rule 144A
   ---------         ---------
   Yes               No            Securities only for the Buyer's own account?

6. If the answer to the foregoing question is "no", the Buyer agrees that, in
connection with any purchase of securities sold to the Buyer for the account of
a third party (including any separate account) in reliance on Rule 144A, the
Buyer will only purchase for the account of a third party that at the time is a
"qualified institutional buyer" within the meaning of Rule 144A. In addition,
the Buyer agrees that the Buyer will not purchase securities for a third party
unless the Buyer has obtained a current representation letter from such third
party or taken other appropriate steps contemplated by Rule 144A to conclude
that such third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.

7. The Buyer will notify each of the parties to which this certification is made
of any changes in the information and conclusions herein. Until such notice is
given, the Buyer's purchase of Rule 144A Securities will constitute a
reaffirmation of this certification as of the date of such purchase.

                                      ___________________________________
                                      Print Name of Buyer

                                      By: _______________________________
                                      Name:
                                      Title:

                                      Date:______________________________

                                     L-1-3
<PAGE>

                                                           Annex 2 to Exhibit L

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

              [For Buyers That Are Registered Investment Companies]

The undersigned hereby certifies as follows in connection with the Rule 144A
Investment Representation to which this Certification is attached:

1. As indicated below, the undersigned is the President, Chief Financial Officer
or Senior Vice President of the Buyer or, if the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because Buyer is part of a Family of Investment
Companies (as defined below), is such an officer of the Adviser.

2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, and (ii)
as marked below, the Buyer alone, or the Buyer's Family of Investment Companies,
owned at least $100,000,000 in securities (other than the excluded securities
referred to below) as of the end of the Buyer's most recent fiscal year. For
purposes of determining the amount of securities owned by the Buyer or the
Buyer's Family of Investment Companies, the cost of such securities was used.

____ The Buyer owned $___________________ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most recent fiscal
year (such amount being calculated in accordance with Rule 144A).

____ The Buyer is part of a Family of Investment Companies which owned in the
aggregate $______________ in securities (other than the excluded securities
referred to below) as of the end of the Buyer's most recent fiscal year (such
amount being calculated in accordance with Rule 144A).

3. The term "Family of Investment Companies" as used herein means two or more
registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).

4. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer or are part of the Buyer's Family of
Investment Companies, (ii) bank deposit notes and certificates of deposit, (iii)
loan participations, (iv) repurchase agreements, (v) securities owned but
subject to a repurchase agreement and (vi) currency, interest rate and commodity
swaps.

5. The Buyer is familiar with Rule 144A and understands that each of the parties
to which this certification is made are relying and will continue to rely on the
statements made herein because one or more sales to the Buyer will be in
reliance on Rule 144A. In addition, the Buyer will only purchase for the Buyer's
own account.

6. The undersigned will notify each of the parties to which this certification
is made of any changes in the information and conclusions herein. Until such
notice, the Buyer's purchase of Rule 144A Securities will constitute a

                                     L-2-1
<PAGE>

reaffirmation of this certification by the undersigned as of the date of such
purchase.

                                      ___________________________________
                                      Print Name of Buyer

                                      By:
                                      Name:
                                      Title:

                                      Date:_______________________________

                                       IF AN ADVISER:

                                      ____________________________________
                                      Print Name of Buyer

                                      By:
                                      Name:
                                      Title:

                                      Date: ______________________________
(SEAL)

                                     L-2-2
<PAGE>

                                                                   Exhibit M

                                     [Date]

[Company]

Re:  Pooling and Servicing Agreement dated as of April 1, 2004 by and among
     Washington Mutual Mortgage Securities Corp., as Depositor and Master
     Servicer, Deutsche Bank National Trust Company, as Trustee, and Deutsche
     Bank Trust Company Delaware, as Delaware Trustee, relating to Washington
     Mutual Mortgage Securities Corp. WaMu Mortgage Pass-Through Certificates,
     Series 2004-AR2

Ladies and Gentlemen:

In accordance with Section 2.02 of the above-captioned Pooling and Servicing
Agreement, the undersigned, as [Trustee] [Initial Custodian], hereby certifies
that, except as noted on the attachment hereto, as to each Mortgage Loan listed
in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or
listed on the attachment hereto) it has reviewed the documents delivered to it
pursuant to Section 2.01 of the Pooling and Servicing Agreement and has
determined that (i) all documents required (in the case of instruments described
in clauses (X)(ii), (X)(iv) and (Y)(ix) of the definition of "Mortgage File,"
known by it to be required) pursuant to the definition of "Mortgage File" and
Section 2.01 of the Pooling and Servicing Agreement to have been executed and
received as of the date hereof are in its possession and (ii) all such documents
have been executed and relate to the Mortgage Loans identified in the Mortgage
Loan Schedule. The [Trustee] [Initial Custodian] has made no independent
examination of such documents beyond the review specifically required in the
above referenced Pooling and Servicing Agreement and has relied upon the
purported genuineness and due execution of any such documents and upon the
purported genuineness of any signature thereon. The [Trustee] [Initial
Custodian] makes no representations as to: (i) the validity, legality,
enforceability or genuineness of any of the documents contained in each Mortgage
File or any of the Mortgage Loans identified on the Mortgage Loan Schedule, or
(ii) the collectability, insurability, effectiveness or suitability of any such
Mortgage Loan.

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

                                             ________________________________
                                             as [Trustee] [Initial Custodian]

                                             By:_________________________
                                                  Name:
                                                  Title:

                                      M-1

<PAGE>

                                                                  Exhibit N

                             BENEFIT PLAN AFFIDAVIT

Deutsche Bank National Trust Company, as Trustee (the "Trustee")
1761 East St. Andrew Place
Santa Ana, CA 92705
Attn: Trust Administration WA04A2

Washington Mutual Mortgage Securities Corp. ("Washington Mutual")
75 North Fairway Drive
Vernon Hills, IL  60061

RE:      CLASS [B-4][B-5][B-6] CERTIFICATES (THE "PURCHASED CERTIFICATES")
         ISSUED BY WaMu MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2004-AR2
         TRUST (THE "TRUST")

Under penalties of perjury, I, _____________________, declare that, to the best
of my knowledge and belief, the following representations are true, correct and
complete; and

1. That I am the _______________ of __________________ (the "Purchaser"), whose
taxpayer identification number is ___________, and on behalf of which I have the
authority to make this affidavit.

2. That the Purchaser is acquiring a Purchased Certificate representing an
interest in the assets of the Trust.

3. That the Purchaser satisfies the condition in the paragraph marked below
[mark one paragraph only]:

___ The Purchaser is not an employee benefit plan or other plan subject to the
prohibited transaction provisions of the Employee Retirement Income Security Act
of 1974, as amended, or Section 4975 of the Internal Revenue Code of 1986, as
amended (a "Plan"), or any other person (including an investment manager, a
named fiduciary or a trustee of any Plan) acting, directly or indirectly, on
behalf of, or purchasing any of the Purchased Certificates with "plan assets"
of, any Plan within the meaning of the Department of Labor ("DOL") regulation at
29 C.F.R. Section 2510.3-101.

___ The Purchaser is an insurance company, the source of funds to be used by it
to acquire or hold the Purchased Certificate is an "insurance company general
account" (within the meaning of DOL Prohibited Transaction Class Exemption
("PTCE") 95-60), and the conditions in Sections I and III of PTCE 95-60 have
been satisfied.

___ The Purchaser has delivered to Washington Mutual and the Trustee a Benefit
Plan Opinion (as defined in Section 1.01 of the Pooling and Servicing Agreement,
dated as of April 1, 2004, by and among Washington Mutual, the Trustee and the
Delaware Trustee thereunder, and relating to the Trust).

IN WITNESS WHEREOF, the Purchaser has caused this instrument to be duly executed
on its behalf, by its duly authorized officer this _____ day of
__________________, 20__.

                                     N-1
<PAGE>

[Purchaser]

By:
    ----------------------------------------
      Its:

                                      N-2
<PAGE>

Personally appeared before me ______________________, known or proved to me to
be the same person who executed the foregoing instrument and to be a
________________ of the Purchaser, and acknowledged to me that (s)he executed
the same as his/her free act and deed and as the free act and deed of the
Purchaser.

           SUBSCRIBED and SWORN to before me this day of ____________, 20__.

           _____________________
           Notary Public

                                      N-3

<PAGE>

                                                                    Exhibit O
                             BENEFIT PLAN AFFIDAVIT

Deutsche Bank National Trust Company, as Trustee (the "Trustee")
1761 East St. Andrew Place
Santa Ana, CA 92705
Attn: Trust Administration WA04A2

Washington Mutual Mortgage Securities Corp. ("Washington Mutual")
75 North Fairway Drive
Vernon Hills, IL  60061

RE:      CLASS [B-1][B-2][B-3] CERTIFICATES (THE "PURCHASED CERTIFICATES")
         ISSUED BY WaMu MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2004-AR2
         TRUST (THE "TRUST")

Under penalties of perjury, I, _____________________, declare that, to the best
of my knowledge and belief, the following representations are true, correct and
complete; and

1. That I am the _______________ of __________________ (the "Purchaser"), whose
taxpayer identification number is ___________, and on behalf of which I have the
authority to make this affidavit.

2. That the Purchaser is acquiring a Purchased Certificate representing an
interest in the assets of the Trust.

3. That the Purchaser satisfies the condition in the paragraph marked below
[mark one paragraph only]:

___ The Purchaser is not an employee benefit or other plan subject to the
prohibited transaction provisions of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), or Section 4975 of the Internal Revenue Code of
1986, as amended (a "Plan"), or any other person (including an investment
manager, a named fiduciary or a trustee of any such Plan) acting, directly or
indirectly, on behalf of or purchasing the Purchased Certificate with "plan
assets" of, any Plan within the meaning of the Department of Labor ("DOL")
regulation at 29 C.F.R. Section 2510.3-101.

___ The Purchaser is an insurance company, the source of funds to be used by it
to acquire or hold the Purchased Certificate is an "insurance company general
account" (within the meaning of DOL Prohibited Transaction Class Exemption
("PTCE") 95-60), and the conditions in Sections I and III of PTCE 95-60 have
been satisfied.

___ The Purchased Certificate was rated "BBB-" or better (or its equivalent) by
at least one of the Rating Agencies (as defined in Section 1.01 of the Pooling
and Servicing Agreement (the "the Pooling and Servicing Agreement"), dated as of
April 1, 2004, by and among Washington Mutual, the Trustee and the Delaware
Trustee thereunder, and relating to the Trust) at the time of Purchaser's
acquisition of the Purchased Certificate (or interest therein).

___ The Purchaser has delivered to Washington Mutual and the Trustee a Benefit
Plan Opinion (as defined in Section 1.01 of the Pooling and Servicing
Agreement).

                                     O-1
<PAGE>

IN WITNESS WHEREOF, the Purchaser has caused this instrument to be duly executed
on its behalf, by its duly authorized officer this _____ day of
__________________, 20__.

[Purchaser]

By:
    ----------------------------------------
      Its:

                                      O-2

<PAGE>

Personally appeared before me ______________________, known or proved to me to
be the same person who executed the foregoing instrument and to be a
________________ of the Purchaser, and acknowledged to me that (s)he executed
the same as his/her free act and deed and as the free act and deed of the
Purchaser.

        SUBSCRIBED and SWORN to before me this day of ____________, 20__.

        ___________________________
        Notary Public

                                      O-3Exhibit 10.1

TOTAL IDENTITY CORP.

2003 OMNIBUS SECURITIES PLAN 

AS AMENDED THROUGH JANUARY 12, 2004

	 
	 	 	 
	

	 

TABLE OF CONTENTS

 

	
 
	
 
	
Page

			

	
SECTION 1. PURPOSE.
	
1

	 	 
	
SECTION 2. DEFINITIONS.
	
1

	 	 	 
	
(a)
	
“Award”
	
1

	
(b)
	
“Board of Directors”
	
1

	
(c)
	
“Change in Control”
	
1

	
(d)
	
“Code”
	
1

	
(e)
	
“Committee”
	
1

	
(f)
	
“Common-Law Employee”
	
1

	
(g)
	
“Company”
	
2

	
(h)
	
“Employee”
	
2

	
(i)
	
“Exchange Act”
	
2

	
(j)
	
“Exercise Price”
	
2

	
(k)
	
“Fair Market Value”
	
2

	
(l)
	
“Incentive Stock Option” or “ISO”
	
2

	
(m)
	
“Nonstatutory Option” or “NSO”
	
2

	
(n)
	
“Offeree”
	
3

	
(o)
	
“Option”
	
3

	
(p)
	
“Optionee”
	
3

	
(q)
	
“Outside Director”
	
3

	
(r)
	
“Participant”
	
3

	
(s)
	
“Plan”
	
3

	
(t)
	
“Plan Year”
	
3

	
(u)
	
“Purchase Price”
	
3

	
(v)
	
“Restricted Share”
	
3

	
(w)
	
“Service”
	
3

	
(x)
	
“Share”
	
3

	
(y)
	
“Stock”
	
3

	
(z)
	
“Stock Award Agreement”
	
3

	
(aa)
	
“Stock Option Agreement”
	
3

	
(bb)
	
“Stock Purchase Agreement”
	
3

	
(cc)
	
“Subsidiary”
	
4

	
(dd)
	
“Total and Permanent Disability”
	
4

	
(ee)
	
“W-2 Payroll”
	
4

	 	 
	
SECTION 3. ADMINISTRATION.
	
4

	 	 	 
	
(a)
	
Committee Membership
	
4

	
(b)
	
Committee Procedures
	
4

	
(c)
	
Committee Responsibilities
	
4

	
(d)
	
Committee Liability
	
4

	
(e)
	
Financial Reports
	
4

 

	
 i

	 	 	 
	

	 

	
SECTION 4. ELIGIBILITY.
	
5

	 	 	 
	
(a)
	
General Rule
	
5

	
(b)
	
Ten-Percent Shareholders
	
5

	
(c)
	
Attribution Rules
	
5

	
(d)
	
Outstanding Stock
	
5

	 	 
	
SECTION 5. STOCK SUBJECT TO PLAN.
	
5

	 	 	 
	
(a)
	
Basic Limitation
	
5

	
(b)
	
Additional Shares
	
5

	 	 
	
SECTION 6. TERMS AND CONDITIONS OF AWARDS OR SALES.
	
5

	 	 	 
	
(a)
	
Stock Purchase Agreement
	
6

	
(b)
	
Duration of Offers
	
6

	
(c)
	
Purchase Price
	
6

	
(d)
	
Payment for Shares
	
6

	
(e)
	
Exercise of Awards on Termination of Service
	
7

	 	 
	
SECTION 7. ADDITIONAL TERMS AND CONDITIONS OF RESTRICTED
	
7

	 	 	 
	
(a)
	
Form and Amount of Award
	
7

	
(b)
	
Exercisability
	
7

	
(c)
	
Effect of Change in Control
	
7

	
(d)
	
Voting Rights
	
7

	 	 
	
SECTION 8. TERMS AND CONDITIONS OF OPTIONS.
	
7

	 	 	 
	
(a)
	
Stock Option Agreement
	
7

	
(b)
	
Number of Shares
	
7

	
(c)
	
Exercise Price
	
7

	
(d)
	
Exercisability
	
8

	
(e)
	
Effect of Change in Control
	
8

	
(f)
	
Term
	
8

	
(g)
	
Exercise of Options on Termination of Service
	
8

	
(h)
	
Payment of Option Shares
	
8

	
(i)
	
No Rights as a Shareholder
	
9

	
(j)
	
Modification, Extension and Assumption of Options
	
9

	 	 
	
SECTION 9. ADJUSTMENT OF SHARES.
	
9

	 	 	 
	
(a)
	
General
	
9

	
(b)
	
Reorganizations
	
9

	
(c)
	
Reservation of Rights
	
9

	
 ii

	 	 	 
	

	 

 

	
SECTION 10. WITHHOLDING TAXES.
	
9

	 	 	 
	
(a)
	
General
	
9

	
(b)
	
Share Withholding
	
9

	
(c)
	
Cashless Exercise/Pledge
	
10

	
(d)
	
Other Forms of Payment
	
10

	 	 
	
SECTION 11. ASSIGNMENT OR TRANSFER OF AWARDS.
	
10

	 	 	 
	
(a)
	
General
	
10

	
(b)
	
Trusts
	
10

	 	 
	
SECTION 12. LEGAL REQUIREMENTS.
	
10

	 	 
	
SECTION 13. NO EMPLOYMENT RIGHTS.
	
10

	 	 
	
SECTION 14. DURATION AND AMENDMENTS.
	
10

	 	 	 
	
(a)
	
Term of the Plan
	
10

	
(b)
	
Right to Amend or Terminate the Plan
	
11

	
(c)
	
Effect of Amendment or Termination
	
11

 

	
 iii

	 	 	 
	

	 

 

TOTAL IDENTITY CORP.

 

2003 OMNIBUS SECURITES PLAN

SECTION 1.    PURPOSE.

 

The purpose of the Total Identity Corp. f/k/a TMI Holdings, Inc. 2003 Omnibus Securities Plan (the “Plan”) is to offer selected employees, an opportunity to acquire a proprietary interest in the success of the Company, or to increase such interest, to encourage such selected persons to remain in the employ of the Company, and to attract new employees with outstanding qualifications. The Plan seeks to achieve this purpose by providing for Awards in the form of Restricted Shares and Options (which may constitute Incentive Stock Options or Nonstatutory Stock Options) as well as the direct award or sale of Shares of the Company’s Common Stock. Awards may be granted under this Plan in reliance upon federal and state securities law exemptions.

 

SECTION 2.    DEFINITIONS.

 

(a)   “Award” shall mean any award of an Option, Restricted Share or other right under the Plan.

 

(b)   “Board of Directors” shall mean the Board of Directors of the Company, as constituted from time to time.

 

(c)   “Change in Control” shall mean:

 

(i)   The consummation of a merger, consolidation, sale of the Company’s stock, or other reorganization of the Company (other than a reincorporation of the Company), if after giving effect to such merger, consolidation or other reorganization of the Company, the stockholders of the Company immediately prior to such merger, consolidation or other reorganization do not represent a majority interest of the holders of voting securities (on a fully diluted basis) with the ordinary voting power to elect directors of the surviving or resulting entity after such merger, consolidation or other reorganization; or

 

(ii)   The sale of all or substantially all of the assets of the Company to a third party who is not an affiliate of the Company.

 

(iii)   The term Change in Control shall not include: (a) a transaction the sole purpose of which is to change the state of the Company’s incorporation, or (b) the Company’s initial public offering.

 

(d)   “Code” shall mean the Internal Revenue Code of 1986, as amended.

 

(e)   “Committee” shall mean a committee of the Board of Directors which is authorized to administer the Plan under Section 3.

 

(f)   “Common-Law Employee” shall mean an individual paid from W-2 Payroll of the Company or a Subsidiary. If, during any period, the Company (or Subsidiary, as applicable) has not treated an individual as a Common-Law Employee and, for that reason, has not paid such individual in a manner which results in the issuance of a Form W-2 and withheld taxes with respect to him or her, then that 

	
 1

	 	 	 
	

	 

 

individual shall not be an eligible Employee for that period, even if any person, court of law or government agency determines, retroactively, that that individual is or was a Common-Law Employee during all or any portion of that period.

 

(g)   “Company” shall mean Total Identity Corp. f/k/a TMI Holdings, Inc., a Florida corporation.

 

(h)   “Employee” shall mean (i) any individual who is a Common-Law Employee of the Company or of a Subsidiary, (ii) a member of the Board of Directors, including (without limitation) an Outside Director, or an affiliate of a member of the Board of Directors, (iii) a member of the board of directors of a Subsidiary, or (iv) an independent contractor who performs services for the Company or a Subsidiary. Service as a member of the Board of Directors, a member of the board of directors of a Subsidiary or an independent contractor shall be considered employment for all purposes of the Plan except the second sentence of Section 4(a).

 

(i)   “Exchange Act” means the Securities and Exchange Act of 1934, as amended.

 

(j)   “Exercise Price” shall mean the amount for which one Share may be purchased upon exercise of an Option, as specified by the Committee in the applicable Stock Option Agreement.

 

(k)   “Fair Market Value” means the market price of Shares, determined by the Committee as follows:

 

(i)    If the Shares were traded over-the-counter on the date in question but were not traded on the Nasdaq Stock Market or the Nasdaq National Market System, then the Fair Market Value shall be equal to the mean between the last reported representative bid and asked prices quoted for such date by the principal automated inter-dealer quotation system on which the Shares are quoted or, if the Shares are not quoted on any such system, by the “Pink Sheets” published by the National Quotation Bureau, Inc.;

 

(ii)    If the Shares were traded over-the-counter on the date in question and were traded on the Nasdaq Stock Market or the Nasdaq National Market System, then the Fair Market Value shall be equal to the last-transaction price quoted for such date by the Nasdaq Stock Market or the Nasdaq National Market;

 

(iii)    If the Shares were traded on a stock exchange on the date in question, then the Fair Market Value shall be equal to the closing price reported by the applicable composite transactions report for such date; and

 

(iv)    If none of the foregoing provisions is applicable, then the Fair Market Value shall be determined by the Committee in good faith on such basis as it deems appropriate.

 

In all cases, the determination of Fair Market Value by the Committee shall be conclusive and binding on all persons.

 

(l)   “Incentive Stock Option” or “ISO” shall mean an employee incentive stock option described in Code section 422(b).

 

(m)   “Nonstatutory Option” or “NSO” shall mean an employee stock option that is not an ISO.

 

	
 2

	 	 	 
	

	 

 

(n)   “Offeree” shall mean an individual to whom the Committee has offered the right to acquire Shares under the Plan (other than upon exercise of an Option).

 

(o)   “Option” shall mean an Incentive Stock Option or Nonstatutory Option granted under the Plan and entitling the holder to purchase Shares.

 

(p)   “Optionee” shall mean an individual or estate who holds an Option.

 

(q)   “Outside Director” shall mean a member of the Board who is not a Common-Law Employee of the Company or a Subsidiary.

 

(r)   “Participant” shall mean an individual or estate who holds an Award.

 

(s)   “Plan” shall mean this 2003 Omnibus Securities Plan of Total Identity Corp.

 

(t)   “Plan Year” shall mean any twelve (12) month period (or shorter period during the final year of this Plan) commencing May 1 during the term of this Plan.

 

(u)   “Purchase Price” shall mean the consideration for which one Share may be acquired under the Plan (other than upon exercise of an Option), as specified by the Committee.

 

(v)   “Restricted Share” shall mean a Share sold or granted to an eligible Employee which is nontransferable and subject to substantial risk of forfeiture until restrictions lapse.

 

(w)   “Service” shall mean service as an Employee.

 

(x)   “Share” shall mean one share of Stock, as adjusted in accordance with Section 9 (if applicable).

 

(y)   “Stock” shall mean the common stock of the Company.

 

(z)   “Stock Award Agreement” shall mean the agreement between the Company and the recipient of a Restricted Share which contains the terms, conditions and restrictions pertaining to such Restricted Share.

 

(aa)   “Stock Option Agreement” shall mean the agreement between the Company and an Optionee which contains the terms, conditions and restrictions pertaining to his or her Option.

 

(bb)   “Stock Purchase Agreement” shall mean the agreement between the Company and an Offeree who acquires Shares under the Plan which contains the terms, conditions and restrictions pertaining to the acquisition of such Shares.

 

	
 3

	 	 	 
	

	 

 

(cc)   “Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date.

 

(dd)   “Total and Permanent Disability” means that the Optionee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment.

 

(ee)   “W-2 Payroll” means whatever mechanism or procedure that the Company or a Subsidiary utilizes to pay any individual which results in the issuance of Form W-2 to the individual. “W-2 Payroll” does not include any mechanism or procedure which results in the issuance of any form other than a Form W-2 to an individual, including, but not limited to, any Form 1099 which may be issued to an independent contractor, an agency employee or a consultant. Whether a mechanism or procedure qualifies as a “W-2 Payroll” shall be determined in the absolute discretion of the Company (or Subsidiary, as applicable), and the Company or Subsidiary determination shall be conclusive and binding on all persons.

 

SECTION 3.    ADMINISTRATION.

 

(a)   Committee Membership. The Plan shall be administered by the Compensation Committee (the “Committee”) appointed by the Company’s Board of Directors and comprised of at least two or more Outside Directors (although Committee functions may be delegated to officers to the extent the awards relate to persons who are not subject to the reporting requirements of Section 16 of the Exchange Act). If no Committee has been appointed, the entire Board shall constitute the Committee.

 

(b)   Committee Procedures. The Board of Directors shall designate one of the members of the Committee as chairperson. The Committee may hold meetings at such times and places as it shall determine. The acts of a majority of the Committee members present at meetings at which a quorum exists, or acts reduced to or approved in writing by all Committee members, shall be valid acts of the Committee.

 

(c)   Committee Responsibilities. The Committee has and may exercise such power and authority as may be necessary or appropriate for the Committee to carry out its functions as described in the Plan. The Committee has authority in its discretion to determine eligible Employees to whom, and the time or times at which, Awards may be granted and the number of Shares subject to each Award. Subject to the express provisions of the respective Award agreements (which need not be identical) and to make all other determinations necessary or advisable for Plan administration, the Committee has authority to prescribe, amend, and rescind rules and regulations relating to the Plan. All interpretations, determinations, and actions by the Committee will be final, conclusive, and binding upon all persons.

 

(d)   Committee Liability. No member of the Board or the Committee will be liable for any action or determination made in good faith by the Committee with respect to the Plan or any Award made under the Plan.

 

(e)   Financial Reports. To the extent required by applicable law, and not less often than annually, the Company shall furnish to Offerees, Optionees and Shareholders who have received Stock under the Plan its financial statements including a balance sheet regarding the Company’s financial condition and results of operations, unless such Offerees, Optionees or Shareholders have duties with the 

 

	
 4

	 	 	 
	

	 

 

Company that assure them access to equivalent information. Such financial statements need not be audited.

 

SECTION 4.    ELIGIBILITY.

 

(a)   General Rule. Only Employees shall be eligible for designation as Participants by the Committee. In addition, only individuals who are employed as Common-Law Employees by the Company or a Subsidiary shall be eligible for the grant of ISOs.

 

(b)   Ten-Percent Shareholders. An Employee who owns more than ten percent (10%) of the total combined voting power of all classes of outstanding stock of the Company or any of its Subsidiaries shall not be eligible for designation as an Offeree or Optionee unless (i) the Exercise Price for an ISO (and a NSO to the extent required by applicable law) is at least one hundred ten percent (110%) of the Fair Market Value of a Share on the date of grant, (ii) if required by applicable law, the Purchase Price of Shares is at least one hundred percent (100%) of the Fair Market Value of a Share on the date of grant, and (iii) in the case of an ISO, such ISO by its terms is not exercisable after the expiration of five years from the date of grant.

 

(c)   Attribution Rules. For purposes of Subsection (b) above, in determining stock ownership, an Employee shall be deemed to own the stock owned, directly or indirectly, by or for his brothers, sisters, spouse, ancestors and lineal descendants. Stock owned, directly or indirectly, by or for a corporation, partnership, estate or trust shall be deemed to be owned proportionately by or for its shareholders, partners or beneficiaries. Stock with respect to which such Employee holds an Option shall not be counted.

 

(d)   Outstanding Stock. For purposes of Subsection (b) above, “outstanding stock” shall include all stock actually issued and outstanding immediately after the grant. “Outstanding Stock” shall not include shares authorized for issuance under outstanding Options held by the Employee or by any other person.

 

SECTION 5.    STOCK SUBJECT TO PLAN.

 

(a)   Basic Limitation. Shares offered under the Plan shall be authorized but unissued Shares. Subject to Sections 5(b) and 9 of the Plan, the aggregate number of Shares which may be issued or transferred as common stock pursuant to an Award under the Plan shall not exceed 800,000.

In any event, the number of Shares which are subject to Awards or other rights outstanding at any time under the Plan shall not exceed the number of Shares which then remain available for issuance under the Plan. The Company, during the term of the Plan, shall at all times reserve and keep available sufficient Shares to satisfy the requirements of the Plan.

(b)   Additional Shares. In the event that any outstanding Option or other right for any reason expires or is canceled or otherwise terminated, the Shares allocable to the unexercised portion of such Option or other right shall again be available for the purposes of the Plan. If a Restricted Share is forfeited before any dividends have been paid with respect to such Restricted Share, then such Restricted Share shall again become available for award under the Plan.

 

SECTION 6.    TERMS AND CONDITIONS OF AWARDS OR SALES.

 

	
 6

	 	 	 
	

	 

 

(a)   Stock Purchase Agreement. Each award or sale of Shares under the Plan (other than upon exercise of an Option) shall be evidenced by a Stock Purchase Agreement between the Offeree and the Company. Such award or sale shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions which are not inconsistent with the Plan and which the Committee deems appropriate for inclusion in a Stock Purchase Agreement. The provisions of the various Stock Purchase Agreements entered into under the Plan need not be identical.

 

(b)   Duration of Offers. Any right to acquire Shares under the Plan (other than an Option) shall automatically expire if not exercised by the Offeree within thirty (30) days after the grant of such right was communicated to the Offeree by the Committee.

 

(c)   Purchase Price. Unless otherwise permitted by applicable law, the Purchase Price of Shares to be offered under the Plan shall not be less than eighty-five percent (85%) of the Fair Market Value of a Share on the date of grant (100% for 10% shareholders), except as otherwise provided in Section 4(b). Subject to the preceding sentence, the Purchase Price shall be determined by the Committee in its sole discretion. The Purchase Price shall be payable in a form described in Subsection (d) below.

 

(d)   Payment for Shares. The entire Purchase Price of Shares issued under the Plan shall be payable in lawful money of the United States of America at the time when such Shares are purchased, except as provided below:

 

(i)   Surrender of Stock. To the extent that a Stock Option Agreement so provides, payment may be made all or in part with Shares which have already been owned by the Optionee or Optionee’s representative for any time period specified by the Committee and which are surrendered to the Company in good form for transfer. Such shares shall be valued at their Fair Market Value on the date when the new Shares are purchased under the Plan.

 

(ii)   Promissory Notes. To the extent that a Stock Option Agreement or Stock Purchase Agreement so provides, payment may be made all or in part with a full recourse promissory note executed by the Optionee or Offeree. The interest rate and other terms and conditions of such note shall be determined by the Committee. The Committee may require that the Optionee or Offeree pledge his or her Shares to the Company for the purpose of securing the payment of such note. In no event shall the stock certificate(s) representing such Shares be released to the Optionee or Offeree until such note is paid in full.

 

(iii)   Cashless Exercise. To the extent that a Stock Option Agreement so provides and a public market for the Shares exists, payment may be made all or in part by delivery (on a form prescribed by the Committee) of an irrevocable direction to a securities broker to sell shares and to deliver all or part of the sale proceeds to the Company in payment of the aggregate Exercise Price.

 

(iv)   Other Forms of Payment. To the extent provided in the Stock Option Agreement, payment may be made in any other form that is consistent with applicable laws, regulations and rules.

 

	
 7

	 	 	 
	

	 

 

(e)   Exercise of Awards on Termination of Service. Each Stock Award Agreement shall set forth the extent to which the recipient shall have the right to exercise the Award following termination of the recipient’s Service with the Company and its Subsidiaries. Such provisions shall be determined in the sole discretion of the Committee, need not be uniform among all the Awards issued pursuant to the Plan, and may reflect distinctions based on the reasons for termination of employment.

 

SECTION 7.    ADDITIONAL TERMS AND CONDITIONS OF RESTRICTED SHARES. 

(a)   Form and Amount of Award. Each Stock Award Agreement shall specify the number of Shares that are subject to the Award. Restricted Shares may be awarded in combination with NSOs and such an Award may provide that the Restricted Shares will be forfeited in the event that the related NSOs are exercised.

(b)   Exercisability. Each Stock Award Agreement shall specify the conditions upon which Restricted Shares shall become vested, in full or in installments. To the extent required by applicable law, each Stock Award shall become exercisable no less rapidly than the rate of 20% per year for each of the first five years from the date of grant. Subject to the preceding sentence, the exercisability of any Stock Award shall be determined by the Committee in its sole discretion.

 

(c)   Effect of Change in Control. The Committee may determine at the time of making an Award or thereafter, that such Award shall become fully vested, in whole or in part, in the event that a Change in Control occurs with respect to the Company.

 

(d)   Voting Rights. Holders of Restricted Shares awarded under the Plan shall have the same voting, dividend and other rights as the Company’s other stockholders. A Stock Award Agreement, however, may require that the holders invested any cash dividends received in additional Restricted Shares. Such additional Restricted Shares shall be subject to the same conditions and restrictions as the Award with respect to which the dividends were paid. Such additional Restricted Shares shall not reduce the number of Shares available under Section 5.

 

SECTION 8.    TERMS AND CONDITIONS OF OPTIONS.

 

(a)   Stock Option Agreement. Each grant of an Option under the Plan shall be evidenced by a Stock Option Agreement between the Optionee and the Company. Such Option shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions which are not inconsistent with the Plan and which the Committee deems appropriate for inclusion in a Stock Option Agreement. The provisions of the various Stock Option Agreements entered into under the Plan need not be identical.

 

(b)   Number of Shares. Each Stock Option Agreement shall specify the number of Shares that are subject to the Option and shall provide for the adjustment of such number in accordance with Section 9. The Stock Option Agreement shall also specify whether the Option is an ISO or a Nonstatutory Option.

 

(c)   Exercise Price. Each Stock Option Agreement shall specify the Exercise Price. The Exercise Price of an ISO shall not be less than one hundred percent (100%) of the Fair Market Value of a Share on the date of grant, except as otherwise provided in Section 4(b). To the extent required by applicable law and except as otherwise provided in Section 4(b), the Exercise Price of a Nonstatutory Option shall not be less than eighty-five percent (85%) of the Fair Market Value of a Share on the date of grant. Subject to the preceding two sentences, the Exercise Price under any Option shall be determined 

 

	
 8

	 	 	 
	

	 

 

by the Committee in its sole discretion. The Exercise Price shall be payable in a form described in Subsection (h) below.

 

(d)   Exercisability. Each Stock Option Agreement shall specify the date when all or any installment of the Option is to become exercisable. To the extent required by applicable law, an Option shall become exercisable no less rapidly than the rate of 20% per year for each of the first five years from the date of grant. Subject to the preceding sentence, the exercisability of any Option shall be determined by the Committee in its sole discretion.

 

(e)   Effect of Change in Control. The Committee may determine, at the time of granting an Option or thereafter, that such Option shall become fully exercisable as to all Shares subject to such Option in the event that a Change in Control occurs with respect to the Company.

 

(f)   Term. The Stock Option Agreement shall specify the term of the Option. The term shall not exceed ten (10) years from the date of grant (or five (5) years for ten percent (10%) shareholders as provided in Section 4(b)). Subject to the preceding sentence, the Committee at its sole discretion shall determine when an Option is to expire.

 

(g)   Exercise of Options on Termination of Service. Each Option shall set forth the extent to which the Optionee shall have the right to exercise the Option following termination of the Optionee’s Service with the Company and its Subsidiaries. Such provisions shall be determined in the sole discretion of the Committee, need not be uniform among all Options issued pursuant to the Plan, and may reflect distinctions based on the reasons for termination of employment. Notwithstanding the foregoing, to the extent required by applicable law, each Option shall provide that the Optionee shall have the right to exercise the vested portion of any Option held at termination for at least sixty (60) days following termination of Service with the Company for any reason, and that the Optionee shall have the right to exercise the Option for at least six (6) months if the Optionee’s Service terminates due to death or Disability.

 

(h)   Payment of Option Shares. The entire Exercise Price of Shares issued under the Plan shall be payable in lawful money of the United States of America at the time when such Shares are purchased, except as provided below:

 

(i)   Surrender of Stock. To the extent that a Stock Option Agreement so provides, payment may be made all or in part with Shares which have already been owned by the Optionee or Optionee’s representative for any time period specified by the Committee and which are surrendered to the Company in good form for transfer. Such shares shall be valued at their Fair Market Value on the date when the new Shares are purchased under the Plan.

 

(ii)   Promissory Notes. To the extent that a Stock Option Agreement or Stock Purchase Agreement so provides, payment may be made all or in part with a full recourse promissory note executed by the Optionee or Offeree. The interest rate and other terms and conditions of such note shall be determined by the Committee. The Committee may require that the Optionee or Offeree pledge his or her Shares to the Company for the purpose of securing the payment of such note. In no event shall the stock certificate(s) representing such Shares be released to the Optionee or Offeree until such note is paid in full.

 

(iii)   Cashless Exercise. To the extent that a Stock Option Agreement so provides and a public market for the Shares exists, payment may be made all or in part by delivery (on a form prescribed by the Committee) of an irrevocable direction to a securities broker to sell shares and 

 

	
 9

	 	 	 
	

	 

 

to deliver all or part of the sale proceeds to the Company in payment of the aggregate Exercise Price.

 

(iv)   Other Forms of Payment. To the extent provided in the Stock Option Agreement, payment may be made in any other form that is consistent with applicable laws, regulations and rules.

 

(i)   Modification, Extension and Assumption of Options. Within the limitations of the Plan, the Committee may modify, extend or assume outstanding Options or may accept the cancellation of outstanding Options (whether granted by the Company or another issuer) in return for the grant of new Options for the same or a different number of Shares and at the same or a different Exercise Price or for other consideration.

 

SECTION 9.    ADJUSTMENT OF SHARES.

 

(a)   General. In the event of a subdivision of the outstanding Stock, a declaration of a dividend payable in Shares, a combination or consolidation of the outstanding Stock into a lesser number of Shares, a recapitalization, a reclassification or a similar occurrence, the Committee shall make appropriate adjustments, subject to the limitations set forth in Section 9(c), in one or more of (i) the number of Shares available for future Awards under Section 5, (ii) the number of Shares covered by each outstanding Option or Purchase Agreement or (iii) the Exercise Price or Purchase Price under each outstanding Option or Stock Purchase Agreement.

 

(b)   Reorganizations. In the event that the Company is a party to a merger or reorganization, outstanding Options shall be subject to the agreement of merger or reorganization, provided however, that the limitations set forth in Section 9(c) shall apply.

 

(c)   Reservation of Rights. Except as provided in this Section 9, an Optionee or an Offeree shall have no rights by reason of (i) any subdivision or consolidation of shares of stock of any class, (ii) the payment of any dividend or (iii) any other increase or decrease in the number of shares of stock of any class. Any issue by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number, Exercise Price or Purchase Agreement of Shares subject to an Option or Stock Purchase Agreement. The grant of an Award pursuant to the Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, to merge or consolidate or to dissolve, liquidate, sell or transfer all or any part of its business or assets.

 

SECTION 10.    WITHHOLDING TAXES.

 

(a)   General. To the extent required by applicable federal, state, local or foreign law, a Participant or his or her successor shall make arrangements satisfactory to the Committee for the satisfaction of any withholding tax obligations that arise in connection with the Plan. The Company shall not be required to issue any Shares or make any cash payment under the Plan until such obligations are satisfied.

 

(b)   Share Withholding. The Committee may permit a Participant to satisfy all or part of his or her withholding or income tax obligations by having the Company withhold all or a portion of any Shares that otherwise would be issued to him or her or by surrendering all or a portion of any Shares that he or she previously acquired. Such Shares shall be valued at their Fair Market Value on the date when

 

	
 10

	 	 	 
	

	 

 

 taxes otherwise would be withheld in cash. Any payment of taxes by assigning Shares to the Company may be subject to restrictions, including any restrictions required by rules of any federal or state regulatory body or other authority.

 

(c)   Cashless Exercise/Pledge. The Committee may provide that if Company Shares are publicly traded at the time of exercise, arrangements may be made to meet the Optionee’s withholding obligation by cashless exercise or pledge.

 

(d)   Other Forms of Payment. The Committee may permit such other means of tax withholding as it deems appropriate.

 

SECTION 11.    ASSIGNMENT OR TRANSFER OF AWARDS.

 

(a)   General. An Award granted under the Plan shall not be anticipated, assigned, attached, garnished, optioned, transferred or made subject to any creditor’s process, whether voluntarily, involuntarily or by operation of law, except as approved by the Committee. Notwithstanding the foregoing, ISOs may not be transferable. Also notwithstanding the foregoing, Offerees and Optionees may not transfer their rights hereunder except by will, beneficiary designation or the laws of descent and distribution.

 

(b)   Trusts. Neither this Section 11 nor any other provision of the Plan shall preclude a Participant from transferring or assigning Restricted Shares to (a) the trustee of a trust that is revocable by such Participant alone, both at the time of the transfer or assignment and at all times thereafter prior to such Participant’s death, or (b) the trustee of any other trust to the extent approved by the Committee in writing. A transfer or assignment of Restricted Shares from such trustee to any other person than such Participant shall be permitted only to the extent approved in advance by the Committee in writing, and Restricted Shares held by such trustee shall be subject to all the conditions and restrictions set forth in the Plan and in the applicable Stock Award Agreement, as if such trustee were a party to such Agreement.

 

SECTION 12.    LEGAL REQUIREMENTS.

 

Shares shall not be issued under the Plan unless the issuance and delivery of such Shares complies with (or is exempt from) all applicable requirements of law, including (without limitation) the Securities Act of 1933, as amended, the rules and regulations promulgated thereunder, state securities laws and regulations, and the regulations of any stock exchange on which the Company’s securities may then be listed.

 

SECTION 13.    NO EMPLOYMENT RIGHTS.

 

No provision of the Plan, nor any right or Option granted under the Plan, shall be construed to give any person any right to become, to be treated as, or to remain an Employee. The Company and its Subsidiaries reserve the right to terminate any person’s Service at any time and for any reason.

 

SECTION 14.    DURATION AND AMENDMENTS.

 

(a)   Term of the Plan. The Plan, as set forth herein, shall become effective on the date of its adoption by the Board of Directors, subject to the approval of the Company’s shareholders. In the event that the shareholders fail to approve the Plan within twelve (12) months after its adoption by the Board of Directors, any grants already made shall be null and void, and no additional grants shall be made after such date. The Plan shall terminate automatically ten (10) years after its adoption by the Board of Directors and may be terminated on any earlier date pursuant to Subsection (b) below.

 

(b)   Right to Amend or Terminate the Plan. The Board of Directors may amend the Plan at any time and from time to time. Rights and obligations under any right or Option granted before amendment of the Plan shall not be materially altered, or impaired adversely, by such amendment, except with consent of the person to whom the right or Option was granted. An amendment of the Plan shall be subject to the approval of the Company’s shareholders only to the extent required by applicable laws, regulations or rules including the rules of any applicable exchange.

 

(c)   Effect of Amendment or Termination. No Shares shall be issued or sold under the Plan after the termination thereof, except upon exercise of an Option granted prior to such termination. The termination of the Plan, or any amendment thereof, shall not affect any Shares previously issued or any Option previously granted under the Plan.

	
 11

	 	 	 
	

	 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE, AND MAY BE OFFERED AND SOLD ONLY IF REGISTERED AND QUALIFIED PURSUANT TO THE RELEVANT PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS OR IF THE COMPANY IS PROVIDED AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION AND QUALIFICATION UNDER FEDERAL AND STATE SECURITIES LAWS IS NOT REQUIRED.

 

TOTAL IDENTITY CORP.

2003 OMNIBUS SECURITIES PLAN

INCENTIVE STOCK OPTION AGREEMENT

 

Total Identity Corp. (the “Company”), hereby grants an Option to purchase shares of its common stock (“Shares”) to the Optionee named below. The terms and conditions of the Option are set forth in this cover sheet, in the attachment and in the Company’s 2003 Omnibus Securities Plan (the “Plan”).

 

Date of Grant: ________________________

 

Name of Optionee: ________________________________

 

Optionee’s Social Security Number: _________________________

 

Number of Shares Covered by Option: ________________________

 

Exercise Price per Share: $ _______________________

 

[must be at least 100% fair market value on Date of Grant]

 

Vesting Start Date: ______________________

 

___   Check here if Optionee is a 10% owner (so that exercise price must be 110% of fair market value and term will not exceed 5 years).

 

By signing this cover sheet, you agree to all of the terms and conditions described in the attached Agreement and in the Plan, a copy of which is also attached.

Optionee: _____________________________

         (Signature)

 

Company: _____________________________ 

 (Signature)

 

Title: _________________________

	 
	 	 	 
	

	 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE, AND MAY BE OFFERED AND SOLD ONLY IF REGISTERED AND QUALIFIED PURSUANT TO THE RELEVANT PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS OR IF THE COMPANY IS PROVIDED AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION AND QUALIFICATION UNDER FEDERAL AND STATE SECURITIES LAWS IS NOT REQUIRED.

TOTAL IDENTITY CORP.

2003 OMNIBUS SECURITIES PLAN

INCENTIVE STOCK OPTION AGREEMENT

	
 

Incentive Stock Option
	
 

This Option is intended to be an incentive stock option under section 422 of the Internal Revenue Code and will be interpreted accordingly.

	
    

Vesting
	
 

No Shares will vest until you have performed _________ (____) months of Service from the commencement of your employment with the Company. Your Option shall vest as to ________ of the Shares on the date _______ (____) months from the Vesting Start Date as shown on the cover sheet. Thereafter, Shares shall vest at the rate of _______ of the Shares at the end of each full month thereafter. After you have completed _________ (____) months of Service, the number of Shares which vest under this Option at the Exercise Price shall be equal to the product of the number of full months of your continuous employment with the Company (“Service”) (including any approved leaves of absence) from the Vesting Start Date times the number of Shares covered by this Option times ________. The resulting number of Shares will be rounded to the nearest whole number. No additional Shares will vest after your Service has terminated for any reason.

 

You should note that you may exercise the Option prior to vesting. In that case, the Company has a right to repurchase the unvested shares at the original exercise price if you terminate employment before vesting in all shares you purchased. Also, if you exercise before vesting, you should consider making an 83(b) election. Please see the attached Tax Summary. The 83(b) election must be filed within 30 days of the date you exercise.

	
 

Term
	
 

Your Option will expire in any event at the close of business at Company headquarters on the day before the tenth anniversary (fifth anniversary for a 10% owner) of the Date of Grant, as shown on the cover sheet. (It will expire earlier if your Service terminates, as described below.)

 

	
 

Regular Termination
	
 

If your Service terminates for any reason except death, Disability or for “Cause,” your Option will expire at the close of business at Company headquarters on the 30th day after your termination date. During that 30-day period, you may exercise that portion of your Option that was vested on your termination date.

	
 

Death
	
 

If you die while in Service with the Company, your Option will expire at the close of business at Company headquarters on the date six months after the date of death. During that six-month period, your estate or heirs may exercise that portion of your Option that was vested on the date of death.

	
 

Disability
	
 

If your Service terminates because of your Disability, your Option will expire at the close of business at Company headquarters on the date six months after your termination date. (However, if your Disability is not expected to result in death or to last for a continuous period of at least 12 months, your Option will be eligible for ISO tax treatment only if it is exercised within three months following the termination of your Service.) During that six-month period, you may exercise that portion of your Option that was vested on the date of your Disability.

 

“Disability” means that you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment.

	
 

Leaves of Absence
	
 

For purposes of this Option, your Service does not terminate when you go on a bona fide leave of absence that was approved by the Company in writing, if the terms of the leave provide for continued service crediting, or when continued service crediting is required by applicable law. However, your Service will be treated as terminating 30 days after you went on leave, unless your right to return to active work is guaranteed by law or by a contract. Your Service terminates in any event when the approved leave ends unless you immediately return to active work. The Company determines which leaves count for this purpose, and when your Service terminates for all purposes under the Plan. The Company also determines the extent to which you may exercise the vested portion of your Option during a leave of absence.

	
 

Notice of Exercise
	
 

When you wish to exercise this Option, you must execute Exhibit A (and, if exercise is prior to vesting, you must also execute Exhibits B and D). Your exercise will be effective when it is received by the Company. If someone else wants to exercise this Option after your death, that person must prove to the Company’s satisfaction that he or she is entitled to do so.

	
 

Form of Payment
	
 

When you submit Exhibit A, you must include payment of the Exercise Price for the Shares you are purchasing. Payment may be made in one (or a combination) of the following forms at the discretion of the committee:

·Your personal check, a cashier’s check or a money order.

 

·   Shares which you have owned for six months and which are surrendered to the Company. The value of the Shares, determined as of the effective date of the Option exercise, will be applied to the Exercise Price.

 

·   To the extent that a public market for the Shares exists as determined by the Company, by delivery (on a form prescribed by the Committee) of an irrevocable direction to a securities broker to sell Shares and to deliver all or part of the sale proceeds to the Company in payment of the aggregate Exercise Price.

 

Any other form of legal consideration approved by the Committee.

	
 

Withholding Taxes
	
 

You will not be allowed to exercise this Option unless you make acceptable arrangements to pay any withholding or other taxes that may be due as a result of the Option exercise or the sale of Shares acquired upon exercise of this Option.

	
 

Restrictions on Resale 
	
 

By signing this Agreement, you agree not to exercise this Option or sell any Shares acquired upon exercise of this Option at a time when applicable laws, regulations or Company or underwriter trading policies prohibit exercise or sale. In particular, the Company shall have the right to designate one or more periods of time, each of which shall not exceed 180 days in length, during which this Option shall not be exercisable if the Company determines (in its sole discretion) that such limitation on exercise could in any way facilitate a lessening of any restriction on transfer pursuant to the Securities Act or any state securities laws with respect to any issuance of securities by the Company, facilitate the registration or qualification of any securities by the Company under the Securities Act or any state securities laws, or facilitate the perfection of any exemption from the registration or qualification requirements of the Securities Act or any applicable state securities laws for the issuance or transfer of any securities. Such limitation on exercise shall not alter the vesting schedule set forth in this Agreement other than to limit the periods during which this Option shall be exercisable.

 

Furthermore, in respect of any underwritten public offering by the Company, you agree that you will not sell or otherwise transfer or dispose of any Shares covered by this Option during a reasonable and customary period of time as agreed to by the Company and the underwriters, not to exceed the greater of (a) 180 days following the effective date of the registration statement of the Company filed under the Securities Act in respect of such offering and (b) such other period of time as agreed to by holders of a majority of the then outstanding Shares. By signing this Agreement you agree to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriter which are consistent with the foregoing or which are necessary to give further effect thereto. The Company may impose stop-transfer instructions with respect to the Shares subject to the foregoing restriction until the end of such period.

 

If the sale of Shares under the Plan is not registered under the Securities Act of 1933, as amended (the “Securities Act”), but an exemption is available which requires an investment or other representation, you shall represent and agree at the time of exercise that the Shares being acquired upon exercise of this Option are being acquired for investment, and not with a view to the sale or distribution thereof, and shall make such other representations as are deemed necessary or appropriate by the Company and its counsel.

	
 

The Company’s Right of First Refusal
	
 

In the event that you propose to sell, pledge or otherwise transfer to a third party any Shares acquired under this Agreement, or any interest in such Shares, the Company shall have the “Right of First Refusal” with respect to all (and not less than all) of such Shares. If you desire to transfer Shares acquired under this Agreement, you must give a written “Transfer Notice” to the Company describing fully the proposed transfer, including the number of Shares proposed to be transferred, the proposed transfer price and the name and address of the proposed transferee. The Transfer Notice shall be signed both by you and by the proposed transferee and must constitute a binding commitment of both parties to the transfer of the Shares.

 

The Company and its assignees shall have the right to purchase all, and not less than all, of the Shares on the terms described in the Transfer Notice (subject, however, to any change in such terms permitted in the next paragraph) by delivery of a Notice of Exercise of the Right of First Refusal within 30 days after the date when the Transfer Notice was received by the Company. The Company’s rights under this Subsection shall be freely assignable, in whole or in part.

 

If the Company fails to exercise its Right of First Refusal within 30 days after the date when it received the Transfer Notice, you may, not later than 60 days following receipt of the Transfer Notice by the Company, conclude a transfer of the Shares subject to the Transfer Notice on the terms and conditions described in the Transfer Notice. Any proposed transfer on terms and conditions different from those described in the Transfer Notice, as well as any subsequent proposed transfer by you, shall again be subject to the Right of First Refusal and shall require compliance with the procedure described in the paragraph above. If the Company exercises its Right of First Refusal, you and the Company (or its assignees) shall consummate the sale of the Shares on the terms set forth in the Transfer Notice.

 

The Company’s Right of First Refusal shall terminate upon the Company’s initial public offering.

 

The Company’s Right of First Refusal shall inure to the benefit of its successors and assigns and shall be binding upon any transferee of the Shares.

	
 

Right of Repurchase
	
 

Following termination of your Service for any reason, the Company shall have the right to purchase all of those vested Shares that you have or will acquire under this Option (unvested Shares which have been exercised are subject to a Repurchase Option set forth in Exhibit A). If the Company fails to provide you with written notice of its intention to purchase such Shares before or within 30 days of the date the Company receives written notice from you of your termination of Service, the Company’s right to purchase such Shares shall terminate. If the Company exercises its right to purchase such Shares, the Company will consummate the purchase of such Shares within 60 days of the date of its written notice to you. The purchase price for any Shares repurchased shall be the higher of the fair market value of the Shares on the date of purchase or the aggregate Exercise Price for such Shares and shall be paid in cash. The Company’s right of repurchase shall terminate in the event that Stock is listed on an established stock exchange or is quoted regularly on the Nasdaq National Market. The fair market value shall be determined by the Board of Directors in its sole discretion.

	
 

Transfer of Option
	
 

Prior to your death, only you may exercise this Option. You cannot transfer or assign this Option. For instance, you may not sell this Option or use it as security for a loan. If you attempt to do any of these things, this Option will immediately become invalid. You may, however, dispose of this Option in your will.

	
 
	
 

Regardless of any marital property settlement agreement, the Company is not obligated to honor a Notice of Exercise from your spouse or former spouse, nor is the Company obligated to recognize such individual’s interest in your Option in any other way.

	
 

Retention Rights
	
 

This Agreement does not give you the right to be retained by the Company in any capacity. The Company reserves the right to terminate your Service at any time and for any reason.

	
 

Shareholder Rights
	
 

Neither you, nor your estate or heirs, have any rights as a shareholder of the Company until a certificate for the Shares acquired upon exercise of this Option has been issued. No adjustments are made for dividends or other rights if the applicable record date occurs before your stock certificate is issued, except as described in the Plan.

	
 

Adjustments
	
 

In the event of a stock split, a stock dividend or a similar change in the Company’s Stock, the number of Shares covered by this Option and the Exercise Price per share may be adjusted pursuant to the Plan. Your Option shall be subject to the terms of the agreement of merger, liquidation or reorganization in the event the Company is subject to such corporate activity.

	
 

Legends
	
 

All certificates representing the Shares issued upon exercise of this Option shall, where applicable, have endorsed thereon the following legends:

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND OPTIONS TO PURCHASE SUCH SHARES SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER, OR SUCH HOLDER’S PREDECESSOR IN INTEREST. SUCH AGREEMENT IMPOSES CERTAIN TRANSFER RESTRICTIONS AND GRANTS CERTAIN REPURCHASE RIGHTS TO THE COMPANY (OR ITS ASSIGNS) UPON THE SALE OF THE SHARES OR UPON TERMINATION OF SERVICE WITH THE COMPANY. A COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY AND WILL BE FURNISHED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY BY THE HOLDER OF SHARES REPRESENTED BY THIS CERTIFICATE.

	
 
	
 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, OR THE SECURITIES LAWS OF ANY STATE, AND MAY BE OFFERED AND SOLD ONLY IF REGISTERED AND QUALIFIED PURSUANT TO THE RELEVANT PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS OR IF THE COMPANY IS PROVIDED AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT REGISTRATION AND QUALIFICATION UNDER FEDERAL AND STATE SECURITIES LAWS IS NOT REQUIRED.”

	
 

Applicable Law
	
 

This Agreement will be interpreted and enforced under the laws of the State of Florida (without regard to their choice of law provisions).

	
 

The Plan and Other Agreements
	
 

The text of the Plan is incorporated in this Agreement by reference. Certain capitalized terms used in this Agreement are defined in the Plan.

 

This Agreement, including its attachments, and the Plan constitute the entire understanding between you and the Company regarding this Option. Any prior agreements, commitments or negotiations con-cerning this Option are superseded.

By signing the cover sheet of this Agreement, you agree to all of the terms and conditions described above and in the Plan. You also acknowledge that you have read Section 11, “Purchaser’s Investment Representations” of Attachment A and that you can and hereby do make the same representations with respect to the grant of this Option.

	 
	 	 	 
	

	 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE, AND MAY BE OFFERED AND SOLD ONLY IF REGISTERED AND QUALIFIED PURSUANT TO THE RELEVANT PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS OR IF THE COMPANY IS PROVIDED AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION AND QUALIFICATION UNDER FEDERAL AND STATE SECURITIES LAWS IS NOT REQUIRED.

 

TOTAL IDENTITY CORP.

2003 OMNIBUS SECURITIES PLAN

NONSTATUTORY STOCK OPTION AGREEMENT

 

Total Identity Corp. (the “Company”), hereby grants an Option to purchase shares of its common stock (“Shares”) to the Optionee named below. The terms and conditions of the Option are set forth in this cover sheet, in the attachment and in the Company’s 2003 Omnibus Securities Plan (the “Plan”).

 

Date of Grant: _____________________________

 

Name of Optionee: ________________________________________

 

Optionee’s Social Security Number: ___________________________

 

Number of Shares Covered by Option: _________________________

 

Exercise Price per Share: $____________________

 

Vesting Start Date: _________________________

 

[must be at least 85% fair market value on Date of Grant]

___   Check here if Optionee is a 10% owner (so that exercise price must be 110% of fair market value and term will not exceed 5 years).

 

By signing this cover sheet, you agree to all of the terms and conditions described in the attached Agreement and in the Plan, a copy of which is also attached.

Optionee: ____________________________ 

         (Signature)

 

Company: ____________________________

      (Signature)

 

     Title: ________________________

	 
	 	 	 
	

	 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE, AND MAY BE OFFERED AND SOLD ONLY IF REGISTERED AND QUALIFIED PURSUANT TO THE RELEVANT PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS OR IF THE COMPANY IS PROVIDED AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION AND QUALIFICATION UNDER FEDERAL AND STATE SECURITIES LAWS IS NOT REQUIRED.

 

TOTAL IDENTITY CORP.

2003 OMNIBUS SECURITIES PLAN

NONSTATUTORY STOCK OPTION AGREEMENT

	
 

Nonstatutory Stock Option
	
 

This Option is not intended to be an incentive stock option under section 422 of the Internal Revenue Code and will be interpreted accordingly.

	
 

Vesting
	
 

No Shares will vest until you have performed _______ (____) months of Service from the commencement of your employment with the Company. Your Option shall vest as to _______ of the Shares on the date _______ (____) months from the Vesting Start Date as shown on the cover sheet. Thereafter, Shares shall vest at the rate of ________ of the Shares at the end of each full month thereafter. After you have completed ________ (____) months of Service, the number of Shares which vest under this Option at the Exercise Price shall be equal to the product of the number of full months of your continuous employment with the Company (“Service”) (including any approved leaves of absence) from the Vesting Start Date times the number of Shares covered by this Option times ________. The resulting number of Shares will be rounded to the nearest whole number. No additional Shares will vest after your Service has terminated for any reason.

 

You should note that you may exercise the Option prior to vesting. In that case, the Company has a right to repurchase the unvested shares at the original exercise price if you terminate employment before vesting in all shares you purchased. Also, if you exercise before vesting, you should consider making an 83(b) election. Please see the attached Tax Summary. The 83(b) election must be filed within 30 days of the date you exercise.

	
 

Term
	
 

Your Option will expire in any event at the close of business at Company headquarters on the day before the tenth anniversary (fifth anniversary for a 10% owner) of the Date of Grant, as shown on the cover sheet. (It will expire earlier if your Service terminates, as described below.)

	
 

Regular Termination
	
 

If your Service terminates for any reason except death, Disability, or for “Cause” your Option will expire at the close of business at Company headquarters on the 30th day after your termination date. During such 30-day period, you may exercise that portion of your Option that was vested on your termination date.

	
 

Death
	
 

If you die while in Service with the Company, your Option will expire at the close of business at Company headquarters on the date six months after the date of death. During that six-month period, your estate or heirs may exercise that portion of your Option that was vested on your date of death.

	
 

Disability
	
 

If your Service terminates because of your Disability, your Option will expire at the close of business at Company headquarters on the date six months after your termination date. During that six-month period, you may exercise that portion of your Option that was vested on your date of Disability.

“Disability” means that you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment.

	
 

Leaves of Absence
	
 

For purposes of this Option, your Service does not terminate when you go on a bona fide leave of absence that was approved by the Company in writing, if the terms of the leave provide for continued service crediting, or when continued service crediting is required by applicable law. However, your Service will be treated as terminating 30 days after you went on leave, unless your right to return to work is guaranteed by law or by a contract. Your service terminates in any event when the approved leave ends unless you immediately return to Service. The Company determines which leaves count for this purpose, and when your Service terminates for all purposes under the Plan. The Company also determines the extent to which you may exercise the vested portion of your Option during a leave of absence.

	
 

Notice of Exercise
	
 

When you wish to exercise this Option, you must execute Exhibit A (and if exercise is prior to vesting you must also execute Exhibits B and D). Your Exercise will be effective when it is received by the Company. If someone else wants to exercise this Option after your death, that person must prove to the Company’s satisfaction that he or she is entitled to do so.

	
 

Form of Payment
	
 

When you submit Exhibit A, you must include payment of the Exercise Price for the Shares you are purchasing. Payment may be made in one (or a combination) of the following forms at the discretion of the committee:

 ·Your personal check, a cashier’s check or a money order.

 ·   Shares which you have owned for six months and which are surrendered to the Company. The value of the Shares, determined as of the effective date of the Option exercise, will be applied to the Exercise Price.

·   To the extent that a public market for the Shares exists as determined by the Company, by delivery (on a form prescribed by the Committee) of an irrevocable direction to a securities broker to sell Shares and to deliver all or part of the sale proceeds to the Company in payment of the aggregate Exercise Price.

 

Any other form of legal consideration approved by the Committee.

 

	
 

Withholding Taxes
	
 

You will not be allowed to exercise this Option unless you make acceptable arrangements to pay any withholding or other taxes that may be due as a result of the Option exercise or the sale of Shares acquired upon exercise of this Option.

	
 

Restrictions on Resale
	
 

By signing this Agreement, you agree not to exercise this Option or sell any Shares acquired upon exercise of this Option at a time when applicable laws, regulations or Company or underwriter trading policies prohibit exercise or sale. In particular, the Company shall have the right to designate one or more periods of time, each of which shall not exceed 180 days in length, during which this Option shall not be exercisable if the Company determines (in its sole discretion) that such limitation on exercise could in any way facilitate a lessening of any restriction on transfer pursuant to the Securities Act or any state securities laws with respect to any issuance of securities by the Company, facilitate the registration or qualification of any securities by the Company under the Securities Act or any state securities laws, or facilitate the perfection of any exemption from the registration or qualification requirements of the Securities Act or any applicable state securities laws for the issuance or transfer of any securities. Such limitation on exercise shall not alter the vesting schedule set forth in this Agreement other than to limit the periods during which this Option shall be exercisable.

 

Furthermore, in respect of any underwritten public offering by the Company, you agree that you will not sell or otherwise transfer or dispose of any Shares covered by this Option during a reasonable and customary period of time as agreed to by the Company and the underwriters, not to exceed the greater of (a) 180 days following the effective date of the registration statement of the Company filed under the Securities Act in respect of such offering and (b) such other period of time as agreed to by holders of a majority of the then outstanding Shares. By signing this Agreement you agree to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriter which are consistent with the foregoing or which are necessary to give further effect thereto. The Company may impose stop-transfer instructions with respect to the Shares subject to the foregoing restriction until the end of such period.

 

If the sale of Shares under the Plan is not registered under the Securities Act of 1933, as amended (the “Securities Act”), but an exemption is available which requires an investment or other representation, you shall represent and agree at the time of exercise that the Shares being acquired upon exercise of this Option are being acquired for investment, and not with a view to the sale or distribution thereof, and shall make such other representations as are deemed necessary or appropriate by the Company and its counsel.

	
The Company’s Right of First Refusal
	
In the event that you propose to sell, pledge or otherwise transfer to a third party any Shares acquired under this Agreement, or any interest in such Shares, the Company shall have the “Right of First Refusal” with respect to all (and not less than all) of such Shares. If you desire to transfer Shares acquired under this Agreement, you must give a written “Transfer Notice” to the Company describing fully the proposed transfer, including the number of Shares proposed to be transferred, the proposed transfer price and the name and address of the proposed transferee. The Transfer Notice shall be signed both by you and by the proposed transferee and must constitute a binding commitment of both parties to the transfer of the Shares.

 

The Company and its assignees shall have the right to purchase all, and not less than all, of the Shares on the terms described in the Transfer Notice (subject, however, to any change in such terms permitted in the next paragraph) by delivery of a notice of exercise of the Right of First Refusal within 30 days after the date when the Transfer Notice was received by the Company. 

 

The Company’s rights under this Subsection shall be freely assignable, in whole or in part.

 

If the Company fails to exercise its Right of First Refusal within 30 days after the date when it received the Transfer Notice, you may, not later than 60 days following receipt of the Transfer Notice by the Company, conclude a transfer of the Shares subject to the Transfer Notice on the terms and conditions described in the Transfer Notice. Any proposed transfer on terms and conditions different from those described in the Transfer Notice, as well as any subsequent proposed transfer by you, shall again be subject to the Right of First Refusal and shall require compliance with the procedure described in the paragraph above. If the Company exercises its Right of First Refusal, you and the Company (or its assignees) shall consummate the sale of the Shares on the terms set forth in the Transfer Notice.

 

The Company’s Right of First Refusal shall terminate upon the Company’s initial public offering.

 

The Company’s Right of First Refusal shall inure to the benefit of its successors and assigns and shall be binding upon any transferee of the Shares. 

	
 

Right of Repurchase
	
 

Following termination of your Service for any reason, the Company shall have the right to purchase all of those vested Shares that you have or will acquire under this Option (unvested Shares which have been exercised are subject to a Repurchase Option set forth in Exhibit A). If the Company fails to provide you with written notice of its intention to purchase such Shares before or within 30 days of the date the Company receives written notice from you of your termination of Service, the Company’s right to purchase such Shares shall terminate. If the Company exercises its right to purchase such Shares, the Company will consummate the purchase of such Shares within 60 days of the date of its written notice to you. The purchase price for any Shares repurchased shall be the higher of the fair market value of the Shares on the date of purchase or the aggregate Exercise Price for such Shares and shall be paid in cash. The Company’s right of repurchase shall terminate in the event that Stock is listed on an established stock exchange or is quoted regularly on the Nasdaq National Market. The fair market value shall be determined by the Board of Directors in its sole discretion.

	
 

Transfer of Option
	
 

Prior to your death, only you may exercise this Option. You cannot transfer or assign this Option. For instance, you may not sell this Option or use it as security for a loan. If you attempt to do any of these things, this Option will immediately become invalid. You may, however, dispose of this Option in your will.

 

Regardless of any marital property settlement agreement, the Company is not obligated to honor a Notice of Exercise from your spouse or former spouse, nor is the Company obligated to recognize such individual’s interest in your Option in any other way. 

	
 

Retention Rights
	
 

This Agreement does not give you the right to be retained by the Company in any capacity. The Company reserves the right to terminate your Service at any time and for any reason.

	
 

Shareholder Rights
	
 

Neither you, nor your estate or heirs, have any rights as a shareholder of the Company until a certificate for the Shares acquired upon exercise of this Option has been issued. No adjustments are made for dividends or other rights if the applicable record date occurs before your stock certificate is issued, except as described in the Plan.

	
 

Adjustments
	
 

In the event of a stock split, a stock dividend or a similar change in the Company Stock, the number of Shares covered by this Option and the Exercise Price per share may be adjusted pursuant to the Plan. Your Option shall be subject to the terms of the agreement of merger, liquidation or reorganization in the event the Company is subject to such corporate activity.

	
 

Legends
	
 

All certificates representing the Shares issued upon exercise of this Option shall, where applicable, have endorsed thereon the following legends:

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND OPTIONS TO PURCHASE SUCH SHARES SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER, OR SUCH HOLDER’S PREDECESSOR IN INTEREST. SUCH AGREEMENT IMPOSES CERTAIN TRANSFER RESTRICTIONS AND GRANTS CERTAIN REPURCHASE RIGHTS TO THE COMPANY (OR ITS ASSIGNS) UPON THE SALE OF THE SHARES OR UPON TERMINATION OF SERVICE WITH THE COMPANY. A COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY AND WILL BE FURNISHED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY BY THE HOLDER OF SHARES REPRESENTED BY THIS CERTIFICATE.

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, OR THE SECURITIES LAWS OF ANY STATE, AND MAY BE OFFERED AND SOLD ONLY IF REGISTERED AND QUALIFIED PURSUANT TO THE RELEVANT PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS OR IF THE COMPANY IS PROVIDED AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT REGISTRATION AND QUALIFICATION UNDER FEDERAL AND STATE SECURITIES LAWS IS NOT REQUIRED.” 

	
 

Applicable Law

 
	
 

This Agreement will be interpreted and enforced under the laws of the State of Florida (without regard to their choice of law provisions).

	
 

The Plan and Other Agreements
	
 

The text of the Plan is incorporated in this Agreement by reference. Certain capitalized terms used in this Agreement are defined in the Plan.

This Agreement and the Plan constitute the entire understanding between you and the Company regarding this Option. Any prior agreements, commitments or negotiations concerning this Option are superseded.

	 
	 	 	 
	

	 

 

By signing the cover sheet of this Agreement, you agree to all of the terms and conditions described above and in the Plan. You also acknowledge that you have read Section 11, “Purchaser’s Investment Representations” of Attachment A and that you can and hereby do make the same representations with respect to the grant of this Option.

EXHIBIT A

TOTAL IDENTITY CORP.

Notice of Exercise and Common Stock Purchase Agreement

 

 

THIS AGREEMENT is dated as of ___________, ____, between Total Identity Corp. f/k/a TMI Holdings, Inc. (the “Company”), and _________________ (“Purchaser”).

 

W I T N E S S E T H:

 

WHEREAS, the Company and Purchaser are parties to that certain ___ Incentive ___ Nonstatutory Stock Option Agreement dated as of ___________, ____ (the “Option Agreement”) pursuant to which the Purchaser has the right to purchase up to __________ shares of the Company’s common stock (the “Option Shares”); and

 

WHEREAS, the Option is exercisable with respect to certain of the Option Shares as of the date hereof; and

 

WHEREAS, pursuant to the Option Agreement, Purchaser desires to purchase shares of the Company as herein described, on the terms and conditions set forth in this Agreement, the Option Agreement and the Total Identity Corp. 2003 Omnibus Securities Plan (the “Plan”). Certain capitalized terms used in this Agreement are defined in the Plan.

 

NOW, THEREFORE, it is agreed between the parties as follows:

 

SECTION 1:    PURCHASE OF SHARES.

 

(a)   Pursuant to the terms of the Option Agreement, Purchaser hereby agrees to purchase from the Company and the Company agrees to sell and issue to Purchaser _________ shares of the Company’s common stock (the “Stock”) for the Exercise Price per share specified in the Option Agreement payable by personal check, cashier’s check or money order, if permitted by the Option Agreement, as follows: _______________________________. Payment shall be delivered at the Closing, as such term is hereinafter defined.

 

(b)   The closing hereunder (the “Closing”) shall occur at the offices of the Company on __________, ____, or such other time and place as may be designated by the Company (the “Closing Date”).

	 
	 	 	 
	

	 

 

SECTION 2:    REPURCHASE OPTION

 

All unvested shares of the Stock purchased by the Purchaser pursuant to this Agreement (sometimes referred to as the “Repurchase Option Stock”) shall be subject to the following option (the “Repurchase Option”):

 

(a)   In the event the Purchaser terminates service with the Company (“Service”) for any reason, with or without cause, the Company may exercise the Repurchase Option.

 

(b)   Purchaser understands that the Stock is being sold in order to induce Purchaser to become and/or remain associated with the Company and to work diligently for the success of the Company and that the Repurchase Option Stock will continue to vest in accordance with the schedule set forth in the Option Agreement. Accordingly, the Company shall have the right at any time within 90 days after the termination of Service to purchase from the Purchaser all shares of Stock purchased hereunder which have not vested in accordance with the terms of such vesting schedule in the Option Agreement. The purchase price for such unvested shares of Repurchase Option Stock shall be the Exercise Price per share paid by Purchaser for such shares pursuant to the Option (the “Option Price”). The purchase price shall be paid by certified or cashier’s check or by cancellation of any indebtedness of Purchaser to the Company.

 

(c)   Nothing in this Agreement shall be construed as a right by purchaser to be employed by Company, or a parent or subsidiary of Company.

 

SECTION 3:    EXERCISE OF REPURCHASE OPTION

 

The Repurchase Option shall be exercised by written notice signed by an officer of the Company and delivered or mailed as provided in Section 16 of this Agreement and to the Escrow Agent as provided in Section 16 of the Joint Escrow Instructions attached as Exhibit B to the Option Agreement.

 

SECTION 4:    WAIVER, ASSIGNMENT, EXPIRATION OF REPURCHASE OPTION

 

If the Company waives or fails to exercise the Repurchase Option as to all of the shares subject thereto, the Company may, in the discretion of its Board of Directors, assign the Repurchase Option to any other holder or holders of preferred or common stock of the Company in such proportions as such Board of Directors may determine. In the event of such an assignment, the assignee shall pay to the Company in cash an amount equal to the fair market value of the Repurchase Option. The Company shall promptly, upon expiration of the 90-day period referred to in Section 2 above, notify Purchaser of the number of shares subject to the Repurchase Option assigned to such stockholders and shall notify both the Purchaser and the assignees of the time, place and date for settlement of such purchase, which must be made within 90 days from the date of cessation of continuous employment. In the event that the Company and/or such assignees do not elect to exercise the Repurchase Option as to all or part of the shares subject to it, the Repurchase Option shall expire as to all shares which the Company and/or such assignees have not elected to purchase.

 

SECTION 5:    ESCROW OF SHARES

 

(a)   As security for Purchaser’s faithful performance of the terms of this Agreement and to ensure the availability for delivery of Purchaser’s shares upon exercise of the Repurchase Option herein provided for, Purchaser agrees at the Closing hereunder, to deliver to and deposit with the Escrow Agent named in the Joint Escrow Instructions attached to the Option Agreement as Exhibit B, the certificate or 

	 
	 	 	 
	

	 

 

certificates evidencing the Option Stock subject to the Repurchase Option and two Assignments Separate from Certificate duly executed (with date and number of shares in blank) in the form attached to the Option Agreement as Exhibit D. Such documents are to be held by the Escrow Agent and delivered by the Escrow Agent pursuant to the Joint Escrow Instructions, which instructions shall also be delivered to the Escrow Agent at the Closing hereunder.

 

(b)   Within 30 days after the last day of each successive completed calendar quarter after the Closing Date, if Purchaser so requests, the Escrow Agent will deliver to Purchaser certificates representing so many shares of Stock as are no longer subject to the Repurchase Option (less such shares as have been previously delivered). Ninety days after cessation of Purchaser’s employment with the Company the Company will direct the Escrow Agent to deliver to Purchaser a certificate or certificates representing the number of shares not repurchased by the Company or its assignees pursuant to exercise of the Repurchase Option (less such shares as have been previously delivered).

 

SECTION 6:    ADJUSTMENT OF SHARES

 

Subject to the provisions of the Articles of Incorporation of the Company, if, from time to time during the term of the Repurchase Option:

 

(a)   there is any stock dividend or liquidating dividend of cash and/or property, stock split or other change in the character or amount of any of the outstanding securities of the Company, or

 

(b)   there is any consolidation, merger or sale of all or substantially all, of the assets of the Company,

then, in such event, any and all new, substituted or additional securities or other property to which Purchaser is entitled by reason of Purchaser’s ownership of the shares shall be immediately subject to such Repurchase Option with the same force and effect as the shares of Option Stock from time to time subject to the Repurchase Option. While the total Option Price shall remain the same after each such event, the Option Price per share of Option Stock upon exercise of the Repurchase Option shall be appropriately and equitably adjusted as determined by the Board of Directors of the Company.

 

SECTION 7:    THE COMPANY’S RIGHT OF FIRST REFUSAL.

 

Before any shares of Stock registered in the name of Purchaser and not subject to the Repurchase Option may be sold or transferred, such shares shall first be offered to the Company as set forth in the Option Agreement.

 

SECTION 8:    PURCHASER’S RIGHTS AFTER EXERCISE OF REPURCHASE OPTION OR RIGHT OF FIRST REFUSAL.

 

If the Company makes available, at the time and place and in the amount and form provided in this Agreement, the consideration for the Stock to be repurchased in accordance with the provisions of Sections 2 and 7 of this Agreement, then from and after such time the person from whom such shares are to be repurchased shall no longer have any rights as a holder of such shares (other than the right to receive payment of such consideration in accordance with this Agreement). Such shares shall be deemed to have been repurchased in accordance with the applicable provisions hereof, whether or not the certificate(s) therefor have been delivered as required by this Agreement.

 

SECTION 9:    TRANSFER BY PURCHASER TO CERTAIN TRUSTS.

	 
	 	 	 
	

	 

 

Purchaser shall have the right to transfer all or any portion of Purchaser’s interest in the shares issued under this Agreement which have been delivered to Purchaser under the provisions of Section 5 of this Agreement, to a trust established by Purchaser for the benefit of Purchaser, Purchaser’s spouse or Purchaser’s children, without being subject to the provisions of Section 7 hereof, provided that the trustee on behalf of the trust shall agree in writing to be bound by the terms and conditions of this Agreement. The transferee shall execute a copy of Exhibit C attached to the Option Agreement and file the same with the Secretary of the Company.

 

SECTION 10:    LEGEND OF SHARES.

 

All certificates representing the Stock purchased under this Agreement shall, where applicable, have endorsed thereon the legends set forth in the Option Agreement and any other legends required by applicable securities laws.

 

SECTION 11:    PURCHASER’S INVESTMENT REPRESENTATIONS.

 

(a)   This Agreement is made with Purchaser in reliance upon Purchaser’s representation to the Company, which by Purchaser’s acceptance hereof Purchaser confirms, that the Stock which Purchaser will receive will be acquired with Purchaser’s own funds for investment for an indefinite period for Purchaser’s own account, not as a nominee or agent, and not with a view to the sale or distribution of any part thereof, and that Purchaser has no present intention of selling, granting participation in, or otherwise distributing the same, but subject, nevertheless, to any requirement of law that the disposition of Purchaser’s property shall at all times be within Purchaser’s control. By executing this Agreement, Purchaser further represents that Purchaser does not have any contract, understanding or agreement with any person to sell, transfer, or grant participation, to such person or to any third person, with respect to any of the Stock.

 

(b)   Purchaser understands that the Stock will not be registered or qualified under federal or state securities laws on the ground that the sale provided for in this Agreement is exempt from registration or qualification under federal or state securities laws and that the Company’s reliance on such exemption is predicated on Purchaser’s representations set forth herein.

 

(c)   Purchaser agrees that in no event will Purchaser make a disposition of any of the Stock (including a disposition under Section 9 of this Agreement), unless and until (i) Purchaser shall have notified the Company of the proposed disposition and shall have furnished the Company with a statement of the circumstances surrounding the proposed disposition and (ii) Purchaser shall have furnished the Company with an opinion of counsel satisfactory to the Company to the effect that (A) such disposition will not require registration or qualification of such Stock under federal or state securities laws or (B) appropriate action necessary for compliance with the federal or state securities laws has been taken or (iii) the Company shall have waived, expressly and in writing, its rights under clauses (i) and (ii) of this section.

 

(d)   With respect to a transaction occurring prior to such date as the Plan and Stock thereunder are covered by a valid Form S-8 or similar federal registration statement, this subsection shall apply unless the transaction is covered by the exemption in Florida General Corporation Law or a similar broad based exemption. In connection with the investment representations made herein, Purchaser represents that Purchaser is able to fend for himself or herself in the transactions contemplated by this Agreement, has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of Purchaser’s investment, has the ability to bear the economic risks of Purchaser’s investment and has been furnished with and has had access to such information as would be made available in

	 
	 	 	 
	

	 

 

 the form of a registration statement together with such additional information as is necessary to verify the accuracy of the information supplied and to have all questions answered by the Company.

 

(e)   Purchaser understands that if the Company does not register with the Securities and Exchange Commission pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or if a registration statement covering the Stock (or a filing pursuant to the exemption from registration under Regulation A of the Securities Act of 1933) under the Securities Act of 1933 is not in effect when Purchaser desires to sell the Stock, Purchaser may be required to hold the Stock for an indeterminate period. Purchaser also acknowledges that Purchaser understands that any sale of the Stock which might be made by Purchaser in reliance upon Rule 144 under the Securities Act of 1933 may be made only in limited amounts in accordance with the terms and conditions of that Rule.

 

SECTION 12:    ASSISTANCE TO PURCHASER UNDER RULE 144.

 

The Company covenants and agrees that (a) at all times after it first becomes subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, it will use its best efforts to comply with the current public information requirements of Rule 144(c)(1) under the Securities Act of 1933, and that if prior to becoming subject to such reporting requirements an over-the-counter market develops for the Stock, it will make publicly available the information required by Rule 144(c)(2); (b) it will furnish Purchaser, upon request, with all information required for the preparation and filing of Form 144; and (c) it will on a timely basis use its best efforts to file all reports required to be filed and make all disclosures, including disclosures of materially adverse information, required to permit Purchaser to make the required representations in Form 144.

 

SECTION 13:    NO DUTY TO TRANSFER IN VIOLATION HEREUNDER.

 

The Company shall not be required (a) to transfer on its books any shares of Stock of the Company which shall have been sold or transferred in violation of any of the provisions set forth in this Agreement or (b) to treat as owner of such shares or to accord the right to vote as such owner or to pay dividends to any transferee to whom such shares shall have been so transferred.

 

SECTION 14:    RIGHTS OF PURCHASER.

 

Except as otherwise provided herein, Purchaser shall, during the term of this Agreement, exercise all rights and privileges of a stockholder of the Company with respect to the Stock.

 

SECTION 15:    OTHER NECESSARY ACTIONS.

 

The parties agree to execute such further instruments and to take such further action as may reasonably be necessary to carry out the intent of this Agreement.

 

SECTION 16:    NOTICE.

 

Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon the earliest of personal delivery, receipt or the third full day following deposit in the United States Post Office with postage and fees prepaid, addressed to the other party hereto at the address last known or at such other address as such party may designate by 10 days’ advance written notice to the other party hereto.

	 
	 	 	 
	

	 

 

SECTION 17:    SUCCESSORS AND ASSIGNS.

 

This Agreement shall inure to the benefit of the successors and assigns of the Company and, subject to the restrictions on transfer herein set forth, be binding upon Purchaser and Purchaser’s heirs, executors, administrators, successors and assigns. The failure of the Company in any instance to exercise the Repurchase Option or rights of first offer described herein shall not constitute a waiver of any other Repurchase Option or right of first offer that may subsequently arise under the provisions of this Agreement. No waiver of any breach or condition of this Agreement shall be deemed to be a waiver of any other or subsequent breach or condition, whether of a like or different nature.

 

SECTION 18:    APPLICABLE LAW.

 

This Agreement shall be governed by, and construed in accordance with, the laws of the State of Florida, as such laws are applied to contracts entered into and performed in such state.

 

SECTION 19:    NO STATE QUALIFICATION.

 

THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF FLORIDA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM THE QUALIFICATION. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.

 

SECTION 20:    NO ORAL MODIFICATION.

 

No modification of this Agreement shall be valid unless made in writing and signed by the parties hereto.

 

SECTION 21:    ENTIRE AGREEMENT.

 

This Agreement and the Option Agreement constitute the entire complete and final agreement between the parties hereto with regard to the subject matter hereof.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

 

TOTAL IDENTITY CORP.               PURCHASER

 

By ___________________________          ____________________                   

	 
	 	 	 
	

	 

EXHIBIT B

Joint Escrow Instructions

 _________, _____

Secretary

_____________________

Dear Sir or Madam:

As Escrow Agent for both Total Identity Corp. (the “Company”), and ___________________ (“Purchaser”), you are hereby authorized and directed to hold the documents delivered to you pursuant to the terms of that certain Common Stock Purchase Agreement (the “Agreement”) of even date herewith, to which a copy of these Joint Escrow Instructions is attached as Exhibit B to a certain Stock Option dated ________ (“Option Agreement”), in accordance with the following instructions:

1.   In the event the Company shall elect to exercise the Repurchase Option set forth in the Agreement, the Company shall give to Purchaser and you a written notice as provided in the Agreement. Purchaser and the Company hereby irrevocably authorize and direct you to close the transaction contemplated by such notice, including prompt delivery of stock certificates.

2.   At the closing, you are directed (a) to date the stock assignment form or forms necessary for the transfer in question, (b) to fill in the number of shares being transferred, and (c) to deliver same, together with the certificate or certificates evidencing the shares to be transferred, to the Company against the simultaneous delivery to you of the purchase price (by certified or bank cashier’s check) for the number of shares being purchased pursuant to the exercise of the Repurchase Option.

3.   Purchaser irrevocably authorizes the Company to deposit with you any certificates evidencing shares to be held by you hereunder and any additions and substitutions to said shares as defined in the Agreement. Purchaser does hereby irrevocably constitute and appoint you as Purchaser’s attorney-in-fact and agent for the term of this escrow to execute with respect to such securities all documents necessary or appropriate to make such securities negotiable and to complete any transaction herein contemplated. Subject to the provisions of this Section 3, Purchaser shall exercise all rights and privileges, including but not limited to, the right to vote and to receive dividends (if any), of a stockholder of the Company while the shares are held by you.

4.   In accordance with the terms of Section 5 of the Agreement, you may from time to time deliver to Purchaser a certificate or certificates representing so many shares as are no longer subject to the Repurchase Option.

5.   This escrow shall terminate upon the release of all shares held under the terms and provisions hereof.

6.   If at the time of termination of this escrow you should have in your possession any documents, securities or other property belonging to Purchaser, you shall deliver all of same to Purchaser and shall be discharged from all further obligations hereunder.

7.   Your duties hereunder may be altered, amended, modified or revoked only by a writing signed by all of the parties hereto.

8.   You shall be obligated only for the performance of such duties as are specifically set forth herein and may rely and shall be protected in relying or refraining from acting on any instrument reasonably believed by you to be genuine and to have been signed or presented by the proper party or parties. You shall not be personally liable for any act you may do or omit to do hereunder as Escrow Agent or as attorney-in-fact of Purchaser while acting in good faith and in the exercise of your own good judgment, and any act done or omitted by you pursuant to the advice of your own attorneys shall be conclusive evidence of such good faith.

9.   You are hereby expressly authorized to disregard any and all warnings given by any of the parties hereto or by any other person or corporation, excepting only orders or process of courts of law, and are hereby expressly authorized to comply with and obey orders, judgments or decrees of any court. In case you obey or comply with any such order, judgment or decree of any court, you shall not be liable to any of the parties hereto or to any other person, firm or corporation by reason of such compliance, notwithstanding any such order, judgment or decree being subsequently reversed, modified, annulled, set aside, vacated or found to have been entered without jurisdiction.

10.   You shall not be liable in any respect on account of the identity, authority or rights of the parties executing or delivering or purporting to execute or deliver the Agreement or any documents or papers deposited or called for hereunder.

11.   You shall not be liable for the outlawing of any rights under any statute of limitations with respect to these Joint Escrow Instructions or any documents deposited with you.

12.   You shall be entitled to employ such legal counsel and other experts as you may deem necessary properly to advise you in connection with your obligations hereunder and may rely upon the advice of such counsel.

13.   Your responsibilities as Escrow Agent hereunder shall terminate if you shall cease to be Secretary of the Company or if you shall resign by written notice of each party. In the event of any such termination, the Company shall appoint any officer of the Company as successor Escrow Agent.

14.   If you reasonably require other or further instruments in connection with these Joint Escrow Instructions or obligations in respect hereto, the necessary parties hereto shall join in furnishing such instruments.

15.   It is understood and agreed that should any dispute arise with respect to the delivery and/or ownership or right of possession of the securities held by you hereunder, you are authorized and directed to retain in your possession without liability to anyone all or any part of said securities until such dispute shall have been settled either by mutual written agreement of the parties concerned or by a final order, decree or judgment of a court of competent jurisdiction after the time for appeal has expired and no appeal has been perfected, but you shall be under no duty whatsoever to institute or defend any such proceedings.

 

	 
	 	 	 
	

	 

 

16.   Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery or upon deposit in the United States Post Office, by registered or certified mail with postage and fees prepaid, addressed to each of the other parties thereunto entitled.

17.   By signing these Joint Escrow Instructions, you become a party hereto only for the purpose of said Joint Escrow Instructions; you do not become a party to the Agreement.

18.   This instrument shall be governed by and construed in accordance with the laws of the State of Florida.

19.   This instrument shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

Very truly yours,

TOTAL IDENTITY CORP.

By ___________________________

ESCROW AGENT:                   PURCHASER:

__________________________               ______________________________

	 
	 	 	 
	

	 

EXHIBIT C

Acknowledgment of and Agreement to be Bound

By the Notice of Exercise and Common Stock Purchase Agreement of

Total Identity Corp.

The undersigned, as transferee of shares of Total Identity Corp., hereby acknowledges that he or she has read and reviewed the terms of the Notice of Exercise and Common Stock Purchase Agreement of Total Identity Corp. and hereby agrees to be bound by the terms and conditions thereof, as if the undersigned had executed said Agreement as an original party thereto.

Dated: ____________________, ____.

By ___________________________

	 
	 	 	 
	

	 

EXHIBIT D

ASSIGNMENT SEPARATE FROM CERTIFICATE

FOR VALUE RECEIVED _________________________________ hereby sells, assigns and transfers unto _________________________ ________________________ (________) shares of the Common Stock of Total Identity Corp. (the “Company”), standing in ___________________ name on the books of the Company represented by Certificate No. ___________ herewith and hereby irrevocably constitutes and appoints ________________ Attorney to transfer said stock on the books of the Company with full power of substitution in the premises.

Dated: ____________________, ____.

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