Document:

Credit Agreement dated May 26, 2004

 Exhibit 10.2 
  
 CREDIT AGREEMENT 
  
 dated as of 
 May 26, 2004 
  
 among 
  
 THE WET SEAL, INC., 
 as Lead Borrower for: 
  
 THE WET SEAL, INC. 

THE WET SEAL RETAIL, INC. 
 WET SEAL CATALOG,
INC., 
 as the Borrowers 
  
 WET SEAL GC, INC. 
 As Facility Guarantor

  
 The LENDERS Party Hereto, 
  
 FLEET RETAIL GROUP, INC. 
 as Administrative Agent and Collateral Agent 
  
 FLEET NATIONAL BANK 
 as Issuing Bank

  

 TABLE OF CONTENTS 
  

			
	 	  	Page

	 ARTICLE I Definitions
	  	1
		
	 SECTION 1.01. Defined Terms
	  	1
	 SECTION 1.02. Terms Generally
	  	24
	 SECTION 1.03. Accounting Terms; GAAP
	  	24
		
	 ARTICLE II Amount and Terms of Credit
	  	24
		
	 SECTION 2.01. Commitment of the Lenders.
	  	24
	 SECTION 2.02. Reserves; Changes to Reserves.
	  	25
	 SECTION 2.03. Making of Loans.
	  	25
	 SECTION 2.04. Overadvances
	  	27
	 SECTION 2.05. Swingline Loans
	  	27
	 SECTION 2.06. Letters of Credit.
	  	28
	 SECTION 2.07. Settlements Amongst Lenders
	  	31
	 SECTION 2.08. Notes; Repayment of Loans.
	  	32
	 SECTION 2.09. Interest on Loans.
	  	33
	 SECTION 2.10. Default Interest.
	  	33
	 SECTION 2.11. Certain Fees.
	  	33
	 SECTION 2.12. Unused Commitment Fee.
	  	33
	 SECTION 2.13. Letter of Credit Fees.
	  	34
	 SECTION 2.14. Early Termination Fee.
	  	35
	 SECTION 2.15. Nature of Fees.
	  	35
	 SECTION 2.16. Termination or Reduction of Commitments.
	  	35
	 SECTION 2.17. Alternate Rate of Interest.
	  	35
	 SECTION 2.18. Conversion and Continuation of Loans.
	  	36
	 SECTION 2.19. Mandatory Prepayment; Commitment Termination; Cash Collateral.
	  	37
	 SECTION 2.20. Optional Prepayment of Loans; Reimbursement of Lenders.
	  	38
	 SECTION 2.21. Maintenance of Loan Account; Statements of Account.
	  	39
	 SECTION 2.22. Cash Receipts.
	  	40
	 SECTION 2.23. Application of Payments.
	  	41
	 SECTION 2.24. Increased Costs.
	  	42
	 SECTION 2.25. Change in Legality.
	  	43
	 SECTION 2.26. Payments; Sharing of Setoff.
	  	44
	 SECTION 2.27. Taxes.
	  	45
	 SECTION 2.28. Security Interests in Collateral.
	  	47
	 SECTION 2.29. Mitigation Obligations; Replacement of Lenders.
	  	47
		
	 ARTICLE III Representations and Warranties
	  	49
		
	 SECTION 3.01. Organization; Powers
	  	49
	 SECTION 3.02. Authorization; Enforceability
	  	49

  

 (i) 

			
	 SECTION 3.03. Governmental Approvals; No Conflicts
	  	49
	 SECTION 3.04. Financial Condition
	  	49
	 SECTION 3.05. Properties
	  	49
	 SECTION 3.06. Litigation and Environmental Matters
	  	50
	 SECTION 3.07. Compliance with Laws and Agreements
	  	50
	 SECTION 3.08. Investment and Holding Company Status
	  	50
	 SECTION 3.09. Taxes
	  	50
	 SECTION 3.10. ERISA
	  	51
	 SECTION 3.11. Disclosure
	  	51
	 SECTION 3.12. Subsidiaries.
	  	51
	 SECTION 3.13. Insurance
	  	51
	 SECTION 3.14. Labor Matters
	  	51
	 SECTION 3.15. Security Documents
	  	52
	 SECTION 3.16. Federal Reserve Regulations
	  	52
	 SECTION 3.17. Solvency
	  	52
		
	 ARTICLE IV Conditions
	  	52
		
	 SECTION 4.01. Closing Date
	  	52
	 SECTION 4.02. Conditions Precedent to Each Loan and Each Letter of Credit.
	  	55
		
	 ARTICLE V Affirmative Covenants
	  	56
		
	 SECTION 5.01. Financial Statements and Other Information
	  	56
	 SECTION 5.02. Notices of Material Events
	  	58
	 SECTION 5.03. Information Regarding Collateral
	  	59
	 SECTION 5.04. Existence; Conduct of Business
	  	59
	 SECTION 5.05. Payment of Obligations
	  	59
	 SECTION 5.06. Maintenance of Properties
	  	59
	 SECTION 5.07. Insurance
	  	59
	 SECTION 5.08. Casualty and Condemnation
	  	60
	 SECTION 5.09. Books and Records; Inspection and Audit Rights; Appraisals; Accountants
	  	60
	 SECTION 5.10. Physical Inventories.
	  	61
	 SECTION 5.11. Compliance with Laws
	  	62
	 SECTION 5.12. Use of Proceeds and Letters of Credit
	  	62
	 SECTION 5.13. Additional Subsidiaries
	  	62
	 SECTION 5.14. Depository Account.
	  	62
	 SECTION 5.15. Further Assurances
	  	62
		
	 ARTICLE VI Negative Covenants
	  	63
		
	 SECTION 6.01. Indebtedness and Other Obligations
	  	63
	 SECTION 6.02. Liens
	  	64
	 SECTION 6.03. Fundamental Changes
	  	65
	 SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions
	  	65
	 SECTION 6.05. Asset Sales
	  	65
	 SECTION 6.06. Restricted Payments; Certain Payments of Indebtedness
	  	66

  

 (ii) 

			
	 SECTION 6.07. Transactions with Affiliates
	  	66
	 SECTION 6.08. Restrictive Agreements
	  	66
	 SECTION 6.09. Amendment of Material Documents
	  	67
	 SECTION 6.10. Additional Subsidiaries
	  	67
	 SECTION 6.11. Excess Availability
	  	67
	 SECTION 6.12. Fiscal Year
	  	67
	 SECTION 6.13. Environmental Laws
	  	67
		
	 ARTICLE VII Events of Default
	  	67
		
	 SECTION 7.01.
	  	67
	 SECTION 7.02. Remedies on Default
	  	70
	 SECTION 7.03. Application of Proceeds
	  	71
		
	 ARTICLE VIII The Agents
	  	71
		
	 SECTION 8.01. Administration by Administrative Agent.
	  	71
	 SECTION 8.02. The Collateral Agent.
	  	72
	 SECTION 8.03. Sharing of Excess Payments.
	  	72
	 SECTION 8.04. Agreement of Required Lenders.
	  	73
	 SECTION 8.05. Liability of Agents.
	  	73
	 SECTION 8.06. Notice of Default
	  	74
	 SECTION 8.07. Lenders’ Credit Decisions
	  	74
	 SECTION 8.08. Reimbursement and Indemnification.
	  	75
	 SECTION 8.09. Rights of Agents.
	  	75
	 SECTION 8.10. Independent Lenders and Issuing Bank.
	  	75
	 SECTION 8.11. Notice of Transfer.
	  	76
	 SECTION 8.12. Successor Agent
	  	76
	 SECTION 8.13. Reports and Financial Statements.
	  	76
	 SECTION 8.14. Delinquent Lender
	  	76
		
	 ARTICLE IX Miscellaneous
	  	77
		
	 SECTION 9.01. Notices
	  	77
	 SECTION 9.02. Waivers; Amendments
	  	78
	 SECTION 9.03. Expenses; Indemnity; Damage Waiver
	  	79
	 SECTION 9.04. Designation of Lead Borrower as Borrowers’ Agent
	  	81
	 SECTION 9.05. Successors and Assigns
	  	82
	 SECTION 9.06. Survival
	  	84
	 SECTION 9.07. Counterparts; Integration; Effectiveness
	  	85
	 SECTION 9.08. Severability
	  	85
	 SECTION 9.09. Right of Setoff
	  	85
	 SECTION 9.10. Governing Law; Jurisdiction; Consent to Service of Process.
	  	85
	 SECTION 9.11. WAIVER OF JURY TRIAL
	  	86
	 SECTION 9.12. Headings
	  	86
	 SECTION 9.13. Interest Rate Limitation
	  	86
	 SECTION 9.14. Additional Waivers.
	  	87
	 SECTION 9.15. Confidentiality.
	  	88

  

 (iii) 

 EXHIBITS 
  

			
	 A.
	  	 Assignment and Acceptance

	 B-1.
	  	 Revolving Notes

	 B-2
	  	 Swingline Note

	 C
	  	 Opinion of Counsel to Loan Parties

	 D.
	  	 Form of Compliance Certificate

	 E.
	  	 Borrowing Base Certificate

  

 (iv) 

 SCHEDULES 
  

			
	 1.1
	  	 Lenders and Commitments

	 2.22(a)
	  	 DDAs

	 2.22(b)
	  	 Credit Card Arrangements

	 2.22(c)
	  	 Blocked Accounts

	 2.22(f)
	  	 Disbursement Accounts

	 3.05(c)(i)
	  	 Title to Properties; Real Estate Owned

	 3.05(c)(ii)
	  	 Leased Properties

	 3.06
	  	 Disclosed Matters

	 3.09
	  	 Taxes

	 3.12
	  	 Subsidiaries

	 3.13
	  	 Insurance

	 5.01(i)
	  	 Financial Reporting Requirements

	 6.01
	  	 Indebtedness

	 6.02
	  	 Liens

	 6.04
	  	 Investments

	 6.07
	  	 Transactions with Affiliates

  

 (v) 

 CREDIT AGREEMENT dated as of May 26, 2004 among 
  
 THE WET SEAL, INC., a Delaware corporation, having its principal place of
business at 26972 Burbank, Foothill Ranch, California 92610, as Lead Borrower for the Borrowers, being: 
  
 said WET SEAL, INC., 
  
 WET SEAL CATALOG, INC., a Delaware corporation, having its principal place of business at 26972 Burbank, Foothill Ranch, California 92610; and 

 
 THE WET SEAL RETAIL, INC., a Delaware corporation, having its principal
place of business at 26972 Burbank, Foothill Ranch, California 92610; and 
  
 WET SEAL GC, INC., a Virginia corporation, having its principal place of business at 26972 Burbank, Foothill Ranch, California 92610, as Facility Guarantor; and 
  
 the LENDERS party hereto; and 
  
 FLEET RETAIL GROUP, INC., as Administrative Agent and Collateral Agent for
the Lenders, a Delaware corporation, having its principal place of business at 40 Broad Street, Boston, Massachusetts 02109; and 
  
 FLEET NATIONAL BANK, as Issuing Bank, a national banking association having a place of business at 100 Federal Street, Boston, Massachusetts 02110;

  
 in consideration of the mutual covenants herein contained and benefits to be
derived herefrom. 
  
 ARTICLE I 
  
 Definitions 
  
 SECTION 1.01. Defined Terms. As used in this Agreement, the following
terms have the meanings specified below: 
  
 “ACH” shall mean automated clearing house transfers. 
  
 “Account” shall include, without limitation, “accounts” as defined in the UCC, and also all: accounts, accounts receivable, receivables, and rights to payment (whether or not earned by
performance) (i) for property that has been or is to be sold, leased, licensed, assigned, or otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a policy of insurance issued or to be issued, (iv) for a secondary obligation
incurred or to be incurred, (v) for energy provided or to be provided, (vi) for the use or hire of a vessel, (vii) arising out of the use of a credit or charge card or information contained on or used with that card, or (viii) for winnings in a
lottery or other game of chance. 
  
 “Adjusted LIBO
Rate” means, with respect to any LIBO Borrowing for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal 
  

 1 

 to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate. The Adjusted LIBO Rate will
be adjusted automatically as to all LIBO Rate Loans then outstanding as of the effective date of any change in the Statutory Reserve Rate. 
  
 “Administrative Agent” means Fleet, in its capacity as administrative agent for the Lenders hereunder. 
  
 “Affiliate” means, with respect to a specified Person,
another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. 
  
 “Agents” shall mean collectively, the Administrative Agent and the Collateral Agent. 
  
 “Agreement” means this Credit Agreement, as modified,
amended, supplemented or restated, and in effect from time to time. 
  
 “Applicable Law” means as to any Person: (i) all statutes, rules, regulations, orders, or other requirements having the force of law and (ii) all court orders and injunctions, and/or similar rulings, in each instance ((i)
and (ii)) of or by any Governmental Authority, or court, or tribunal which has jurisdiction over such Person, or any property of such Person, or of any other Person for whose conduct such Person would be responsible. 
  
 “Applicable Margin” means initially, the rates for Prime
Rate Loans and LIBO Loans, set forth in Level 3, below: 
  

									
	 Level

	  	 Performance Criteria

	  	Prime Rate Loans

	 	 	LIBO Loans

	 
	 1
	  	 Average Excess
 Availability greater than
 $35,000,000
	  	0	%	 	1.25	%
				
	 2
	  	 Average Excess
 Availability greater than
 $20,000,000 but less than
 or equal to $35,000,000
	  	0	%	 	1.50	%
				
	 3
	  	 Average Excess
 Availability greater than
 $10,000,000 but less than
 or equal to $20,000,000
	  	0	%	 	1.75	%
				
	 4
	  	 Average Excess
 Availability less than or
 equal to $10,000,000
	  	0	%	 	2.00	%

  
 The Applicable Margin shall be
adjusted quarterly as of the first day of each Fiscal Quarter, based upon the average Excess Availability for the immediately preceding Fiscal Quarter. Notwithstanding the foregoing, the Applicable Margin will be set at Level 3 on the Closing Date
and will remain at Level 3 for the period commencing on the Closing Date and ending November 26, 2004, unless Excess Availability does not support the requirements of Level 3 or higher, in which event the Applicable Margin will be set at Level 4. In
no event shall the Applicable 
  

 2 

 Margin be set at Level 1 or 2 prior to six months subsequent to the Closing Date (even if the Excess Availability
requirements for Level 1 or 2 have been met). Upon the occurrence and during the continuance of an Event of Default, at the option of the Administrative Agent or at the direction of the Required Lenders, interest shall be determined in the manner
set forth in Section 2.10. 
  
 “Appraisal
Percentage” shall mean 85%. 
  
 “Appraised
Value” means the net appraised liquidation value of the Borrowers’ Eligible Inventory as set forth in the Borrowers’ stock ledger as determined from time to time in accordance with an independent appraisal satisfactory to the
Administrative Agent. 
  
 “Assignment and
Acceptance” means an assignment and acceptance entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.04), and accepted by the Administrative Agent, in the form of Exhibit A or any
other form approved by the Administrative Agent. 
  
 “Availability Reserves” means such reserves as the Administrative Agent from time to time determines in the Administrative Agent’s reasonable discretion as being appropriate to reflect the impediments to the
Agents’ ability to realize upon the Collateral. Without limiting the generality of the foregoing, Availability Reserves may include (but are not limited to) reserves based on (i) Rent (but only if a landlord’s waiver, acceptable to the
Administrative Agent, has not been received by the Administrative Agent); (ii) Gift Certificates and Merchandise Credit Liability; (iii) customs, duties, and other costs to release Inventory which is being imported into the United States; (iv)
outstanding customer deposits, and (v) outstanding Taxes and other governmental charges, including, ad valorem, real estate, personal property, sales, and other Taxes which might have priority over the interests of the Collateral Agent in the
Collateral; and (vi) salaries, wages and benefits due to employees of any Borrower which might have priority over the interests of the Collateral Agent in the Collateral. 
  
 “Blocked Account Agreements” has the meaning set forth in Section 2.22(c). 
  
 “Blocked Account Banks” shall mean the banks with whom the
Borrowers have entered into Blocked Account Agreements. 
  
 “Blocked Accounts” shall have the meaning set forth in Section 2.22(c). 
  
 “Board” means the Board of Governors of the Federal Reserve System of the United States of America. 
  
 “Borrowers” means collectively, The Wet Seal, Inc., Wet Seal
Catalog, Inc. and The Wet Seal Retail, Inc. 
  
 “Borrowing” shall mean (a) the incurrence of Loans of a single Type, on a single date and having, in the case of LIBO Loans, a single Interest Period, or (b) a Swingline Loan. 
  
 “Borrowing Base” means, at any time of calculation, an
amount equal to 
  

 3 

 (a) the Credit Card Advance Rate multiplied by the face amount of Eligible Credit Card
Receivables, plus 
  
 (b) the lesser of (i) the Appraisal
Percentage of the Appraised Value of Eligible Inventory, net of Inventory Reserves, or (ii) the Inventory Advance Rate multiplied by the Cost of Eligible Inventory net of Inventory Reserves; plus 
  
 (c) 100% of all Eligible Cash and Cash Equivalents, provided that
Eligible Cash and Cash Equivalents included in the Borrowing Base may not be withdrawn from the respective account, thereby reducing the Borrowing Base, unless and until the Lead Borrower furnishes the Administrative Agent with (i) notice of such
intended withdrawal and (ii) a Borrowing Base Certificate as of the date of such proposed withdrawal reflecting that, after giving effect to such withdrawal, no Overadvance will result; minus 
  
 (d) the then amount of all Availability Reserves. 
  
 “Borrowing Base Certificate” has the meaning assigned to
such term in Section 5.01(f). 
  
 “Borrowing
Request” means a request by the Lead Borrower for a Borrowing in accordance with Section 2.03. 
  
 “Breakage Costs” shall have the meaning set forth in Section 2.19(b). 
  
 “Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in
Boston, Massachusetts are authorized or required by law to remain closed, provided that, when used in connection with a LIBO Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in dollar
deposits in the London interbank market. Except as otherwise provided herein, if any day on which a payment is due is not a Business Day, then the payment shall be due on the next day following which is a Business Day and such extension of time
shall be included in computing interest and fees in connection with such payment. 
  
 “Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal
property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP. 
  
 “Cash and Cash
Equivalents” means (i) unrestricted cash, and (ii) Cash Equivalents. 
  
 “Cash Collateral Account” shall mean an interest-bearing account established by the Borrowers with the Collateral Agent at Fleet under the sole and exclusive dominion and control of the Collateral
Agent designated as the “Wet Seal Cash Collateral Account”. 
  
 “Cash Dominion Event” means either (i) the occurrence and continuance of any Event of Default, or (ii) the failure of the Borrowers to maintain Excess Availability in an amount not less than $15,000,000 at any time.

  

 4 

 “Cash Equivalents” means all investment products offered by Fleet for overnight
investment of cash as of the Closing Date, and such additional overnight investments as may hereafter be offered by Fleet or any successor to Fleet, subject to the prior approval of the Administrative Agent, not to be unreasonably withheld.

  
 “Cash Receipts” has the meaning provided
therefor in Section 2.21(c). 
  
 “CERCLA” means
the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9601 et seq. 
  
 “Change in Control” means, at any time, (a) during any period of twelve months, individuals who at the beginning of such period
constituted the board of directors of the Lead Borrower (together with any new directors whose election or appointment by such board of directors, or whose nomination for election by shareholders of the Lead Borrower, as the case may be, was
approved by a vote of a majority of the directors still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the
board of directors then in office; or (b) any person or group (within the meaning of the Securities and Exchange Act of 1934, as amended) is or becomes the beneficial owner (within the meaning of Rule 13d-3 and 13d-5 of the Securities and Exchange
Act of 1934, as amended, except that such person shall be deemed to have “beneficial ownership” of all shares that such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time)
directly or indirectly of fifty percent (50%) or more of the total then outstanding voting power of the Voting Stock of the Lead Borrower on a fully diluted basis, whether as a result of the issuance of securities of the Lead Borrower, any merger,
consolidation, liquidation or dissolution of the Lead Borrower, any direct or indirect transfers of securities or otherwise, or has the right or ability to Control the Lead Borrower; or (c) the Lead Borrower fails to own one hundred percent (100%)
of the capital stock of the other Loan Parties. 
  
 “Change in Law” means (a) the adoption of any law, rule or regulation after the date of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender or the Issuing Bank (or, for purposes of Section 2.24(b), by any lending office of such Lender or by such Lender’s or the Issuing Bank’s holding company, if any)
with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement. 
  

“Charges” has the meaning provided therefor in Section 9.12. 
  
 “Closing Date” means the date on which the conditions specified in Section 4.01 are satisfied (or waived in
accordance with Section 9.02). 
  
 “Code” means
the Internal Revenue Code of 1986 and the Treasury regulations promulgated thereunder, as amended from time to time. 
  
 “Collateral” means any and all “Collateral” as defined in any applicable Security Document. 
  

 5 

 “Collateral Agent” means FRG, in its capacity as collateral agent under the Security
Documents. 
  
 “Commercial Letter of Credit”
means any Letter of Credit issued for the purpose of providing the primary payment mechanism in connection with the purchase of any materials, goods or services by the Borrowers in the ordinary course of business of the Borrowers. 
  
 “Commitment” shall mean, with respect to each Lender, the
aggregate commitment of such Lender hereunder in the amount set forth opposite its name on Schedule 1.1 hereto or as may subsequently be set forth in the Register from time to time, as the same may be reduced from time to time pursuant to Section
2.16. 
  
 “Commitment Percentage” shall mean,
with respect to each Lender, that percentage of the Commitments of all Lenders hereunder in the amount set forth opposite its name on Schedule 1.1 hereto or as may subsequently be set forth in the Register from time to time, as the same may be
reduced from time to time pursuant to Section 2.16. 
  
 “Consent” means actual consent given by a Lender from whom such consent is sought; or the passage of seven (7) Business Days from receipt of written notice to a Lender from the Administrative Agent of a proposed course of
action to be followed by the Administrative Agent without such Lender’s giving the Administrative Agent written notice of that Lender’s objection to such course of action. 
  
 “Consolidated” means, when used to modify a financial term, test, statement, or report of a Person, refers
to the application or preparation of such term, test, statement or report (as applicable) based upon the consolidation, in accordance with GAAP, of the financial condition or operating results of such Person and its Subsidiaries. 
  
 “Control” means the possession, directly or indirectly, of
the power (a) to vote 50% or more of the securities having ordinary voting power for the election of directors of a Person, or (b) to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise
voting power, by contract or otherwise. The terms “Controlling” and “Controlled” have meanings correlative thereto. 
  
 “Cost” means the cost of purchases, as reported on the Borrowers’ stock ledger, based upon the Borrowers’ accounting practices
which are in effect on the date of this Agreement. “Cost” does not include inventory capitalization costs or other non-purchase price charges (such as freight) used in the Borrowers’ calculation of cost of goods sold. 
  
 “Credit Card Advance Rate” means 85%. 
  
 “Credit Card Agreements” has the meaning provided therefor
in Section 2.22(c). 
  
 “Credit Extensions” as of
any day, shall be equal to the sum of (a) the principal balance of all Loans then outstanding, and (b) the then amount of the Letter of Credit Outstandings. 
  
 “DDAs” means any checking or other demand deposit account maintained by any Borrower. 
  

 6 

 “DDA Notification” has the meaning provided therefor in Section 2.22(c). 
  
 “Default” means any event or condition that constitutes an
Event of Default or that upon notice, lapse of time or both would, unless cured or waived, become an Event of Default. 
  
 “Delinquent Lender” has the meaning therefor provided in Section 8.14. 
  
 “dollars” or “$” refers to lawful money of the United States of America. 
  
 “Early Termination Fee” has the meaning therefor provided in
Section 8.14. 
  
 “Eligible Assignee” means a
bank, insurance company, or company engaged in the business of making commercial loans having a combined capital and surplus in excess of $300,000,000, or any Affiliate of any Lender, or a Related Fund of any Lender, or any Person to whom a Lender
assigns its rights and obligations under this Agreement as part of an assignment and transfer of such Lender’s rights in and to a material portion of such Lender’s portfolio of asset based credit facilities. For the purposes of this
Agreement, “Related Fund” shall mean, with respect to any Lender which is a fund that invests in loans, any other such fund managed by the same investment advisor as such Lender or by an Affiliate of such Lender or such advisor.

  
 “Eligible Cash and Cash Equivalents” means
Cash and Cash Equivalents of the Borrowers, acceptable to the Administrative Agent, in its reasonable discretion, subject to a first perfected security interest in favor of the Collateral Agent for the benefit of itself and the Secured Parties,
maintained in such accounts under the control of the Collateral Agent, on terms and conditions reasonably satisfactory to the Collateral Agent. 
  
 “Eligible Credit Card Receivables means Accounts due to a Borrower on a non-recourse basis from Visa, MasterCard, American Express Co.,
Discover, and other major credit card processors reasonably acceptable to the Administrative Agent as arise in the ordinary course of business, which have been earned by performance and are deemed by the Administrative Agent in its reasonable
discretion to be eligible for inclusion in the calculation of the Borrowing Base. Without limiting the foregoing, unless otherwise approved in writing by the Administrative Agent, none of the following shall be deemed to be Eligible Credit Card
Receivables: 
  

	 	(a)	Accounts that have been outstanding for more than five (5) Business Days from the date of sale; 

  

	 	(b)	Accounts with respect to which a Borrower does not have good, valid and marketable title thereto, free and clear of any Lien (other than Liens granted to the Collateral Agent, for
its benefit and the ratable benefit of the Secured Parties, pursuant to the Security Documents); 

  

	 	(c)	Accounts that are not subject to a first priority security interest in favor of the Collateral Agent, for the benefit of itself and the Secured Parties (it being the intent that
chargebacks in the ordinary course by the credit card processors shall not be deemed violative of this clause); 

  

	 	(d)	Accounts which are disputed, are with recourse (other than standard chargeback rights), or with respect to which a claim, counterclaim, offset or chargeback has been asserted (to
the extent of such claim, counterclaim, offset or chargeback); 

  

 7 

	 	(e)	Accounts which the Administrative Agent determines in its reasonable discretion to be uncertain of collection. 

  
 “Eligible In-Transit Inventory” shall mean, as of the date
of determination thereof, without duplication of other Eligible Inventory, Inventory (a) which has been shipped from a foreign location for receipt by a Borrower within sixty (60) days of the date of determination, but which has not yet been
delivered to a Borrower, (b) for which payment has been made by a Borrower and title has passed to a Borrower, (c) for which the document of title reflects a Borrower as consignee (along with delivery to such Borrower of the documents of title with
respect thereto), (d) as to which the Collateral Agent has control over the documents of title which evidence ownership of the subject Inventory (such as, if requested by the Collateral Agent, by the delivery of a customs broker agency agreement,
satisfactory to the Collateral Agent), and (e) which otherwise would constitute Eligible Inventory. 
  
 “Eligible Inventory” shall mean, as of the date of determination thereof, (a) Eligible In- Transit Inventory, (b) Eligible L/C Inventory,
and (c) items of Inventory of the Borrowers that are finished goods, merchantable and readily saleable to the public in the ordinary course deemed by the Administrative Agent in its reasonable discretion to be eligible for inclusion in the
calculation of the Borrowing Base. Without limiting the foregoing, unless otherwise approved in writing by the Administrative Agent, none of the following shall be deemed to be Eligible Inventory: 
  
 (a) Inventory that is not owned solely by a Borrower, or is
leased or on consignment or a Borrower does not have good and valid title thereto; 
  
 (b) Inventory (other than Eligible In-Transit Inventory and Eligible L/C Inventory) that is not located at a distribution center used by a
Borrower in the ordinary course or at a property that is owned or leased by a Borrower; 
  
 (c) Inventory that represents (i) goods damaged, defective or otherwise unmerchantable, (ii) goods that do not conform in all material
respects to the representations and warranties contained in this Agreement or any of the Security Documents, or (iii) goods to be returned to the vendor; 
  
 (d) Inventory that is not located in the United States of America (excluding territories and possessions thereof) other than Eligible
In-Transit Inventory and Eligible L/C Inventory; 
  
 (e) Inventory that is not subject to a perfected first-priority security interest in favor of the Collateral Agent for the benefit of the Secured Parties; 
  
 (f) Inventory which consists of supplies, samples, labels, bags, packaging, and other similar
non-merchandise categories; 
  

 8 

 (g) Inventory as to which insurance in compliance with the provisions of Section 5.07
hereof is not in effect; or 
  
 (h) Inventory
which has been sold but not yet delivered or as to which the Borrower has accepted a deposit. 
  
 “Eligible L/C Inventory” shall mean, as of the date of determination thereof, without duplication of other Eligible Inventory, Inventory (a) not yet delivered to a Borrower, (b) the purchase of which
is supported by a Commercial Letter of Credit having an expiry within sixty (60) days of such date of determination, (c) for which the document of title reflects a Borrower as consignee (along with delivery to such Borrower of the documents of title
with respect thereto), (d) as to which the Collateral Agent has control over the documents of title which evidence ownership of the subject Inventory (such as, if requested by the Collateral Agent, by the delivery of a customs broker agency
agreement, satisfactory to the Collateral Agent), and (e) which otherwise would constitute Eligible Inventory. 
  
 “Environmental Laws” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by or with any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, handling, treatment, storage, disposal, Release or threatened Release of
any Hazardous Material or to health and safety matters. 
  
 “Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, natural resource damage, costs of environmental remediation, administrative oversight costs, fines, penalties or
indemnities), of any Person directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any
Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the
foregoing. 
  
 “ERISA” means the Employee
Retirement Income Security Act of 1974, as amended from time to time and the regulations promulgated and rulings issued thereunder. 
  
 “ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with the Lead Borrower, is treated as a single
employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code. 
  
 “ERISA Event” means (a) any “reportable event”, as
defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) the existence with respect to any Plan of an “accumulated funding
deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard
with respect to any Plan; (d) the incurrence by the Lead Borrower or any of its ERISA Affiliates of any liability under Title IV of 
  

 9 

 ERISA with respect to the termination of any Plan; (e) the receipt by the Lead Borrower or any ERISA Affiliate from the
PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the Lead Borrower or any of its ERISA Affiliates of any liability with respect
to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by the Lead Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Lead Borrower or any ERISA Affiliate of any
notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA. 
  
 “Event of Default” has the meaning assigned to such term in
Section 7.01. An “Event of Default” shall be deemed to have occurred and to be continuing unless and until that Event of Default has been duly waived by the Administrative Agent in writing or cured to the reasonable satisfaction of the
Administrative Agent. 
  
 “Excess Availability”
means, as of any date of determination, the excess, if any, of (a) the Borrowing Base, minus (b) the outstanding Credit Extensions. 
  
 “Excluded Taxes” means, with respect to the Agents, any Lender, the Issuing Bank or any other recipient of any payment to be made by or
on account of any obligation of the Borrowers hereunder, (a) income or franchise Taxes imposed on (or measured by) its gross or net income by the United States of America, or by the jurisdiction under the laws of which such recipient is organized or
in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any branch profits Taxes imposed by the United States of America or any similar Tax imposed by any other jurisdiction in
which a Borrower is located and (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by a Borrower under Section 2.28(b)), any withholding Tax that (i) is imposed on amounts payable to such Foreign Lender at the time
such Foreign Lender becomes a party to this Agreement (or designates a new lending office), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to
receive additional amounts from a Borrower with respect to such withholding Tax pursuant to Section 2.26(a), or (ii) is attributable to such Foreign Lender’s failure to comply with Sections 2.26(e) or (f). 
  
 “FRG” means Fleet Retail Group, Inc., a Delaware
corporation. 
  
 “FRG Concentration Account”
shall have the meaning set forth in Section 2.22(c). 
  
 “Facility Guarantee” means the Guarantee executed by the Facility Guarantors in favor of the Agents, the Issuing Bank and the Lenders. 
  

“Facility Guarantors” means each of the Subsidiaries of the Lead Borrower, now existing or hereafter created, other than Foreign
Subsidiaries and the Borrowers. 
  
 “Facility Guarantors
Collateral Documents” means all security agreements, mortgages, pledge agreements, deeds of trust, and other instruments, documents or agreements executed and delivered by any Facility Guarantor to secure the Facility Guarantee. 

 

 10 

 “Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing selected by it. 
  
 “Fee Letter” means the letter entitled “Fee Letter” between the Borrowers and the Administrative Agent dated May 26, 2004, as such letter may from time to time be amended. 
  
 “Financial Officer” means, with respect to the Borrowers,
the chief financial officer, treasurer, controller or assistant controller of the Lead Borrower. 
  
 “Fiscal Quarter” means any fiscal quarter of any Fiscal Year, which quarters shall generally end on the Saturday nearest to the last day
of each January, April, July or October of such Fiscal Year in accordance with the fiscal accounting calendar of the Borrowers. 
  
 “Fiscal Year” means any period of twelve consecutive months ending on the Saturday nearest to the last day of January of any calendar
year. 
  
 “Fleet” means Fleet National Bank, a
national banking association. 
  
 “Fleet Disbursement
Accounts” has the meaning provided therefor in Section 2.22(f). 
  
 “Foreign Lender” means any Lender that is organized under the laws of a jurisdiction other than the United States of America or any State thereof or the District of Columbia. 
  
 “Foreign Subsidiary” means any Subsidiary (a) that is
organized under the laws of a jurisdiction other than the United States of America or any State thereof or the District of Columbia, (b) that conducts the major portion of its business outside of the United States, and (c) all or substantially all
of the property and assets of which are located outside of the United States. 
  
 “Fronting Fee” has the meaning assigned to such term in Section 2.13(b). 
  
 “GAAP” means principles which are (a) consistent with those promulgated or adopted by the Financial Accounting Standards Board and its
predecessors (or successors) in effect and applicable to that accounting period in respect of which reference to GAAP is being made, and (b) consistently applied with past financial statements of the Lead Borrower and its Subsidiaries adopting the
same principles. 
  
 “Gift Certificate and Merchandise
Credit Liability” means, at any time, the aggregate face value at such time of (a) outstanding gift certificates and gift cards of the Borrowers entitling the holder thereof to use all or a portion of the certificate to pay all or a portion
of the purchase price for any Inventory, and (b) outstanding merchandise credits of the Borrowers. 
  

 11 

 “Governmental Authority” means the government of the United States of America, any other
nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative
powers or functions of or pertaining to government. 
  
 “Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other
obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of
assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to
pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation, provided that the term “Guarantee” shall not include
endorsements for collection or deposit in the ordinary course of business. 
  
 “Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos
or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes, mold, fungi or similar bacteria, and all other substances or wastes of any nature regulated pursuant to any Environmental Law, including any
material listed as a hazardous substance under Section 101(14) of CERCLA. 
  
 “Hedging Agreement” means any interest rate protection agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, foreign currency exchange agreement,
commodity price protection agreement, or other interest or currency exchange rate or commodity price hedging arrangement designed to hedge against fluctuations in interest rates or foreign exchange rates. 
  
 “Indebtedness” of any Person means, without duplication, (a)
all obligations of such Person for borrowed money (including any obligations which are without recourse to the credit of such Person) or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid (excluding current accounts payable incurred in the ordinary course of business), (d) all obligations of such Person under
conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in
the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person,
whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an
account party in respect of letters of 
  

 12 

 credit and letters of guaranty (j) all obligations, contingent or otherwise, of such Person in respect of bankers’
acceptances, (k) all Hedging Agreements (provided that for purposes hereof the amount of Indebtedness in respect of any Hedging Agreement at any time shall equal the maximum aggregate net amount that a Borrower would be required to pay if such
Hedging Agreement were terminated at that time), and (l) the principal and interest portions of all rental obligations of such Person under any Synthetic Lease, Tax retention operating lease, off-balance sheet loan or similar off-balance sheet
financing where such transaction is considered borrowed money indebtedness for Tax purposes but is classified as an operating lease in accordance with GAAP. The Indebtedness of any Person shall include the Indebtedness of any other entity (including
any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor. 
  
 “Indemnified Taxes” means Taxes other than Excluded Taxes. 
  
 “Indemnitee” has the meaning provided therefor in Section 9.03(b). 
  
 “Interest Payment Date” means (a) with respect to any Prime Rate Loan (including a Swingline Loan), the first day of each calendar month,
and (b) with respect to any LIBO Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part, and, in addition, if such LIBO Loan has an Interest Period of greater than three (3) months, the last day of the
third month of such Interest Period. 
  
 “Interest
Period” means, with respect to any LIBO Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three or six months thereafter, as the Lead
Borrower may elect by notice to the Administrative Agent in accordance with the provisions of this Agreement, provided that (a) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, and (b) any Interest Period that commences on the last
Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month during which such Interest Period ends) shall end on the last Business Day of the last calendar month of such Interest
Period, (c) any Interest Period which would otherwise end after the Termination Date shall end on the Termination Date, and (d) notwithstanding the provisions of clause (c), no Interest Period shall, unless approved by the Administrative Agent and
all of the Lenders, have a duration of less than one month, and if any Interest Period applicable to a LIBO Borrowing would be for a shorter period, such Interest Period shall not be available hereunder. For purposes hereof, the date of a Borrowing
initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing. 
  
 “Inventory” has the meaning assigned to such term in the Security Agreement. 
  

 13 

 “Inventory Advance Rate”: The following percentage during the period indicated:

  

	 	(a)	Wet Seal division 

  

				
	 Calendar Period

	  	Applicable
Percentage

	 
	 December 16 through March 31
	  	58	%
	 April 1 through September 30
	  	69	%
	 October 1 through December 15
	  	75	%

  

	 	(a)	Arden B. division 

  

				
	 Calendar Period

	  	Applicable
Percentage

	 
	 December 16 through June 30
	  	81	%
	 July 1 through September 30
	  	91	%
	 October 1 through December 15
	  	95	%

  
 “Inventory
Reserves” means such reserves as may be established from time to time by the Administrative Agent in the Administrative Agent’s reasonable discretion with respect to the determination of the saleability, at retail, of the Eligible
Inventory or which reflect such other factors as affect the market value of the Eligible Inventory. Without limiting the generality of the foregoing, Inventory Reserves may include (but are not limited to) reserves based on obsolescence or Shrink,
or reasonably required by the Administrative Agent to protect Collateral value based upon changes to the ordinary course business of the Borrowers.. 
  
 “Investment” means (a) any stock, evidence of Indebtedness or other security, including any option, warrant or other right to acquire any
of the foregoing, of another Person, (b) any loan, advance, contribution to capital, extension of credit (except for current trade and customer accounts receivable for inventory sold or services rendered in the ordinary course of business and
payable in accordance with customary trade terms) to another Person, (c) any purchase of (i) stock or other securities of another Person, or (ii) any business or undertaking of any Person (whether by purchase of assets or securities in one
transaction or a series of transactions), (d) any commitment or option to make any such purchase, or (e) any other investment, in all cases whether now existing or hereafter made. 
  
 “Issuing Bank” means Fleet, in its capacity as the issuer of Letters of Credit hereunder, and any successor
to Fleet in such capacity (which may only be a Lender selected by the 
  

 14 

 Administrative Agent in its discretion, including, without limitation, Bank of America). The Issuing Bank may, in its
discretion, arrange for one or more Letters of Credit to be issued by Affiliates of the Issuing Bank, in which case the term “Issuing Bank” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate.

  
 “L/C Disbursement” means a payment made by
the Issuing Bank pursuant to a Letter of Credit. 
  
 “Lead
Borrower” means The Wet Seal, Inc. 
  
 “Lease” means any agreement, whether written or oral, no matter how styled or structured, pursuant to which any Borrower is entitled to the use or occupancy of any space in a structure, land, improvements or premises for
any period of time. 
  
 “Lenders” shall mean the
Persons identified on Schedule 1.1 hereto and each assignee that becomes a party to this Agreement as set forth in Section 9.04(b). 
  
 “Letter of Credit” shall mean a letter of credit that is (i) issued pursuant to this Agreement for the account of a Borrower, (ii) a
Standby Letter of Credit or Commercial Letter of Credit, (iii) issued in connection with the purchase of Inventory by a Borrower and for other purposes for which a Borrower has historically obtained letters of credit, or for any other purpose that
is reasonably acceptable to the Administrative Agent, and (iv) in form and substance reasonably satisfactory to the Issuing Bank. 
  
 “Letter of Credit Fees” shall mean the fees payable in respect of Letters of Credit pursuant to Section 2.13. 
  
 “Letter of Credit Outstandings” shall mean, at any time, the
sum of (a) with respect to Letters of Credit outstanding at such time, the aggregate maximum amount that then is or at any time thereafter may become available for drawing or payment thereunder plus (b) all amounts theretofore drawn or paid
under Letters of Credit for which the Issuing Bank has not then been reimbursed. 
  
 “LIBO Borrowing” shall mean a Borrowing comprised of LIBO Loans. 
  
 “LIBO Loan” shall mean any Loan bearing interest at a rate determined by reference to the Adjusted LIBO Rate in accordance with the
provisions of Article II. 
  
 “LIBO Rate” means,
with respect to any LIBO Borrowing for any Interest Period, the rate of interest (rounded upwards, if necessary, to the next 1/16 of 1%) per annum at which deposits in dollars are offered by banks in the London interbank market, appearing on Reuters
Screen FRBD as of 11:00 a.m. (London time) two (2) Business Days before the first day of the Interest Period for the subject LIBO Borrowing, for a deposit approximately in the amount of the subject Borrowing and for a period of time approximately
equal to such Interest Period; provided, however, if the rate described above does not appear on the Reuters System on any applicable interest determination date, the LIBO Rate shall be the rate (rounded upward, if necessary, to the nearest
1/16 of one percent (1%)), determined on the basis of the offered rates for deposits in dollars for a period of time comparable to such Interest Period which are offered 
  

 15 

 to the Administrative Agent by two (2) major banks in the London interbank market as selected by Administrative Agent at
approximately 11:00 a.m. London time, on the day that is two (2) Business Days preceding the first day of such Interest Period. In the event that the Administrative Agent is unable to obtain any such quotation as provided above, it will be deemed
that a LIBO Rate pursuant to a LIBO Borrowing cannot be obtained. 
  
 “Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call
or similar right of a third party with respect to such securities. 
  
 “Loan Ceiling” means $50,000,000, as such amount may be modified in accordance with the terms of this Agreement. 
  
 “Loan Documents” means this Agreement, the Notes, the Letters of Credit, the Fee Letter, all Borrowing Base Certificates, the Blocked
Account Agreements, the DDA Notifications, the Credit Card Agreements, the Security Documents, the Facility Guarantee, the Facility Guarantors Collateral Documents, and any other instrument or agreement now or hereafter executed and delivered in
connection herewith, each as amended and in effect from time to time. 
  
 “Loan Party” or “Loan Parties” means the Borrowers and the Facility Guarantors. 
  
 “Loans” shall mean all loans at any time made to the Borrowers or for account of the Borrowers pursuant to this Agreement. 
  
 “Margin Stock” has the meaning assigned to such term in
Regulation U. 
  
 “Material Adverse Effect” means
a material adverse effect on (a) the business, operations, property, assets, or condition, financial or otherwise, of the Lead Borrower and its Subsidiaries taken as a whole, (b) the ability of the Loan Parties to perform any material obligation or
to pay any Obligations under this Agreement or any of the other Loan Documents, or (c) the validity or enforceability of this Agreement or any of the other Loan Documents or any of the material rights or remedies of the Administrative Agent, the
Collateral Agent or the Lenders hereunder or thereunder. In determining whether any individual event would result in a Material Adverse Effect, notwithstanding that such event in and of itself does not have such effect, a Material Adverse Effect
shall be deemed to have occurred if the cumulative effect of such event and all other then existing events would result in a Material Adverse Effect. 
  
 “Material Indebtedness” means Indebtedness (other than the Loans and Letters of Credit) of any one or more of the Borrowers in an
aggregate principal amount exceeding $20,000,000. For purposes of determining the amount of Material Indebtedness at any time, the “principal amount” of the obligations in respect of any Hedging Agreement at such time shall be the maximum
aggregate amount that a Borrower would be required to pay if such Hedging Agreement were terminated at that time. 
  

 16 

 “Maturity Date” means May 26, 2007. 
  
 “Maximum Rate” has the meaning provided therefor in Section
9.12. 
  
 “Minority Lenders” has the meaning
provided therefor in Section 9.02(d). 
  
 “Moody’s” means Moody’s Investors Service, Inc. 
  
 “Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA to which the Lead Borrower or any ERISA Affiliate is making or accruing an obligation to make contributions,
or has within the preceding five plan years made or accrued an obligation to make contributions. 
  
 “Multiple Employer Plan” means a single employer plan, as defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees
of the Lead Borrower or any of its Subsidiaries or any ERISA Affiliate and at least one Person other than the Lead Borrower, any Subsidiary or the ERISA Affiliate or (b) was so maintained and in respect of which the Lead Borrower, any Subsidiary or
any ERISA Affiliate could have liability under Section 4064 or 4069 of ERISA in the event such plan has been or were to be terminated. 
  
 “Notes” shall mean (i) the promissory notes of the Borrowers substantially in the form of Exhibit B-1, each payable to the order of a
Lender, evidencing the Revolving Loans, and (ii) the promissory note of the Borrowers substantially in the form of Exhibit B-2, payable to the Swingline Lender, evidencing the Swingline Loans. 
  
 “Obligations” means (a) the due and punctual payment by the
Loan Parties of (i) the principal of, and interest (including all interest that accrues after the commencement of any case or proceeding by or against any Loan Party under any federal or state bankruptcy, insolvency, receivership or similar law,
whether or not allowed in such case or proceeding) on the Loans, as and when due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise, (ii) each payment required to be made by the Loan Parties under the
Credit Agreement in respect of any Letter of Credit, when and as due, including payments in respect of reimbursement of disbursements, interest thereon and obligations to provide cash collateral and (iii) all other monetary obligations, including
fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise, of the Loan Parties to the Secured Parties under the Credit Agreement and the other Loan Documents, and (b) the due and punctual performance
of all covenants, agreements, obligations and liabilities of the Loan Parties under or pursuant to the Credit Agreement and the other Loan Documents, (c) any Hedging Agreements which are permitted pursuant to Section 6.01(a)(vi) hereof, and (d) any
transaction with FRG or Fleet, or any of their respective Affiliates, which arises out of any cash management, depository, investment, letter of credit, or other banking or financial services provided by any such Person. 
  
 “Organizational Document” means, relative to any Loan Party,
its partnership agreement, its certificate of incorporation, its by-laws and all shareholder or equity holder agreements, voting trusts and similar arrangements to which such Loan Party is a party or which is applicable to its capital stock, its
partnership agreement and all other arrangements relating to the control or management of such entity. 
  

 17 

 “Other Taxes” means any and all current or future stamp or documentary Taxes or any
other excise or property Taxes, charges or similar levies arising from any payment made under any Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, any Loan Document. 
  
 “Overadvance” means, at any time of calculation, a
circumstance in which the Credit Extensions exceed the lesser of (a) the Commitments or (b) the Borrowing Base. 
  
 “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar
functions. 
  
 “Permitted Encumbrances” means:

  
 (a) Liens imposed by law for Taxes that are
not yet due or are being contested in compliance with Section 5.05; 
  
 (b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not
overdue by more than 30 days or are being contested in compliance with Section 5.05; 
  
 (c) pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and
other social security laws or regulations; 
  
 (d) deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business; 

 
 (e) judgment liens in respect of judgments that do not
constitute an Event of Default under Section 7.01(k); and 
  
 (f) easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not
materially detract from the value of the affected property or interfere with the ordinary conduct of business of a Borrower or any Subsidiary; 
  
 provided that, except as provided in any one or more of clauses (a) through (g) above, the term “Permitted Encumbrances” shall not include any Lien
securing Indebtedness. 
  
 “Permitted
Investments” means each of the following: 
  
 (a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and
credit of the United States of America), and municipal securities with an “AA” long-term credit rating obtainable from S&P and/or from Moody’s, including pre-funded municipal bonds escrowed to maturity and guaranteed by the
securities issued by the United States of America (or by any agency thereof); 
  

 18 

 (b) Investments in commercial paper (taxable and tax-exempt); 
  
 (c) Investments in (i) securities issued by a corporation
(other than a Loan Party or an Affiliate of a Loan Party) and denominated in U.S. Dollars maturing within three (3) years from the date of acquisition thereof and having, at such date of acquisition, the long-term credit rating of “A/A” or
the short-term credit rating of “A1/P1 SP1/MIG-1” or better obtainable from S&P and/or from Moody’s, (ii) securities issued by a Lender or another banking institution with total assets in excess of $2,000,000,000 maturing within
three (3) years from the date of acquisition thereof; and (iii) auction rate preferred stock or bonds having, at such date of acquisition, the long-term credit rating of “AA” with a reset and maturing within 180 days from the date of
acquisition thereof; 
  
 (d) Investments in
certificates of deposit, banker’s acceptances and time deposits (including Eurodollar denominated and Yankee issues) maturing within three (3) years from the date of acquisition thereof issued or guaranteed by or placed with, and demand deposit
and money market deposit accounts issued or offered by, any Lender or another banking institution with total assets in excess of $2,000,000,000; 
  
 (e) fully collateralized repurchase agreements for securities described in clause (a) above (without regard to the limitation on maturity
contained in such clause) and entered into with any primary dealer and having a market value at the time that such repurchase agreement is entered into of not less than 100% of the repurchase obligation of such counterparty entity with whom such
repurchase agreement has been entered into; 
  
 (f) short-term Tax exempt securities (including municipal notes, auction rate floaters and floating rate notes); and 
  
 (g) Shares of investment companies that are registered under the Investment Company Act of 1940, as amended, and invest solely in one or
more of the types of securities described in clauses (a) through (f) above. 
  
 provided that, notwithstanding the foregoing, no such Investments shall be permitted (i) after the occurrence of a Cash Dominion Event, unless no Loans are then outstanding, and (ii) unless such Investments are pledged to the
Collateral Agent as additional collateral for the Obligations pursuant to such agreements as may be reasonably required by the Collateral Agent. 
  
 “Permitted Overadvance” means an Overadvance determined by the Administrative Agent, in its reasonable discretion, (a) which is made to
maintain, protect or preserve the Collateral and/or the Lenders’ rights under the Loan Documents, or (b) which is otherwise in the Lenders’ interests; provided that Permitted Overadvances shall not (i) exceed ten percent (10%) of
the then Borrowing Base in the aggregate outstanding at any time or (ii) remain outstanding for more than forty-five (45) consecutive Business Days, unless in case of clause (ii), the Required Supermajority Lenders otherwise agree; and provided
further that the foregoing shall not (1) modify or abrogate any of the provisions of Section 2.06(f) hereof regarding the Lender’s obligations with respect to L/C Disbursements, or (2) result in any claim or liability against the

  

 19 

 Administrative Agent (regardless of the amount of any Overadvance) for “inadvertent Overadvances” (i.e. where
an Overadvance results from changed circumstances beyond the control of the Administrative Agent (such as a reduction in the collateral value)), and further provided that in no event shall the Administrative Agent make an Overadvance, if
after giving effect thereto, the principal amount of the Credit Extensions (including any Overadvance or proposed Overadvance) would exceed the Total Commitments. 
  
 “Person” means any natural person, corporation, limited liability company, trust, joint venture,
association, company, partnership, Governmental Authority or other entity. 
  
 “Plan” means a Single Employer Plan or a Multiple Employer Plan. 
  
 “Pledge Agreement” means the Pledge Agreement dated as of May 26, 2004 among the Loan Parties and the Collateral Agent for the benefit of
the Secured Parties, as amended and in effect from time to time. 
  
 “Prime Rate” shall mean, for any day, the higher of (a) the variable annual rate of interest then most recently announced by Fleet at its head office in Boston, Massachusetts as its “Prime Rate” and (b) the
Federal Funds Effective Rate in effect on such day plus 1⁄2 of 1% (0.50%) per annum. The Prime Rate is a reference rate and does not necessarily represent the lowest or best rate being charged to any customer. If for any reason the Administrative
Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable to ascertain the Federal Funds Effective Rate for any reason, including the inability or failure of the Administrative Agent to obtain
sufficient quotations thereof in accordance with the terms hereof, the Prime Rate shall be determined without regard to clause (b) of the first sentence of this definition, until the circumstances giving rise to such inability no longer exist. Any
change in the Prime Rate due to a change in Fleet’s Prime Rate or the Federal Funds Effective Rate shall be effective on the effective date of such change in Fleet’s Prime Rate or the Federal Funds Effective Rate, respectively. 

 
 “Prime Rate Loan” shall mean any Loan bearing interest at
a rate determined by reference to the Prime Rate in accordance with the provisions of Article II. 
  
 “Real Estate” means all land, together with the buildings, structures, parking areas, and other improvements thereon, now or hereafter
owned by any Loan Party, including all easements, rights-of-way, and similar rights relating thereto and all leases, tenancies, and occupancies thereof. 
  
 “Register” has the meaning set forth in Section 9.04(c). 
  
 “Regulation U” means Regulation U of the Board as from time to time in effect and all official rulings and
interpretations thereunder or thereof. 
  
 “Regulation
X” means Regulation X of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof. 
  

 20 

 “Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person’s Affiliates. 
  
 “Release” has the meaning set forth in Section 101(22) of CERCLA. 
  
 “Required Lenders” shall mean, subject to the provisions of Section 8.14, at any time, Lenders having
Commitments greater than 50% of the Total Commitments, or if the Commitments have been terminated, Lenders whose percentage of the outstanding Obligations (after settlement and repayment of all Swingline Loans by the Lenders) aggregate greater than
50% of all such Obligations. 
  
 “Required Supermajority
Lenders” shall mean, subject to the provisions of Section 8.14, at any time, Lenders having Commitments outstanding representing at least 66 2/3% of the Total Commitments outstanding or if the Commitments have been terminated, Lenders whose percentage of the outstanding Obligations (after settlement and repayment of all Swingline Loans by the
Lenders) aggregate not less than 66 2/3% of all such Obligations. 
  
 “Reserves” means all (if any) Inventory Reserves and
Availability Reserves. 
  
 “Restricted Payment”
means any dividend or other distribution (whether in cash, securities or other property) with respect to any shares of any class of capital stock of any Loan Party or any Subsidiary of any Loan Party, or any payment (whether in cash, securities or
other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such shares of capital stock of any Loan Party or any such Subsidiary or any option,
warrant or other right to acquire any such shares of capital stock of any Loan Party or any such Subsidiary. Without limiting the foregoing, “Restricted Payments” with respect to any Person shall also include all payments made by such
Person with respect to any stock appreciation rights, plans, equity incentive or achievement plans or any similar plans and all proceeds of a dissolution or liquidation of such Person payable to the shareholders of such Person. 
  
 “Revolving Loans” means all Loans at any time made by a
Lender pursuant to Section 2.01. 
  
 “S&P”
means Standard & Poor’s. 
  
 “SEC” means
the Securities and Exchange Commission. 
  
 “Secured
Parties” has the meaning assigned to such term in the Security Agreement. 
  
 “Security Agreement” means the Security Agreement dated as of May 26, 2004 among the Loan Parties and the Collateral Agent for the benefit of the Secured Parties, as amended and in effect from time to
time. 
  
 “Security Documents” means the Security
Agreement, the Pledge Agreement, the Facility Guarantors Collateral Documents, and each other security agreement or other instrument or document executed and delivered pursuant to Sections 5.13 or 5.14 to secure any of the Obligations. 

 

 21 

 “Settlement Date” has the meaning provided in Section 2.07(b) hereof. 
  
 “Shrink” means Inventory which has been lost, misplaced,
stolen, or is otherwise unaccounted for. 
  
 “Single
Employer Plan” means a single employer plan, as defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the Lead Borrower or any of its Subsidiaries or any ERISA Affiliate and no Person other than the Lead Borrower,
its Subsidiaries or the ERISA Affiliate or (b) was so maintained and in respect of which the Lead Borrower, any Subsidiary or any ERISA Affiliate could have liability under Section 4069 of ERISA in the event such plan has been or were to be
terminated. 
  
 “Solvent” means, with respect to
any Person on a particular date, that on such date (a) at fair valuations, all of the properties and assets of such Person are greater than the sum of the debts, including contingent liabilities, of such Person, (b) the present fair saleable value
of the properties and assets of such Person is not less than the amount that would be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person is able to realize upon its properties and
assets and pay its debts and other liabilities, contingent obligations and other commitments as they mature in the normal course of business, (d) such Person does not intend to, and does not believe that it will, incur debts beyond such
Person’s ability to pay as such debts mature, and (e) such Person is not engaged in a business or a transaction, and is not about to engage in a business or transaction, for which such Person’s properties and assets would constitute
unreasonably small capital after giving due consideration to the prevailing practices in the industry in which such Person is engaged. The amount of all Guarantees at any time shall be computed as the amount that, in light of all the facts and
circumstances existing at the time, can reasonably be expected to become an actual or matured liability. 
  
 “Standby Letter of Credit” means any Letter of Credit other than a Commercial Letter of Credit. 
  
 “Statutory Reserve Rate” means a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D. LIBO Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to any Lender under such Regulation D or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

  

 22 

 “Subordinated Indebtedness” means Indebtedness which is expressly subordinated in right
of payment, in form and on terms approved by the Administrative Agent in writing, to the prior payment in full of the Obligations. 
  
 “Subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company,
partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s Consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date,
as well as any other corporation, limited liability company, partnership, association or other entity of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held. 
  
 “Swingline Lender” means FRG, in its capacity as lender of Swingline Loans hereunder. 
  
 “Swingline Loan” shall mean a Loan made by the Swingline
Lender to the Borrowers pursuant to Section 2.05 hereof. 
  
 “Synthetic Lease” means any lease or other agreement for the use or possession of property creating obligations which do not appear as indebtedness on the balance sheet of the lessee thereunder but which, upon the
insolvency or bankruptcy of such Person, may be characterized as Indebtedness of such lessee without regard to the accounting treatment. 
  
 “Taxes” means any and all current or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any
Governmental Authority. 
  
 “Termination Date”
shall mean the earliest to occur of (i) the Maturity Date, or (ii) the date on which the maturity of the Loans are accelerated and the Commitments are terminated in accordance with Section 7.01, or (iii) the date of the occurrence of any Event of
Default pursuant to Section 7.01(h) or 7.01(i) hereof. 
  
 “Total Commitment” shall mean, at any time, the sum of the Commitments at such time. As of the Closing Date, the Total Commitments aggregate $50,000,000. 
  
 “Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such
Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate or the Prime Rate. 
  
 “UCC” shall mean the Uniform Commercial Code as in effect from time to time in the Commonwealth of Massachusetts. 
  
 “Unused Commitment” shall mean, on any day, (a) the then
Total Commitments minus (b) the sum of (i) the principal amount of Loans then outstanding (including the principal amount of Swingline Loans then outstanding) and (ii) the then Letter of Credit Outstandings. 
  
 “Voting Stock” means, with respect to any corporation, the
outstanding stock of all classes (or equivalent interests) which ordinarily, in the absence of contingencies, entitles holders thereof to vote for the election of directors (or Persons performing similar functions) of such corporation, even though
the right so to vote has been suspended by the happening of such contingency. 
  

 23 

 “Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete
or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA. 
  
 SECTION 1.02. Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without
limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document
herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer
to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this
Agreement and (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and
contract rights. 
  
 SECTION 1.03. Accounting Terms; GAAP
Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect on the Closing Date, provided that, if the Lead Borrower notifies the Administrative Agent that
the Borrowers request an amendment to any provision hereof to reflect the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Lead
Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such provision shall have been amended in accordance herewith. 
  
 ARTICLE II 
  
 Amount and Terms of Credit 
  
 SECTION 2.01. Commitment of the Lenders. 
  
 (a) Each Lender severally and not jointly with any other Lender, agrees, upon the terms and subject to the conditions herein set forth, to extend credit
to the Borrowers on a revolving basis, in the form of Revolving Loans and Letters of Credit and in an amount not to exceed the lesser of such Lender’s Commitment or such Lender’s Commitment Percentage of the Borrowing Base, subject to the
following limitations: 
  
 (a) The aggregate
outstanding amount of the Credit Extensions shall not at any time exceed the lower of (i) $50,000,000, or any other amount to which the Commitments have then been reduced by the Borrower pursuant to Section 2.16, and (ii) the then amount of the
Borrowing Base. 
  

 24 

 (b) No Lender shall be obligated to issue any Letter of Credit, and Letters of Credit
shall be available from the Issuing Bank, subject to the ratable participation of all Lenders, as set forth in Section 2.06. The Borrowers will not at any time permit the aggregate Letter of Credit Outstandings to exceed $50,000,000. 
  
 (c) Subject to all of the other provisions of this
Agreement, Revolving Loans that are repaid may be reborrowed prior to the Termination Date. No new Credit Extension, however, shall be made to the Borrowers after the Termination Date. 
  
 (b) Each Borrowing of Revolving Loans (other than Swingline Loans) shall be made by the Lenders pro rata in
accordance with their respective Commitment Percentages. The failure of any Lender to make any Loan shall neither relieve any other Lender of its obligation to fund its Loan in accordance with the provisions of this Agreement nor increase the
obligation of any such other Lender. 
  
 SECTION 2.02.
Reserves; Changes to Reserves. 
  
 (a) The initial
Inventory Reserves and Availability Reserves as of the date of this Agreement are the following: 
  
 (a) Shrink (an Inventory Reserve). 
  
 (b) Rent (an Availability reserve): Two months’ rent (but only if a landlord’s waiver, acceptable to the Lender, has not been
received by the Lender) as to any of any Borrower’s locations in Pennsylvania, Virginia or Washington 
  
 (c) Gift Certificates and Merchant Credit Liabilities (an Availability reserve): 50% of the amount thereof reflected on the
Borrowers’ books and records. 
  
 (b) The Administrative
Agent may hereafter establish additional Reserves or change any of the foregoing Reserves, in the exercise of the reasonable judgment of the Administrative Agent. 
  
 SECTION 2.03. Making of Loans. 
  
 (a) Except as set forth in Sections 2.17 and 2.25, Loans (other than Swingline Loans) by the Lenders shall be either Prime
Rate Loans or LIBO Loans as the Lead Borrower may request subject to and in accordance with this Section 2.03, provided that all Swingline Loans shall be only Prime Rate Loans. All Loans made pursuant to the same Borrowing shall, unless
otherwise specifically provided herein, be Loans of the same Type. Each Lender may 
  

 25 

 fulfill its Commitment with respect to any Loan by causing any lending office of such Lender to make such Loan; but any
such use of a lending office shall not affect the obligation of the Borrowers to repay such Loan in accordance with the terms of the applicable Note. Each Lender shall, subject to its overall policy considerations, use reasonable efforts (but shall
not be obligated) to select a lending office which will not result in the payment of increased costs by the Borrowers pursuant to Section 2.25. Subject to the other provisions of this Section 2.03 and the provisions of Section 2.25, Borrowings of
Loans of more than one Type may be incurred at the same time, but no more than four (4) Borrowings of LIBO Loans may be outstanding at any time. 
  
 (b) The Lead Borrower shall give the Administrative Agent three Business Days’ prior telephonic notice (thereafter confirmed in writing) of each
Borrowing of LIBO Loans and one Business Days’ notice of each Borrowing of Prime Rate Loans. Any such notice, to be effective, must be received by the Administrative Agent not later than 12:00 p.m., Boston time, on the third Business Day in the
case of LIBO Loans prior to the date on which, and 1:00 p.m. Boston time one Business Day prior to the date of Borrowing in the case of Prime Rate Loans that, such Borrowing is to be made. Notwithstanding the foregoing, in the case of Prime Rate
Loans, provided that there is only one Lender under this Agreement, the Lead Borrower shall give the Administrative Agent notice each Borrowing of Prime Rate Loan prior to 1:00 p.m. Boston time on the Business Day of the requested Borrowing. Such
notice shall be irrevocable and shall specify the amount of the proposed Borrowing (which shall be not less than $1,000,000 in the case of LIBO Loans, and in an integral multiple of $500,000, and not less than $100,000 in the case of Prime Rate
Loans) and the date thereof (which shall be a Business Day) and shall contain disbursement instructions. Such notice shall specify whether the Borrowing then being requested is to be a Borrowing of Prime Rate Loans or LIBO Loans and, if LIBO Loans,
the Interest Period with respect thereto. If no election of Interest Period is specified in any such notice for a Borrowing of LIBO Loans, such notice shall be deemed a request for an Interest Period of one month. If no election is made as to the
Type of Loan, such notice shall be deemed a request for Borrowing of Prime Rate Loans. The Administrative Agent shall promptly notify each Lender of its proportionate share of such Borrowing, the date of such Borrowing, the Type of Borrowing being
requested and the Interest Period or Interest Periods applicable thereto, as appropriate. On the borrowing date specified in such notice, each Lender shall make its share of the Borrowing available at the office of Fleet at 100 Federal Street,
Boston, Massachusetts 02110, no later than 1:00 p.m., Boston time, in immediately available funds. Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with this Section and may, in reliance upon such
assumption, make available to the Borrowers a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrowers severally
agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrowers to but excluding the date of payment to the
Administrative Agent, at (i) in the case of such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation or (ii) in the case of the
Borrowers, the interest rate applicable to Prime Rate Loans. If such Lender pays such amount to the Administrative 
  

 26 

 Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing. Upon receipt of the funds
made available by the Lenders to fund any Borrowing hereunder, the Administrative Agent shall disburse such funds into a Fleet Disbursement Account or otherwise in the manner specified in the notice of borrowing delivered by the Lead Borrower and
shall use reasonable efforts to make the funds so received from the Lenders available to the Borrowers no later than 4:00 p.m., Boston time. 
  
 (c) The Administrative Agent, without the request of any Borrower, may advance any interest, fee, service charge, or other payment to which any Agent or
their Affiliates or any Lender is entitled from the Borrowers pursuant hereto or any other Loan Document and may charge the same to the Loan Account notwithstanding that an Overadvance may result thereby. The Administrative Agent shall advise the
Lead Borrower of any such advance or charge promptly after the making thereof. Such action on the part of the Administrative Agent shall not constitute a waiver of the Administrative Agent’s rights and the Borrowers’ obligations under
Section 2.18(a). Any amount which is added to the principal balance of the Loan Account as provided in this Section 2.03(c) shall bear interest at the interest rate then and thereafter applicable to Prime Rate Loans. 
  
 SECTION 2.04. Overadvances. The Agents and the Lenders have no
obligation to make any Loan or to provide any Letter of Credit if an Overadvance would result. The Administrative Agent may, in its discretion, make Permitted Overadvances without the Consent of the Lenders and each Lender shall be bound thereby.
Any Permitted Overadvances may constitute Swingline Loans. The making of any Permitted Overadvance is for the benefit of the Borrowers; such Permitted Overadvances constitute Revolving Loans and Obligations. The making of any such Permitted
Overadvances on any one occasion shall not obligate the Administrative Agent or any Lender to make or permit any Permitted Overadvances on any other occasion or to permit such Permitted Overadvances to remain outstanding. 
  
 SECTION 2.05. Swingline Loans  
  
 (a) The Swingline Lender is authorized by the Lenders, but is not obligated,
to make Swingline Loans up to (i) $5,000,000 plus (ii) the maximum Permitted Overadvance, in the aggregate outstanding at any time, consisting only of Prime Rate Loans, upon a notice of Borrowing received by the Administrative Agent and the
Swingline Lender (which notice may be submitted prior to 1:00 p.m., Boston time, on the Business Day on which such Swingline Loan is requested). Swingline Loans shall be subject to periodic settlement with the Lenders under Section 2.07 below.

  
 (b) Swingline Loans shall only be made in the event that there
is more than one Lender under this Agreement, and may be made only in the following circumstances: (A) for administrative convenience, the Swingline Lender may, but is not obligated to, make Swingline Loans in reliance upon the Borrowers’
actual or deemed representations under Section 4.02, that the applicable conditions for borrowing are satisfied or (B) for Permitted Overadvances. If the conditions for borrowing under Section 4.02 cannot be fulfilled, the Required Lenders may
direct the Swingline Lender to, and the Swingline Lender thereupon shall, cease making Swingline Loans (other than Permitted Overadvances) until such conditions can be satisfied or are waived in accordance with Section 9.02 hereof. Unless the
Required Lenders so direct the Swingline 
  

 27 

 Lender, the Swingline Lender may, but is not obligated to, continue to make Swingline Loans notwithstanding that the
conditions for borrowing under Section 4.02 cannot be fulfilled. No Swingline Loans shall be made pursuant to this subsection (b) if the aggregate outstanding amount of the Credit Extensions and Swingline Loans would exceed the lower of (i)
$50,000,000 or any other amount to which the Commitments have then been reduced by the Borrowers pursuant to Sections 2.16, and (ii) (other than with respect to Permitted Overadvances) the then amount of the Borrowing Base. 
  
 SECTION 2.06. Letters of Credit. 
  
 (a) Upon the terms and subject to the conditions herein set forth, the Lead
Borrower may request the Issuing Bank, at any time and from time to time after the date hereof and prior to the Termination Date, to issue, and subject to the terms and conditions contained herein, the Issuing Bank shall issue, for the account of
the Borrowers one or more Letters of Credit; provided that no Letter of Credit shall be issued if after giving effect to such issuance (i) the aggregate Letter of Credit Outstandings shall exceed $50,000,000, or (ii) the aggregate Credit
Extensions would exceed the limitation set forth in Section 2.01(a)(i); and provided, further, that no Letter of Credit shall be issued if the Issuing Bank shall have received notice from the Administrative Agent or the Required
Lenders that the conditions to such issuance have not been met. 
  
 (b) Each Standby Letter of Credit shall expire at or prior to the close of business on the earlier of (i) the date one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one
year after such renewal or extension) and (ii) the date that is five Business Days prior to the Maturity Date, provided that each Standby Letter of Credit may, upon the request of the Lead Borrower, include a provision whereby such Letter of
Credit shall be renewed automatically for additional consecutive periods of 12 months or less (but not beyond the date that is five Business Days prior to the Maturity Date) unless the Issuing Bank notifies the beneficiary thereof at least 30 days
prior to the then-applicable expiration date that such Letter of Credit will not be renewed. 
  
 (c) Each Commercial Letter of Credit shall expire at or prior to the close of business on the earlier of (i) the date 120 days after the date of the issuance of such Commercial Letter of Credit and (ii) the date that
is five Business Days prior to the Maturity Date. 
  
 (d) Drafts
drawn under each Letter of Credit shall be reimbursed by the Borrowers in dollars on the same Business Day of any such drawing by paying to the Administrative Agent an amount equal to such drawing not later than 12:00 noon, Boston time, on (i) the
date that the Lead Borrower shall have received notice of such drawing, if such notice is received prior to 10:00 a.m., Boston time, on such date, or (ii) the Business Day immediately following the day that the Lead Borrower receives such notice, if
such notice is received after 10:00 a.m., Boston time on the day of drawing, provided that the Lead Borrower may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.03 that such payment be financed
with a Revolving Loan consisting of a Prime Rate Loan or Swingline Loan in an equivalent amount and, to the extent so financed, the Borrowers’ obligation to make such payment shall be discharged and replaced by the resulting Prime Rate Loan or
Swingline Loan. The Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting 
  

 28 

 to represent a demand for payment under a Letter of Credit. The Issuing Bank shall promptly notify the Administrative
Agent and the Lead Borrower by telephone (confirmed by telecopy) of such demand for payment and whether the Issuing Bank has made or will make payment thereunder, provided that any failure to give or delay in giving such notice shall not
relieve the Borrowers of their obligation to reimburse the Issuing Bank and the Lenders with respect to any such payment. 
  
 (e) If the Issuing Bank shall make any L/C Disbursement, then, unless the Borrowers shall reimburse the Issuing Bank in full on the date such payment is
made, the unpaid amount thereof shall bear interest, for each day from and including the date such payment is made to but excluding the date that the Borrowers reimburse the Issuing Bank therefor, at the rate per annum then applicable to Prime Rate
Loans, provided that, if the Borrowers fail to reimburse such Issuing Bank when due pursuant to paragraph (d) of this Section, then Section 2.10 shall apply. Interest accrued pursuant to this paragraph shall be for the account of the Issuing
Bank, except that interest accrued on and after the date of payment by any Lender pursuant to paragraph (g) of this Section to reimburse the Issuing Bank shall be for the account of such Lender to the extent of such payment. 
  
 (f) Immediately upon the issuance of any Letter of Credit by the Issuing Bank
(or the amendment of a Letter of Credit increasing the amount thereof), and without any further action on the part of the Issuing Bank, the Issuing Bank shall be deemed to have sold to each Lender, and each such Lender shall be deemed
unconditionally and irrevocably to have purchased from the Issuing Bank, without recourse or warranty, an undivided interest and participation, to the extent of such Lender’s Commitment Percentage, in such Letter of Credit, each drawing
thereunder and the obligations of the Borrowers under this Agreement and the other Loan Documents with respect thereto. Upon any change in the Commitments pursuant to Section 9.04, it is hereby agreed that with respect to all Letter of Credit
Outstandings, there shall be an automatic adjustment to the participations hereby created to reflect the new Commitment Percentages of the assigning and assignee Lenders. Any action taken or omitted by the Issuing Bank under or in connection with a
Letter of Credit, if taken or omitted in the absence of gross negligence or willful misconduct, shall not create for the Issuing Bank any resulting liability to any Lender. 
  
 (g) In the event that the Issuing Bank makes any L/C Disbursement and the Borrowers shall not have reimbursed such amount in
full to the Issuing Bank pursuant to this Section 2.06, the Issuing Bank shall promptly notify the Administrative Agent, which shall promptly notify each Lender of such failure, and each Lender shall promptly and unconditionally pay to the
Administrative Agent for the account of the Issuing Bank the amount of such Lender’s Commitment Percentage of such unreimbursed payment in dollars and in same day funds. If the Issuing Bank so notifies the Administrative Agent, and the
Administrative Agent so notifies the Lenders prior to 11:00 a.m., Boston time, on any Business Day, each such Lender shall make available to the Issuing Bank such Lender’s Commitment Percentage of the amount of such payment on such Business Day
in same day funds (or if such notice is received by the Lenders after 11:00 a.m., Boston time on the day of receipt, payment shall be made on the immediately following Business Day). If and to the extent such Lender shall not have so made its
Commitment Percentage of the amount of such payment available to the Issuing Bank, such Lender agrees to pay to the Issuing Bank, forthwith on demand such amount, together with 
  

 29 

 interest thereon, for each day from such date until the date such amount is paid to the Administrative Agent for the
account of the Issuing Bank at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation. Each Lender agrees to fund its Commitment
Percentage of such unreimbursed payment notwithstanding a failure to satisfy any applicable lending conditions or the provisions of Sections 2.01 or 2.06, or the occurrence of the Termination Date. The failure of any Lender to make available to the
Issuing Bank its Commitment Percentage of any payment under any Letter of Credit shall neither relieve any Lender of its obligation hereunder to make available to the Issuing Bank its Commitment Percentage of any payment under any Letter of Credit
on the date required, as specified above, nor increase the obligation of such other Lender. Whenever any Lender has made payments to the Issuing Bank in respect of any reimbursement obligation for any Letter of Credit, such Lender shall be entitled
to share ratably, based on its Commitment Percentage, in all payments and collections thereafter received on account of such reimbursement obligation. 
  
 (h) Whenever the Borrowers desire that the Issuing Bank issue a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of
Credit), the Lead Borrower shall give to the Issuing Bank and the Administrative Agent at least two Business Days’ prior written (including telegraphic, telex, facsimile or cable communication) notice (or such shorter period as may be agreed
upon in writing by the Issuing Bank and the Lead Borrower) specifying the date on which the proposed Letter of Credit is to be issued, amended, renewed or extended (which shall be a Business Day), the stated amount of the Letter of Credit so
requested, the expiration date of such Letter of Credit, the name and address of the beneficiary thereof, and the provisions thereof. If requested by the Issuing Bank, the Lead Borrower shall also submit a letter of credit application on the Issuing
Bank’s standard form in connection with any request for the issuance, amendment, renewal or extension of a Letter of Credit. 
  
 (i) The obligations of the Borrowers to reimburse the Issuing Bank for any L/C Disbursement shall be unconditional and irrevocable and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances, including, without limitation: (i) any lack of validity or enforceability of any Letter of Credit; (ii) the existence of any claim, setoff, defense or other right which
the Borrowers may have at any time against a beneficiary of any Letter of Credit or against the Issuing Bank or any of the Lenders, whether in connection with this Agreement, the transactions contemplated herein or any unrelated transaction; (iii)
any draft, demand, certificate or other document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the
Issuing Bank of any Letter of Credit against presentation of a demand, draft or certificate or other document which does not comply with the terms of such Letter of Credit in any immaterial respect; (v) any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrowers’ obligations hereunder; or (vi)
the fact that any Event of Default shall have occurred and be continuing. None of the Administrative Agent, the Lenders, the Issuing Bank or any of their Affiliates shall have any liability or responsibility by reason of or in connection with the
issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in
transmission or delivery of any draft, notice or 
  

 30 

 other communication under or relating to any Letter of Credit (including any document required to make a drawing
thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank, provided that the foregoing provisions of this subparagraph (i) shall not be construed to excuse the
Issuing Bank from liability to the Borrowers to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Borrowers to the extent permitted by Applicable Law) suffered by the Borrowers
that are caused by the Issuing Bank’s failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of
gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised care in each such determination. In furtherance of the foregoing
and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept
and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance
with the terms of such Letter of Credit. 
  
 SECTION 2.07.
Settlements Amongst Lenders  
  
 (a) The Swingline Lender
may (but shall not be obligated to), at any time, on behalf of the Borrowers (which hereby authorizes the Swingline Lender to act on its behalf in that regard) request the Administrative Agent to cause the Lenders to make a Revolving Loan (which
shall be a Prime Rate Loan) in an amount equal to such Lender’s Commitment Percentage of the outstanding amount of Swingline Loans made in accordance with Section 2.05, which request may be made regardless of whether the conditions set forth in
Article IV have been satisfied. Upon such request, each Lender shall make available to the Administrative Agent the proceeds of such Revolving Loan for the account of the Swingline Lender. If the Swingline Lender requires a Revolving Loan to be made
by the Lenders and the request therefor is received prior to 12:00 Noon, Boston time, on a Business Day, such transfers shall be made in immediately available funds no later than 3:00 p.m., Boston time, that day; and, if the request therefor is
received after 12:00 Noon, Boston time, then no later than 3:00 p.m., Boston time, on the next Business Day. The obligation of each Lender to transfer such funds is irrevocable, unconditional and without recourse to or warranty by the Administrative
Agent or the Swingline Lender. If and to the extent any Lender shall not have so made its transfer to the Administrative Agent, such Lender agrees to pay to the Administrative Agent, forthwith on demand such amount, together with interest thereon,
for each day from such date until the date such amount is paid to the Administrative Agent at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank
compensation. 
  
 (b) The amount of each Lender’s Commitment
Percentage of outstanding Revolving Loans (excluding Swingline Loans) shall be computed weekly (or more frequently in the Administrative Agent’s discretion) and shall be adjusted upward or downward based on all Revolving Loans (excluding
Swingline Loans) and repayments of Revolving Loans (excluding Swingline Loans) received by the Administrative Agent as of 3:00 p.m., Boston time, on the first Business Day following the end of the period specified by the Administrative Agent (such
date, the “Settlement Date”). 
  

 31 

 (c) The Administrative Agent shall deliver to each of the Lenders promptly after the Settlement Date a
summary statement of the amount of outstanding Revolving Loans (excluding Swingline Loans) for the period and the amount of repayments received for the period. As reflected on the summary statement, each Lender shall transfer to the Administrative
Agent (as provided below), or the Administrative Agent shall transfer to each Lender, such amounts as are necessary to insure that, after giving effect to all such transfers, the amount of Revolving Loans made by each Lender with respect to
Revolving Loans (excluding Swingline Loans) shall be equal to such Lender’s applicable Commitment Percentage of Revolving Loans (excluding Swingline Loans) outstanding as of such Settlement Date. If the summary statement requires transfers to
be made to the Administrative Agent by the Lenders and is received prior to 12:00 Noon, Boston time, on a Business Day, such transfers shall be made in immediately available funds no later than 3:00 p.m., Boston time, that day; and, if received
after 12:00 Noon, Boston time, then no later than 3:00 p.m., Boston time, on the next Business Day. The obligation of each Lender to transfer such funds is irrevocable, unconditional and without recourse to or warranty by the Administrative Agent.
If and to the extent any Lender shall not have so made its transfer to the Administrative Agent, such Lender agrees to pay to the Administrative Agent, forthwith on demand such amount, together with interest thereon, for each day from such date
until the date such amount is paid to the Administrative Agent at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation. 
  
 SECTION 2.08. Notes; Repayment of Loans. 
  
 (a) The Loans made by each Lender (and by the Swingline Lender, with respect
to Swingline Loans) shall be evidenced by a Note duly executed on behalf of the Borrowers, dated the Closing Date, in substantially the form attached hereto as Exhibit B-1 or B-2, as applicable, payable to the order of each such Lender (or the
Swingline Lender, as applicable) in an aggregate principal amount equal to such Lender’s Commitment (or, in the case of the Note evidencing the Swingline Loans, $5,000,000). The outstanding principal balance of all Swingline Loans shall be
repaid on the earlier of the Termination Date or on the date otherwise requested by the Swingline Lender in accordance with the provisions of Section 2.07(a). The outstanding principal balance of all other Obligations shall be payable on the
Termination Date (subject to earlier repayment as provided below). Each Note shall bear interest from the date thereof on the outstanding principal balance thereof as set forth in this Article II. Each Lender is hereby authorized by the Borrowers to
endorse on a schedule attached to each Note delivered to such Lender (or on a continuation of such schedule attached to such Note and made a part thereof), or otherwise to record in such Lender’s internal records, an appropriate notation
evidencing the date and amount of each Loan from such Lender, each payment and prepayment of principal of any such Loan, each payment of interest on any such Loan and the other information provided for on such schedule; provided,
however, that the failure of any Lender to make such a notation or any error therein shall not affect the obligation of the Borrowers to repay the Loans made by such Lender in accordance with the terms of this Agreement and the applicable
Notes. 
  

 32 

 (b) Upon receipt of and indemnification reasonably satisfactory to the Borrowers, and an affidavit of a
Lender as to the loss, theft, destruction or mutilation of such Lender’s Note and upon cancellation of such Note, the Borrowers will issue, in lieu thereof, a replacement Note in favor of such Lender, in the same principal amount thereof and
otherwise of like tenor. 
  
 SECTION 2.09. Interest on
Loans. 
  
 (a) Subject to Section 2.10, each Prime Rate Loan
shall bear interest (computed on the basis of the actual number of days elapsed over a year of 365 days, as applicable) at a rate per annum that shall be equal to the then Prime Rate, plus the Applicable Margin for Prime Rate Loans.

  
 (b) Subject to Section 2.10, each LIBO Loan shall bear
interest (computed on the basis of the actual number of days elapsed over a year of 360 days) at a rate per annum equal, during each Interest Period applicable thereto, to the Adjusted LIBO Rate for such Interest Period, plus the Applicable
Margin for LIBO Loans. 
  
 (c) Accrued interest on all Loans shall
be payable in arrears on each Interest Payment Date applicable thereto, at maturity (whether by acceleration or otherwise), after such maturity on demand and (with respect to LIBO Loans) upon any repayment or prepayment thereof (on the amount
prepaid). 
  
 SECTION 2.10. Default Interest. 

 
 Effective upon the occurrence of any Event of Default and at all times
thereafter while such Event of Default is continuing, at the option of the Administrative Agent or upon the direction of the Required Lenders, interest shall accrue on all outstanding Loans (including Swingline Loans) (after as well as before
judgment, as and to the extent permitted by law) at a rate per annum equal to the rate (including the Applicable Margin for Loans) in effect from time to time plus 2.00% per annum, and such interest shall be payable on demand. 
  
 SECTION 2.11. Certain Fees. 
  
 The Borrowers shall pay to the Administrative Agent, for the account of the
Administrative Agent, the fees set forth in the Fee Letter as and when payment of such fees is due as therein set forth. 
  
 SECTION 2.12. Unused Commitment Fee. 
  
 The Borrowers shall pay to the Administrative Agent for the account of the Lenders, a commitment fee (the “Commitment Fee”) equal to
0.30% per annum (on the basis of actual days elapsed in a year of 360 days) of the average daily balance of the Unused Commitment for each day commencing on and including the Closing Date and ending on but excluding the Termination Date. The
Commitment Fee so accrued in any calendar quarter shall be payable on the first Business Day of the immediately succeeding calendar quarter, except that all Commitment Fees so accrued as of the Termination Date shall be payable on the Termination
Date. 
  

 33 

 SECTION 2.13. Letter of Credit Fees. 
  
 (a) The Borrowers shall pay the Administrative Agent, for the account of the
Lenders, on the first day of each calendar quarter, in arrears, a fee (each, a “Letter of Credit Fee”) equal to the following per annum percentages of the average face amount of the following categories of Letters of Credit outstanding
during the subject quarter: 
  
 (a) Standby
Letters of Credit: At a per annum rate equal to the then Applicable Margin for LIBO Loans. 
  
 (b) Commercial Letters of Credit: At a per annum rate equal to the then Applicable Margin for LIBO Loans minus 0.50%. 
  
 (c) After the occurrence and during the continuance of an
Event of Default, at the option of the Administrative Agent or upon the direction of the Required Lenders, the Letter of Credit Fee shall be increased by an amount equal to one percent (1%) per annum. 
  
 (b) The Borrowers shall pay to the Administrative Agent, for the account of
the Issuing Bank, and in addition to all Letter of Credit Fees otherwise provided for hereunder, a fronting fee in the amount of .125% on the face amount of each Letter of Credit upon the issuance thereof (each, a “Fronting Fee”) and such
other fees and charges in connection with the issuance, negotiation, settlement, amendment and processing of each Letter of Credit issued by the Issuing Bank as are customarily imposed by the Issuing Bank from time to time in connection with letter
of credit transactions. 
  
 All Letter of Credit Fees shall be
calculated on the basis of a 360-day year and actual days elapsed. 
  

 34 

 SECTION 2.14. Early Termination Fee. In the event that the Termination Date occurs, for any
reason, prior to the Maturity Date, the Borrowers shall pay to the Administrative Agent, for the ratable benefit of the Lenders, a fee (the “Early Termination Fee”) in respect of amounts which are or become payable by reason thereof equal
to the following: (i) one percent (1%) of the Loan Ceiling in effect on the Closing Date if the Termination Date shall occur at any time on or before May 26, 2005, less any Early Termination Fee paid in accordance with Section 2.16, below; and (ii)
one-half percent (.5%) of the Loan Ceiling in effect on the Closing Date if the Termination Date shall occur at any time on or after May 26, 2005 but prior to May 26, 2006, less any Early Termination Fee paid in accordance with Section 2.16, below.
All parties to this Agreement agree and acknowledge that the Revolving Credit Lenders will have suffered damages on account of the early termination of this Agreement and that, in view of the difficulty in ascertaining the amount of such damages,
the Early Termination Fee constitutes reasonable compensation and liquidated damages to compensate the Revolving Credit Lenders on account thereof. Notwithstanding the foregoing, in the event that the Borrowers refinance the Credit Extensions with a
credit facility provided by Fleet or any of its Affiliates, or the Credit Extensions are refinanced with another institution and Fleet retains a portion of the Credit Extensions, the Early Termination Fee shall not be payable. 
  
 SECTION 2.15. Nature of Fees. 
  
 All fees shall be paid on the dates due, in immediately available funds, to
the Administrative Agent, for the respective accounts of the Administrative Agent, the Issuing Bank, and the Lenders, as and to the extent provided herein. All fees shall be fully earned on the date when due and shall not be refundable under any
circumstances. 
  
 SECTION 2.16. Termination or Reduction of
Commitments. 
  
 (a) Upon at least three (3) Business
Days’ prior written notice to the Administrative Agent, the Borrowers may, at any time, in whole permanently terminate, or from time to time in part permanently reduce, the Commitments. Each such reduction shall be in the principal amount of
$5,000,000 or any integral multiple of $1,000,000 in excess thereof. Each such reduction or termination shall (i) be applied ratably to the Commitments of each Lender and (ii) be irrevocable when given. At the effective time of each such reduction
or termination, the Borrowers shall pay to the Administrative Agent for application as provided herein (i) all Commitment Fees accrued on the amount of the Commitments so terminated or reduced through the date thereof, (ii) any amount by which the
Credit Extensions outstanding on such date exceed the amount to which the Commitments are to be reduced effective on such date, in each case pro rata based on the amount prepaid, and (iii) an Early Termination Fee on the amount of such
reduction based upon the percentages that would have been due had the Termination Date occurred during the dates set forth in Section 2.14. 
  
 SECTION 2.17. Alternate Rate of Interest. 
  
 If prior to the commencement of any Interest Period for a LIBO Borrowing: 
  
 (a) the Administrative Agent determines (which determination shall be conclusive absent manifest error) that
adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or 
  

 35 

 (b) the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO
Rate for such Interest Period will not adequately and fairly reflect the cost to such Lenders of making or maintaining their Loans included in such Borrowing for such Interest Period; 
  
 then the Administrative Agent shall give notice thereof to the Lead Borrower and the Lenders by telephone or telecopy as promptly as
practicable thereafter and, until the Administrative Agent notifies the Lead Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Borrowing Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a LIBO Borrowing shall be ineffective and (ii) if any Borrowing Request requests a LIBO Borrowing, such Borrowing shall be made as a Borrowing of Prime Rate Loans. 
  
 SECTION 2.18. Conversion and Continuation of Loans. 
  
 The Borrowers shall have the right at any time, on three Business Days’
prior irrevocable notice to the Administrative Agent (which notice, to be effective, must be received by the Administrative Agent not later than 11:00 a.m., Boston time, on the third Business Day preceding the date of any conversion), (x) to convert
any outstanding Borrowings of Loans (but in no event Swingline Loans) of one Type (or a portion thereof) to a Borrowing of Loans of the other Type or (y) to continue an outstanding Borrowing of LIBO Loans for an additional Interest Period, subject
to the following: 
  
 (a) no Borrowing of Loans
may be converted into, or continued as, LIBO Loans at any time when an Event of Default has occurred and is continuing; 
  
 (b) if less than a full Borrowing of Loans is converted, such conversion shall be made pro rata among the Lenders based upon
their Commitment Percentages in accordance with the respective principal amounts of the Loans comprising such Borrowing held by such Lenders immediately prior to such conversion; 
  
 (c) the aggregate principal amount of Loans being converted into or continued as LIBO Loans shall be in an
integral of $500,000 and at least $1,000,000; 
  
 (d) each Lender shall effect each conversion by applying the proceeds of its LIBO Loan or Prime Rate Loan, as the case may be, to its Loan being so converted; 
  
 (e) the Interest Period with respect to a Borrowing of LIBO Loans effected by a conversion or in respect to
the Borrowing of LIBO Loans being continued as LIBO Loans shall commence on the date of conversion or the expiration of the current Interest Period applicable to such continuing Borrowing, as the case may be; 
  
 (f) a Borrowing of LIBO Loans may be converted only on the
last day of an Interest Period applicable thereto; 
  

 36 

 (g) each request for a conversion or continuation of a Borrowing of LIBO Loans which
fails to state an applicable Interest Period shall be deemed to be a request for an Interest Period of one month; and 
  
 (h) no more than four (4) Borrowings of LIBO Loans may be outstanding at any time. 
  
 If the Lead Borrower does not give notice to convert any Borrowing of LIBO Loans, or does not
give notice to continue, or does not have the right to continue, any Borrowing as LIBO Loans, in each case as provided above, such Borrowing shall automatically be converted to a Borrowing of Prime Rate Loans at the expiration of the then-current
Interest Period. The Administrative Agent shall, after it receives notice from the Lead Borrower, promptly give each Lender notice of any conversion, in whole or part, of any Loan made by such Lender. 
  
 SECTION 2.19. Mandatory Prepayment; Commitment Termination; Cash
Collateral. 
  
 The outstanding Obligations shall be subject
to mandatory prepayment as follows: 
  
 (a) If at
any time the amount of the Credit Extensions exceeds the lower of (i) the then amount of the Total Commitments and (ii) the then amount of the Borrowing Base, the Borrowers will immediately upon notice from the Administrative Agent (A) prepay the
Loans in an amount necessary to eliminate such excess, and (B) if, after giving effect to the prepayment in full of all outstanding Loans such excess has not been eliminated, deposit cash into the Cash Collateral Account in an amount equal to the
lesser of (a) such excess, and (b) 103% of the Letter of Credit Outstandings at such time. 
  
 (b) The Revolving Loans shall be repaid daily in accordance with the provisions of Section 2.23 hereof. 
  
 (c) Subject to the provisions of Sections 2.19(a) and (b),
outstanding Prime Rate Loans shall be prepaid before outstanding LIBO Loans are prepaid. Each partial prepayment of LIBO Loans shall be in an integral multiple of $500,000. No prepayment of LIBO Loans shall be permitted pursuant to this Section 2.19
other than on the last day of an Interest Period applicable thereto, unless the Borrowers simultaneously reimburse the Lenders for all “Breakage Costs” (as defined in Section 2.20(b) below) associated therewith. In order to avoid such
Breakage Costs, as long as no Event of Default has occurred and is continuing, at the request of the Lead Borrower, the Administrative Agent shall hold all amounts required to be applied to LIBO Loans in the Cash Collateral Account and will apply
such funds to the applicable LIBO Loans at the end of the then pending Interest Period therefor and such LIBO Loans shall continue to bear interest at the rate set forth in Section 2.09 until the amounts in the Cash Collateral Account have been so
applied (provided that the foregoing shall in no way limit or restrict the Agents’ rights upon the subsequent occurrence of an Event of Default). No partial prepayment of a Borrowing of LIBO Loans shall result in the aggregate principal amount
of the LIBO Loans remaining outstanding pursuant to such Borrowing being less than $1,000,000. Except as provided in Section 2.16, any prepayment of the Revolving Loans shall not permanently reduce the Commitments. 
  

 37 

 (d) All amounts required to be applied to all Loans hereunder (other than Swingline
Loans) shall be applied ratably in accordance with each Lender’s Commitment Percentage. 
  
 (e) Upon the Termination Date, the Commitments and the credit facility provided hereunder shall be terminated in full and the Borrowers
shall pay, in full and in cash, all outstanding Loans and all other outstanding Obligations. 
  
 SECTION 2.20. Optional Prepayment of Loans; Reimbursement of Lenders. 
  
 (a) The Borrowers shall have the right at any time and from time to time to prepay outstanding Loans in whole or in part, (x) with respect to LIBO Loans,
upon at least two (2) Business Days’ prior written, telex or facsimile notice to the Administrative Agent prior to 11:00 a.m., Boston time, and (y) with respect to Prime Rate Loans, on the same Business Day if written, telex or facsimile notice
is received by the Administrative Agent prior to 1:00 p.m., Boston time, subject to the following limitations: 
  
 (a) Subject to Section 2.19, all prepayments shall be paid to the Administrative Agent for application, first, to the prepayment of
outstanding Swingline Loans, second, to the prepayment of other outstanding Loans ratably in accordance with each Lender’s Commitment Percentage, and third, to the funding of a cash collateral deposit in the Cash Collateral
Account in an amount equal to 103% of all Letter of Credit Outstandings. 
  
 (b) Subject to the foregoing, outstanding Prime Rate Loans shall be prepaid before outstanding LIBO Loans are prepaid. Each partial prepayment of LIBO Loans shall be in an integral multiple of $500,000. No prepayment
of LIBO Loans shall be permitted pursuant to this Section 2.19 other than on the last day of an Interest Period applicable thereto, unless the Borrowers simultaneously reimburse the Lenders for all “Breakage Costs” (as defined in Section
2.20(b) below) associated therewith. No partial prepayment of a Borrowing of LIBO Loans shall result in the aggregate principal amount of the LIBO Loans remaining outstanding pursuant to such Borrowing being less than $1,000,000. 
  
 (c) Each notice of prepayment shall specify the prepayment
date, the principal amount and Type of the Loans to be prepaid and, in the case of LIBO Loans, the Borrowing or Borrowings pursuant to which such Loans were made. Each notice of prepayment shall be irrevocable and shall commit the Borrowers to
prepay such Loan by the amount and on the date stated therein. The Administrative Agent shall, promptly after receiving notice from the Lead Borrower hereunder, notify each Lender of the principal amount and Type of the Loans held by such Lender
which are to be prepaid, the prepayment date and the manner of application of the prepayment. 
  
 (b) The Borrowers shall reimburse each Lender on demand for any loss incurred or to be incurred by it in the reemployment of the funds released (i) resulting from any prepayment (for any reason whatsoever, including,
without limitation, conversion to Prime Rate Loans or acceleration by virtue of, and after, the occurrence of an Event of Default) of any LIBO 
  

 38 

 Loan required or permitted under this Agreement, if such Loan is prepaid other than on the last day of the Interest
Period for such Loan or (ii) in the event that after the Lead Borrower delivers a notice of borrowing under Section 2.03 in respect of LIBO Loans, such Loans are not made on the first day of the Interest Period specified in such notice of borrowing
for any reason other than a breach by such Lender of its obligations hereunder. Such loss shall be the amount as reasonably determined by such Lender as the excess, if any, of (A) the amount of interest which would have accrued to such Lender on the
amount so paid or not borrowed at a rate of interest equal to the Adjusted LIBO Rate for such Loan, for the period from the date of such payment or failure to borrow to the last day (x) in the case of a payment or refinancing with Prime Rate Loans
other than on the last day of the Interest Period for such Loan, of the then current Interest Period for such Loan or (y) in the case of such failure to borrow, of the Interest Period for such Loan which would have commenced on the date of such
failure to borrow, over (B) the amount of interest which would have accrued to such Lender on such amount by investing such amount in United States Treasury securities (bills on a discounted basis shall be converted to a bond equivalent) with a
maturity date closest to the last day of the applicable Interest Period (collectively, “Breakage Costs”). Any Lender demanding reimbursement for such loss shall deliver to the Lead Borrower from time to time one or more certificates
setting forth the amount of such loss as determined by such Lender and setting forth in reasonable detail the manner in which such amount was determined. 
  
 (c) In the event the Borrowers fail to prepay any Loan on the date specified in any prepayment notice delivered pursuant to Section 2.20(a), the Borrowers
on demand by any Lender shall pay to the Administrative Agent for the account of such Lender any amounts required to compensate such Lender for any loss incurred by such Lender as a result of such failure to prepay, including, without limitation,
any loss, cost or expenses incurred by reason of the acquisition of deposits or other funds by such Lender to fulfill deposit obligations incurred in anticipation of such prepayment. Any Lender demanding such payment shall deliver to the Lead
Borrower from time to time one or more certificates setting forth the amount of such loss as determined by such Lender and setting forth in reasonable detail the manner in which such amount was determined. 
  
 (d) Whenever any partial prepayment of Loans are to be applied to LIBO Loans,
such LIBO Loans shall be prepaid in the chronological order of their Interest Payment Dates. 
  
 SECTION 2.21. Maintenance of Loan Account; Statements of Account. 
  
 (a) The Administrative Agent shall maintain an account on its books in the name of the Borrowers (the “Loan Account”) which will reflect
(i) all Swingline Loans, all Revolving Loans and other advances made by the Lenders to the Borrowers or for the Borrowers’ account, (ii) all L/C Disbursements, fees and interest that have become payable as herein set forth, and (iii) any and
all other Obligations that have become payable. 
  
 (b) The Loan
Account will be credited with all amounts received by the Administrative Agent from the Borrowers or otherwise for the Borrowers’ account, including all amounts received in the FRG Concentration Account from the Blocked Account Banks, and the
amounts so credited shall be applied as set forth in Section 2.23(a). After the end of each month, 
  

 39 

 the Administrative Agent shall send to the Lead Borrower a statement accounting for the charges, loans, advances and
other transactions occurring among and between the Administrative Agent, the Lenders and the Borrowers during that month. The monthly statements shall, absent manifest error, be final, conclusive and binding on the Borrowers. 
  
 SECTION 2.22. Cash Receipts. 
  
 (a) Annexed hereto as Schedule 2.22(a) is a list of all present DDAs,
which Schedule includes, with respect to each depository (i) the name and address of that depository; (ii) the account number(s) maintained with such depository; and (iii) to the extent known, a contact person at such depository. 
  
 (b) Annexed hereto as Schedule 2.22(b) is a list describing all
arrangements to which any Borrower is a party with respect to the payment to a Borrower of the proceeds of all credit card charges for sales by a Borrower. 
  
 (c) On or prior to the Closing Date, the Lead Borrower shall (i) deliver to the Administrative Agent notifications executed on behalf of the Borrowers to
each depository institution with which any DDA is maintained in form satisfactory to the Administrative Agent, of the Administrative Agent’s interest in such DDA (each, a “DDA Notification”), such DDA Notifications to be held
in escrow by the Administrative Agent until the occurrence of a Cash Dominion Event, at which time the Administrative Agent may, in its discretion, forward such DDA Notifications to the applicable institutions, and (ii) deliver to the Administrative
Agent agreements executed with each of each Borrower’s credit card clearinghouses and processors in form satisfactory to the Administrative Agent, (each, a “Credit Card Agreement”), and (iii) enter into agency agreements with
the banks maintaining the deposit accounts identified on Schedule 2.22(c) (collectively, the “Blocked Accounts”), which agreements (the “Blocked Account Agreements”) shall be in form and substance
satisfactory to the Administrative Agent. The DDA Notifications, Credit Card Agreements and Blocked Account Agreements shall require, after the occurrence and during the continuance of a Cash Dominion Event, the sweep on each Business Day of all
available cash receipts from the sale of Inventory and other assets, all collections of Accounts, and all other cash payments received by any Borrower from any Person or from any source or on account of any sale or other transaction or event (all
such cash receipts and collections, “Cash Receipts”), to a concentration account maintained by the Collateral Agent at Fleet (the “FRG Concentration Account”). In that regard, after the occurrence and during the
continuance of a Cash Dominion Event, the Borrowers shall cause the ACH or wire transfer to a Blocked Account or to the FRG Concentration Account, no less frequently than daily (and whether or not there is then an outstanding balance in the Loan
Account) of (A) the then contents of each DDA, each such transfer to be net of any minimum balance, not to exceed $2,500, as may be required to be maintained in the subject DDA by the bank at which such DDA is maintained; and (B) the proceeds of all
credit card charges not otherwise provided for pursuant hereto. Further, after the occurrence and during the continuance of a Cash Dominion Event, whether or not any Obligations are then outstanding, the Borrowers shall cause the ACH or wire
transfer to the FRG Concentration Account, no less frequently than daily, of the then entire ledger balance of each Blocked Account, net of such minimum balance, not to exceed $2,500, as may be required to be maintained in the subject Blocked
Account by the bank at which such Blocked Account is maintained. In the event that, notwithstanding the provisions of this Section 
  

 40 

 2.22, any Borrower receives or otherwise has dominion and control of any such proceeds or collections, such proceeds and
collections shall be held in trust by such Borrower for the Administrative Agent and shall not be commingled with any of any Borrower’s other funds or deposited in any account of any Borrower and shall either be promptly deposited into a
Blocked Account or the FRG Concentration Account, or dealt with in such other fashion as the Lead Borrower may be instructed by the Administrative Agent. 
  
 (d) The Lead Borrower shall accurately report to the Administrative Agent all amounts deposited in the Blocked Accounts (other than any such amounts
deposited with Fleet) to ensure the proper transfer of funds as set forth above. If at any time other than the times set forth above any cash or cash equivalents owned by any Borrower are deposited to any account, or held or invested in any manner,
otherwise than in a Blocked Account that is subject to a Blocked Account Agreement, the Administrative Agent shall require such Borrower to close such account and have all funds therein transferred to an account maintained by the Administrative
Agent at Fleet and all future deposits made to a Blocked Account which is subject to a Blocked Account Agreement. 
  
 (e) The Borrowers may close DDAs or Blocked Accounts and/or open new DDAs or Blocked Accounts, subject to the execution and delivery to the Administrative
Agent of appropriate DDA Notifications or Blocked Account Agreements (unless expressly waived by the Administrative Agent) consistent with the provisions of this Section 2.22 and otherwise satisfactory to the Administrative Agent. Unless consented
to in writing by the Administrative Agent, the Borrowers may not maintain any bank accounts (other than accounts that in the aggregate have balances of $2,500 or less) or enter into any agreements with credit card processors other than the ones
expressly contemplated herein. 
  
 (f) The Borrowers shall also
maintain with the Administrative Agent at Fleet one or more disbursement accounts (the “Fleet Disbursement Accounts”) to be used by the Borrowers for disbursements and payments (including payroll) in the ordinary course of business
or as otherwise permitted hereunder. The only Disbursement Accounts as of the Closing Date are those described in Schedule 2.22(f). 
  
 (g) The FRG Concentration Account is, and shall remain, under the sole dominion and control of the Collateral Agent. The Borrowers acknowledge and agree
that, subject to the provisions of the next to last sentence of Section 2.23(a), (i) the Borrowers have no right of withdrawal from the FRG Concentration Account, (ii) the funds on deposit in the FRG Concentration Account shall continue to be
collateral security for all of the Obligations, and (iii) the funds on deposit in the FRG Concentration Account shall be applied as provided in Section 2.23(a). 
  

SECTION 2.23. Application of Payments. 
  
 (a) As long as no Cash Dominion Event has occurred and is continuing, and no Event of Default has occurred and is continuing, and the Obligations have not
been accelerated, all amounts received by the Agents from any source shall be applied to the Obligations as the Administrative Agent and the Lead Borrower may agree. Subject to the provisions of Section 2.23, if a Cash Dominion Event has occurred
and is continuing, as long as 
  

 41 

 the Obligations have not been accelerated, all amounts received in the FRG Concentration Account from any source,
including the Blocked Account Banks, shall be applied in the following order: first, to pay interest due and payable on Credit Extensions and to pay fees and expense reimbursements and indemnification then due and payable to the
Administrative Agent, the Issuing Bank, the Collateral Agent, and the Lenders (other than fees, expenses and indemnifications relating to Obligations described in clause SIXTH of this Section 2.22(a)); second to repay outstanding Swingline
Loans; third, to repay other outstanding Revolving Loans that are Prime Rate Loans and all outstanding reimbursement obligations under Letters of Credit; fourth, to repay outstanding Revolving Loans that are LIBO Loans and all Breakage
Costs due in respect of such repayment pursuant to Section 2.19(b) or, at the Borrowers’ option (if no Event of Default has occurred and is then continuing), to fund a cash collateral deposit to the Cash Collateral Account sufficient to pay,
and with direction to pay, all such outstanding LIBO Loans on the last day of the then-pending Interest Period therefor; fifth to pay all other Obligations that are then outstanding and then due and payable, including without limitation, all
Obligations arising out of any cash management, depository, investment, letter of credit, Hedging Agreement, or other banking or financial services provided by FRG or Fleet. If all Obligations are paid, any excess amounts shall be deposited in a
separate cash collateral account, and as long as no Event of Default then exists, shall be released to the Borrowers upon the request of the Lead Borrower and utilized by the Borrowers prior to any further Revolving Loans being made. Any other
amounts received by the Administrative Agent, the Issuing Bank, the Collateral Agent, or any Lender as contemplated by Section 2.22 shall also be applied in the order set forth above in this Section 2.22. 
  
 (b) All credits against the Obligations shall be conditioned upon final
payment to the Administrative Agent of the items giving rise to such credits. If any item deposited to the FRG Concentration Account and credited to the Loan Account is dishonored or returned unpaid for any reason, whether or not such return is
rightful or timely, the Administrative Agent shall have the right to reverse such credit and charge the amount of such item to the Loan Account and the Borrowers shall indemnify the Administrative Agent, the Collateral Agent, the Issuing Bank and
the Lenders against all claims and losses resulting from such dishonor or return. Interest on the unpaid principal balance of the Loan Account shall be calculated as if payments had been made one Business Day after such application. 
  
 SECTION 2.24. Increased Costs. 
  
 (a) If any Change in Law shall: 
  
 (a) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender or any holding company of any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing
Bank; or 
  
 (b) impose on any Lender or the
Issuing Bank or the London interbank market any other condition affecting this Agreement or LIBO Loans made by such Lender or any Letter of Credit or participation therein; 
  

 42 

 and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any LIBO
Loan (or of maintaining its obligation to make any such Loan) or to increase the cost to such Lender or the Issuing Bank of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by
such Lender or the Issuing Bank hereunder (whether of principal, interest or otherwise), then the Borrowers will pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or the
Issuing Bank, as the case may be, for such additional costs incurred or reduction suffered. 
  
 (b) If any Lender or the Issuing Bank reasonably determines that any Change in Law regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s or the Issuing
Bank’s capital or on the capital of such Lender’s or the Issuing Bank’s holding company, if any, as a consequence of this Agreement or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of
Credit issued by the Issuing Bank, to a level below that which such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company could have achieved but for such Change in Law (taking into consideration such
Lender’s or the Issuing Bank’s policies and the policies of such Lender’s or the Issuing Bank’s holding company with respect to capital adequacy), then from time to time the Borrowers will pay to such Lender or the Issuing Bank,
as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any such reduction suffered. 
  
 (c) A certificate of a Lender or the Issuing Bank setting forth the amount or
amounts necessary to compensate such Lender or the Issuing Bank or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section and setting forth in reasonable detail the manner in which such amount or amounts were
determined shall be delivered to the Lead Borrower and shall be conclusive absent manifest error. The Borrowers shall pay such Lender or the Issuing Bank, as the case may be, the amount shown as due on any such certificate within ten (10) Business
Days after receipt thereof. 
  
 (d) Failure or delay on the part
of any Lender or the Issuing Bank to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or the Issuing Bank’s right to demand such compensation, provided that no compensation shall be required to be
paid for any amounts incurred more than 120 days prior to the date of such demand. 
  
 SECTION 2.25. Change in Legality. 
  
 (a) Notwithstanding anything to the contrary contained elsewhere in this Agreement, if (x) any Change in Law shall make it unlawful for a Lender to make or maintain a LIBO Loan or to give effect to its obligations as
contemplated hereby with respect to a LIBO Loan or (y) at any time any Lender determines that the making or continuance of any of its LIBO Loans has become impracticable as a result of a contingency occurring after the date hereof which adversely
affects the London interbank market or the position of such Lender in the London interbank market, then, by written notice to the Lead Borrower, such Lender may (i) declare that LIBO Loans will not thereafter be made by such Lender hereunder,
whereupon any request by the Lead Borrower for a LIBO Borrowing shall, as to such Lender only, be deemed a 
  

 43 

 request for a Prime Rate Loan unless such declaration shall be subsequently withdrawn; and (ii) require that all
outstanding LIBO Loans made by it be converted to Prime Rate Loans, in which event all such LIBO Loans shall be automatically converted to Prime Rate Loans as of the effective date of such notice as provided in paragraph (b) below. In the event any
Lender shall exercise its rights under clause (i) or (ii) of this paragraph (a), all payments and prepayments of principal which would otherwise have been applied to repay the LIBO Loans that would have been made by such Lender or the converted LIBO
Loans of such Lender shall instead be applied to repay the Prime Rate Loans made by such Lender in lieu of, or resulting from the conversion of, such LIBO Loans. 
  
 (b) For purposes of this Section 2.25, a notice to the Lead Borrower by any Lender pursuant to paragraph (a) above shall be
effective, if any LIBO Loans shall then be outstanding, on the last day of the then-current Interest Period; and otherwise such notice shall be effective on the date of receipt by the Lead Borrower. 
  
 SECTION 2.26. Payments; Sharing of Setoff. 
  
 (a) The Borrowers shall make each payment required to be made by it hereunder
or under any other Loan Document (whether of principal, interest, fees or reimbursement of drawings under Letters of Credit, or of amounts payable under Sections 2.20(b), 2.24 or 2.27, or otherwise) prior to 12:00 noon, Boston time, on the date when
due, in immediately available funds, without setoff or counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for
purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent at Fleet’s offices at 100 Federal Street, Boston, Massachusetts, except payments to be made directly to the Issuing Bank or Swingline Lender
as expressly provided herein and except that payments pursuant to Sections 2.20(b), 2.24, 2.27 and 9.03 shall be made directly to the Persons entitled thereto and payments pursuant to other Loan Documents shall be made to the Persons specified
therein. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment under any Loan Document shall be due on a day
that is not a Business Day, except with respect to LIBO Borrowings, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of
such extension. All payments under each Loan Document shall be made in U.S. dollars. 
  
 (b) All funds received by and available to the Administrative Agent to pay principal, unreimbursed drawings under Letters of Credit, interest and fees then due hereunder, shall be applied in accordance with the
provisions of Section 2.23(a) hereof or Section 6.02 of the Security Agreement, as applicable, ratably among the parties entitled thereto. 
  
 (c) Unless the Administrative Agent shall have received notice from the Lead Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the Issuing Bank hereunder that the Borrowers will not make such payment, the Administrative Agent may assume that the Borrowers have made such payment on such date in accordance herewith and may, in reliance
upon such assumption, distribute to the Lenders or the Issuing Bank, as the case may be, the amount due. In such event, if the Borrowers 
  

 44 

 have not in fact made such payment, then each of the Lenders or the Issuing Bank, as the case may be, severally agrees to
repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or Issuing Bank with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to
the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation. 
  
 (d) If any Lender shall fail to make any payment required to be made by it
pursuant to this Agreement, then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such
Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid. 
  
 SECTION 2.27. Taxes. 
  
 (a) Any and all payments by or on account of any obligation of the Borrowers hereunder or under any other Loan Document shall be made free and clear of
and without deduction for any Indemnified Taxes, provided that if the Borrowers shall be required to deduct any Indemnified Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required
deductions for Indemnified Taxes (including deductions for Indemnified Taxes applicable to additional sums payable under this Section) the Agents, such Lender or the Issuing Bank (as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrowers shall make such deductions, and (iii) the Borrowers shall pay the full amount deducted to the relevant Governmental Authority in accordance with Applicable Law. 
  
 (b) In addition, the Borrowers shall pay any Other Taxes to the relevant
Governmental Authority in accordance with Applicable Law. 
  
 (c)
The Borrowers shall indemnify the Agents, each Lender and the Issuing Bank, within ten (10) Business Days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by the Agents, such Lender or the Issuing Bank,
as the case may be, on or with respect to any payment by or on account of any obligation of the Borrowers hereunder or under any other Loan Document (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts
payable under this Section) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Lead Borrower by a Lender or the Issuing Bank, or by the Administrative Agent on its own behalf or on behalf of an Agent, a Lender or the Issuing
Bank setting forth in reasonable detail the manner in which such amount was determined, shall be conclusive absent manifest error. 
  
 (d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrowers to a Governmental Authority, the Borrowers shall deliver
to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the
Administrative Agent. 
  

 45 

 (e) Any Foreign Lender that is entitled to an exemption from or reduction in U.S. Federal withholding tax
shall deliver to the Lead Borrower and the Administrative Agent two copies of either United States Internal Revenue Service Form W-8BEN or Form W-8ECI, or any subsequent versions thereof or successors thereto, or, in the case of a Foreign Lender
claiming exemption from in U.S. Federal withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of “portfolio interest”, a (i) Form W-8BEN, or any subsequent versions thereof or successors thereto and (ii) a
certificate representing that such Foreign Lender is not (A) a bank for purposes of Section 881(c) of the Code, (B) is not a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of any Borrower and (C) is not a controlled
foreign corporation related to any Borrower (within the meaning of Section 864(d)(4) of the Code)), properly completed and duly executed by such Foreign Lender claiming, as applicable, complete exemption from or reduced rate of, U.S. Federal
withholding Tax on payments by the Borrowers under this Agreement and the other Loan Documents, or in the case of a Foreign Lender claiming exemption for “portfolio interest” certifying that it is not a foreign corporation, partnership,
estate or trust. Such forms shall be delivered by each Foreign Lender on or before the date it becomes a party to this Agreement (or, in the case of a transferee that is a participation holder, on or before the date such participation holder becomes
a transferee hereunder) and on or before the date, if any, such Foreign Lender changes its applicable lending office by designating a different lending office (a “New Lending Office”). In addition, each Foreign Lender shall deliver such
forms promptly upon the obsolescence or invalidity of any form previously delivered by such Foreign Lender. Notwithstanding any other provision of this Section 2.26(e), a Foreign Lender shall not be required to deliver any form pursuant to this
Section 2.26(e) that such Foreign Lender is not legally able to deliver. 
  
 (f) Upon the request of the Lead Borrower, any Lender that is not a Foreign Lender shall deliver to the Lead Borrower two copies of United States Internal Revenue Service Form W-9 or any subsequent versions thereof or
successors thereto, properly completed and duly executed. If any Lender fails to deliver Form W-9 or any subsequent versions thereof or successors thereto as required herein, then the Borrowers may withhold from any payment to such party an amount
equivalent to the applicable backup withholding Tax imposed by the Code, without reduction. 
  
 (g) The Borrowers shall not be required to indemnify any Lender or to pay any additional amounts to any Lender in respect of U.S. Federal withholding tax pursuant to paragraph (a) or (c) above to the extent that the
obligation to pay such additional amounts would not have arisen but for a failure by such Lender to comply with the provisions of paragraphs (e) or (f) above. Should a Lender become subject to Taxes because of its failure to deliver a form required
hereunder, the Borrowers shall, at such Lender’s expense, take such steps as such Lender shall reasonably request to assist such Lender to recover such Taxes. 
  
 (h) Each of the Lenders agrees that upon the occurrence of any circumstances entitling such party to indemnification or
additional amounts pursuant to Section 2.27(a) or (c), such party shall use reasonable efforts to take any action (including designating a new lending office and signing any prescribed forms or other documentation appropriate in the circumstances)
if such action would reduce or eliminate any Tax (including penalties or interest, as applicable) with respect to which such indemnification or additional amounts may thereafter accrue. 
  

 46 

 (i) If any Lender reasonably determines that it has actually and finally realized, by reason of a refund,
deduction or credit of any Taxes paid or reimbursed by the Borrowers pursuant to subsection (a) or (c) above in respect of payments under the Loan Documents, a current monetary benefit that it would otherwise not have obtained and that would result
in the total payments under this Section 2.27 exceeding the amount needed to make such Lender whole, such Lender shall pay to the Lead Borrower, with reasonable promptness following the date upon which it actually realizes such benefit, an amount
equal to the lesser of the amount of such benefit or the amount of such excess, in each case net of all out-of-pocket expenses incurred in securing such refund, deduction or credit. 
  
 SECTION 2.28. Security Interests in Collateral. 
  
 To secure their Obligations under this Agreement and the other Loan Documents, the Loan Parties shall grant to the
Collateral Agent, for its benefit and the ratable benefit of the other Secured Parties, a first-priority security interest in all of the Collateral pursuant to the Security Documents. 
  
 SECTION 2.29. Mitigation Obligations; Replacement of Lenders.  
  
 (a) If any Lender requests compensation under Section 2.24, or if the
Borrowers are required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.27, then such Lender shall use reasonable efforts to designate a different lending office for funding
or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable
pursuant to Section 2.24 or 2.27, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrowers hereby agree to pay all
reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment; provided, however, that the Borrowers shall not be liable for such costs and expenses of a Lender requesting compensation if
(i) such Lender becomes a party to this Agreement on a date after the Closing Date and (ii) the relevant Change in Law occurs on a date prior to the date such Lender becomes a party hereto. 
  
 (b) If any Lender requests compensation under Section 2.24, or if the
Borrowers are required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.27, or if any Lender defaults in its obligation to fund Loans hereunder, then the Borrowers may, at
their sole expense and effort, upon notice to such Lender and the Administrative Agent by the Lead Borrower, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.04),
all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that (i) the Lead Borrower shall have

  

 47 

 received the prior written consent of the Administrative Agent, the Issuing Bank and Swingline Lender, which consent
shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in unreimbursed drawings under Letters of Credit and Swingline Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrowers (in the case of all other amounts) and (iii) in the case of any such
assignment resulting from a claim for compensation under Section 2.24 or payments required to be made pursuant to Section 2.27, such assignment will result in a reduction in such compensation or payments. A Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrowers to require such assignment and delegation cease to apply. 
  

 48 

 ARTICLE III 
  
 Representations and Warranties 
  
 Each Loan Party represents and warrants to the Agents and the Lenders that: 
  
 SECTION 3.01. Organization; Powers. Each Loan Party is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, has all requisite power and authority to carry on its business as now conducted and, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required.  
  
 SECTION 3.02. Authorization; Enforceability. The transactions contemplated hereby and by the other Loan Documents to be entered into by each Loan
Party are within such Loan Party’s corporate or partnership and other powers, as applicable, and have been duly authorized by all necessary corporate and, if required, stockholder action. This Agreement has been duly executed and delivered by
each Loan Party that is a party hereto and constitutes, and each other Loan Document to which any Loan Party is a party, when executed and delivered by such Loan Party will constitute, a legal, valid and binding obligation of such Loan Party (as the
case may be), enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law. 
  
 SECTION 3.03. Governmental Approvals; No Conflicts. The transactions to be entered into contemplated by the Loan Documents (a) do not require any consent or approval of, registration or filing with, or any other action by, any
Governmental Authority, except for such as have been obtained or made and are in full force and effect and except filings and recordings necessary to perfect Liens created under the Loan Documents, (b) will not violate any Applicable Law or the
Organizational Documents of any Loan Party or any order of any Governmental Authority, (c) will not violate or result in a default under any indenture, agreement or other instrument binding upon any Loan Party or its assets, or give rise to a right
thereunder to require any payment to be made by any Loan Party, and (d) will not result in the creation or imposition of any Lien on any asset of any Loan Party, except Liens created under the Loan Documents. 
  
 SECTION 3.04. Financial Condition The Lead Borrower has heretofore
furnished to the Lenders the Consolidated balance sheet, and statements of income, stockholders’ equity, and cash flows for the Lead Borrower and its Subsidiaries as of and for the Fiscal Year ending January 31, 2004, certified by a Financial
Officer of the Lead Borrower. Such financial statements present fairly, in all material respects, the financial position, results of operations and cash flows of the Lead Borrower and its Subsidiaries as of such dates and for such periods in
accordance with GAAP, subject to year end audit adjustments and the absence of footnotes. Since March 31, 2004, there have been no changes in the assets, liabilities, financial condition, or business of the Lead Borrower and its Subsidiaries other
than changes in the ordinary course of business, the effect of which has had a Material Adverse Effect. 
  
 SECTION 3.05. Properties(a) Except as disclosed in Schedules 3.05(c)(i) and 3.05(c)(ii), each Loan Party has good title to, or valid leasehold
interests in, all its real and personal property material to its business, except for defects which could not reasonably be expected to have a Material Adverse Effect. 
  
 (b) Each Loan Party owns, or is licensed to use, all trademarks, trade names, copyrights, patents and other intellectual
property material to its business, and the use thereof by the Loan Parties does not infringe upon the rights of any other Person, except for any such infringements that, individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect. 
  

 49 

 (c) Schedule 3.05(c)(i) sets forth the address (including county) of all Real Estate that is owned by the
Loan Parties, together with a list of the holders of any mortgage or other Lien thereon as of the Closing Date. Schedule 3.05(c)(ii) sets forth the address (including county) of all Leases of the Loan Parties, together with a list of the holders of
any mortgage or other Lien on any Borrower’s interest in such Lease as of the Closing Date. Each of such Leases is in full force and effect and the Loan Parties are not in default of the terms thereof. 
  
 SECTION 3.06. Litigation and Environmental Matters(a) There are no
actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of the Borrowers, threatened against or affecting any Loan Party (i) as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect or (ii) that involve any of the Loan Documents. 
  
 (b) Except for the matters set forth on Schedule 3.06, no Loan Party (i) has
failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received notice of any
claim with respect to any Environmental Liability or (iv) knows of any basis for any Environmental Liability. 
  
 (c) Since the date of this Agreement, there has been no change in the status of the matters set forth on Schedule 3.06 that, individually or in the
aggregate, has resulted in, or could reasonably be expected to result in, a Material Adverse Effect. 
  
 SECTION 3.07. Compliance with Laws and Agreements Each Loan Party is in compliance with all Applicable Law and all indentures, material agreements
and other instruments binding upon it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. No Default has occurred and is continuing.

  
 SECTION 3.08. Investment and Holding Company Status No
Loan Party is (a) an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940 or (b) a “holding company” as defined in, or subject to regulation under, the Public Utility Holding
Company Act of 1935. 
  
 SECTION 3.09. Taxes Except as set
forth on Schedule 3.09 hereto, each Loan Party has timely filed or caused to be filed all federal and state Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a)
Taxes that are being contested in good faith by appropriate proceedings, for which such Loan Party has set aside on its books adequate reserves, and as to which no Lien has been filed, or (b) to the extent that the failure to do so could not
reasonably be expected to result in a Material Adverse Effect. 
  

 50 

 SECTION 3.10. ERISA No ERISA Event has occurred or is reasonably expected to occur that, when
taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect. The present value of all accumulated benefit obligations under each Plan (based
on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of such Plan, and the
present value of all accumulated benefit obligations of all underfunded Plans (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements
reflecting such amounts, exceed the fair market value of the assets of all such underfunded Plans. 
  
 SECTION 3.11. Disclosure The Borrowers have disclosed to the Lenders all agreements, instruments and corporate or other restrictions to which any
Loan Party is subject, and all other matters known to any of them, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. None of any of the reports, financial statements, certificates or other
written information furnished by or on behalf of any Loan Party to the Administrative Agent or any Lender in connection with the negotiation of this Agreement or any other Loan Document or delivered hereunder or thereunder (as modified or
supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

  
 SECTION 3.12. Subsidiaries. 
  
 (a) Schedule 3.12 sets forth the name of, and the ownership interest of each
Loan Party in each Subsidiary as of the Closing Date. There is no other capital stock or ownership interest of any class outstanding as of the Closing Date. The Loan Parties are not party to any joint venture, general or limited partnership, or
limited liability company, agreements or any other business ventures or entities as of the Closing Date. 
  
 (b) The Lead Borrower and its Subsidiaries have received the consideration for which the capital stock and other ownership interests was authorized to be
issued and have otherwise complied with all legal requirements relating to the authorization and issuance of shares of stock and other ownership interests, and all such shares and ownership interests are validly issued, fully paid, and
non-assessable. 
  
 SECTION 3.13. Insurance Schedule 3.13
sets forth a description of all insurance maintained by or on behalf of the Loan Parties and their Subsidiaries. Each of such policies is in full force and effect. All premiums in respect of such insurance that are due and payable have been paid.

  
 SECTION 3.14. Labor Matters There are no strikes,
lockouts or slowdowns against any Loan Party pending or, to the knowledge of the Borrowers, threatened. The hours worked by and payments made to employees of the Loan Parties have not been in violation of the Fair Labor Standards Act or any other
applicable federal, state, local or foreign law dealing with such matters to the extent that any such violation could reasonably be expected to have a Material 
  

 51 

 Adverse Effect. All payments due from any Loan Party, or for which any claim may be made against any Loan Party, on
account of wages and employee health and welfare insurance and other benefits, have been paid or accrued as a liability on the books of such member. The consummation of the transactions contemplated by the Loan Documents will not give rise to any
right of termination or right of renegotiation on the part of any union under any collective bargaining agreement to which any Loan Party is bound. 
  
 SECTION 3.15. Security Documents The Security Documents create in favor of the Collateral Agent, for the ratable benefit of the Secured Parties, a
legal, valid and enforceable security interest in the Collateral, and the Security Documents constitute the creation of a fully perfected first priority Lien on, and security interest in, all right, title and interest of the Loan Parties thereunder
in such Collateral, in each case prior and superior in right to any other Person (other than Permitted Encumbrances having priority under Applicable Law). 
  
 SECTION 3.16. Federal Reserve Regulations(a) No Loan Party is engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of buying or carrying Margin Stock. 
  
 (b) No part of the proceeds of any Loan or any Letter of Credit will be used, whether directly or indirectly, and whether immediately, incidentally or ultimately, (i) to buy or carry Margin Stock or to extend credit
to others for the purpose of buying or carrying Margin Stock or to refund indebtedness originally incurred for such purpose or (ii) for any purpose that entails a violation of, or that is inconsistent with, the provisions of the Regulations of the
Board, including Regulation U or X. 
  
 SECTION 3.17.
Solvency The Loan Parties, on a Consolidated basis, are Solvent. No transfer of property is being made by any Loan Party and no obligation is being incurred by any Loan Party in connection with the transactions contemplated by this Agreement
or the other Loan Documents with the intent to hinder, delay, or defraud either present or future creditors of any Loan Party. 
  
 ARTICLE IV 
  
 Conditions 
  
 SECTION 4.01. Closing Date The obligation of the Lenders to make each Loan and of the Issuing Bank to issue each Letter of Credit, including the initial Loan and the initial Letters of Credit, if any, on the Closing Date, is subject
to the following conditions precedent: 
  
 (a)
The Agents (or their counsel) shall have received from each party hereto either (i) a counterpart of this Agreement and all other Loan Documents (including, without limitation, the Security Documents) signed on behalf of such party or (ii) written
evidence satisfactory to the Agents (which may include telecopy transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement and all other Loan Documents. 
  

 52 

 (b) The Agents shall have received a favorable written opinion (addressed to each Agent
and the Lenders and dated the Closing Date) of Akin Gump Strauss Hauer & Feld LLP, counsel for the Loan Parties, and covering such matters relating to the Loan Parties, the Loan Documents or the transactions contemplated thereby as the Required
Lenders shall reasonably request. The Borrowers hereby request such counsel to deliver such opinion. 
  
 (c) The Agents shall have received such documents and certificates as the Agents or their counsel may reasonably request relating to the
organization, existence and good standing of each Loan Party, the authorization of the transactions contemplated by the Loan Documents and any other legal matters relating to the Loan Parties, the Loan Documents or the transactions contemplated
thereby, all in form and substance reasonably satisfactory to the Agents and their counsel. 
  
 (d) After giving effect to the first funding under the Loans; any charges to the Loan Account made in connection with the establishment of
the credit facility contemplated hereby; all Letters of Credit to be issued at, or immediately subsequent to, such establishment, and all then held checks, accounts payable which are beyond credit terms then accorded the Borrowers, and overdrafts,
Excess Availability shall be not less than $15,000,000. The Agents shall have received a Borrowing Base Certificate dated the Closing Date, relating to the most recent week ending on May 22, 2004, and executed by a Financial Officer of the Lead
Borrower. 
  
 (e) The Agents shall have received
a certificate, reasonably satisfactory in form and substance to the Agents, (i) with respect to the Solvency of the Loan Parties as of the Closing Date, and (ii) certifying that, as of the Closing Date, the representations and warranties made by the
Loan Parties in the Loan Documents and otherwise are true and complete and that no Default or Event of Default exists. 
  
 (f) All of the Loan Parties’ accounts payable and Taxes then due and owing shall be paid currently, other than those amounts subject
to the good faith dispute of the Loan Parties. 
  
 (g) The corporate structure and organization of the Loan Parties shall be reasonably satisfactory to the Administrative Agent, and the Administrative Agent shall be reasonably satisfied that all Loan Parties are Solvent as of the Closing
Date, and are left with capital sufficient to operate, and that all transactions and conditions required to consummate the closing and post closing will not be subject to a successful claim of fraudulent conveyance. 
  
 (h) All necessary consents and approvals to the transactions
contemplated hereby shall have been obtained and shall be reasonably satisfactory to the Agents. 
  
 (i) The Collateral Agent shall have received (a) appraisals of the Collateral consisting of Inventory by a third party appraiser
acceptable to the Collateral Agent, the results of which are reasonably satisfactory to the Collateral Agent; and (b) a written report regarding the results of a commercial finance examination of the Loan Parties, which shall be reasonably
satisfactory to the Collateral Agent. 
  

 53 

 (j) The Agents shall be reasonably satisfied that any financial statements delivered to
them fairly present the business and financial condition of the Lead Borrower and its Subsidiaries, and that there has been no material adverse change in the assets, business, financial condition, income or prospects of the Lead Borrower and its
Subsidiaries since the date of the most recent financial information delivered to the Agents. 
  
 (k) The Administrative Agent shall have received and be reasonably satisfied with (a) monthly detailed one-year financial projections and
business assumptions for the Lead Borrower and its Subsidiaries, and (b) such other information (financial or otherwise) reasonably requested by the Administrative Agent. 
  
 (l) There shall not be pending any litigation or other proceeding, the result of which could reasonably be
expected to have a Material Adverse Effect. 
  
 (m) There shall not have occurred any default of any material contract or agreement of any Loan Party which could reasonably be expected to have a Material Adverse Effect. 
  
 (n) The Collateral Agent shall have received results of searches or other evidence reasonably satisfactory
to the Collateral Agent (in each case dated as of a date reasonably satisfactory to the Collateral Agent) indicating the absence of Liens on the assets of the Loan Parties, except for (i) Permitted Encumbrances and (ii) Liens for which termination
statements and releases or subordination agreements reasonably satisfactory to the Collateral Agent are being tendered concurrently with such extension of credit. 
  
 (o) The Collateral Agent shall have received (i) all documents and instruments, including Uniform Commercial
Code financing statements, required by law or reasonably requested by the Collateral Agent to be filed, registered or recorded to create or perfect the first priority Liens intended to be created under the Loan Documents and all such documents and
instruments shall have been so filed, registered or recorded to the satisfaction of the Collateral Agent, and (ii) the DDA Notifications, Credit Card Agreements, and Blocked Account Agreements required pursuant to Section 2.22(c) hereof. 

 
 (p) The Collateral Agent shall have received, and be
reasonably satisfied with, evidence of the Loan Parties’ insurance, together with such endorsements as are required by the Loan Documents. 
  
 (q) The Collateral Agent shall be reasonably satisfied that those Investments held by the Borrowers, to be transferred to an account with
Bank of America have been fully transferred, and that the Collateral Agent shall have received a first perfected security interest in all such account, subject to a control agreement satisfactory to the Collateral Agent. 
  
 (r) All fees due at or immediately prior to the Closing Date
and all costs and expenses incurred by the Agents in connection with the establishment of the credit facility contemplated hereby (including the fees and expenses of counsel to the Agents) shall have been paid in full. 
  

 54 

 (s) The consummation of the transactions contemplated hereby shall not (a) violate any
Applicable Law or (b) conflict with, or result in a default or event of default under, any material agreement of any Loan Party. No event shall exist which is, or solely with the passage of time, the giving of notice or both, would be a default
under any material agreement of any Loan Party. 
  
 (t) There shall have been delivered to the Administrative Agent such additional instruments and documents as the Agents or counsel to the Agents reasonably may require or request. 
  
 The Administrative Agent shall notify the Lead Borrower and the Lenders of the Closing Date,
and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become effective unless each of the foregoing
conditions is satisfied (or waived by the Administrative Agent in writing) at or prior to 12:00 noon, Boston time, on May 28, 2004 (and, in the event such conditions are not so satisfied or waived, this Agreement shall terminate at such time).

  
 SECTION 4.02. Conditions Precedent to Each Loan and Each
Letter of Credit. 
  
 In addition to those conditions
described in Section 4.01, the obligation of the Lenders to make each Revolving Loan and of the Issuing Bank to issue each Letter of Credit, is subject to the following conditions precedent: 
  
 (a) Notice. The Administrative Agent shall have
received a notice with respect to such Borrowing or issuance, as the case may be, as required by Article II. 
  
 (b) Representations and Warranties. All representations and warranties contained in this Agreement and the other Loan Documents or
otherwise made in writing in connection herewith or therewith shall be true and correct in all material respects on and as of the date of each Borrowing or the issuance of each Letter of Credit hereunder with the same effect as if made on and as of
such date, other than representations and warranties that relate solely to an earlier date. 
  
 (c) No Default. On the date of each Borrowing hereunder and the issuance of each Letter of Credit and after giving effect thereto,
no Default or Event of Default shall have occurred and be continuing. 
  
 (d) Borrowing Base Certificate. The Administrative Agent shall have received the timely delivery of the most recently required Borrowing Base Certificate, with each such Borrowing Base Certificate including
schedules as required by the Administrative Agent. 
  

 55 

 The request by the Lead Borrower for, and the acceptance by the Borrowers of, each extension of credit hereunder shall be
deemed to be a representation and warranty by the Borrowers that the conditions specified in this Section 4.02 have been satisfied at that time and that after giving effect to such extension of credit the Borrowers shall continue to be in compliance
with the Borrowing Base. The conditions set forth in this Section 4.02 are for the sole benefit of the Administrative Agent and each Lender and may be waived by the Administrative Agent, in whole or in part, without prejudice to the Administrative
Agent or any Lender. 
  
 ARTICLE V 
  
 Affirmative Covenants 
  
 Until (i) the Commitments have expired or been terminated, and (ii) the
principal of and interest on each Loan and all fees payable hereunder shall have been paid in full, and (iii) all Letters of Credit shall have expired or terminated or been collateralized, to the extent of 103% of the then Letter of Credit
Outstandings, and (iv) all L/C Disbursements shall have been reimbursed, each Loan Party covenants and agrees with the Agents and the Lenders that: 
  
 SECTION 5.01. Financial Statements and Other Information The Lead Borrower will furnish to the Agents: 
  
 (a) within ninety (90) days after the end of each Fiscal
Year of the Lead Borrower, its Consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous
Fiscal Year, all audited and reported on by independent public accountants of recognized national standing (without a “going concern” or like qualification or exception and without a qualification or exception as to the scope of such
audit) to the effect that such Consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Lead Borrower and its Subsidiaries on a Consolidated basis in accordance with GAAP
consistently applied; 
  
 (b) within forty-five
(45) days after the end of each Fiscal Quarter of the Lead Borrower, its Consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows, as of the end of and for such Fiscal Quarter and the elapsed portion
of the Fiscal Year, setting forth in each case in comparative form the figures for the previous Fiscal Year, all certified by one of its Financial Officers as presenting in all material respects the financial condition and results of operations of
the Lead Borrower and its Subsidiaries on a Consolidated basis in accordance with GAAP consistently applied, subject to normal year end audit adjustments and the absence of footnotes; 
  
 (c) within thirty (30) days after the end of each fiscal month of the Lead Borrower, its Consolidated
balance sheet and related statements of operations, stockholders’ equity and cash flows, as of the end of and for such fiscal month and the elapsed portion of the Fiscal Year, setting forth in each case in comparative form the figures for the
previous Fiscal Year and the figures as set forth in the business plan delivered pursuant to Section 5.01(e) hereof, all certified by one of its Financial Officers as presenting in all material respects the financial condition and results of
operations of the Lead Borrower and its Subsidiaries on a Consolidated basis in accordance with GAAP consistently applied, subject to normal year end audit adjustments and the absence of footnotes; 
  

 56 

 (d) concurrently with any delivery of financial statements under clause (a), (b), or (c)
above, a certificate of a Financial Officer of the Lead Borrower in the form of Exhibit D (i) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken
with respect thereto, and (ii) setting forth reasonably detailed calculations (A) with respect to the average Excess Availability for such period, and (B) demonstrating compliance with Section 6.11, and (iii) stating whether any change in GAAP or in
the application thereof has occurred since the date of the Lead Borrower’s audited financial statements referred to in Section 3.04 and, if any such change has occurred, specifying the effect of such change on the financial statements
accompanying such certificate; 
  
 (e) within
thirty (30) days after the commencement of each Fiscal Year of the Lead Borrower, a preliminary business plan, and within ninety (90) days after the commencement of each Fiscal Year of the Lead Borrower, a final business plan, including a detailed
Consolidated budget by month for such Fiscal Year (including a projected Consolidated balance sheet and related statements of projected operations and cash flow as of the end of and for such Fiscal Year); 
  
 (f) on Wednesday of each week, a certificate in the form of
Exhibit E (a “Borrowing Base Certificate”) showing the Borrowing Base as of the close of business on the immediately preceding Saturday, each Borrowing Base Certificate to be certified as complete and correct on behalf of the
Borrowers by a Financial Officer of the Lead Borrower. Notwithstanding the foregoing, as long as no Cash Dominion Event has occurred, such Borrowing Base Certificate shall be provided within three (3) days after the end of each fiscal month;

  
 (g) promptly after the same become publicly
available, copies of all periodic and other reports, proxy statements and other materials filed in final form by any Loan Party with the Securities and Exchange Commission (including, without limitation, Forms 10K and 10Q but excluding any
registration statement on Form S-8 or its equivalent), or any Governmental Authority succeeding to any or all of the functions of said Commission, or with any national securities exchange, as the case may be; 
  
 (h) promptly upon receipt thereof, copies of all reports
submitted to any Loan Party by independent certified public accountants in connection with each annual, interim or special audit of the books of the Loan Parties or any of their Subsidiaries made by such accountants, including any management letter
commenting on the Loan Parties’ internal controls submitted by such accountants to management in connection with their annual audit; 
  
 (i) the financial and collateral reports described on Schedule 5.01(i) hereto, at the times set forth in such Schedule; 
  

 57 

 (j) notice of any intended sale or other disposition of any material portion of the
assets of any Loan Party permitted hereunder or incurrence of any material amount of Indebtedness permitted hereunder at least thirty (30) Business Days prior to the date of consummation of such sale or disposition or the incurrence of such
Indebtedness; and 
  
 (k) promptly following any
request therefor, such other information regarding the operations, business affairs and financial condition of any Loan Party, or compliance with the terms of any Loan Document, as the Agents or any Lender (acting through an Agent) may reasonably
request. 
  
 SECTION 5.02. Notices of Material Events The
Lead Borrower will furnish to the Agents prompt written notice of the following: 
  
 (a) the occurrence of any Default or Event of Default; 
  
 (b) the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental
Authority against or affecting any Loan Party or any Affiliate thereof that, if adversely determined, could reasonably be expected to result in a Material Adverse Effect; 
  
 (c) the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have
occurred, could reasonably be expected to result in a Material Adverse Effect; 
  
 (d) any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect; 
  
 (e) any change in any Loan Party’s chief executive
officer, chief financial officer or chairman; 
  
 (f) the discharge by any Loan Party of its present independent accountants or any withdrawal or resignation by such independent accountants; 
  
 (g) any failure by any Loan Party to pay rent at any of such Loan Party’s locations, which failure continues for more than ten (10)
days following the day on which such rent first came due if the result of such failure would be reasonably likely to result in a Material Adverse Effect; 
  
 (h) any collective bargaining agreement or other labor contract to which a Loan Party becomes a party, or the application for the
certification of a collective bargaining agent; and 
  
 (i) the filing of any Lien for unpaid Taxes against any Loan Party. 
  
 Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer or other executive officer of the Lead Borrower setting forth the details of the event or development requiring such notice and, if
applicable, any action taken or proposed to be taken with respect thereto. 
  

 58 

 SECTION 5.03. Information Regarding Collateral The Lead Borrower will furnish to the Agents at
least ten (10) days’ prior written notice of any change (i) in any Loan Party’s corporate name or in any trade name used to identify it in the conduct of its business or in the ownership of its properties, (ii) in the location of any Loan
Party’s chief executive office, its principal place of business, any office in which it maintains books or records relating to Collateral owned by it or any office or facility at which Collateral owned by it is located (including the
establishment of any such new office or facility), (iii) in any Loan Party’s corporate structure or jurisdiction of incorporation or formation, or (iv) in any Loan Party’s Federal Taxpayer Identification Number or organizational
identification number assigned to it by its state of organization. The Borrowers also agree promptly to notify the Agents if any material portion of the Collateral is damaged or destroyed. 
  
 SECTION 5.04. Existence; Conduct of Business Each Loan Party will, and
will cause each of its Subsidiaries to, do or cause to be done all things necessary to comply with its respective Organizational Documents, as applicable, and to preserve, renew and keep in full force and effect its legal existence and the rights,
licenses, permits, privileges, franchises, patents, copyrights, trademarks and trade names material to the conduct of its business, provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under
Section 6.03. 
  
 SECTION 5.05. Payment of Obligations Each
Loan Party will, and will cause each of the Subsidiaries to, pay its Indebtedness and other obligations, including Tax liabilities, and claims for labor, materials, or supplies, before the same shall become delinquent or in default, except where (a)
the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) such Loan Party or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP, (c) such contest
effectively suspends collection of the contested obligation and enforcement of any Lien securing such obligation, (d) no Lien has been filed with respect thereto, and (e) the failure to make payment pending such contest could not reasonably be
expected to result in a Material Adverse Effect. Nothing contained herein shall be deemed to limit the rights of the Administrative Agent under Section 2.03(b) hereof. 
  
 SECTION 5.06. Maintenance of Properties Each Loan Party will, and will cause each of the Subsidiaries to, keep and
maintain all property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted and with the exception of storing closings and asset dispositions permitted hereunder. 
  
 SECTION 5.07. Insurance(a) Each Loan Party shall (i) maintain
insurance with financially sound and reputable insurers reasonably acceptable to the Administrative Agent (or, to the extent consistent with prudent business practice, a program of self-insurance) on such of its property and in at least such amounts
and against at least such risks as is customary with companies in the same or similar businesses operating in the same or similar locations, including public liability insurance against claims for personal injury or death occurring upon, in or about
or in connection with the use of any properties owned, occupied or controlled by it (including the insurance required pursuant to the Security Documents); (ii) maintain such other insurance as may be required by law; and (iii) furnish to the
Administrative Agent, upon written request, full information as to the insurance carried. 
  

 59 

 (b) Fire and extended coverage policies maintained with respect to any Collateral shall be endorsed or
otherwise amended to include (i) a non-contributing mortgage clause (regarding improvements to real property) and lenders’ loss payable clause (regarding personal property), in form and substance reasonably satisfactory to the Collateral Agent,
which endorsements or amendments shall provide that the insurer shall pay all proceeds otherwise payable to the Loan Parties under the policies directly to the Collateral Agent, (ii) a provision to the effect that none of the Loan Parties, the
Administrative Agent, the Collateral Agent, or any other party shall be a coinsurer and (iii) such other provisions as the Collateral Agent may reasonably require from time to time to protect the interests of the Lenders. Commercial general
liability policies shall be endorsed to name the Collateral Agent as an additional insured. Business interruption policies shall name the Collateral Agent as a loss payee and shall be endorsed or amended to include (i) a provision that, from and
after the Closing Date, the insurer shall pay all proceeds otherwise payable to the Loan Parties under the policies directly to the Administrative Agent or the Collateral Agent, which amounts shall be released to the Borrowers provided that no Event
of Default or Cash Dominion Event has occurred and is then continuing, (ii) a provision to the effect that none of the Loan Parties, the Administrative Agent, the Collateral Agent or any other party shall be a co-insurer and (iii) such other
provisions as the Collateral Agent may reasonably require from time to time to protect the interests of the Lenders. Each such policy referred to in this paragraph also shall provide that it shall not be canceled, modified or not renewed (i) by
reason of nonpayment of premium except upon not less than 10 days’ prior written notice thereof by the insurer to the Collateral Agent (giving the Collateral Agent the right to cure defaults in the payment of premiums) or (ii) for any other
reason except upon not less than 30 days’ prior written notice thereof by the insurer to the Collateral Agent. The Lead Borrower shall deliver to the Collateral Agent, prior to the cancellation, modification or nonrenewal of any such policy of
insurance, a copy of a renewal or replacement policy (or other evidence of renewal of a policy previously delivered to the Collateral Agent, including an insurance binder) together with evidence reasonably satisfactory to the Collateral Agent of
payment of the premium therefor. 
  
 SECTION 5.08. Casualty and
Condemnation The Borrowers will furnish to the Agents and the Lenders prompt written notice of any casualty or other insured damage to any material portion of the Collateral or the commencement of any action or proceeding for the taking of any
interest in a material portion of the Collateral under power of eminent domain or by condemnation or similar proceeding. 
  
 SECTION 5.09. Books and Records; Inspection and Audit Rights; Appraisals; Accountants(a) Each Loan Party will, and will cause each of the
Subsidiaries to, keep proper books of record and account in accordance with GAAP and in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities. Each Loan Party will, and will cause
each of the Subsidiaries to, permit any representatives designated by any Agent, upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and
condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested, provided that Lead Borrower shall be furnished the opportunity to participate in any such discussions. 
  

 60 

 (b) Each Loan Party will, and will cause each of the Subsidiaries to, from time to time upon the request
of the Collateral Agent or the Required Lenders through the Administrative Agent and after reasonable prior notice, permit any Agent or professionals (including investment bankers, consultants, accountants, lawyers and appraisers) retained by the
Agents to conduct appraisals, commercial finance examinations and other evaluations, including, without limitation, of (i) the Borrowers’ practices in the computation of the Borrowing Base and (ii) the assets included in the Borrowing Base and
related financial information such as, but not limited to, sales, gross margins, payables, accruals and reserves, and pay the reasonable fees and expenses of the Agents or such professionals with respect to such evaluations and appraisals. Without
limiting the foregoing, the Loan Parties acknowledge that the Agents intend to undertake at least one (1) inventory appraisal and one (1) commercial finance examination each Fiscal Year after the Closing Date, at the Loan Parties’ expense.
Notwithstanding the foregoing, the Agents may cause additional appraisals and commercial finance examinations to be undertaken as they in their reasonable discretion deem necessary or appropriate, or as may be required by Applicable Law, provided
that the Loan Parties shall not be obligated to pay for any such additional appraisals and commercial finance examinations unless (i) an Event of Default has occurred and is continuing, or (ii) Excess Availability is at any time less than the
greater of (A) forty percent (40%) of the Borrowing Base at the time of calculation, or (B) $20,000,000, in which case all such additional appraisals and commercial finance examinations shall be at the expense of the Borrowers. The Agents
contemplate undertaking not more than four (4) inventory appraisals and four (4) commercial finance examinations each Fiscal Year but reserve the discretion to require additional appraisals and/or examination. 
  
 (c) The Loan Parties shall, at all times, retain independent certified public
accountants who are reasonably satisfactory to the Administrative Agent and instruct such accountants to cooperate with, and be reasonably available to, the Administrative Agent or its representatives to discuss the Loan Parties’ financial
performance, financial condition, operating results, controls, and such other matters, within the scope of the retention of such accountants, as may be raised by the Administrative Agent, provided that Lead Borrower shall be furnished the
opportunity to participate in any such discussions. 
  
 SECTION
5.10. Physical Inventories. 
  
 (a) The Collateral Agent,
at the expense of the Loan Parties, may participate in and/or observe each physical count and/or inventory of so much of the Collateral as consists of Inventory which is undertaken on behalf of the Borrowers so long as such participation does not
disrupt the normal inventory schedule or process. 
  
 (b) The
Borrowers, at their own expense, shall cause not less than one physical inventory per location of the Borrowers’ Inventory in each twelve (12) month period during which this Agreement is in effect, conducted by nationally recognized inventory
takers and using practices consistent with practices in effect on the date hereof, provided, however, if no Cash Dominion Event has occurred, the Borrowers shall not be required to engage nationally recognized inventory takers to conduct such
physical inventories. 
  

 61 

 (c) The Lead Borrower shall provide the Collateral Agent with the preliminary Inventory levels at each of
each Borrower’s stores within ten (10) days following the completion of such inventory. 
  
 (d) The Lead Borrower, within forty-five (45) days following the completion of such inventory, shall provide the Collateral Agent with a reconciliation of the results of each such inventory (as well as of any other
physical inventory undertaken by the Borrowers) and shall post such results to the Borrowers’ stock ledger and general ledger, as applicable. 
  
 (e) The Collateral Agent, in its discretion, if any Event of Default exists, may cause such additional inventories to be taken as the Collateral Agent
determines (each, at the expense of the Borrowers). 
  
 SECTION
5.11. Compliance with Laws Each Loan Party will, and will cause each of the Subsidiaries to, comply with all Applicable Laws, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a
Material Adverse Effect. 
  
 SECTION 5.12. Use of Proceeds and
Letters of Credit The proceeds of Loans made hereunder and Letters of Credit issued hereunder will be used only (a) to refinance existing Indebtedness, (b) to finance the acquisition of working capital assets of the Borrowers, including the
purchase of inventory, in the ordinary course of business, and (c) for general corporate purposes. No part of the proceeds of any Loan will be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations
of the Board, including Regulations U and X. 
  
 SECTION 5.13.
Additional Subsidiaries If any additional Subsidiary of any Loan Party is formed or acquired after the Closing Date, the Lead Borrower will notify the Agents and the Lenders thereof and (a) if such Subsidiary is not a Foreign Subsidiary, the
Borrowers will cause such Subsidiary to become a Loan Party hereunder and under each applicable Security Document in the manner provided therein within ten (10) Business Days after such Subsidiary is formed or acquired and promptly take such actions
to create and perfect Liens on such Subsidiary’s assets to secure the Obligations as any Agent or the Required Lenders shall reasonably request and (b) if any shares of capital stock or Indebtedness of such Subsidiary are owned by or on behalf
of any Loan Party, the Borrowers will cause such shares and promissory notes evidencing such Indebtedness to be pledged within ten (10) Business Days after such Subsidiary is formed or acquired (except that, if such Subsidiary is a Foreign
Subsidiary shares of stock of such Subsidiary to be pledged may be limited to 65% of the outstanding shares of Voting Stock of such Subsidiary). 
  
 SECTION 5.14. Depository Account. In order to facilitate the administration of the Revolving Loans and Collateral Agent’s security interest in
the Loan Parties’ assets, the Borrowers shall maintain Fleet or its Affiliates as each Borrower’s principal depository bank, including for the maintenance of operating, administrative, cash management, collection activity and other deposit
accounts for the conduct of such Borrower’s business. 
  

 62 

 SECTION 5.15. Further Assurances(a) Each Loan Party will execute any and all further documents,
financing statements, agreements and instruments, and take all such further actions (including the filing and recording of financing statements and other documents), that may be required under any Applicable Law, or which any Agent or the
Required Lenders may reasonably request, or to grant, preserve, protect or perfect the Liens created or intended to be created by the Security Documents or the validity or priority of any such Lien, all at the expense of the Loan Parties. The Loan
Parties also agree to provide to the Agents, from time to time upon request, evidence reasonably satisfactory to the Agents as to the perfection and priority of the Liens created or intended to be created by the Security Documents. 
  
 (b) If any material assets are acquired by any Loan Party after the Closing
Date (other than assets constituting Collateral under the Security Agreement that become subject to the Lien of the Security Agreement upon acquisition thereof), except for real property leaseholds to the extent that the consent of the landlord is
required but is not obtained, the Lead Borrower will notify the Agents and the Lenders thereof, and the Loan Parties will cause such assets to be subjected to a Lien securing the Obligations and will take such actions as shall be necessary or
reasonably requested by any Agent or the Required Lenders to grant and perfect such Liens, including actions described in paragraph (a) of this Section, all at the expense of the Loan Parties. 
  
 (c) Upon the request of the Administrative Agent, each Borrower shall cause
each of its customs brokers to deliver an agreement to the Administrative Agent covering such matters and in such form as the Administrative Agent may reasonably require. 
  
 ARTICLE VI 
  
 Negative Covenants 
  
 Until (i) the Commitments have expired or been terminated, and (ii) the principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full, and (iii) all Letters of Credit shall have expired or terminated or been collateralized, to the extent of 103% of the then Letter of Credit Outstandings, and (iv) all L/C Disbursements shall have been reimbursed, each Loan Party
covenants and agrees with the Agents and the Lenders that: 
  
 SECTION 6.01. Indebtedness and Other Obligations The Loan Parties will not, and will not permit any Subsidiary to, create, incur, assume or permit to exist any Indebtedness, except: 
  
 (a) Indebtedness created under the Loan Documents;

  
 (b) Indebtedness set forth in Schedule 6.01
and extensions, renewals and replacements of any such Indebtedness provided that after giving effect to the refinancing (i) the principal amount of the outstanding Indebtedness is not increased, (ii) neither the tenor nor the weighted average
life to maturity is reduced, and (iii) the holders of such refinancing Indebtedness are not afforded covenants, defaults, rights or remedies more burdensome in any material respect to the obligor or obligors than those contained in the Indebtedness
being refinanced; 
  
 (c) Indebtedness of any
Loan Party to any other Loan Party, all of which Indebtedness shall be reflected in the Loan Parties’ books and records in accordance with GAAP; 
  

 63 

 (d) Indebtedness of any Loan Party to finance the acquisition of any fixed or capital
assets, including Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of any
such Indebtedness that do not increase the outstanding principal amount thereof or result in an earlier maturity date or decreased weighted average life to maturity thereof, provided that the aggregate principal amount of Indebtedness
permitted by this clause (iv) shall not exceed $20,000,000 at any time outstanding; 
  
 (e) Indebtedness incurred to finance any Real Estate owned by any Loan Party or incurred in connection with sale-leaseback transactions;

  
 (f) Indebtedness under Hedging Agreements
with Fleet or an Affiliate of Fleet; and 
  
 (g)
other unsecured Indebtedness, in an aggregate principal amount not exceeding $5,000,000 at any time outstanding. 
  
 (h) Subordinated Indebtedness, in amounts, and on terms and conditions reasonably satisfactory to the Administrative Agent. 
  
 SECTION 6.02. Liens The Loan Parties will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including Accounts) or rights in respect of any thereof: 
  
 (a) Liens created under the Loan Documents; 
  
 (b) Permitted Encumbrances; 
  
 (c) any Lien on any property or asset of any Loan Party set
forth in Schedule 6.02, provided that (i) such Lien shall not apply to any other property or asset of any Loan Party and (ii) such Lien shall secure only those obligations that it secures as of the Closing Date, and extensions,
renewals and replacements thereof that do not increase the outstanding principal amount thereof; 
  
 (d) Liens on fixed or capital assets acquired by any Loan Party, provided that (i) such Liens secure Indebtedness permitted by
clause (iv) of Section 6.01(a), (ii) the Indebtedness secured thereby does not exceed 100% of the cost of acquiring such fixed or capital assets and (iii) such Liens shall not extend to any other property or assets of the Loan Parties; and

  
 (e) Liens to secure Indebtedness permitted by
clause (v) of Section 6.01(a) provided that such Liens shall not extend to any property or assets of the Loan Parties other than the Real Estate so financed or which is the subject of a sale-leaseback transaction. 
  

 64 

 SECTION 6.03. Fundamental Changes(a) The Loan Parties will not merge into or consolidate with any
other Person, or permit any other Person to merge into or consolidate with it, or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Default or Event of Default shall have occurred and be
continuing, (i) any Facility Guarantor may merge into any other Facility Guarantor, provided that in any such transaction involving the Lead Borrower, the Lead Borrower shall be the surviving entity, and (ii) any Facility Guarantor (other than the
Lead Borrower) may liquidate or dissolve voluntarily into the Lead Borrower or into any other Facility Guarantor. 
  
 (b) The Loan Parties will not engage in any business other than businesses of the type conducted by the Loan Parties on the date of execution of this
Agreement and businesses reasonably related thereto. 
  
 SECTION
6.04. Investments, Loans, Advances, Guarantees and Acquisitions The Loan Parties will not make any Investment, except: 
  
 (a) Permitted Investments; 
  
 (b) Investments existing on the Closing Date, and set forth on Schedule 6.04; 
  
 (c) loans or advances made by any Loan Party to any other
Loan Party; 
  
 (d) Guarantees constituting
Indebtedness permitted by Section 6.01; 
  
 (e)
Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with, customers and suppliers, in each case in the ordinary course of business; 
  
 (f) loans or advances to employees for the purpose of
travel, entertainment or relocation in the ordinary course of business in an amount not to exceed $50,000 in the aggregate at any time outstanding; and 
  
 (g) other Investments not to exceed $1,000,000 in the aggregate at any time outstanding. 
  
 SECTION 6.05. Asset Sales The Loan Parties will not, and will not
permit any of the Subsidiaries to, sell, transfer, lease or otherwise dispose of any asset, including any capital stock, nor will the Loan Parties permit any of the Subsidiaries to issue any additional shares of its capital stock or other ownership
interest in such Subsidiary, except: 
  
 (a) (i)
sales of Inventory in the ordinary course of business, or (ii) sales of used or surplus equipment, or (iii) Permitted Investments, in each case in the ordinary course of business; 
  
 (b) sales, transfers and dispositions among the Loan Parties and their Subsidiaries, provided that
any such sales, transfers or dispositions involving a Subsidiary that is not a Loan Party shall be made in compliance with Section 6.07; and 
  

 65 

 (c) sale-leaseback transactions involving any Loan Party’s Real Estate as long as if
the Administrative Agent so requests, the Administrative Agent shall have received an intercreditor agreement executed by the purchaser of such Real Estate on terms and conditions reasonably satisfactory to the Administrative Agent; 
  
 provided that all sales, transfers, leases and other dispositions permitted hereby
(other than sales, transfers and other disposition permitted under clause (b)) shall be made at arm’s length and for fair value and solely for cash consideration. 
  
 SECTION 6.06. Restricted Payments; Certain Payments of Indebtedness (a) The Loan Parties will not, and will not
permit any Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except that any Loan Party may pay dividends to the Lead Borrower. None of the Loan Parties will, nor will they permit any Subsidiary
to, issue any preferred stock (except for preferred stock that is not subject to redemption other than redemption at the option of the Loan Party issuing such preferred stock or be or become liable in respect of any obligation (contingent or
otherwise) to purchase, redeem, retire, acquire or make any other payment in respect of (i) any shares of capital stock of any Loan Party or (ii) any option, warrant or other right to acquire any such shares of capital stock. 
  
 (b) The Loan Parties will not, and will not permit any Subsidiary to, make or
agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash securities or other property) of or in respect of principal of or interest on any Indebtedness, or any payment or other distribution (whether in cash,
securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Indebtedness, except: 
  
 (a) mandatory payments as and when due in respect of any
other Indebtedness permitted hereunder; and 
  
 (b) refinancings of Indebtedness described in clause (i), above, to the extent permitted by Section 6.01. 
  
 SECTION 6.07. Transactions with Affiliates The Loan Parties will not, and will not permit any Subsidiary to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except transactions in the ordinary course of business that are at prices and on
terms and conditions not less favorable to the Loan Parties or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties. The Loan Parties will not conduct any business in the name of, nor permit any business
to be conducted in the name of, WSCC Buying Group, Inc., nor will any of the Loan Parties transfer any assets to WSCC Buying Group, Inc. 
  
 SECTION 6.08. Restrictive Agreements The Loan Parties will not, and will not permit any Subsidiary to, directly or indirectly, enter into, incur or
permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of the Loan Parties or any Subsidiary to create, incur or permit to exist any Lien upon any of its property or assets or (b)
the ability of any Subsidiary to pay dividends or other distributions with 
  

 66 

 respect to any shares of its capital stock or to make or repay loans or advances to the Loan Parties or any other
Subsidiary or to guarantee Indebtedness of the Loan Parties or any other Subsidiary, provided that (i) the foregoing shall not apply to restrictions and conditions imposed by law or by any Loan Document, (ii) clause (a) of the foregoing shall not
apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness and (iii) clause (a) of the
foregoing shall not apply to customary provisions in leases restricting the assignment or subleasing thereof. 
  
 SECTION 6.09. Amendment of Material Documents The Loan Parties will not, and will not permit any Subsidiary to, amend, modify or waive any of its
rights under (a) its Organizational Documents, and (b) any other instruments, documents or agreements, in each case to the extent that such amendment, modification or waiver would be materially adverse to the interests of the Lenders. 
  
 SECTION 6.10. Additional Subsidiaries The Loan Parties will not, and
will not permit any Subsidiary to, create any additional Subsidiary unless no Default or Event of Default would arise therefrom and the requirements of Section 5.13 are satisfied. 
  
 SECTION 6.11. Excess Availability. The Borrowers shall maintain Excess Availability at all times of not less than the
greater of (i) fifteen percent (15%) of the Borrowing Base at any time of calculation, or (ii) $7,500,000. 
  
 SECTION 6.12. Fiscal Year The Lead Borrower and its Subsidiaries shall not change their Fiscal Year without the prior written consent of the
Administrative Agent, which consent shall not be unreasonably withheld. 
  
 SECTION 6.13. Environmental Laws The Loan Parties shall not (a) fail to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, or (b) become
subject to any Environmental Liability, in each case which is reasonably likely to have a Material Adverse Effect. 
  
 SECTION 6.14 Store Closings. The Borrowers will not commit to close, or close, any location at which any Borrower maintains, offers for sale or
stores any of its Inventory or other Collateral, except that the Borrowers may downsize by closing up to 10% of the number of stores existing as of the Closing Date in any twelve (12) month period, provided that if the Borrowers close more than 5%
of the number of stores existing as of the Closing Date in any twelve (12) month period, all such closings in excess of 5% of the number of stores existing as of the Closing Date in any twelve (12) month period shall be conducted by professional
liquidators, subject to the approval of, and on terms and conditions reasonably acceptable to the Administrative Agent. 
  

 67 

 ARTICLE VII 
  
 Events of Default 
  
 SECTION 7.01. Events of Default. 
  
 If any of the following events (“Events of Default”) shall occur: 
  
 (a) the Loan Parties shall fail to pay any principal of any Loan or any reimbursement obligation in respect
of any L/C Disbursement when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise; 
  
 (b) (i) the Loan Parties shall fail to pay any interest on any Loan payable under this Agreement, when and
as the same shall become due and payable, or (ii) the Loan Parties shall fail to pay any fee or any other amount (other than an amount referred to in clause (a) or (b) of this Article) payable under this Agreement or any other Loan Document, when
and as the same shall become due and payable and such failure continues for five (5) days; 
  
 (c) any representation or warranty made or deemed made by or on behalf of any Loan Party in or in connection with any Loan Document or any
amendment or modification thereof or waiver thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with any Loan Document or any amendment or modification thereof or waiver thereunder,
shall prove to have been incorrect in any material respect when made or deemed made; 
  
 (d) the Loan Parties shall fail to observe or perform any covenant, condition or agreement contained in Sections 2.22, 5.01(f), 5.07 (with
respect to insurance covering the Collateral), 5.09, or 5.12, or in Article VI; 
  
 (e) any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in any Loan Document (other than those
specified in clause (a), (b), (c), or (d) of this Article), and such failure shall continue unremedied for a period of 15 days after notice thereof from the Administrative Agent to the Lead Borrower; 
  
 (f) any Loan Party shall fail to make any payment (whether
of principal or interest and regardless of amount) in respect of any Material Indebtedness when and as the same shall become due and payable (after giving effect to the expiration of any grace or cure period set forth therein); 
  
 (g) any event or condition occurs that results in any
Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (after giving effect to the expiration of any grace or cure period set forth therein) the holder or holders of any such Material Indebtedness or any
trustee or agent on its or their behalf to cause any such Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; 
  
 (h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of any Loan Party or its debts, or of a substantial part of its assets, under any federal or state bankruptcy, insolvency, receivership or similar
law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Loan Party or for a substantial part of its assets, and, in any such case, such proceeding or petition
shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered; 
  

 68 

 (i) any Loan Party shall (i) voluntarily commence any proceeding or file any petition
seeking liquidation, reorganization or other relief under any federal or state bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner,
any proceeding or petition described in clause (h) of this Section 7.01, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Loan Party or for a substantial part of
its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the
foregoing; 
  
 (j) any Loan Party shall become
unable, admit in writing its inability or fail generally to pay its debts as they become due; 
  
 (k) one or more judgments for the payment of money in an aggregate amount in excess of $1,000,000 shall be rendered against any Loan Party
or any combination thereof and the same shall remain undischarged for a period of 30 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any
material assets of any Loan Party to enforce any such judgment; 
  
 (l) an ERISA Event shall have occurred that when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in liability of the Loan Parties in an aggregate amount exceeding
$500,000; 
  
 (m) (i) any challenge in writing by
or on behalf of any Loan Party to the validity of any Loan Document or the applicability or enforceability of any Loan Document strictly in accordance with the subject Loan Document’s terms or which seeks to void, avoid, limit, or otherwise
adversely affect any security interest created by or in any Loan Document or any payment made pursuant thereto; 
  
       (ii) any judicial proceeding by or on behalf of any other Person seeking to challenge the validity of
any Loan Document or the applicability or enforceability of any Loan Document strictly in accordance with the subject Loan Document’s terms or which seeks to void, avoid, limit, or otherwise adversely affect any security interest created by or
in any Loan Document or any payment made pursuant thereto. 
  
       (iii) any Lien purported to be created under any Security Document shall cease to be, or shall be asserted by any Loan Party not to be, a valid and perfected Lien on any Collateral,
with the priority required by the applicable Security Document, except as a result of the sale or other disposition of the applicable Collateral in a transaction permitted under the Loan Documents; 
  

 69 

 (n) the occurrence of any uninsured loss to any material portion of the Collateral;

  
 (o) the indictment of, or institution of any
legal process or proceeding against, any Loan Party, under any federal, state, municipal, and other civil or criminal statute, rule, regulation, order, or other requirement having the force of law where the relief, penalties, or remedies sought or
available include the forfeiture of any material property of any Loan Party and/or the imposition of any stay or other order, the effect of which could reasonably be to restrain in any material way the conduct by the Loan Parties, taken as a whole,
of their business in the ordinary course; 
  
 (p)
the determination by the Borrowers, whether by vote of the Borrowers’ board of directors or otherwise to: suspend the operation of any Borrower’s business in the ordinary course, liquidate all or a material portion of the Borrowers’
assets or store locations, or employ an agent or other third party to conduct any so-called store closing, store liquidation or “Going-Out-Of-Business” sales; or 
  
 (q) the occurrence of any Change in Control; 
  
 then, and in every such event (other than an event with respect to any Loan Party described in clause (h) or (i) of this
Section 7.01), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Lead Borrower, take either or both of the following actions, at the same
or different times: (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be
due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrowers accrued
hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Loan Parties; and in case of any event with respect to any Loan Party described in clause
(h) or (i) of this Article, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrowers accrued hereunder, shall
automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Loan Parties. 
  
 SECTION 7.02. Remedies on Default 
  
 (a) In case any one or more of the Events of Default shall have occurred and be continuing, and whether or not the maturity of the Loans shall have been
accelerated pursuant hereto, the Administrative Agent may proceed to protect and enforce its rights and remedies under this Agreement, the Notes or any of the other Loan Documents by suit in equity, action at law or other appropriate proceeding,
whether for the specific performance of any covenant or agreement contained in this Agreement and the other Loan Documents or any instrument pursuant to which the Obligations are evidenced, and, if such amount shall have become due, by declaration
or otherwise, proceed to enforce the payment thereof or any other legal or equitable 
  

 70 

 right of the Agents or the Lenders. No remedy herein is intended to be exclusive of any other remedy and each and every
remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute or any other provision of law. 
  
 If any Event of Default shall occur and be continuing, on the Business Day that the Lead Borrower receives notice from the
Administrative Agent or the Required Lenders demanding the deposit of cash collateral pursuant to this paragraph, the Borrowers shall deposit in the Cash Collateral Account an amount in cash equal to 103% of the Letter of Credit Outstandings as of
such date plus any accrued and unpaid interest thereon. Each such deposit shall be held by the Collateral Agent as collateral for the payment and performance of the Obligations of the Borrowers under this Agreement. The Collateral Agent shall have
exclusive dominion and control, including the exclusive right of withdrawal, over such Cash Collateral Account. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of
the Collateral Agent at the request of the Lead Borrower and at the Borrowers’ risk and expense, such deposits shall not bear interest. Interest or profits, if any, on such investments shall accumulate in such account. Moneys in such Cash
Collateral Account shall be applied by the Collateral Agent to reimburse the Issuing Bank for payments on account of drawings under Letters of Credit for which it has not been reimbursed and, to the extent not so applied, shall be held first for the
satisfaction of the reimbursement obligations of the Borrowers for the Letter of Credit Outstandings at such time and thereafter be applied to satisfy other Obligations of the Borrowers under this Agreement. 
  
 SECTION 7.03. Application of Proceeds 
  
 After the occurrence of an Event of Default and acceleration of the
Obligations, all proceeds realized from any Loan Party or on account of any Collateral shall be applied in the manner set forth in Section 6.02 of the Security Agreement. All amounts required to be applied to Loans hereunder (other than Swingline
Loans) shall be applied ratably in accordance with each Lender’s Commitment Percentage. 
  
 ARTICLE VIII  
  
 The
Agents 
  
 SECTION 8.01. Administration by Administrative
Agent. 
  
 Each Lender, the Collateral Agent and the Issuing
Bank hereby irrevocably designate Fleet as Administrative Agent under this Agreement and the other Loan Documents. The general administration of the Loan Documents shall be by the Administrative Agent. The Lenders, the Collateral Agent and the
Issuing Bank each hereby irrevocably authorizes the Administrative Agent (i) to enter into the Loan Documents to which it is a party and (ii) at its discretion, to take or refrain from taking such actions as agent on its behalf and to exercise or
refrain from exercising such powers under the Loan Documents and the Notes as are delegated by the terms hereof or thereof, as appropriate, together with all powers reasonably incidental thereto. The Administrative Agent shall have no duties or
responsibilities except as set forth in this Agreement and the remaining Loan Documents, nor shall it have any fiduciary relationship with any Lender, and no implied covenants, responsibilities, duties, obligations, or liabilities shall be read into
the Loan Documents or otherwise exist against the Administrative Agent. 
  

 71 

 SECTION 8.02. The Collateral Agent. 
  
 Each Lender, the Administrative Agent and the Issuing Bank hereby irrevocably (i) designate FRG as Collateral Agent under
this Agreement and the other Loan Documents, (ii) authorize the Collateral Agent to enter into the Collateral Documents and the other Loan Documents to which it is a party and to perform its duties and obligations thereunder, together with all
powers reasonably incidental thereto, and (iii) agree and consent to all of the provisions of the Security Documents. All Collateral shall be held or administered by the Collateral Agent (or its duly-appointed agent) for its benefit and for the
ratable benefit of the other Secured Parties. Any proceeds received by the Collateral Agent from the foreclosure, sale, lease or other disposition of any of the Collateral and any other proceeds received pursuant to the terms of the Security
Documents or the other Loan Documents shall be paid over to the Administrative Agent for application as provided in Sections 2.19, 2.23, or 7.04, as applicable. The Collateral Agent shall have no duties or responsibilities except as set forth in
this Agreement and the remaining Loan Documents, nor shall it have any fiduciary relationship with any Lender, and no implied covenants, responsibilities, duties, obligations, or liabilities shall be read into the Loan Documents or otherwise exist
against the Collateral Agent. 
  
 SECTION 8.03. Sharing of
Excess Payments. 
  
 Each of the Lenders, the Agents and the
Issuing Bank agrees that if it shall, through the exercise of a right of banker’s lien, setoff or counterclaim against the Loan Parties, including, but not limited to, a secured claim under Section 506 of the Bankruptcy Code or other security
or interest arising from, or in lieu of, such secured claim and received by such Lender, any Agent or the Issuing Bank under any applicable bankruptcy, insolvency or other similar law, or otherwise, obtain payment in respect of the Obligations owed
it (an “excess payment”) as a result of which such Lender, such Agent or the Issuing Bank has received payment of any Loans or other Obligations outstanding to it in excess of the amount that it would have received if all payments
at any time applied to the Loans and other Obligations had been applied in the order of priority set forth in Section 7.04, then such Lender, Agent or the Issuing Bank shall promptly purchase at par (and shall be deemed to have thereupon purchased)
from the other Lenders, such Agent and the Issuing Bank, as applicable, a participation in the Loans and Obligations outstanding to such other Persons, in an amount determined by the Administrative Agent in good faith as the amount necessary to
ensure that the economic benefit of such excess payment is reallocated in such manner as to cause such excess payment and all other payments at any time applied to the Loans and other Obligations to be effectively applied in the order of priority
set forth in Section 7.04 in proportion to its Commitment Percentages; provided, that if any such excess payment is thereafter recovered or otherwise set aside such purchase of participations shall be correspondingly rescinded (without
interest). The Loan Parties expressly consent to the foregoing arrangements and agree that any Lender, any Agent or the Issuing Bank holding (or deemed to be holding) a participation in any Loan or other Obligation may exercise any and all rights of
banker’s lien, setoff or counterclaim with respect to any and all moneys owing by such Loan Party to such Lender, such Agent or the Issuing Bank as fully as if such Lender, Agent or the Issuing Bank held a Note and was the original obligee
thereon, in the amount of such participation. 
  

 72 

 SECTION 8.04. Agreement of Required Lenders. 
  
 (i) Upon any occasion requiring or permitting an approval, consent, waiver,
election or other action on the part of only the Required Lenders, action shall be taken by the Agents for and on behalf or for the benefit of all Lenders upon the direction of the Required Lenders, and any such action shall be binding on all
Lenders, and (ii) upon any occasion requiring or permitting an approval, consent, waiver, election or other action on the part of the Required Supermajority Lenders, action shall be taken by the Agents for and on behalf or for the benefit of all
Lenders upon the direction of the Required Supermajority Lenders and any such action shall be binding on all Lenders. No amendment, modification, consent, or waiver shall be effective except in accordance with the provisions of Section 9.02.

  
 (ii) Upon the occurrence of an Event of Default, the Agents
shall (subject to the provisions of Section 9.02) take such action with respect thereto as may be reasonably directed by the Required Lenders; provided that unless and until the Agents shall have received such directions, the Agents may (but
shall not be obligated to) take such action as it shall deem advisable in the best interests of the Lenders. In no event shall the Agents be required to comply with any such directions to the extent that the Agents believe that the Agents’
compliance with such directions would be unlawful. 
  
 SECTION
8.05. Liability of Agents. 
  
 (i) Each of the Agents,
when acting on behalf of the Lenders and the Issuing Bank, may execute any of its respective duties under this Agreement by or through any of its respective officers, agents and employees, and none of the Agents nor their respective directors,
officers, agents or employees shall be liable to the Lenders or the Issuing Bank or any of them for any action taken or omitted to be taken in good faith, or be responsible to the Lenders or the Issuing Bank or to any of them for the consequences of
any oversight or error of judgment, or for any loss, except to the extent of any liability imposed by law by reason of such Agent’s own gross negligence or willful misconduct. The Agents and their respective directors, officers, agents and
employees shall in no event be liable to the Lenders or the Issuing Bank or to any of them for any action taken or omitted to be taken by them pursuant to instructions received by them from the Required Lenders, or Required Supermajority Lenders, as
applicable, or in reliance upon the advice of counsel selected by it. Without limiting the foregoing, none of the Agents, nor any of their respective directors, officers, employees, or agents (A) shall be responsible to any Lender or the Issuing
Bank for the due execution, validity, genuineness, effectiveness, sufficiency, or enforceability of, or for any recital, statement, warranty or representation in, this Agreement, any Loan Document or any related agreement, document or order, or (B)
shall be required to ascertain or to make any inquiry concerning the performance or observance by any Loan Party of any of the terms, conditions, covenants, or agreements of this Agreement or any of the Loan Documents, or (C) shall be responsible to
any Lender or the Issuing Bank for the state or condition of any properties of any Borrower or any other obligor hereunder constituting Collateral for the Obligations of the Borrower hereunder, or any information contained in the books or records of
the Borrowers; or (D) shall be responsible to any Lender or the Issuing Bank 
  

 73 

 for the validity, enforceability, collectibility, effectiveness or genuineness of this Agreement or any other Loan
Document or any other certificate, document or instrument furnished in connection therewith; or (E) shall be responsible to any Lender or the Issuing Bank for the validity, priority or perfection of any lien securing or purporting to secure the
Obligations or the value or sufficiency of any of the Collateral. 
  
 (ii) The Agents may execute any of their duties under this Agreement or any other Loan Document by or through their agents or attorneys-in-fact, and shall be entitled to the advice of counsel concerning all matters pertaining to its rights
and duties hereunder or under the Loan Documents. The Agents shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by them with reasonable care. 
  
 (iii) None of the Agents nor any of their respective directors, officers,
employees, or agents shall have any responsibility to the Loan Parties on account of the failure or delay in performance or breach by any Lender (other than by the Agent in its capacity as a Lender) or the Issuing Bank of any of their respective
obligations under this Agreement or the Notes or any of the Loan Documents or in connection herewith or therewith. 
  
 (iv) The Agents shall be entitled to rely, and shall be fully protected in relying, upon any notice, consent, certificate, affidavit, or other document or
writing believed by it to be genuine and correct and to have been signed, sent or made by the proper person or persons, and upon the advice and statements of legal counsel (including, without, limitation, counsel to the Loan Parties), independent
accountants and other experts selected by the Agents. The Agents shall be fully justified in failing or refusing to take any action under this Agreement or any other Loan Document unless they shall first receive such advice or concurrence of the
Required Lenders as they deem appropriate or they shall first be indemnified to their satisfaction by the Lenders against any and all liability and expense which may be incurred by them by reason of the taking or failing to take any such action.

  
 SECTION 8.06. Notice of Default. The Agents shall not
be deemed to have knowledge or notice of the occurrence of any Default or Event of Default unless the Agents have actual knowledge of the same or has received notice from a Lender or the Loan Parties referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a “notice of default”. In the event that the Agents obtain such actual knowledge or receive such a notice, the Agents shall give prompt notice thereof to each of the Lenders. The
Agents shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Lenders. Unless and until the Agents shall have received such direction, the Agents may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to any such Default or Event of Default as they shall deem advisable in the best interest of the Lenders. 
  
 SECTION 8.07. Lenders’ Credit Decisions. Each Lender acknowledges that it has, independently and without
reliance upon the Agents or any other Lender, and based on the financial statements prepared by the Loan Parties and such other documents and information as it has deemed appropriate, made its own credit analysis and investigation into the business,
assets, operations, property, and financial and other condition of the Loan Parties and has made its own decision to enter into this Agreement and the other Loan Documents. Each Lender also 
  

 74 

 acknowledges that it will, independently and without reliance upon the Agents or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in determining whether or not conditions precedent to closing any Loan hereunder have been satisfied and in taking or not taking any action
under this Agreement and the other Loan Documents. 
  
 SECTION
8.08. Reimbursement and Indemnification. 
  
 Each Lender
agrees (i) to reimburse (x) each Agent for such Lender’s Commitment Percentage of any expenses and fees incurred by such Agent for the benefit of the Lenders or the Issuing Bank under this Agreement, the Notes and any of the Loan Documents,
including, without limitation, counsel fees and compensation of agents and employees paid for services rendered on behalf of the Lenders or the Issuing Bank, and any other expense incurred in connection with the operations or enforcement thereof not
reimbursed by the Loan Parties and (y) each Agent for such Lender’s Commitment Percentage of any expenses of such Agent incurred for the benefit of the Lenders or the Issuing Bank that the Loan Parties have agreed to reimburse pursuant to
Section 9.03 and has failed to so reimburse and (ii) to indemnify and hold harmless the Agents and any of their directors, officers, employees, or agents, on demand, in the amount of such Lender’s Commitment Percentage, from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses, or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against it or any of them in any way relating
to or arising out of this Agreement, the Notes or any of the Loan Documents or any action taken or omitted by it or any of them under this Agreement, the Notes or any of the Loan Documents to the extent not reimbursed by the Loan Parties (except
such as shall result from their respective gross negligence or willful misconduct). The provisions of this Section 8.08 shall survive the repayment of the Obligations and the termination of the Commitments. 
  
 SECTION 8.09. Rights of Agents. 
  
 It is understood and agreed that Fleet and FRG shall each have the same
rights and powers hereunder (including the right to give such instructions) as the other Lenders and may exercise such rights and powers, as well as its rights and powers under other agreements and instruments to which it is or may be party, and
engage in other transactions with any Borrower, as though they were not the Administrative Agent or the Collateral Agent, respectively, of the Lenders under this Agreement. The Agents and their affiliates may accept deposits from, lend money to, and
generally engage in any kind of commercial or investment banking, trust, advisory or other business with the Loan Parties and their Subsidiaries and Affiliates as if it were not the Agent hereunder. 
  
 SECTION 8.10. Independent Lenders and Issuing Bank. 
  
 The Lenders and the Issuing Bank each acknowledge that they have decided to
enter into this Agreement and to make the Loans or issue the Letters of Credit hereunder based on their own analysis of the transactions contemplated hereby and of the creditworthiness of the Loan Parties and agrees that the Agents shall bear no
responsibility therefor. 
  

 75 

 SECTION 8.11. Notice of Transfer. 
  
 The Agents may deem and treat a Lender party to this Agreement as the owner of such Lender’s portion of the Loans for
all purposes, unless and until, and except to the extent, an Assignment and Acceptance shall have become effective as set forth in Section 9.04(b). 
  
 SECTION 8.12. Successor Agent 
  
 Any Agent may resign at any time by giving five (5) Business Days’ written notice thereof to the Lenders, the Issuing Bank, the other Agents and the
Lead Borrower. Upon any such resignation of any Agent, the Required Lenders shall have the right to appoint a successor Agent, which so long as there is no Default or Event of Default, shall be reasonably satisfactory to the Lead Borrower (whose
consent shall not be unreasonably withheld or delayed). If no successor Agent shall have been so appointed by the Required Lenders and shall have accepted such appointment, within 30 days after the retiring Agent’s giving of notice of
resignation, the retiring Agent may, on behalf of the Lenders, the other Agents and the Issuing Bank, appoint a successor Agent which shall be a Person capable of complying with all of the duties of such Agent (and the Issuing Bank), hereunder (in
the opinion of the retiring Agent and as certified to the Lenders in writing by such successor Agent) which, so long as there is no Default or Event of Default, shall be reasonably satisfactory to the Lead Borrower (whose consent shall not be
unreasonably withheld or delayed). Notwithstanding the foregoing, if Fleet resigns as Administrative Agent, FRG may, at its option, become successor Administrative Agent; and if FRG resigns as Collateral Agent, Fleet may, at its option, become
successor Collateral Agent. Upon the acceptance of any appointment as Agent by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent and the
retiring Agent shall be discharged from its duties and obligations under this Agreement. After any retiring Agent’s resignation hereunder as such Agent, the provisions of this Article VIII shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was such Agent under this Agreement. 
  
 SECTION 8.13. Reports and Financial Statements. 
  
 Promptly after receipt thereof from the Lead Borrower, the Administrative Agent shall remit to each Lender and the Collateral Agent copies of all financial statements required to be delivered by the Borrowers hereunder and all commercial
finance examinations and appraisals of the Collateral received by the Administrative Agent. 
  
 SECTION 8.14. Delinquent Lender. If for any reason any Lender shall fail or refuse to abide by its obligations under this Agreement, including without limitation its obligation to make available to
Administrative Agent its Commitment Percentage of any Revolving Loans, expenses or setoff or purchase its Commitment Percentage of a participation interest in the Swingline Loans (a “Delinquent Lender”) and such failure is not cured within
ten (10) days of receipt from the Administrative Agent of written notice thereof, then, in addition to the rights and remedies that may be available to Agents, other Lenders, the Loan Parties or any other party at law or in equity, and not at
limitation thereof, (i) such Delinquent Lender’s right to participate in the administration of, or decision-making rights related to, the Loans, this Agreement or the other Loan Documents shall be suspended during the pendency of such failure
or refusal, and (ii) a 
  

 76 

 Delinquent Lender shall be deemed to have assigned any and all payments due to it from the Loan Parties, whether on
account of outstanding Loans, interest, fees or otherwise, to the remaining non-delinquent Lenders for application to, and reduction of, their proportionate shares of all outstanding Loans until, as a result of application of such assigned payments
the Lenders’ respective Commitment Percentage of all outstanding Loans shall have returned to those in effect immediately prior to such delinquency and without giving effect to the nonpayment causing such delinquency. The Delinquent
Lender’s decision-making and participation rights and rights to payments as set forth in clauses (i) and (ii) hereinabove shall be restored only upon the payment by the Delinquent Lender of its Commitment Percentage of any Loans, any
participation obligation, or expenses as to which it is delinquent, together with interest thereon at the rate set forth in Section 2.11 hereof from the date when originally due until the date upon which any such amounts are actually paid.

  
 The non-delinquent Lenders shall also have the right, but not
the obligation, in their respective, sole and absolute discretion, to acquire for no cash consideration, (pro rata, based on the respective Commitments of those Lenders electing to exercise such right) the Delinquent Lender’s
Commitment to fund future Loans. Upon any such purchase of the Commitment Percentage of any Delinquent Lender’s future commitment, the Delinquent Lender’s share in future Loans and its rights under the Loan Documents with respect thereto
shall terminate on the date of purchase, and the Delinquent Lender shall promptly execute all documents reasonably requested to surrender and transfer such interest, including, if so requested, an Assignment and Acceptance. Each Delinquent Lender
shall indemnify the Agents and each non-delinquent Lender from and against any and all loss, damage or expenses, including but not limited to reasonable attorneys’ fees and funds advanced by any Agent or by any non-delinquent Lender, on account
of a Delinquent Lender’s failure to timely fund its Commitment Percentage of a Loan or to otherwise perform its obligations under the Loan Documents. 
  
 ARTICLE IX  
  
 Miscellaneous 
  
 SECTION 9.01. Notices. Except in the case of notices and other communications expressly permitted to be given by telephone, all notices and other communications provided for herein shall be in writing and shall
be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows: 
  
 (a) if to any Loan Party, to it at The Wet Seal, Inc., 26972 Burbank, Foothill Ranch, California 92610, Attention: Chief Financial Officer
(Telecopy No. (858) 206-4977), with a copy to Akin Gump Strauss Hauer & Feld LLP, 590 Madison Avenue, New York, New York 10022, Attention: Steven Scheinman, Esquire (Telecopy No. (212) 872-1090); 
  
 (b) if to the Administrative Agent or the Collateral Agent,
or the Swingline Lender to Fleet Retail Group, Inc., 40 Broad Street, Boston, Massachusetts 02109, Attention Daniel T. Platt (Telecopy No. (617) 434-4312), with a copy to Riemer & Braunstein, LLP, Three Center Plaza, Boston, Massachusetts 02108,
Attention: Robert E. Paul, Esquire (Telecopy No. (617) 880-3456); 
  

 77 

 Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to
the other parties hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt. 
  
 (b) if to any other Lender, to it at its address (or telecopy number) set
forth on the signature pages hereto or on any Assignment and Acceptance for such Lender. 
  
 SECTION 9.02. Waivers; Amendments. (a) No failure or delay by the Agents, the Issuing Bank or any Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power.
The rights and remedies of the Agents, the Issuing Bank and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of any
Loan Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether the Agents, any Lender or
the Issuing Bank may have had notice or knowledge of such Default at the time. 
  
 (b) Neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended or modified except, in the case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Lead Borrower and the Required Lenders or, in the case of any other Loan Document, pursuant to an agreement or agreements in writing entered into by the Agents and the Loan Parties that are parties thereto, in each case with the
Consent of the Required Lenders, provided that no such agreement shall (i) increase the Commitment of any Lender without the Consent of such Lender, (ii) reduce the principal amount of any Loan or L/C Disbursement or reduce the rate of
interest thereon, or reduce any fees payable hereunder, without the Consent of each Lender affected thereby, (iii) postpone the scheduled date of payment of the principal amount of any Loan or L/C Disbursement, or any interest thereon, or any fees
payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of the Commitments or the Maturity Date, without the Consent of each Lender affected thereby, (iv) change Sections 2.19, 2.22,
or 2.23 or Section 6.02 of the Security Agreement, without the Consent of each Lender, (v) change any of the provisions of this Section 9.02 or the definition of the term “Required Lenders” or “Required Supermajority Lenders” or
any other provision of any Loan Document specifying the number or percentage of Lenders required to waive, amend or modify any rights thereunder or make any determination or grant any consent thereunder, without the Consent of each Lender, (vi)
release any Loan Party from its obligations under any Loan Document, or limit its liability in respect of such Loan Document, without the Consent of each Lender, (vii) except for sales described in Section 6.05 or as permitted in the Security
Documents, release any material portion of the Collateral from the Liens of the Security Documents, without the Consent of each Lender, (viii) change the definition of the term “Borrowing Base” or any component definition thereof if as a
result thereof the amounts 
  

 78 

 available to be borrowed by the Borrowers would be increased, without the Consent of each Lender, provided that
the foregoing shall not limit the discretion of the Administrative Agent to change, establish or eliminate any Reserves, (ix) increase the Permitted Overadvance, without the Consent of each Lender, (x) subordinate the Obligations hereunder, or the
Liens granted hereunder or under the other Loan Documents, to any other Indebtedness or Lien, as the case may be without the prior Consent of each Lender, and provided further that no such agreement shall amend, modify or otherwise affect the
rights or duties of the Agents or the Issuing Bank without the prior written consent of the Agents or the Issuing Bank, as the case may be. 
  
 (c) Notwithstanding anything to the contrary contained herein, no modification, amendment or waiver which increases the maximum amount of the Swingline
Loans to an amount in excess of $10,000,000 (or such greater amount to which such limit has been previously increased in accordance with the provisions of this Section 9.02(c)) shall be made without the Consent of the Required Supermajority Lenders.

  
 (d) Notwithstanding anything to the contrary contained in this
Section 9.02, in the event that the Borrowers request that this Agreement or any other Loan Document be modified, amended or waived in a manner which would require the Consent of the Lenders pursuant to Sections 9.02(b) or 9.02(c) and such amendment
is approved by the Required Lenders, but not by the percentage of the Lenders set forth in said Sections 9.02(b) or 9.02(c), as applicable, the Borrowers, and the Required Lenders shall be permitted to amend this Agreement without the Consent of the
Lender or Lenders which did not agree to the modification or amendment requested by the Borrowers (such Lender or Lenders, collectively the “Minority Lenders”) subject to providing for (w) the termination of the Commitment of each
of the Minority Lenders, (x) the addition to this Agreement of one or more other financial institutions (reasonably acceptable to the Administrative Agent), or an increase in the Commitment of one or more of the Required Lenders, so that the
aggregate Commitments after giving effect to such amendment shall be in the same amount as the aggregate Commitments immediately before giving effect to such amendment, (y) if any Loans are outstanding at the time of such amendment, the making of
such additional Loans by such new or increasing Lender or Lenders, as the case may be, as may be necessary to repay in full the outstanding Loans (including principal, interest, and fees) of the Minority Lenders immediately before giving effect to
such amendment and (z) such other modifications to this Agreement or the Loan Documents as may be appropriate and incidental to the foregoing. 
  
 (e) No notice to or demand on any Loan Party shall entitle any Loan Party to any other or further notice or demand in the same, similar or other
circumstances. Each holder of a Note shall be bound by any amendment, modification, waiver or consent authorized as provided herein, whether or not a Note shall have been marked to indicate such amendment, modification, waiver or consent and any
consent by a Lender, or any holder of a Note, shall bind any Person subsequently acquiring a Note, whether or not a Note is so marked. No amendment to this Agreement or any other Loan Document shall be effective against the Borrowers unless signed
by the Borrowers or other applicable Loan Party. 
  
 SECTION 9.03.
Expenses; Indemnity; Damage Waiver. (a) The Loan Parties shall jointly and severally pay (i) all reasonable out-of-pocket expenses incurred by the Agents and their Affiliates, including the reasonable fees, charges and disbursements of
counsel for the Agents, 
  

 79 

 outside consultants for the Agents, appraisers, for commercial finance examinations and environmental site assessments,
in connection with the syndication of the credit facilities provided for herein, the preparation and administration of the Loan Documents or any amendments, modifications or waivers of the provisions thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment
thereunder, and (iii) all reasonable out-of-pocket expenses incurred by the Agents, the Issuing Bank or any Lender, including the reasonable fees, charges and disbursements of any counsel and any outside consultants for the Agents, the Issuing Bank
or any Lender, for appraisers, commercial finance examinations, and environmental site assessments, in connection with the enforcement or protection of its rights in connection with the Loan Documents, including its rights under this Section, or in
connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit; provided that the
Lenders who are not the Agents or the Issuing Bank shall be entitled to reimbursement for no more than one counsel representing all such Lenders (absent a conflict of interest in which case the Lenders may engage and be reimbursed for additional
counsel). 
  
 (b) The Loan Parties shall, jointly and severally,
indemnify the Agents, the Issuing Bank and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses,
claims, damages, liabilities and related expenses, including the reasonable and documented fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a
result of (i) the execution or delivery of any Loan Document or any other agreement or instrument contemplated hereby, the performance by the parties to the Loan Documents of their respective obligations thereunder or the consummation of the
transactions contemplated by the Loan Documents or any other transactions contemplated hereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by the Issuing Bank to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property currently or
formerly owned or operated by any Loan Party or any of the Subsidiaries, or any Environmental Liability related in any way to any Loan Party or any of the Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto, provided that such indemnity shall not, as to any Indemnitee, be available to the extent that
such losses, claims, damages, liabilities or related expenses resulted from the gross negligence or wilful misconduct of such Indemnitee. In connection with any indemnified claim hereunder, the Indemnitee shall be entitled to select its own counsel
and the Loan Parties shall promptly pay the reasonable fees and expenses of such counsel. 
  
 (c) To the extent that any Loan Party fails to pay any amount required to be paid by it to the Agents or the Issuing Bank under paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the Agents
or the Issuing Bank, as the case may be, such Lender’s Commitment Percentage (determined as of the time that the applicable unreimbursed 
  

 80 

 expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Agents or the Issuing Bank. 
  
 (d) To the extent permitted by Applicable Law, no Loan Party shall assert, and each hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement or any agreement or instrument contemplated hereby, the transactions
contemplated by the Loan Documents, any Loan or Letter of Credit or the use of the proceeds thereof. The Loan Parties further agree that no Indemnitee shall have any liability to the Loan Parties, any Person asserting claims by or on behalf of any
Loan Party or any other Person in connection with this Agreement or the other Loan Documents except (i) for breach of the Indemnitee’s obligations under this Agreement and the other Loan Documents, or (ii) the Indemnitee’s gross
negligence, willful misconduct or bad faith. 
  
 (e) All amounts
due under this Section shall be payable promptly after written demand therefor. 
  
 SECTION 9.04. Designation of Lead Borrower as Borrowers’ Agent 
  
 (a) Each Borrower hereby irrevocably designates and appoints the Lead Borrower as that Borrower’s agent to obtain Loans and Letters
of Credit hereunder, the proceeds of which shall be available to each Borrower for those uses as those set forth herein. As the disclosed principal for its agent, each Borrower shall be obligated to the Agents and each Lender on account of Loans so
made and Letters of Credit so issued hereunder as if made directly by the Lenders to that Borrower, notwithstanding the manner by which such Loans and Letters of Credit are recorded on the books and records of the Lead Borrower and of any Borrower.

  
 (b) Each Borrower recognizes that credit
available to it hereunder is in excess of and on better terms than it otherwise could obtain on and for its own account and that one of the reasons therefor is its joining in the credit facility contemplated herein with all other Borrowers.
Consequently, each Borrower hereby assumes, guarantees, and agrees to discharge all Obligations of all other Borrowers as if the Borrower so assuming and guarantying were each other Borrower. 
  
 (c) The Lead Borrower shall act as a conduit for each
Borrower (including itself, as a “Borrower”) on whose behalf the Lead Borrower has requested a Loan. 
  
 (d) The Lead Borrower shall cause the transfer of the proceeds of each Loan to the (those) Borrower(s) on whose behalf such Loan was
obtained. Neither the Agents nor any Lender shall have any obligation to see to the application of such proceeds. 
  
 (e) If, for any reason, and at any time during the term of this Agreement, any Borrower, including the Lead Borrower, as agent for the
Borrowers, shall be unable to, or prohibited from carrying out the terms and conditions of this Agreement (as determined by the Administrative Agent in the Administrative Agent’s sole and absolute discretion); or the Administrative Agent deems
it inexpedient (in the Administrative Agent’s sole and 
  

 81 

 absolute discretion) to continue making Loans and cause Letters of Credit to be issued to or for the
account of any particular Borrower, or to channel such Loans and Letters of Credit through the Lead Borrower, then the Lenders may make Loans directly to, and cause the issuance of Letters of Credit directly for the account of such of the Borrowers
as the Administrative Agent determines to be expedient, which Loans may be made without regard to the procedures otherwise included herein. 
  
 (f) In the event that the Administrative Agent determines to forgo the procedures included herein pursuant to which Loans and Letters of
Credit are to be channeled through the Lead Borrower, then the Administrative Agent may designate one or more of the Borrowers to fulfill the financial and other reporting requirements otherwise imposed herein upon the Lead Borrower. 
  
 (g) Each of the Borrowers shall remain liable to the Agents
and the Lenders for the payment and performance of all Obligations (which payment and performance shall continue to be secured by all Collateral granted by each of the Borrowers) notwithstanding any determination by the Administrative Agent to cease
making Loans or causing Letters of Credit to be issued to or for the benefit of any Borrower. 
  
 (h) The authority of the Lead Borrower to request Loans on behalf of, and to bind, the Borrowers, shall continue unless and until the
Administrative Agent acts as provided in subparagraph (c), above, or the Administrative Agent actually receives written notice of: (i) the termination of such authority, and (ii) the subsequent appointment of a successor Lead Borrower, which notice
is signed by the respective chief executive officers of each Borrower (other than the chief executive officer of the Lead Borrower being replaced) then eligible for borrowing under this Agreement; and written notice from such successive Lead
Borrower (i) accepting such appointment; (ii) acknowledging that such removal and appointment has been effected by the respective chief executive officers of such Borrowers eligible for borrowing under this Agreement; and (iii) acknowledging that
from and after the date of such appointment, the newly appointed Lead Borrower shall be bound by the terms hereof, and that as used herein, the term “Lead Borrower” shall mean and include the newly appointed Lead Borrower. 
  
 SECTION 9.05. Successors and Assigns.(a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), except that no Loan Party may
assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any such attempted assignment or transfer without such consent shall be null and void). Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit) and, to the
extent expressly contemplated hereby, the Related Parties of each of the Agents, the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement. 
  

 82 

 (b) Any Lender may assign to no more than one Eligible Assignee all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it), provided that (i) except in the case of an assignment to a Lender or an Affiliate of a Lender, the Lead Borrower (but only
if no Default then exists) (which consent shall not be unreasonably withheld or delayed), the Agents and the Issuing Bank must give their prior written consent to such assignment, (ii) except in the case of an assignment to a Lender or an Affiliate
of a Lender or an assignment of the entire remaining amount of the assigning Lender’s Commitment or Loans, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment
and Acceptance with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000 unless the Administrative Agent otherwise consents, (iii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender’s rights and obligations, (iv) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Acceptance, and, after completion of the syndication of the
Loans, together with a processing and recordation fee of $3,500. Subject to acceptance and recording thereof pursuant to paragraph (d) of this Section, from and after the effective date specified in each Assignment and Acceptance the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all of the assigning Lender’s rights and obligations under this Agreement,
such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Section 9.03). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be
treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (e) of this Section. 
  
 (c) The Administrative Agent, acting for this purpose as an agent of the Loan Parties, shall maintain at one of its offices
in Boston, Massachusetts a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Loans and L/C Disbursements owing to,
each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive and the Loan Parties, the Administrative Agent, the Issuing Bank and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Lead Borrower, the Issuing
Bank and any Lender, at any reasonable time and from time to time upon reasonable prior notice. 
  
 (d) Upon its receipt of a duly completed Assignment and Acceptance executed by an assigning Lender and an assignee, the processing and recordation fee
referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Acceptance and record the information contained therein in
the Register. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph. 
  

 83 

 (e) Any Lender may, without the consent of the Loan Parties, the Agents, and the Issuing Bank, sell
participations to one or more banks or other entities (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it),
provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Loan Parties, the
Agents, the Issuing Bank and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender
sells such a participation in the Commitments, the Loans and the Letters of Credit Outstandings shall provide that such Lender shall retain the sole right to enforce the Loan Documents and to approve any amendment, modification or waiver of any
provision of the Loan Documents, provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in Section 9.02(b)(ii) or
(iii) that affects such Participant. Subject to paragraph (f) of this Section, the Loan Parties agree that each Participant shall be entitled to the benefits of Sections 2.24, 2.26 and 2.27 to the same extent as if it were a Lender and had acquired
its interest by assignment pursuant to paragraph (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.08 as though it were a Lender, provided such Participant agrees to be
subject to Section 2.26(c) as though it were a Lender. 
  
 (f) A
Participant shall not be entitled to receive any greater payment under Section 2.24 or 2.27 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Lead Borrower’s prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.27 unless (i) the Lead Borrower is
notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrowers, to comply with Section 2.27(e) as though it were a Lender and (ii) such Participant is eligible for exemption from the withholding
Tax referred to therein, following compliance with Section 2.27(e). 
  
 (g) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to any of the twelve
Federal Reserve Banks organized under Section 4 of the Federal Reserve Act, 12 U.S.C. Section 341, and this Section shall not apply to any such pledge or assignment of a security interest, provided that no such pledge or assignment of a
security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto. 
  
 SECTION 9.06. Survival. All covenants, agreements, representations and warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan
Documents and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Agents, the Issuing Bank or any Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any credit is 
  

 84 

 extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on
any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or terminated. The provisions of Sections 2.24, 2.27 and 9.03 and
Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the
termination of this Agreement or any provision hereof. 
  
 SECTION
9.07. Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall
constitute a single contract. This Agreement and the other Loan Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all contemporaneous or previous agreements and understandings,
oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Agents and the Lenders and when the Administrative Agent shall have received
counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an
executed counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement. 
  
 SECTION 9.08. Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a
particular jurisdiction shall not invalidate such provision in any other jurisdiction. 
  
 SECTION 9.09. Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender, each Participant and each of its Affiliates is hereby authorized with the consent of the Administrative
Agent or required Lenders at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any
time owing by such Lender or Affiliate to or for the credit or the account of the Loan Parties against any of and all the obligations of the Loan Parties now or hereafter existing under this Agreement held by such Lender, irrespective of whether or
not such Lender shall have made any demand under this Agreement and although such obligations may be unmatured and regardless of the adequacy of the Collateral. The rights of each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) that such Lender may have. 
  
 SECTION 9.10. Governing Law; Jurisdiction; Consent to Service of Process. 
  
 (a) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS. 
  

 85 

 (b) The Loan Parties agree that any suit for the enforcement of this Agreement or any other Loan Document
may be brought in any Massachusetts state or federal court sitting in Suffolk County in Boston, Massachusetts as the Administrative Agent may elect in its sole discretion and consent to the non-exclusive jurisdiction of such courts. The Loan Parties
hereby waive any objection which they may now or hereafter have to the venue of any such suit or any such court or that such suit is brought in an inconvenient forum. The Loan Parties agree that any action commenced by any Loan Party asserting any
claim or counterclaim arising under or in connection with this Agreement or any other Loan Document shall be brought solely in any Massachusetts or federal court sitting in Suffolk County in Boston, Massachusetts as the Administrative Agent may
elect in its sole discretion and consent to the exclusive jurisdiction of such courts with respect to any such action. 
  
 (c) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01. Nothing in this Agreement
or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law. 
  
 SECTION 9.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO A JURY IN ANY
TRIAL OF ANY CASE OR CONTROVERSY IN WHICH ANY BORROWER, ANY AGENT, FLEET, ANY LENDER OR ANY PARTICIPANT IS OR BECOMES A PARTY (WHETHER SUCH CASE OR CONTROVERSY IS INITIATED BY OR AGAINST ANY BORROWER, THE AGENT, FLEET, AND/OR SUCH LENDER OR
PARTICIPANT OR IN WHICH ANY BORROWER, THE AGENT, FLEET, OR SUCH LENDER OR PARTICIPANT, IS JOINED AS A PARTY LITIGANT), WHICH CASE OR CONTROVERSY ARISES OUT OF OR IS IN RESPECT OF, ANY RELATIONSHIP AMONGST OR BETWEEN ANY BORROWER OR ANY OTHER PERSON
AND THE AGENT, FLEET, OR SUCH LENDER OR PARTICIPANT. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. 
  
 SECTION 9.12. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement. 
  
 SECTION 9.13. Interest Rate Limitation. Notwithstanding anything
herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts that are treated as interest on such Loan under Applicable Law (collectively the “Charges”), shall exceed
the maximum lawful rate (the “Maximum Rate”) that may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with Applicable Law, the rate of interest payable in respect of such Loan
hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, 
  

 86 

 to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable
as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender. 
  
 SECTION 9.14. Additional Waivers. 
  
 (a) The Obligations are the joint and several obligations of each Loan Party. To the fullest extent permitted by Applicable Law, the obligations of each
Loan Party hereunder shall not be affected by (i) the failure of any Agent or any other Secured Party to assert any claim or demand or to enforce or exercise any right or remedy against any other Loan Party under the provisions of this Agreement,
any other Loan Document or otherwise, (ii) any rescission, waiver, amendment or modification of, or any release from any of the terms or provisions of, this Agreement or any other Loan Document, or (iii) the failure to perfect any security interest
in, or the release of, any of the security held by or on behalf of the Collateral Agent or any other Secured Party. 
  
 (b) To the fullest extent permitted by Applicable Law, the obligations of each Loan Party hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason (other than the indefeasible payment in full in cash of the Obligations), including any claim of waiver, release, surrender, alteration or compromise of any of the Obligations, and shall not be subject to any
defense or set-off, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each Loan Party
hereunder shall not be discharged or impaired or otherwise affected by the failure of any Agent or any other Secured Party to assert any claim or demand or to enforce any remedy under this Agreement, any other Loan Document or any other agreement,
by any waiver or modification of any provision of any thereof, by any default, failure or delay, willful or otherwise, in the performance of the Obligations, or by any other act or omission that may or might in any manner or to any extent vary the
risk of any Loan Party or that would otherwise operate as a discharge of any Loan Party as a matter of law or equity (other than the indefeasible payment in full in cash of all the Obligations). 
  
 (c) To the fullest extent permitted by Applicable Law, each Loan Party waives
any defense based on or arising out of any defense of any other Loan Party or the unenforceability of the Obligations or any part thereof from any cause, or the cessation from any cause of the liability of any other Loan Party, other than the
indefeasible payment in full in cash of all the Obligations. The Collateral Agent and the other Secured Parties may, at their election, foreclose on any security held by one or more of them by one or more judicial or nonjudicial sales, accept an
assignment of any such security in lieu of foreclosure, compromise or adjust any part of the Obligations, make any other accommodation with any other Loan Party, or exercise any other right or remedy available to them against any other Loan Party,
without affecting or impairing in any way the liability of any Loan Party hereunder except to the extent that all the Obligations have been paid in full in cash and the Commitments have been terminated. Pursuant to Applicable Law, each Loan Party
waives any defense arising out of any such election even 
  

 87 

 though such election operates, pursuant to Applicable Law, to impair or to extinguish any right of reimbursement or
subrogation or other right or remedy of such Loan Party against any other Loan Party, as the case may be, or any security. 
  
 (d) Upon payment by any Loan Party of any Obligations, all rights of such Loan Party against any other Loan Party arising as a result thereof by way of
right of subrogation, contribution, reimbursement, indemnity or otherwise shall in all respects be subordinate and junior in right of payment to the prior payment in full in cash of all the Obligations. In addition, any indebtedness of any Loan
Party now or hereafter held by any other Loan Party is hereby subordinated in right of payment to the prior payment in full of the Obligations. Notwithstanding the foregoing, prior to the occurrence of an Event of Default, Loan Party may make
payments to any other Loan Party on account of any such indebtedness. After the occurrence and during the continuance of an Event of Default, none of the Loan Parties will demand, sue for, or otherwise attempt to collect any such indebtedness. If
any amount shall erroneously be paid to any Loan Party on account of (a) such subrogation, contribution, reimbursement, indemnity or similar right or (b) any such indebtedness of any Loan Party, such amount shall be held in trust for the benefit of
the Secured Parties and shall forthwith be paid to the Collateral Agent to be credited against the payment of the Obligations, whether matured or unmatured, in accordance with the terms of the Loan Documents. 
  
 SECTION 9.15. Confidentiality. 
  
 Each of the Lenders agrees that it will use its best efforts not to disclose
without the prior consent of the Lead Borrower (other than to its employees, auditors, counsel or other professional advisors, to Affiliates, to another Lender or to such Lender’s holding or parent company) any information with respect to the
Borrowers or any other Loan Party which is furnished pursuant to this Agreement and which is designated by the Lead Borrower to the Lenders in writing as confidential provided that any Lender may disclose any such information (a) as has become
generally available to the public, (b) as may be required or appropriate in any report, statement or testimony submitted to any municipal, state or federal regulatory body having or claiming to have jurisdiction over such Lender or to the Federal
Reserve Board or the Federal Deposit Insurance Corporation or similar organizations (whether in the United States or elsewhere) or their successors, (c) as may be required or appropriate in response to any summons or subpoena or in connection with
any litigation, (d) in order to comply with any law, order, regulation or ruling applicable to such Lender, (e) in connection with the enforcement of remedies under this Agreement and the other Loan Documents, and (f) to any prospective transferee
in connection with any contemplated transfer of any of the Loans or Notes or any interest therein by such Lender provided that such prospective transferee agrees to be bound by the provisions of this Section. The Loan Parties hereby agree that the
failure of a Lender to comply with the provisions of this Section 9.14 shall not relieve the Loan Parties of any of its obligations to such Lender under this Agreement and the other Loan Documents. 
  
 [SIGNATURE PAGES FOLLOW] 
  

 88 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective
authorized officers as a sealed instrument as of the day and year first above written. 
  

			
	 THE WET SEAL, INC.

		
	 By:
	 	 /s/    DOUGLAS C. FELDERMAN

	 Name:
	 	 Douglas C. Felderman

	 Title:
	 	 SVP & Chief Financial Officer

	
	 THE WET SEAL RETAIL, INC.

		
	 By:
	 	 /s/    DOUGLAS C. FELDERMAN

	 Name:
	 	 Douglas C. Felderman

	 Title:
	 	 Secretary – Treasurer

	
	 WET SEAL CATALOG, INC.

		
	 By:
	 	 /s/    DOUGLAS C. FELDERMAN

	 Name:
	 	 Douglas C. Felderman

	 Title:
	 	 Secretary – Treasurer

	
	 WET SEAL GC, INC.

		
	 By:
	 	 /s/    DOUGLAS C. FELDERMAN

	 Name:
	 	 Douglas C. Felderman

	 Title:
	 	 Secretary – Treasurer

  

 S-1 

			
	 FLEET RETAIL GROUP, INC.,

	As Administrative Agent, Collateral Agent, as Swingline Lender and as Lender
		
	 By:
	 	 /s/ Daniel T. Platt

	 Name:
	 	Daniel T. Platt
	 Title:
	 	Director
	 Address:
	 	 
	40 Broad Street, 10th Floor
	Boston, Massachusetts 02109
	 Attn:
	 	Daniel T. Platt
	 Telephone:
	 	(617) 434-4190
	 Telecopy:
	 	(617) 434-4312
	
	 FLEET NATIONAL BANK,

	 as Issuing Bank

		
	 By :
	 	 /s/ Daniel T. Platt

	 Name:
	 	Daniel T. Platt
	 Title:
	 	Director
	 Address:
	 	 
	40 Broad Street
	Boston, Massachusetts 02109
	 Attn:
	 	Daniel T. Platt
	 Telephone:
	 	(617) 434-4190
	 Telecopy:
	 	(617) 434-4312

  

 S-2PSA 2004-S2

EXHIBIT 4.1

                                                               EXECUTION VERSION

                  WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.,

                        as Depositor and Master Servicer

                                       and

                         U.S. BANK NATIONAL ASSOCIATION,

                                   as Trustee

                                       and

                        CHRISTIANA BANK & TRUST COMPANY,

                               as Delaware Trustee

                         POOLING AND SERVICING AGREEMENT

                                 $400,039,601.00

                   Washington Mutual Mortgage Securities Corp.

                     WaMu Mortgage Pass-Through Certificates

                                 Series 2004-S2

                            Cut-Off Date: May 1, 2004

                                TABLE OF CONTENTS
                                                                                                                 Page

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

SECTION 1.01.Definitions.........................................................................................5

                  Aggregate Certificate Principal Balance........................................................5
                  Appraised Value................................................................................5
                  Assignment of Proprietary Lease................................................................5
                  Authenticating Agent...........................................................................5
                  Authorized Denomination........................................................................5
                  Bankruptcy Coverage............................................................................5
                  Bankruptcy Loss................................................................................6
                  Beneficial Holder..............................................................................6
                  Benefit Plan Opinion...........................................................................6
                  Book-Entry Certificates........................................................................6
                  Business Day...................................................................................6
                  Buydown Agreement..............................................................................6
                  Buydown Fund...................................................................................6
                  Buydown Fund Account...........................................................................7
                  Buydown Loan...................................................................................7
                  Carry-Forward Subsequent Recoveries Amount.....................................................7
                  Certificate....................................................................................7
                  Certificate Account............................................................................7
                  Certificateholder or Holder....................................................................7
                  Certificate Interest Rate......................................................................8
                  Certificate of Trust...........................................................................8
                  Certificate Principal Balance..................................................................8
                  Certificate Register and Certificate Registrar.................................................8
                  Class    ......................................................................................8
                  Class A Certificates...........................................................................8
                  Class 1-A-1 Certificates.......................................................................8
                  Class 1-A-2 Certificates.......................................................................8
                  Class 1-A-3 Certificates.......................................................................8
                  Class 1-A-4 Accretion Termination Date.........................................................9
                  Class 1-A-4 Accrual Amount.....................................................................9
                  Class 1-A-4 Certificates.......................................................................9
                  Class 1-A-5 Certificates.......................................................................9
                  Class 2-A-1 Certificates.......................................................................9
                  Class 2-A-2 Certificates.......................................................................9
                  Class 2-A-3 Certificates.......................................................................9
                  Class 2-A-4 Accretion Termination Date.........................................................9
                  Class 2-A-4 Accrual Amount.....................................................................9
                  Class 2-A-4 Certificates.......................................................................9
                  Class 2-A-5 Certificates.......................................................................9
                  Class 2-A-6 Certificates.......................................................................9
                  Class 3-A-1 Certificates.......................................................................9
                  Class 3-A-2 Accretion Termination Date........................................................10
                  Class 3-A-2 Accrual Amount....................................................................10
                  Class 3-A-2 Certificates......................................................................10

                  Class 3-A-3 Certificates......................................................................10
                  Class B Certificates..........................................................................10
                  Class B Percentage............................................................................10
                  Class B-1 Certificates........................................................................10
                  Class B-2 Certificates........................................................................10
                  Class B-3 Certificates........................................................................10
                  Class B-4 Certificates........................................................................10
                  Class B-5 Certificates........................................................................10
                  Class B-6 Certificates........................................................................10
                  Class C-Y Principal Reduction Amounts.........................................................10
                  Class C-Y Regular Interests...................................................................11
                  Class C-Y-1 Principal Distribution Amount.....................................................11
                  Class C-Y-1 Regular Interest..................................................................11
                  Class C-Y-2 Principal Distribution Amount.....................................................11
                  Class C-Y-2 Regular Interest..................................................................11
                  Class C-Y-3 Principal Distribution Amount.....................................................11
                  Class C-Y-3 Regular Interest..................................................................11
                  Class C-Z Principal Reduction Amounts.........................................................11
                  Class C-Z Regular Interests...................................................................12
                  Class C-Z-1 Principal Distribution Amount.....................................................12
                  Class C-Z-1 Regular Interest..................................................................12
                  Class C-Z-2 Principal Distribution Amount.....................................................12
                  Class C-Z-2 Regular Interest..................................................................12
                  Class C-Z-3 Principal Distribution Amount.....................................................12
                  Class C-Z-3 Regular Interest..................................................................13
                  Class Notional Amount.........................................................................13
                  Class P Certificates..........................................................................13
                  Class P Fraction..............................................................................13
                  Class P Mortgage Loan.........................................................................13
                  Class P-M Regular Interest....................................................................13
                  Class Principal Balance.......................................................................13
                  Class R Certificates..........................................................................14
                  Class R Residual Interests....................................................................14
                  Class R-1 Residual Interest...................................................................14
                  Class R-2 Residual Interest...................................................................14
                  Class X Certificates..........................................................................15
                  Class X Notional Amount.......................................................................15
                  Class X-M Regular Interest....................................................................15
                  Clean-Up Call Percentage......................................................................15
                  Clearing Agency...............................................................................15
                  Closing Date..................................................................................15
                  Code     .....................................................................................15
                  Company  .....................................................................................15
                  Compensating Interest.........................................................................15
                  Cooperative...................................................................................15
                  Cooperative Apartment.........................................................................15

                  Cooperative Lease.............................................................................16
                  Cooperative Loans.............................................................................16
                  Cooperative Stock.............................................................................16
                  Cooperative Stock Certificate.................................................................16
                  Corporate Trust Office........................................................................16
                  Corporation...................................................................................16
                  Credit Support Depletion Date.................................................................16
                  Cumulative Carry-Forward Subsequent Recoveries Amount.........................................16
                  Curtailment...................................................................................16
                  Curtailment Shortfall.........................................................................16
                  Custodial Account for P&I.....................................................................17
                  Custodial Account for Reserves................................................................17
                  Custodial Agreement...........................................................................17
                  Custodian.....................................................................................17
                  Cut-Off Date..................................................................................18
                  Definitive Certificates.......................................................................18
                  Delaware Trustee..............................................................................18
                  Depositary Agreement..........................................................................18
                  Destroyed Mortgage Note.......................................................................18
                  Determination Date............................................................................18
                  Disqualified Organization.....................................................................18
                  Distribution Date.............................................................................18
                  DTC      .....................................................................................18
                  DTC Participant...............................................................................18
                  Due Date .....................................................................................18
                  Eligible Institution..........................................................................18
                  Eligible Investments..........................................................................19
                  ERISA    .....................................................................................20
                  ERISA Restricted Certificate..................................................................20
                  Event of Default..............................................................................20
                  Excess Liquidation Proceeds...................................................................20
                  Excess Subsequent Recoveries..................................................................20
                  FDIC     .....................................................................................21
                  FHA      .....................................................................................21
                  Fannie Mae....................................................................................21
                  Final Maturity Date...........................................................................21
                  Fitch    .....................................................................................21
                  Fraud Coverage................................................................................21
                  Fraud Loss....................................................................................21
                  Freddie Mac...................................................................................21
                  Indirect DTC Participants.....................................................................21
                  Initial Custodial Agreement...................................................................22
                  Initial Custodian.............................................................................22
                  Insurance Proceeds............................................................................22
                  Interest Distribution Amount..................................................................22
                  Interest Transfer Amount......................................................................22

                  Investment Account............................................................................22
                  Investment Depository.........................................................................22
                  Junior Subordinate Certificates...............................................................22
                  Last Scheduled Distribution Date..............................................................22
                  Lender   .....................................................................................22
                  Liquidated Mortgage Loan......................................................................23
                  Liquidation Principal.........................................................................23
                  Liquidation Proceeds..........................................................................23
                  Loan-to-Value Ratio...........................................................................23
                  Lowest Class B Owner..........................................................................23
                  Master Servicer...............................................................................23
                  Master Servicer Business Day..................................................................23
                  Master Servicing Fee..........................................................................23
                  MERS     .....................................................................................23
                  MERS Loan.....................................................................................23
                  MERS(R)System.................................................................................24
                  MIN      .....................................................................................24
                  MOM Loan .....................................................................................24
                  Monthly P&I Advance...........................................................................24
                  Monthly Payment...............................................................................24
                  Moody's  .....................................................................................24
                  Mortgage .....................................................................................24
                  Mortgage File.................................................................................24
                  Mortgage Interest Rate........................................................................27
                  Mortgage Loan Schedule........................................................................27
                  Mortgage Loans................................................................................27
                  Mortgage Note.................................................................................27
                  Mortgage Pool.................................................................................27
                  Mortgage Pool Assets..........................................................................27
                  Mortgaged Property............................................................................28
                  Mortgagor.....................................................................................28
                  Nonrecoverable Advance........................................................................28
                  Non-U.S. Person...............................................................................28
                  Notice Addresses..............................................................................28
                  OTS      .....................................................................................29
                  Officer's Certificate.........................................................................29
                  Opinion of Counsel............................................................................29
                  Original Trust Agreement......................................................................29
                  Original Value................................................................................29
                  Overcollateralized Subgroup...................................................................29
                  Ownership Interest............................................................................29
                  Pass-Through Entity...........................................................................29
                  Pass-Through Rate.............................................................................29
                  Paying Agent..................................................................................29
                  Payoff   .....................................................................................30
                  Payoff Earnings...............................................................................30

                  Payoff Interest...............................................................................30
                  Payoff Period.................................................................................30
                  Percentage Interest...........................................................................30
                  Permitted Transferee..........................................................................31
                  Person   .....................................................................................31
                  Premium Rate Mortgage Loans...................................................................31
                  Prepaid Monthly Payment.......................................................................31
                  Primary Insurance Policy......................................................................31
                  Principal Balance.............................................................................31
                  Principal Payment.............................................................................32
                  Principal Payment Amount......................................................................32
                  Principal Prepayment..........................................................................32
                  Principal Prepayment Amount...................................................................32
                  Principal Transfer Amount.....................................................................32
                  Prior Period..................................................................................33
                  Pro Rata Allocation...........................................................................33
                  Prospectus....................................................................................34
                  Purchase Obligation...........................................................................34
                  Purchase Price................................................................................34
                  Qualified Insurer.............................................................................35
                  Rating Agency.................................................................................35
                  Ratings  .....................................................................................35
                  Realized Loss.................................................................................35
                  Recognition Agreement.........................................................................38
                  Record Date...................................................................................38
                  Regular Interests.............................................................................38
                  Relief Act Shortfall..........................................................................38
                  REMIC.........................................................................................38
                  REMIC Provisions..............................................................................38
                  REMIC I  .....................................................................................38
                  REMIC I Assets................................................................................38
                  REMIC I Available Distribution Amount.........................................................38
                  REMIC I Distribution Amount...................................................................40
                  REMIC I Regular Interests.....................................................................42
                  REMIC II .....................................................................................42
                  REMIC II Assets...............................................................................42
                  REMIC II Available Distribution Amount........................................................42
                  REMIC II Distribution Amount..................................................................42
                  REMIC II Regular Interests....................................................................51
                  Residual Certificates.........................................................................52
                  Residual Distribution Amount..................................................................52
                  Responsible Officer...........................................................................52
                  S&P      .....................................................................................52
                  Secretary of State............................................................................52
                  Securities Act................................................................................52
                  Security Agreement............................................................................52

                  Selling and Servicing Contract................................................................52
                  Senior Certificates...........................................................................53
                  Senior Subordinate Certificates...............................................................53
                  Servicer .....................................................................................53
                  Servicing Fee.................................................................................53
                  Servicing Officer.............................................................................53
                  Special Hazard Coverage.......................................................................53
                  Special Hazard Loss...........................................................................53
                  Special Primary Insurance Policy..............................................................54
                  Special Primary Insurance Premium.............................................................54
                  Statutory Trust Statute.......................................................................54
                  Step Down Percentage..........................................................................54
                  Stripped Interest Rate........................................................................54
                  Subgroup .....................................................................................54
                  Subgroup 1....................................................................................54
                  Subgroup 1 Certificates.......................................................................55
                  Subgroup 1 Loans..............................................................................55
                  Subgroup 1 Lockout Adjusted Percentage........................................................55
                  Subgroup 1 Lockout Liquidation Amount.........................................................55
                  Subgroup 1 Lockout Percentage.................................................................55
                  Subgroup 1 Lockout Prepayment Percentage......................................................55
                  Subgroup 1 Lockout Priority Amount............................................................55
                  Subgroup 1 Senior Principal Distribution Amount...............................................55
                  Subgroup 1 Senior Liquidation Amount..........................................................56
                  Subgroup 1 Senior Percentage..................................................................56
                  Subgroup 1 Senior Prepayment Percentage, Subgroup 2 Senior Prepayment
                       Percentage or Subgroup 3 Senior Prepayment Percentage....................................56
                  Subgroup 1 Subordinate Balance................................................................58
                  Subgroup 1 Subordinate Percentage.............................................................58
                  Subgroup 1 Subordinate Prepayment Percentage..................................................58
                  Subgroup 2....................................................................................58
                  Subgroup 2 Certificates.......................................................................58
                  Subgroup 2 Loans..............................................................................58
                  Subgroup 2 Lockout Adjusted Percentage........................................................59
                  Subgroup 2 Lockout Liquidation Amount.........................................................59
                  Subgroup 2 Lockout Percentage.................................................................59
                  Subgroup 2 Lockout Prepayment Percentage......................................................59
                  Subgroup 2 Lockout Priority Amount............................................................59
                  Subgroup 2 Senior Principal Distribution Amount...............................................59
                  Subgroup 2 Senior Liquidation Amount..........................................................60
                  Subgroup 2 Senior Percentage..................................................................60
                  Subgroup 2 Senior Prepayment Percentage.......................................................60
                  Subgroup 2 Subordinate Balance................................................................60
                  Subgroup 2 Subordinate Percentage.............................................................60
                  Subgroup 2 Subordinate Prepayment Percentage..................................................60

                  Subgroup 3....................................................................................60
                  Subgroup 3 Certificates.......................................................................60
                  Subgroup 3 Loans..............................................................................60
                  Subgroup 3 Lockout Adjusted Percentage........................................................61
                  Subgroup 3 Lockout Liquidation Amount.........................................................61
                  Subgroup 3 Lockout Percentage.................................................................61
                  Subgroup 3 Lockout Prepayment Percentage......................................................61
                  Subgroup 3 Lockout Priority Amount............................................................61
                  Subgroup 3 Senior Principal Distribution Amount...............................................61
                  Subgroup 3 Senior Liquidation Amount..........................................................61
                  Subgroup 3 Senior Percentage..................................................................61
                  Subgroup 3 Senior Prepayment Percentage.......................................................62
                  Subgroup 3 Subordinate Balance................................................................62
                  Subgroup 3 Subordinate Percentage.............................................................62
                  Subgroup 3 Subordinate Prepayment Percentage..................................................62
                  Subordinate Certificates......................................................................62
                  Subordinate Component Balance.................................................................62
                  Subordinate Liquidation Amount................................................................62
                  Subordinate Percentage........................................................................62
                  Subordinate Principal Distribution Amount.....................................................62
                  Subordinate Principal Prepayments Distribution Amount.........................................63
                  Subordination Level...........................................................................63
                  Subsequent Recoveries.........................................................................63
                  Substitute Mortgage Loan......................................................................63
                  Tax Matters Person............................................................................63
                  Termination Date..............................................................................64
                  Termination Payment...........................................................................64
                  Total Transfer Amount.........................................................................64
                  Transfer .....................................................................................64
                  Transferee....................................................................................64
                  Transferee Affidavit and Agreement............................................................64
                  Trust    .....................................................................................64
                  Trustee  .....................................................................................64
                  Uncollected Interest..........................................................................64
                  Uncompensated Interest Shortfall..............................................................65
                  Undercollateralized Subgroup..................................................................65
                  Underwriters..................................................................................65
                  Underwriting Standards........................................................................65
                  Uninsured Cause...............................................................................65
                  U.S. Person...................................................................................65
                  VA       .....................................................................................65
                  Withdrawal Date...............................................................................65
ARTICLE II            Creation of the Trust; Conveyance of the Mortgage Pool Assets
                      and REMIC I Regular Interests; REMIC
                      Election and Designations; Original Issuance of Certificates..............................66

SECTION 2.01.Creation of the Trust..............................................................................66

SECTION 2.02.Restrictions on Activities of the Trust............................................................67

SECTION 2.03.Separateness Requirements..........................................................................67

SECTION 2.04.Conveyance of Mortgage Pool Assets; Security Interest..............................................69

SECTION 2.05.Delivery of Mortgage Files.........................................................................70

SECTION 2.06.REMIC Election for REMIC I.........................................................................71

SECTION 2.07.Acceptance by Trustee..............................................................................73

SECTION 2.08.Representations and Warranties of the Company Concerning the Mortgage Loans........................75

SECTION 2.09.Acknowledgment of Transfer of Mortgage Pool Assets.................................................79

SECTION 2.10.Conveyance of REMIC I Assets; Security Interest....................................................79

SECTION 2.11.REMIC Election for REMIC II........................................................................80

SECTION 2.12.Acknowledgement of Transfer of REMIC II Assets; Authentication of Certificates.....................81

SECTION 2.13.Legal Title........................................................................................81

SECTION 2.14.Compliance with ERISA Requirements.................................................................81

SECTION 2.15.Additional Representation of the Company Concerning the Mortgage Loans.............................82

ARTICLE III           Administration and Servicing of Mortgage Loans............................................82

SECTION 3.01.The Company to Act as Master Servicer..............................................................82

SECTION 3.02.Custodial Accounts and Buydown Fund Accounts.......................................................85

SECTION 3.03.The Investment Account; Eligible Investments.......................................................86

SECTION 3.04.The Certificate Account............................................................................87

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...........................................87

SECTION 3.06.Maintenance of Primary Insurance Policies; Collections Thereunder..................................89

SECTION 3.07.Maintenance of Hazard Insurance....................................................................90

SECTION 3.08.Enforcement of Due-on-Sale Clauses; Assumption Agreements..........................................90

SECTION 3.09.Realization Upon Defaulted Mortgage Loans..........................................................91

SECTION 3.10.Trustee to Cooperate; Release of Mortgage Files....................................................93

SECTION 3.11.Compensation to the Master Servicer and the Servicers..............................................94

SECTION 3.12.Reports to the Trustee; Certificate Account Statement..............................................94

SECTION 3.13.Annual Statement as to Compliance..................................................................95

SECTION 3.14.Access to Certain Documentation and Information Regarding the Mortgage Loans.......................95

SECTION 3.15.Annual Independent Public Accountants' Servicing Report............................................95

SECTION 3.16.[Reserved.]........................................................................................95

SECTION 3.17.[Reserved.]........................................................................................95

SECTION 3.18.[Reserved.]........................................................................................96

SECTION 3.19.[Reserved.]........................................................................................96

SECTION 3.20.Assumption or Termination of Selling and Servicing Contracts by Trustee............................96

ARTICLE IV            Payments to Certificateholders; Payment of Expenses.......................................96

SECTION 4.01.Distributions to Holders of REMIC I Regular Interests and Class R-1 Residual Interest..............96

SECTION 4.02.Advances by the Master Servicer; Distribution Reports to the Trustee...............................97

SECTION 4.03.Nonrecoverable Advances............................................................................98

SECTION 4.04.Distributions to Certificateholders; Payment of Special Primary Insurance Premiums.................98

SECTION 4.05.Statements to Certificateholders...................................................................99

ARTICLE V             The Certificates.........................................................................100

SECTION 5.01.The Certificates..................................................................................100

SECTION 5.02.Certificates Issuable in Classes;
             Distributions of Principal and Interest; Authorized Denominations.................................107

SECTION 5.03.Registration of Transfer and Exchange of Certificates.............................................107

SECTION 5.04.Mutilated, Destroyed, Lost or Stolen Certificates.................................................108

SECTION 5.05.Persons Deemed Owners.............................................................................108

SECTION 5.06.Temporary Certificates............................................................................108

SECTION 5.07.Book-Entry for Book-Entry Certificates............................................................109

SECTION 5.08.Notices to Clearing Agency........................................................................110

SECTION 5.09.Definitive Certificates...........................................................................110

SECTION 5.10.Office for Transfer of Certificates...............................................................111

SECTION 5.11.Nature of Certificates............................................................................111

ARTICLE VI            The Company and the Master Servicer......................................................111

SECTION 6.01.Liability of the Company and the Master Servicer..................................................111

SECTION 6.02.Merger or Consolidation of the Company, or the Master Servicer....................................111

SECTION 6.03.Limitation on Liability of the Company, the Master Servicer and Others............................111

SECTION 6.04.The Company and the Master Servicer not to Resign.................................................112

SECTION 6.05.Trustee Access....................................................................................112

ARTICLE VII           Default..................................................................................113

SECTION 7.01.Events of Default.................................................................................113

SECTION 7.02.Trustee to Act; Appointment of Successor..........................................................115

SECTION 7.03.Notification to Certificateholders................................................................116

ARTICLE VIII          Concerning the Trustees..................................................................117

SECTION 8.01.Duties of Trustees................................................................................117

SECTION 8.02.Certain Matters Affecting the Trustees............................................................118

SECTION 8.03.Trustees Not Liable for Certificates or Mortgage Loans............................................119

SECTION 8.04.Trustees May Own Certificates.....................................................................119

SECTION 8.05.The Master Servicer to Pay Trustees' Fees and Expenses............................................120

SECTION 8.06.Eligibility Requirements for Trustees.............................................................120

SECTION 8.07.Resignation and Removal of Trustees...............................................................120

SECTION 8.08.Successor Trustee.................................................................................121

SECTION 8.09.Merger or Consolidation of Trustee................................................................122

SECTION 8.10.Appointment of Co-Trustee or Separate Trustee.....................................................122

SECTION 8.11.Authenticating Agents.............................................................................123

SECTION 8.12.Paying Agents.....................................................................................124

SECTION 8.13.Duties of Delaware Trustee........................................................................124

SECTION 8.14.Amendment to Certificate of Trust.................................................................125

SECTION 8.15.Limitation of Liability...........................................................................125

ARTICLE IX            Termination..............................................................................125

SECTION 9.01.Termination Upon Purchase by the Master Servicer or Liquidation of All Mortgage Loans.............125

SECTION 9.02.Additional Termination Requirements...............................................................127

SECTION 9.03.Trust Irrevocable.................................................................................128

ARTICLE X             Miscellaneous Provisions.................................................................128

SECTION 10.01.Amendment........................................................................................128

SECTION 10.02.Recordation of Agreement.........................................................................129

SECTION 10.03.Limitation on Rights of Certificateholders.......................................................130

SECTION 10.04.Access to List of Certificateholders.............................................................130

SECTION 10.05.Governing Law....................................................................................131

SECTION 10.06.Notices......................................................................................... 131

SECTION 10.07.Severability of Provisions.......................................................................131

SECTION 10.08.Counterpart Signatures...........................................................................131

SECTION 10.09.Benefits of Agreement............................................................................131

SECTION 10.10.Notices and Copies to Rating Agencies............................................................132

Appendix 1 Definition of "Class C-Y Principal Reduction Amounts"
Exhibit A  Form of Certificates (other than Class R Certificates)
Exhibit B  Form of Class R Certificates
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 2.07
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)

         This Pooling and Servicing Agreement, dated and effective as of May 1,
2004 (this "Agreement"), is executed by and among Washington Mutual Mortgage
Securities Corp., as depositor and Master Servicer (the "Company"), U.S. Bank
National Association, a national banking association with a corporate trust
office at One Federal Street, Third Floor, Boston, MA 02110, as Trustee (the
"Trustee"), and Christiana Bank & Trust Company, 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 REMIC I Regular Interests and the Class R-1 Residual
Interest 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 REMIC I
Regular Interests and the Class R-1 Residual Interest. Thereafter on the Closing
Date, the Company will acquire the Certificates (other than the Class R
Certificates) and the Class R-2 Residual Interest from the Trust as
consideration for its transfer to the Trust of the REMIC I Regular Interests 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, (ii) the issuance to
the Company of the REMIC I Regular Interests and the Class R-1 Residual Interest
representing in the aggregate the entire beneficial interest in REMIC I, (iii)
the conveyance to the Trust of the REMIC I Regular Interests and (iv) the
issuance to the Company of the Certificates, such Certificates (other than the
portion of the Class R Certificates representing ownership of the Class R-1
Residual Interest) representing in the aggregate the entire beneficial interest
in REMIC II. 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 May 21, 2004, of the
Company (together, the "Prospectus"). The Junior Subordinate Certificates have
been offered for sale pursuant to a Private Placement Memorandum, dated May 26,
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 tables set
forth the designation, type of interest, Certificate Interest Rate, initial
Class Principal Balance and Final Maturity Date for the REMIC I Regular
Interests, the Class R Residual Interests and the Certificates:

                                       1

                                                REMIC I Interests
 Class Designation for
 each REMIC I Regular
Interest and the Class                        Certificate            Initial Class
    R-1 Residual           Type of            Interest                Principal
     Interest              Interest            Rate (1)                 Balance             Final Maturity Date*
----------------------    ------------    --------------------    --------------------     ------------------------
Class C-Y-1                Regular             5.000%                   $  41,084.68          June 2034
Class C-Y-2                Regular             5.500%                     132,105.07          June 2034
Class C-Y-3                Regular             6.000%                      25,749.37          June 2034
Class C-Z-1                Regular             5.000%                  82,128,267.46          June 2034
Class C-Z-2                Regular             5.500%                 265,520,670.15          June 2034
Class C-Z-3                Regular             6.000%                  51,754,176.26          June 2034
Class X-M                  Regular             6.000%(2)                    -----             June 2034
Class P-M                  Regular             (3)                        437,448.32          June 2034
Class R-1+                 Residual            5.000%                         100.00          June 2034

*        The Distribution Date in the specified month, which is the month
         following the month the latest maturing Mortgage Loan in the related
         Subgroup 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.
+        The Class R-1 Residual Interest is entitled to receive the applicable
         Residual Distribution Amount and any Excess Liquidation Proceeds.
(1)      Interest distributed to the REMIC I Regular Interests (other than the
        Class P-M Regular Interest, which shall not be entitled to receive any
         distributions of interest) and the Class R-1 Residual Interest on each
         Distribution Date will have accrued at the applicable per annum
         Certificate Interest Rate on the applicable Class Principal Balance or
         Class Notional Amount outstanding immediately before such Distribution
         Date.
(2)      The Class X-M Regular Interest shall accrue interest on the Class X
         Notional Amount. The Class X-M Regular Interest shall not be entitled
         to receive any distributions of principal.
(3)      The Class P-M Regular Interest shall not be entitled to receive any
         distributions of interest.

         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 REMIC I Regular Interests will be designated regular
interests in REMIC I and the Class R-1 Residual Interest will be designated the
sole class of residual interest in REMIC I, for purposes of the REMIC
Provisions.

                                       2

                                                               REMIC II Interests

Class Designation for
     each Class of                                Certificate            Initial Class
 Certificates and the            Type of            Interest                Principal               Final Maturity
Class R-2 Residual Interest      Interest            Rate (1)                 Balance                     Date*
---------------------------    ------------    --------------------    --------------------     ------------------------
  Class 1-A-1                  Regular             5.000%                $ 54,795,000.00          June 2034
  Class 1-A-2                  Regular             5.000%                   5,597,000.00          June 2034
  Class 1-A-3                  Regular             5.000%                   3,414,000.00          June 2034
  Class 1-A-4                  Regular             5.000%(2)                7,750,000.00          June 2034
  Class 1-A-5                  Regular             5.000%                   8,217,000.00          June 2034
  Class 2-A-1                  Regular             5.500%                 175,570,000.00          June 2034
  Class 2-A-2                  Regular             5.500%                  18,902,000.00          June 2034
  Class 2-A-3                  Regular             5.500%                  13,711,000.00          June 2034
  Class 2-A-4                  Regular             5.500%(3)               23,200,000.00          June 2034
  Class 2-A-5                  Regular             5.500%                  25,990,000.00          June 2034
  Class 2-A-6                  Regular             5.500%                     575,000.00          June 2034
  Class 3-A-1                  Regular             6.000%                  41,998,000.00          June 2034
  Class 3-A-2                  Regular             6.000%(4)                3,102,000.00          June 2034
  Class 3-A-3                  Regular             6.000%                   5,178,000.00          June 2034
  Class X                      Regular             6.000%(5)                    -----             June 2034
  Class P                      Regular             (6)                        437,448.32          June 2034
  Class B-1                    Regular            Variable(7)               6,002,000.00          June 2034
  Class B-2                    Regular            Variable(7)               2,200,000.00          June 2034
  Class B-3                    Regular            Variable(7)               1,200,000.00          June 2034
  Class B-4                    Regular            Variable(7)               1,000,000.00          June 2034
  Class B-5                    Regular            Variable(7)                 801,000.00          June 2034
  Class B-6                    Regular            Variable(7)                 400,052.00          June 2034
  Class R-2 (8)                Residual                 -----                   -----             June 2034

*        The Distribution Date in the specified month, which is the month
         following the month the latest maturing Mortgage Loan in the related
         Subgroup (or Subgroups, as applicable) matures. For federal income tax
         purposes, for each Class of REMIC II 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
         (other than the Class P Certificates, which shall not be entitled to
         receive any distributions of interest) will have accrued at the
         applicable per annum Certificate Interest Rate on the applicable Class
         Principal Balance or Class Notional Amount outstanding immediately
         before such Distribution Date.
(2)      On each Distribution Date on or before the Class 1-A-4 Accretion
         Termination Date, an amount equal to the Class 1-A-4 Accrual Amount
         shall be added to the Class 1-A-4 Principal Balance, and such amount
         shall be distributed as principal to certain Classes of Subgroup 1
         Certificates and shall not be distributed as interest to the Class
         1-A-4 Certificates.
(3)      On each Distribution Date on or before the Class 2-A-4 Accretion
         Termination Date, an amount equal to the Class 2-A-4 Accrual Amount
         shall be added to the Class 2-A-4 Principal Balance, and such amount
         shall be distributed as principal to certain Classes of Subgroup 2
         Certificates and shall not be distributed as interest to the Class
         2-A-4 Certificates.
(4)      On each Distribution Date on or before the Class 3-A-2 Accretion
         Termination Date, an amount equal to the Class 3-A-2 Accrual Amount
         shall be added to the Class 3-A-2 Principal Balance, and such amount
         shall be distributed as principal to certain Classes of Subgroup 3
         Certificates and shall not be distributed as interest to the Class
         3-A-2 Certificates.
(5)      The Class X Certificates shall accrue interest on the Class X Notional
         Amount. The Class X Certificates shall not be entitled to receive any
         distributions of principal.
(6)      The Class P Certificates shall not be entitled to receive any
         distributions of interest. (7) The Certificate Interest Rate for each
         Class of the Class B Certificates shall equal, on any Distribution
         Date, the weighted average of the Certificate Interest Rates for the
         Class C-Y-1, Class C-Y-2 and Class C-Y-3 Regular Interests.
(8)      The Class R-2 Residual Interest shall be entitled to receive the
         applicable Residual Distribution Amount. The Class R-2 Residual
         Interest shall not be entitled to receive any distributions of interest
         or principal.

                                       3

As provided herein, with respect to REMIC II, the Company will cause an election
to be made on behalf of REMIC II 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 II, and the Class R-2 Residual Interest
will be designated the sole class of residual interest in REMIC II, for purposes
of the REMIC Provisions. As of the Cut-Off Date, the Mortgage Loans have an
aggregate Principal Balance of $400,039,601.32 and the Certificates have an
Aggregate Certificate Principal Balance of $400,039,601.00.

In addition, the Trust will issue the Class R Certificates, which will represent
ownership of the Class R-1 and Class R-2 Residual Interests.

                              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 of America 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;

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, (ii) issue the REMIC I Regular
Interests and the Class R-1 Residual Interest, (iii) hold the REMIC I Regular
Interests and (iv) issue the Certificates.

                                       4

NOW, THEREFORE, in order to declare the terms and conditions upon which the
REMIC I Regular Interests, the Class R Residual Interests and 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 REMIC I
Regular Interests and 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 the Certificates (other than the Class
X and 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 X
Certificates, a Class Notional Amount as of the Cut-Off Date equal to $100,000
and multiples of $1 in excess thereof. With respect to the Class R Certificates,
one Certificate with a Percentage Interest equal to 0.01% and one Certificate
with a Percentage Interest equal to 99.99%.

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.

                                       5

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, Class X, Class P 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 a Saturday, a Sunday, or a day on which banking
institutions in Stockton, California, Chicago, Illinois, New York, New York,
Seattle, Washington, St. Paul, Minnesota or any city in which the Corporate
Trust Office is located 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.

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

                                       6

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 the corporate trust department of the Trustee
or another 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. 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 and any
Subgroup, the excess, if any, of (i) the Subsequent Recoveries for such
Distribution Date for such Subgroup 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 for such Subgroup 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,
Section 4.01 and Section 4.04.

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

                                       7

upon an Officer's Certificate to determine whether any Person is an affiliate of
the Company or the Master Servicer. With respect to the REMIC I Regular
Interests, the owner of the REMIC I Regular Interests, which as of the Closing
Date shall be the Trust.

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 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 REMIC I Regular Interests or the Class R-1 Residual Interest having
the same priority and rights to payments on the Mortgage Loans from the REMIC I
Available Distribution Amount, and all REMIC II Regular Interests or the Class
R-2 Residual Interest having the same priority and rights to payments on the
REMIC I Regular Interests from the REMIC II Available Distribution Amount, as
applicable, which REMIC I Regular Interests, REMIC II Regular Interests and
Class R Residual Interests, as applicable, shall be designated as a separate
Class, and which, in the case of the Certificates (including the Class R
Certificates representing ownership of the Class R Residual Interests), shall be
set forth in the applicable forms of Certificates attached hereto as Exhibits A
and B. Each Class of REMIC I Regular Interests and the Class R-1 Residual
Interest shall be entitled to receive the amounts allocated to such Class
pursuant to the definition of "REMIC I Distribution Amount" only to the extent
of the REMIC I Available Distribution Amount for such Distribution Date
remaining after distributions in accordance with prior clauses of the definition
of "REMIC I Distribution Amount," and each Class of REMIC II Regular Interests
and the Class R-2 Residual Interest shall be entitled to receive the amounts
allocated to such Class pursuant to the definition of "REMIC II Distribution
Amount" only to the extent of the REMIC II Available Distribution Amount for
such Distribution Date remaining after distributions in accordance with prior
clauses of the definition of "REMIC II Distribution Amount."

Class A Certificates: The Subgroup 1, Subgroup 2 and Subgroup 3 Certificates.

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

Class 1-A-2 Certificates: The Certificates designated as "Class 1-A-2" on the
face thereof in substantially the form attached hereto as Exhibit A.

Class 1-A-3 Certificates: The Certificates designated as "Class 1-A-3" on the
face thereof in substantially the form attached hereto as Exhibit A.

                                       8

Class 1-A-4 Accretion Termination Date: The earlier to occur of (i) the
Distribution Date on which the Class 1-A-2 and Class 1-A-3 Principal Balances
have each been reduced to zero and (ii) the Credit Support Depletion Date.

Class 1-A-4 Accrual Amount: For any Distribution Date, an amount equal to the
amounts that would be payable to the Class 1-A-4 Certificates as interest on
such Distribution Date pursuant to clauses (I)(a)(ii) and (I)(a)(iii)(a) of the
definition of "REMIC II Distribution Amount" without regard to the provisos in
such clauses. Notwithstanding the foregoing, for any Distribution Date after the
Class 1-A-4 Accretion Termination Date, the Class 1-A-4 Accrual Amount shall be
zero.

Class 1-A-4 Certificates: The Certificates designated as "Class 1-A-4" on the
face thereof in substantially the form attached hereto as Exhibit A.

Class 1-A-5 Certificates: The Certificates designated as "Class 1-A-5" on the
face thereof in substantially the form attached hereto as Exhibit A.

Class 2-A-1 Certificates: The Certificates designated as "Class 2-A-1" on the
face thereof in substantially the form attached hereto as Exhibit A. Class 2-A-2
Certificates: The Certificates designated as "Class 2-A-2" on the face thereof
in substantially the form attached hereto as Exhibit A.

Class 2-A-3 Certificates: The Certificates designated as "Class 2-A-3" on the
face thereof in substantially the form attached hereto as Exhibit A.

Class 2-A-4 Accretion Termination Date: The earlier to occur of (i) the
Distribution Date on which the Class 2-A-2 and Class 2-A-3 Principal Balances
have each been reduced to zero and (ii) the Credit Support Depletion Date.

Class 2-A-4 Accrual Amount: For any Distribution Date, an amount equal to the
amounts that would be payable to the Class 2-A-4 Certificates as interest on
such Distribution Date pursuant to clauses (I)(b)(i) and (I)(b)(ii)(a) of the
definition of "REMIC II Distribution Amount" without regard to the provisos in
such clauses. Notwithstanding the foregoing, for any Distribution Date after the
Class 2-A-4 Accretion Termination Date, the Class 2-A-4 Accrual Amount shall be
zero.

Class 2-A-4 Certificates: The Certificates designated as "Class 2-A-4" on the
face thereof in substantially the form attached hereto as Exhibit A.

Class 2-A-5 Certificates: The Certificates designated as "Class 2-A-5" on the
face thereof in substantially the form attached hereto as Exhibit A.

Class 2-A-6 Certificates: The Certificates designated as "Class 2-A-6" on the
face thereof in substantially the form attached hereto as Exhibit A.

Class 3-A-1 Certificates: The Certificates designated as "Class 3-A-1" on the
face thereof in substantially the form attached hereto as Exhibit A.

                                       9

Class 3-A-2 Accretion Termination Date: The earlier to occur of (i) the
Distribution Date on which the Class 3-A-1 Principal Balance has been reduced to
zero and (ii) the Credit Support Depletion Date.

Class 3-A-2 Accrual Amount: For any Distribution Date, an amount equal to the
amounts that would be payable to the Class 3-A-2 Certificates as interest on
such Distribution Date pursuant to clauses (I)(c)(i) and (I)(c)(ii)(a) of the
definition of "REMIC II Distribution Amount" without regard to the provisos in
such clauses. Notwithstanding the foregoing, for any Distribution Date after the
Class 3-A-2 Accretion Termination Date, the Class 3-A-2 Accrual Amount shall be
zero.

Class 3-A-2 Certificates: The Certificates designated as "Class 3-A-2" on the
face thereof in substantially the form attached hereto as Exhibit A.

Class 3-A-3 Certificates: The Certificates designated as "Class 3-A-3" 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 Percentage: For any date of determination, the aggregate Class Principal
Balance of the Class B Certificates divided by the then outstanding aggregate
Principal Balance of the Mortgage Loans.

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.

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 C-Y Principal Reduction Amounts: For any Distribution Date, the amounts by
which the Class Principal Balances of the Class C-Y-1, Class C-Y-2 and Class
C-Y-3 Regular Interests, respectively, will be reduced on such Distribution Date
by the allocation of Realized Losses and the distribution of principal,
determined as described in Appendix 1.

                                       10

Class C-Y  Regular  Interests:  The Class  C-Y-1,  Class  C-Y-2 and Class  C-Y-3
Regular Interests.

Class C-Y-1 Principal Distribution Amount: For any Distribution Date, the sum of
(A) the excess, if any, of the Class C-Y-1 Principal Reduction Amount for such
Distribution Date over the principal portion of Realized Losses allocated to the
Class C-Y-1 Regular Interest on such Distribution Date and (B) an amount equal
to the lesser of (i) the portion, if any, of the Subsequent Recoveries for
Subgroup 1 for such Distribution Date not included in the Class C-Z-1 Principal
Distribution Amount pursuant to clause (B) of the definition thereof and (ii)
the amount of Realized Losses allocated to the Class C-Y-1 Regular Interest on
previous Distribution Dates (the amount in this clause (B)(ii) reduced by the
amount, if any, calculated pursuant to this clause (B) for prior Distribution
Dates).

Class C-Y-1 Regular Interest: The uncertificated undivided beneficial interest
in REMIC I which constitutes a REMIC I Regular Interest and is entitled to
distributions as set forth herein.

Class C-Y-2 Principal Distribution Amount: For any Distribution Date, the sum of
(A) the excess, if any, of the Class C-Y-2 Principal Reduction Amount for such
Distribution Date over the principal portion of Realized Losses allocated to the
Class C-Y-2 Regular Interest on such Distribution Date and (B) an amount equal
to the lesser of (i) the portion, if any, of the Subsequent Recoveries for
Subgroup 2 for such Distribution Date not included in the Class C-Z-2 Principal
Distribution Amount pursuant to clause (B) of the definition thereof and (ii)
the amount of Realized Losses allocated to the Class C-Y-2 Regular Interest on
previous Distribution Dates (the amount in this clause (B)(ii) reduced by the
amount, if any, calculated pursuant to this clause (B) for prior Distribution
Dates).

Class C-Y-2 Regular Interest: The uncertificated undivided beneficial interest
in REMIC I which constitutes a REMIC I Regular Interest and is entitled to
distributions as set forth herein.

Class C-Y-3 Principal Distribution Amount: For any Distribution Date, the sum of
(A) the excess, if any, of the Class C-Y-3 Principal Reduction Amount for such
Distribution Date over the principal portion of Realized Losses allocated to the
Class C-Y-3 Regular Interest on such Distribution Date and (B) an amount equal
to the lesser of (i) the portion, if any, of the Subsequent Recoveries for
Subgroup 3 for such Distribution Date not included in the Class C-Z-3 Principal
Distribution Amount pursuant to clause (B) of the definition thereof and (ii)
the amount of Realized Losses allocated to the Class C-Y-3 Regular Interest on
previous Distribution Dates (the amount in this clause (B)(ii) reduced by the
amount, if any, calculated pursuant to this clause (B) for prior Distribution
Dates).

Class C-Y-3 Regular Interest: The uncertificated undivided beneficial interest
in REMIC I which constitutes a REMIC I Regular Interest and is entitled to
distributions as set forth herein.

Class C-Z Principal Reduction Amounts: For any Distribution Date, the amounts by
which the Class Principal Balances of the Class C-Z-1, Class C-Z-2 and Class
C-Z-3 Regular Interests, respectively, will be reduced on such Distribution Date
by the allocation of Realized Losses and the distribution of principal, which
shall be in each case the excess of (A) the sum of (x) the excess of the REMIC I
Available Distribution Amount for the related Subgroup (i.e. the "related
Subgroup" for the Class C-Z-1 Regular Interest is Subgroup 1, the "related

                                       11

Subgroup" for the Class C-Z-2 Regular Interest is Subgroup 2 and the "related
Subgroup" for the Class C-Z-3 Regular Interest is Subgroup 3) over the sum of
the amounts thereof distributable (i) in the case of Subgroup 1, to the Class
P-M and the Clas R-1 Regular Interests, (ii) in the case of Subgroup 3, to the
Class X-M Regular Interest, (iii) in respect of interest on such Class C-Z
Regular Interest and the related Class C-Y Regular Interest and (iv) to such
Class C-Z Regular Interest and the related Class C-Y Regular Interest pursuant
to clause (d)(ii) of the definition of "REMIC I Distribution Amount" and (y) the
amount of Realized Losses allocable to principal for the related Subgroup
(reduced, in the case of Subgroup 1, by the portion of such amount allocable to
the Class P-M Regular Interest) over (B) the Class C-Y Principal Reduction
Amount for the related Subgroup.

Class C-Z  Regular  Interests:  The Class  C-Z-1,  Class  C-Z-2 and Class  C-Z-3
Regular Interests.

Class C-Z-1 Principal Distribution Amount: For any Distribution Date, the sum of
(A) the excess, if any, of the Class C-Z-1 Principal Reduction Amount for such
Distribution Date over the principal portion of Realized Losses allocated to the
Class C-Z-1 Regular Interest on such Distribution Date and (B) an amount equal
to the lesser of (i) the Subsequent Recoveries for Subgroup 1 for such
Distribution Date and (ii) the amount of Realized Losses allocated to the Class
C-Z-1 Regular Interest on previous Distribution Dates (the amount in this clause
(B)(ii) reduced by the amount, if any, calculated pursuant to this clause (B)
for prior Distribution Dates).

Class C-Z-1 Regular Interest: The uncertificated undivided beneficial interest
in REMIC I which constitutes a REMIC I Regular Interest and is entitled to
distributions as set forth herein.

Class C-Z-2 Principal Distribution Amount: For any Distribution Date, the sum of
(A) the excess, if any, of the Class C-Z-2 Principal Reduction Amount for such
Distribution Date over the principal portion of Realized Losses allocated to the
Class C-Z-2 Regular Interest on such Distribution Date and (B) an amount equal
to the lesser of (i) the Subsequent Recoveries for Subgroup 2 for such
Distribution Date and (ii) the amount of Realized Losses allocated to the Class
C-Z-2 Regular Interest on previous Distribution Dates (the amount in this clause
(B)(ii) reduced by the amount, if any, calculated pursuant to this clause (B)
for prior Distribution Dates).

Class C-Z-2 Regular Interest: The uncertificated undivided beneficial interest
in REMIC I which constitutes a REMIC I Regular Interest and is entitled to
distributions as set forth herein.

Class C-Z-3 Principal Distribution Amount: For any Distribution Date, the sum of
(A) the excess, if any, of the Class C-Z-3 Principal Reduction Amount for such
Distribution Date over the principal portion of Realized Losses allocated to the
Class C-Z-3 Regular Interest on such Distribution Date and (B) an amount equal
to the lesser of (i) the Subsequent Recoveries for Subgroup 3 for such
Distribution Date and (ii) the amount of Realized Losses allocated to the Class
C-Z-3 Regular Interest on previous Distribution Dates (the amount in this clause
(B)(ii) reduced by the amount, if any, calculated pursuant to this clause (B)
for prior Distribution Dates).

                                       12

Class C-Z-3 Regular Interest: The uncertificated undivided beneficial interest
in REMIC I which constitutes a REMIC I Regular Interest and is entitled to
distributions as set forth herein.

Class Notional Amount: With respect to the Class X Certificates and the Class
X-M Regular Interests, the Class X Notional Amount.

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

Class P Fraction: For each Class P Mortgage Loan, a fraction, the numerator of
which is 5.000% less the Pass-Through Rate on such Class P Mortgage Loan and the
denominator of which is 5.000%.

Class P Mortgage Loan: Any Subgroup 1 Loan with a Pass-Through Rate of less than
5.000% per annum.

Class P-M Regular Interest: The uncertificated undivided beneficial interest in
REMIC I which constitutes a REMIC I Regular Interest and is entitled to
distributions as set forth herein.

Class Principal Balance: For any Class of Certificates, for any Class of REMIC I
Regular Interests and for the Class R-1 Residual Interest, the applicable
initial Class Principal Balance therefor set forth in the Preliminary Statement
hereto (or, in the case of the Class R Certificates, the Class Principal Balance
of the Class R-1 Residual Interest), corresponding to the rights of such Class
in payments of principal due to be passed through to the Certificateholders or
the Holders of the REMIC I Regular Interests from principal payments on the
Mortgage Loans or the REMIC I Regular Interests, as applicable, as reduced from
time to time by (x) distributions of principal (including andy Class 1-A-4,
Class 2-A-4 and Class 3-A-2 Accrual Amounts) to the Certificateholders or the
Holders of the REMIC I Regular Interests 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" (including amounts allocated as losses to
the Class B Certificates pursuant to the fourth paragraph of the definition of
"Realized Loss") with respect to a given Distribution Date. For any Distribution
Date, the reduction of the Class Principal Balance of any Class of Certificates
and REMIC I Regular Interests pursuant to the definition of "Realized Loss"
shall be deemed effective after the determination and distribution of principal
on such Class pursuant to the definitions of "REMIC I Distribution Amount" and
"REMIC II Distribution Amount."

Notwithstanding the foregoing, (A) any amounts distributed in respect of losses
pursuant to paragraph (I)(d)(i) or (I)(d)(ii) of the definition of "REMIC II
Distribution Amount" shall not cause a reduction in the Class Principal Balance
of the Class P Certificates, (B) any amounts distributed in respect of principal
losses pursuant to paragraph (I)(d)(xxi) of the definition of "REMIC II
Distribution Amount" shall not cause a reduction in the Class Principal Balances
of the REMIC II Regular Interests, (C) any amounts distributed in respect of
principal losses pursuant to clause (d)(i) of the definition of "REMIC I
Distribution Amount" shall not cause a reduction in the Class Principal Balance

                                       13

of the Class P-M Regular Interest, (D) any amounts distributed in respect of
principal losses pursuant to clause (d)(ii) of the definition of "REMIC I
Distribution Amount" shall not cause a reduction in the Class Principal Balances
of the REMIC I Regular Interests and (E) any amounts distributed to the REMIC I
Regular Interests in respect of Subsequent Recoveries shall not cause a
reduction in the Class Principal Balances of the REMIC I Regular Interests.

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, for each Subgroup, equal to the
lesser of (i) the Subsequent Recoveries for such Distribution Date for such
Subgroup and (ii) the amount of Realized Losses for Mortgage Loans (or portions
of Mortgage Loans) in such Subgroup 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 in respect of Subsequent
Recoveries for such Subgroup).

In addition to the foregoing, (i) on each Distribution Date on or before the
Class 1-A-4 Accretion Termination Date, the Class Principal Balance of the the
Class 1-A-4 Certificates shall be increased by the Class 1-A-4 Accrual Amount
for such Distribution Date, (ii) on each Distribution Date on or before the
Class 2-A-4 Accretion Termination Date, the Class Principal Balance of the the
Class 2-A-4 Certificates shall be increased by the Class 2-A-4 Accrual Amount
for such Distribution Date and (iii) on each Distribution Date on or before the
Class 3-A-2 Accretion Termination Date, the Class Principal Balance of the the
Class 3-A-2 Certificates shall be increased by the Class 3-A-2 Accrual Amount
for such Distribution Date.

The Class Principal Balance for the Class 1-A-1 Certificates shall be referred
to as the "Class 1-A-1 Principal Balance," the Class Principal Balance for the
Class 1-A-2 Certificates shall be referred to as the "Class 1-A-2 Principal
Balance" and so on. The Class Principal Balances for the Class X Certificates
and the Class X-M Regular Interest shall each be zero.

Class R Certificates: The Certificates designated as "Class R" on the face
thereof in substantially the form attached hereto as Exhibit B, representing
ownership of the Class R-1 and Class R-2 Residual Interests, each of which Class
of Residual Interests has been designated as the sole class of "residual
interest" in REMIC I and REMIC II, respectively, pursuant to Section 2.06 and
Section 2.11, respectively, for purposes of Section 860G(a)(2) of the Code.

Class R Residual Interests: The Class R-1 and Class R-2 Residual Interests
(which shall be transferable only as a unit evidenced by the Class R
Certificates, in accordance with the applicable provisions of Section 5.01).

Class R-1 Residual Interest: The uncertificated undivided beneficial interest in
REMIC I which has been designated as the single class of "residual interest" in
REMIC I pursuant to Section 2.06. The Class R-1 Residual Interest, together with
the REMIC I Regular Interests, shall be deemed to be a separate series of
beneficial interests in the assets of the Trust consisting of the REMIC I Assets
pursuant to Section 3806(b)(2) of the Statutory Trust Statute.

Class R-2 Residual Interest: The uncertificated undivided beneficial interest in
REMIC II which has been designated as the single class of "residual interest" in
REMIC II pursuant to Section 2.11. The Class R-2 Residual Interest, together
with the REMIC II Regular Interests, shall be deemed to be a separate series of

                                       14

beneficial interests in the assets of the Trust consisting of the REMIC II
Assets pursuant to Section 3806(b)(2) of the Statutory Trust Statute.

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

Class X Notional Amount: With respect to any Distribution Date, the product of
(x) the aggregate scheduled principal balance, as of the second preceding Due
Date after giving effect to payments scheduled to be received as of such Due
Date, whether or not received (and after giving effect to Principal Prepayments,
Monthly P&I Advances and the principal portion of Realized Losses applied prior
to such Due Date), or with respect to the initial Distribution Date, as of the
Cut-Off Date, of the Premium Rate Mortgage Loans and (y) a fraction, the
numerator of which is the weighted average of the Stripped Interest Rates for
the Premium Rate Mortgage Loans as of such Due Date and the denominator of which
is 6.000%.

Class X-M Regular Interest: The uncertificated undivided beneficial interest in
REMIC I which constitutes a REMIC I Regular Interest and is entitled to
distributions as set forth herein.

Clean-Up Call Percentage: 5%.

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: May 26, 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.

                                       15

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, 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 One Federal Street, Third Floor, Boston, MA 02110,
Attention: Corporate Trust Washington Mutual 2004-S2.

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.

Credit Support Depletion Date: The first Distribution Date on which the
aggregate Class Principal Balance of the Class B Certificates has been or will
be reduced to zero as a result of principal distributions thereon and the
allocation of Realized Losses on such Distribution Date.

Cumulative Carry-Forward Subsequent Recoveries Amount: For any Distribution Date
and any Subgroup, the sum of (i) the Carry-Forward Subsequent Recoveries Amount
for such Distribution Date for such Subgroup and (ii) the Carry-Forward
Subsequent Recoveries Amounts for prior Distribution Dates for such Subgroup 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.

                                       16

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 the corporate trust department of
the Trustee or another financial institution approved by the Master Servicer
such that the rights of the Master Servicer, the Trustee, the Trust, 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. 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 the corporate trust department of the Trustee or another
financial institution approved by the Master Servicer such that the rights of
the Master Servicer, the Trustee, the Trust, 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. 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

                                       17

terms of this Agreement, notwithstanding the fact that certain duties have been
assigned to a Custodian.

Cut-Off Date: May 1, 2004.

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

Delaware Trustee:  Christiana Bank & Trust Company, 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 May 25, 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 Date: With respect to distributions on the REMIC I Regular
Interests and 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 June 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

                                       18

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;

(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;

                                       19

(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.

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 any Subgroup for
such Distribution Date.

Excess Subsequent Recoveries: For any Distribution Date and any Subgroup, 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

                                       20

(ii)) in connection with the liquidation of defaulted Mortgage Loans in such
Subgroup after such Mortgage Loans became Liquidated Mortgage Loans over (ii)
the Subsequent Recoveries for such Distribution Date for such Subgroup.

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 the REMIC I Regular
Interests, the REMIC II Regular Interests and the Certificates, the date set
forth in the applicable table contained in the Preliminary Statement hereto.

Fitch: Fitch Ratings, provided that at any time it be a Rating Agency.

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.

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.

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.

                                       21

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 REMIC
I Regular Interests or Certificates and for the Class R-1 Residual Interest, the
amount of interest accrued during the Prior Period, at the related Certificate
Interest Rate for such Class for such Distribution Date, on the respective Class
Principal Balance or Class Notional Amount immediately before such Distribution
Date, reduced by Uncompensated Interest Shortfall and the interest portion of
Realized Losses allocated to such Class pursuant to the definitions of
"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. The Interest Distribution Amounts for the Class P-M
Regular Interest and the Class P Certificates shall equal zero.

Interest Transfer Amount: On any Distribution Date for an Undercollateralized
Subgroup, an amount equal to one month's interest on the applicable Principal
Transfer Amount at 5.000% per annum if the Undercollateralized Subgroup is
Subgroup 1, at 5.500% per annum if the Undercollateralized Subgroup is Subgroup
2 and at 6.000% per annum if the Undercollateralized Subgroup is Subgroup 3,
plus any interest accrued on the Senior Certificates related to such
Undercollateralized Subgroup remaining unpaid from prior Distribution Dates.

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.

                                       22

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
(exclusive of the portion thereof attributable to distributions to the Class P
Certificates pursuant to clauses (I)(a)(i) and (II)(a)(i) of the definition of
"REMIC II Distribution Amount") 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.

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: The fee charged by the Master Servicer for supervising the
mortgage servicing and advancing certain expenses, equal to a per annum rate set
forth for each Mortgage Loan in Exhibit D on the outstanding Principal Balance
of such Mortgage Loan, payable monthly from the Certificate Account, the
Investment Account or the Custodial Account for P&I.

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.

                                       23

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 (including any amounts due from a Buydown Fund, if any) which is due on the
related Due Date for such Mortgage Loan.

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 "U.S. Bank National Association, as Custodian/Trustee, without recourse" or
to "WaMu Mortgage Pass-Through Certificates Series 2004-S2 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 (or portion thereof, as applicable), 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 (or portion thereof, as applicable); provided, however, that in
the event the Company acquired the Mortgage Loan from an affiliate of the
Company, then the Mortgage Note (or portion thereof, as applicable) need not be
endorsed in blank or to U.S. Bank National Association 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

                                       24

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 "U.S. Bank National
Association, as Custodian/Trustee," or to "WaMu Mortgage Pass-Through
Certificates Series 2004-S2 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

(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 "U.S. Bank National Association, as
Custodian/Trustee," or to "WaMu Mortgage Pass-Through Certificates Series
2004-S2 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 U.S. Bank National Association 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 "U.S. Bank National Association, as Custodian/Trustee, without recourse" or
to "WaMu Mortgage Pass-Through Certificates Series 2004-S2 Trust, without

                                       25

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 (or portion thereof, as applicable), 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 (or portion thereof, as applicable); 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 U.S. Bank National Association 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);

(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

                                       26

(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 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 borne by the Mortgage Note,

(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 and the Master Servicing Fee, 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,

                                       27

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
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.

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
the Master Servicer in writing by the Trustee, (c) in the case of the Delaware
Trustee, 1314 King Street, Wilmington, DE 19801, 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 U.S. Bank National Association, 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

                                       28

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 Fitch.

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.

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 May 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.

Overcollateralized Subgroup: Any of Subgroup 1, Subgroup 2 or Subgroup 3, if on
any Distribution Date such Subgroup is not an Undercollateralized Subgroup and
one or more of the other Subgroups is an Undercollateralized Subgroup.

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, a per annum rate equal to the
Mortgage Interest Rate for such Mortgage Loan less the per annum percentage
rates related to each of (i) the Servicing Fee for such Mortgage Loan, (ii) the
Master Servicing Fee 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 applicable Special Primary Insurance Premium. 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.

                                       29

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 June 14, 2003, 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 and Class X
Certificates), its Certificate Principal Balance divided by the applicable Class
Principal Balance; (ii) with respect to any Class X Certificate, the portion of
the Class X Notional Amount evidenced by such Certificate divided by the Class X
Notional Amount; and

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

(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 and the Class X
Certificates), the product of (x) ninety-nine percent (99%) and (y) its
Certificate Principal Balance divided by the Aggregate Certificate Principal
Balance of the Certificates; provided, however, that the percentage in clause
(x) above shall be increased by one percent (1%) upon the retirement of the
Class X Certificates;

                                       30

(ii) with respect to any Class X Certificate, one percent (1%) of such
Certificate's Percentage Interest as calculated by paragraph (a)(ii) of this
definition; and

(iii) 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 or REMIC II 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.

Premium Rate  Mortgage  Loans:  The Subgroup 3 Loans having  Pass-Through  Rates
greater than or equal to 6.000% per annum.

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

                                       31

through the Distribution Date in the month of determination that are reported as
allocable to principal of such Mortgage Loan.

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.

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.

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.

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

Principal Payment Amount: For any Distribution Date and for any Subgroup, the
sum with respect to the Mortgage Loans (or portions of Mortgage Loans) in such
Subgroup of (i) the scheduled principal payments on such Mortgage Loans due on
the related Due Date, (ii) the principal portion of proceeds received with
respect to any such 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 such 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.

Principal Prepayment Amount: For any Distribution Date and for any Subgroup, the
sum with respect to the Mortgage Loans (or portions of Mortgage Loans) in such
Subgroup of (i) Curtailments received during the Prior Period from such Mortgage
Loans and (ii) Payoffs received during the Payoff Period from such Mortgage
Loans.

Principal Transfer Amount: For any Distribution Date for each
Undercollateralized Subgroup, the excess, if any, of the aggregate Class
Principal Balance of the Class A Certificates related to such
Undercollateralized Subgroup over the aggregate Principal Balance of the
Mortgage Loans (or portions of Mortgage Loans) in such Subgroup (in the case of

                                       32

Subgroup 1, less the applicable Class P Fraction thereof with respect to any
Class P Mortgage Loans in such Subgroup), in each case immediately prior to such
Distribution Date.

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 the Senior Certificates (other than the Class R and Class P Certificates), on
the one hand, and the Class B Certificates, on the other hand, pro rata
according to their respective aggregate Class Principal Balances, in reduction
thereof in the manner provided in the succeeding paragraphs of this definition
(except if the loss is recognized with respect to a Class P Mortgage Loan, in
which case the applicable Class P Fraction of such loss shall first be allocated
to the Class P Certificates, and the remainder of such loss shall be allocated
as set forth above), and the allocation of the interest portion of Realized
Losses to all Classes of Certificates (other than the Class R and Class P
Certificates) pro rata according to the amount of interest accrued but unpaid on
each such Class, in reduction thereof, and then to the Senior Certificates
(other than the Class R, Class P and Class X Certificates), on the one hand, and
the Class B Certificates, on the other hand, pro rata according to their
respective aggregate Class Principal Balances, in reduction thereof in the
manner provided in the succeeding paragraphs of this definition.

The principal portion of a Realized Loss on any Mortgage Loan allocated to the
Class A Certificates pursuant to this definition of "Pro Rata Allocation" shall
be allocated in reduction of the respective Class Principal Balances of the
Subgroup 1, Subgroup 2 and Subgroup 3 Certificates as follows:

(i) with respect to any Realized Loss on a Mortgage Loan with a Pass-Through
Rate of 5.000% or less, to the Subgroup 1 Certificates only, pro rata according
to their respective Class Principal Balances;

(ii) with respect to any Realized Loss on a Mortgage Loan with a Pass-Through
Rate equal to 5.125%, 75% to the Subgroup 1 Certificates pro rata according to
their respective Class Principal Balances, and 25% to the Subgroup 2
Certificates pro rata according to their respective Class Principal Balances;

(iii) with respect to any Realized Loss on a Mortgage Loan with a Pass-Through
Rate equal to 5.250%, 50% to the Subgroup 1 Certificates pro rata according to
their respective Class Principal Balances, and 50% to the Subgroup 2
Certificates pro rata according to their respective Class Principal Balances;

(iv) with respect to any Realized Loss on a Mortgage Loan with a Pass-Through
Rate equal to 5.375%, 25% to the Subgroup 1 Certificates pro rata according to
their respective Class Principal Balances, and 75% to the Subgroup 2
Certificates pro rata according to their respective Class Principal Balances;

(v) with respect to any Realized Loss on a Mortgage Loan with a Pass-Through
Rate equal to 5.500%, to the Subgroup 2 Certificates only, pro rata according to
their respective Class Principal Balances;

                                       33

(vi) with respect to any Realized Loss on a Mortgage Loan with a Pass-Through
Rate equal to 5.600%, 80% to the Subgroup 2 Certificates pro rata according to
their respective Class Principal Balances, and 20% to the Subgroup 3
Certificates pro rata according to their respective Class Principal Balances;

(vii) with respect to any Realized Loss on a Mortgage Loan with a Pass-Through
Rate equal to 5.625%, 75% to the Subgroup 2 Certificates pro rata according to
their respective Class Principal Balances, and 25% to the Subgroup 3
Certificates pro rata according to their respective Class Principal Balances;

(vii) with respect to any Realized Loss on a Mortgage Loan with a Pass-Through
Rate equal to 5.650%, 70% to the Subgroup 2 Certificates pro rata according to
their respective Class Principal Balances, and 30% to the Subgroup 3
Certificates pro rata according to their respective Class Principal Balances;

(viii) with respect to any Realized Loss on a Mortgage Loan with a Pass-Through
Rate equal to 5.750%, 50% to the Subgroup 2 Certificates pro rata according to
their respective Class Principal Balances, and 50% to the Subgroup 3
Certificates pro rata according to their respective Class Principal Balances;

(ix) with respect to any Realized Loss on a Mortgage Loan with a Pass-Through
Rate equal to 5.875%, 25% to the Subgroup 2 Certificates pro rata according to
their respective Class Principal Balances, and 75% to the Subgroup 3
Certificates pro rata according to their respective Class Principal Balances;
and

(x) with respect to any Realized Loss on a Mortgage Loan with a Pass-Through
Rate greater than or equal to 6.000%, to the Subgroup 3 Certificates only, pro
rata according to their respective Class Principal Balances.

The total amount of the principal portion of Realized Losses allocated to the
Class B Certificates pursuant to this definition of "Pro Rata Allocation" shall
be allocated to each Class of Class B Certificates in reduction of the
respective Class Principal Balances thereof pro rata according to the Class
Principal Balances thereof.

Prospectus:  The  Prospectus,  dated  February  10,  2004,  and  the  Prospectus
Supplement, dated May 21, 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

                                       34

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.

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 for any Subgroup shall be reduced by the
Cumulative Carry-Forward Subsequent Recoveries Amount for such Distribution Date
for such Subgroup. 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.

Realized Losses on Subgroup 1, Subgroup 2 and Subgroup 3 Loans shall be
allocated to the REMIC I Regular Interests as follows: (1) The interest portion
of Realized Losses on Subgroup 1 Loans, if any, shall be allocated among the
Class C-Y-1 and Class C-Z-1 Regular Interests pro rata according to the amount
of interest accrued but unpaid thereon, in reduction thereof; (2) the interest
portion of Realized Losses on Subgroup 2 Loans, if any, shall be allocated among
the Class Class C-Y-2 and Class C-Z-2 Regular Interests pro rata according to
the amount of interest accrued but unpaid thereon, in reduction thereof and (3)
the interest portion of Realized Losses on Subgroup 3 Loans, if any, shall be
allocated among the Class X-M, Class C-Y-3 and Class C-Z-3 Regular Interests pro
rata according to the amount of interest accrued but unpaid thereon, in
reduction thereof. Any interest portion of such Realized Losses in excess of the

                                       35

amount allocated pursuant to the preceding sentence shall be treated as a
principal portion of Realized Losses not attributable to any specific Mortgage
Loan in such Subgroup and allocated pursuant to the succeeding sentences. The
applicable Class P Fraction of any principal portion of Realized Losses
attributable to a Class P Mortgage Loan shall be allocated to the Class P-M
Regular Interest in reduction of the Class Principal Balance thereof. The
remainder of the principal portion of Realized Losses with respect to Subgroup
1, Subgroup 2 and Subgroup 3 shall be allocated to the REMIC I Regular Interests
as follows: (1) The principal portion of Realized Losses on Subgroup 1 Loans
shall be allocated, first, to the Class C-Y-1 Regular Interest to the extent of
the Class C-Y-1 Principal Reduction Amount in reduction of the Class Principal
Balance of such Regular Interest and, second, the remainder, if any, of such
principal portion of such Realized Losses shall be allocated to the Class C-Z-1
Regular Interest in reduction of the Class Principal Balance thereof; (2) the
principal portion of Realized Losses on Subgroup 2 Loans shall be allocated,
first, to the Class C-Y-2 Regular Interest to the extent of the Class C-Y-2
Principal Reduction Amount in reduction of the Class Principal Balance of such
Regular Interest and, second, the remainder, if any, of such principal portion
of such Realized Losses shall be allocated to the Class C-Z-2 Regular Interest
in reduction of the Class Principal Balance thereof; and (3) the principal
portion of Realized Losses on Subgroup 3 Loans shall be allocated, first, to the
Class C-Y-3 Regular Interest to the extent of the Class C-Y-3 Principal
Reduction Amount in reduction of the Class Principal Balance of such Regular
Interest and, second, the remainder, if any, of such principal portion of such
Realized Losses shall be allocated to the Class C-Z-3 Regular Interest in
reduction of the Class Principal Balance thereof.

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 on Mortgage Loans in a Subgroup 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, and (g) seventh, (x) with respect to Realized Losses on
Subgroup 1 Loans, to the Class 1-A-1, Class 1-A-2, Class 1-A-3, Class 1-A-4 and
Class 1-A-5 Certificates, pro rata, according to, and in reduction of the Class
Principal Balances thereof, (y) with respect to Realized Losses on Subgroup 2
Loans, to the Class 2-A-1, Class 2-A-2, Class 2-A-3, Class 2-A-4, Class 2-A-5
and Class 2-A-6 Certificates, pro rata, according to, and in reduction of the
Class Principal Balances thereof and (z) with respect to Realized Losses on
Subgroup 3 Loans, to the Class 3-A-1, Class 3-A-2 and Class 3-A-3 Certificates,
pro rata, according to, and in reduction of the Class Principal Balances
thereof; provided, however, that if the loss is recognized with respect to a
Class P Mortgage Loan, the applicable Class P Fraction of such loss shall first
be allocated to the Class P Certificates and the remainder of such loss shall be
allocated as set forth above in this clause (i); 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

                                       36

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, and (g) seventh, (x) with respect to Realized Losses on
Subgroup 1 Loans, to the Class 1-A-1, Class 1-A-2, Class 1-A-3, Class 1-A-4 and
Class 1-A-5 Certificates, pro rata, according to accrued but unpaid interest on
such Classes, in reduction thereof, and then to such Classes, pro rata according
to, and in reduction of, the Class Principal Balances thereof, (y) with respect
to Realized Losses on Subgroup 2 Loans, to the Class 2-A-1, Class 2-A-2, Class
2-A-3, Class 2-A-4, Class 2-A-5 and Class 2-A-6 Certificates, pro rata,
according to accrued but unpaid interest on such Classes, in reduction thereof,
and then to such Classes, pro rata according to, and in reduction of, the Class
Principal Balances thereof and (z) with respect to Realized Losses on Subgroup 3
Loans, to the Class 3-A-1, Class 3-A-2 and Class 3-A-3 Certificates, pro rata,
according to accrued but unpaid interest on such Classes, in reduction thereof,
and then to such Classes, pro rata according to, and in reduction of, the Class
Principal Balances thereof; provided, however, that until the Class 2-A-6
Principal Balance has been reduced to zero, all principal losses that would
otherwise be allocated to the Class 2-A-5 Certificates pursuant to clause (i) of
this paragraph shall instead be allocated to the Class 2-A-6 Certificates, in
reduction of the Class 2-A-6 Principal Balance, and all interest losses that
would otherwise be allocated to the Class 2-A-5 Certificates pursuant to clause
(ii) of this paragraph shall instead be allocated to the Class 2-A-6
Certificates, in reduction of accrued but unpaid interest thereon, and then in
reduction of the Class 2-A-6 Principal Balance.

For any Distribution Date, any amounts distributed to the Class P Certificates
pursuant to clauses (I)(d)(i) and (I)(d)(ii) of the definition of "REMIC II
Distribution Amount" shall be allocated as a loss to the most junior Class (or
Classes) of Class B Certificates, until the Class Principal Balance thereof has
been reduced to zero.

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 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 for any Subgroup) 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 such 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 REMIC II Available Distribution Amount
for the Subgroup 1, Subgroup 2 and Subgroup 3 Certificates and all losses in
respect of each Mortgage Loan that have been allocated to the Certificates on
such Distribution Date or prior Distribution Dates, 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.

                                       37

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.

Regular  Interests:  (i) With respect to REMIC I, the REMIC I Regular  Interests
and (ii) with respect to REMIC II, the REMIC II Regular Interests.

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 otherwise payable by the Mortgagor on the related
Due Date under the terms of the related Mortgage Note over (ii) the annual
interest rate payable by the Mortgagor on the related Due Date 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 REMIC I Regular Interests and the Class R-1 Residual Interest.

REMIC I Assets: All of the Mortgage Pool Assets.

REMIC I Available Distribution Amount: For each Subgroup for any Distribution
Date, the sum of the following amounts with respect to the Mortgage Loans (or
portions of Mortgage Loans) in such Subgroup:

(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

                                       38

14th day of the month of such Distribution Date, which interest shall not be
included in the calculation of the REMIC I 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

(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;

provided, however, that interest received or advanced (subject to the exceptions
stated above) on each Mortgage Loan, a portion of which Mortgage Loan is
included in such Subgroup and a portion of which is included in another
Subgroup, shall be allocated to the REMIC I Available Distribution Amount for
such Subgroup in an amount equal to interest accrued on the portion of such
Mortgage Loan included in such Subgroup at a Pass-Through Rate equal to 5.000%,
5.500% and 6.000% in the case of Subgroup 1, Subgroup 2 and Subgroup 3,
respectively, rather than at the actual Pass-Through Rate for such Mortgage Loan
(or, in the event of a shortfall in collections of interest on such Mortgage
Loan, the interest collected shall be allocated to the REMIC I Available
Distribution Amount for each Subgroup pro rata according to the amount for each
Subgroup calculated as described in this proviso); provided, further, that, with
respect to each Subgroup, in the event (a) the portion attributable to that
Subgroup of Uncompensated Interest Shortfall exceeds (b) the portion of
Uncompensated Interest Shortfall allocated, pursuant to the definition of
"Uncompensated Interest Shortfall," to the Certificates related to that Subgroup
(or, in the case of the Class B Certificates, to the portions of the Class B
Certificates that derive their Interest Distribution Amounts from such
Subgroup), then the REMIC I Available Distribution Amount for such Subgroup
shall be increased by the amount of such excess; provided, further, that, with
respect to each Subgroup, in the event (a) the portion of Uncompensated Interest

                                       39

Shortfall allocated, pursuant to the definition of "Uncompensated Interest
Shortfall," to the Certificates related to that Subgroup (or, in the case of the
Class B Certificates, to the portions of the Class B Certificates that derive
their Interest Distribution Amounts from such Subgroup) exceeds (b) the portion
attributable to that Subgroup of Uncompensated Interest Shortfall, then the
REMIC I Available Distribution Amount for such Subgroup shall be decreased by
the amount of such excess.

REMIC I Distribution Amount: For any Distribution Date, the REMIC I Available
Distribution Amount shall be distributed to the REMIC I Regular Interests and
the Class R-1 Residual Interest in the following amounts and priority:

(a) To the extent of the REMIC I Available Distribution Amount for Subgroup 1:

(i) first, to the Class P-M Regular Interest, the sum of (A) the aggregate for
all of the Class P Mortgage Loans of the product for each Class P Mortgage Loan
of the applicable Class P Fraction and the sum of (x) scheduled payments of
principal on such Class P Mortgage Loan due on or before the related Due Date in
respect of which no distribution has been made on any previous Distribution Date
and which were received by the Determination Date, or which have been advanced
as part of a Monthly P&I Advance with respect to such Distribution Date, (y) the
principal portion received in respect of such Class P Mortgage Loan during the
Prior Period of (1) Curtailments, (2) Insurance Proceeds, (3) the amount, if
any, of the principal portion of the Purchase Price paid pursuant to a Purchase
Obligation or any purchase of a Mortgage Loan permitted hereunder and (4)
Liquidation Proceeds and (z) the principal portion of Payoffs received in
respect of such Class P Mortgage Loan during the Payoff Period and (B) the
portion, if any, of the Subsequent Recoveries for Subgroup 1 for such
Distribution Date not included in the Class C-Y-1 Principal Distribution Amount
or the Class C-Z-1 Principal Distribution Amount pursuant to clause (B) of the
respective definitions thereof;

(ii) second, to the Class C-Y-1 and Class C-Z-1 Regular Interests and the Class
R-1 Residual Interest, concurrently, the Interest Distribution Amounts for such
Classes remaining unpaid from previous Distribution Dates, pro rata according to
their respective shares of such unpaid amounts;

(iii) third, to the Class C-Y-1 and Class C-Z-1 Regular Interests and the Class
R-1 Residual Interest, concurrently, the Interest Distribution Amounts for such
Classes for the current Distribution Date, pro rata according to their
respective Interest Distribution Amounts;

(iv) fourth, to the Class R-1 Residual Interest, until the Class Principal
Balance thereof has been reduced to zero; and

(v) fifth, to the Class C-Y-1 and Class C-Z-1 Regular Interests, the Class C-Y-1
Principal Distribution Amount and the Class C-Z-1 Principal Distribution Amount,
respectively.

(b) To the extent of the REMIC I Available Distribution Amount for Subgroup 2:

                                       40

(i) first, to the Class C-Y-2 and Class C-Z-2 Regular Interests, concurrently,
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 C-Y-2 and Class C-Z-2 Regular Interests, concurrently,
the Interest Distribution Amounts for such Classes for the current Distribution
Date, pro rata according to their respective Interest Distribution Amounts; and

(iii) third, to the Class C-Y-2 and Class C-Z-2 Regular Interests, the Class
C-Y-2 Principal Distribution Amount and the Class C-Z-2 Principal Distribution
Amount, respectively.

(c) To the extent of the REMIC I Available Distribution Amount for Subgroup 3:

(i) first, to the Class X-M, Class C-Y-3 and Class C-Z-3 Regular Interests,
concurrently, 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 X-M, Class C-Y-3 and Class C-Z-3 Regular Interests,
concurrently, the Interest Distribution Amounts for such Classes for the current
Distribution Date, pro rata according to their respective Interest Distribution
Amounts; and

(iii) third, to the Class C-Y-3 and Class C-Z-3 Regular Interests, the Class
C-Y-3 Principal Distribution Amount and the Class C-Z-3 Principal Distribution
Amount, respectively.

(d) To the extent of the REMIC I Available Distribution Amounts for Subgroup 1,
Subgroup 2 and Subgroup 3 for such Distribution Date remaining after payment of
the amounts pursuant to paragraphs (a), (b) and (c) of this definition of "REMIC
I Distribution Amount":

(i) first, to the Class P-M Regular Interest, the aggregate amount of any
distributions to the Class P Certificates pursuant to paragraphs (I)(d)(i) and
(I)(d)(ii) of the definition of "REMIC II Distribution Amount" on such
Distribution Date; provided, however, that any amounts distributed pursuant to
this paragraph (d)(i) of this definition of "REMIC I Distribution Amount" shall
not cause a reduction in the Class Principal Balance of the Class P-M Regular
Interest;

(ii) second, to each Class of Class C-Y and Class C-Z Regular Interests, pro
rata according to the amount of unreimbursed Realized Losses allocable to
principal previously allocated to each such Class, the aggregate amount of any
distributions to the Certificates pursuant to paragraph (I)(d)(xxi) of the
definition of "REMIC II Distribution Amount" on such Distribution Date;
provided, however, that any amounts distributed pursuant to this paragraph
(d)(ii) of this definition of "REMIC I Distribution Amount" shall not cause a
reduction in the Class Principal Balances of any of the Class C-Y and Class C-Z
Regular Interests; and

                                       41

(iii) third, to the Class R-1 Residual Interest, the Residual Distribution
Amount for the Class R-1 Residual Interest for such Distribution Date.

REMIC I Regular Interests: The Classes of undivided beneficial interests in
REMIC I designated as "regular interests" in the table titled "REMIC I
Interests" in the Preliminary Statement hereto. The REMIC I Regular Interests,
together with the Class R-1 Residual Interest, shall be deemed to be a separate
series of beneficial interests in the assets of the Trust consisting of the
REMIC I Assets pursuant to Section 3806(b)(2) of the Statutory Trust Statute.

REMIC II: The segregated pool of assets of the Trust consisting of the REMIC II
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 REMIC II Regular Interests and the Class R-2 Residual Interest.

REMIC II Assets: The REMIC I Regular Interests, including all interest and
principal received by the Company on or with respect to the REMIC I Regular
Interests after the Cut-Off Date.

REMIC II Available Distribution Amount: With respect to the Subgroup 1
Certificates, on any Distribution Date, the aggregate of all distributions to
the Class C-Y-1, Class C-Z-1 and Class P-M Regular Interests (which amount shall
be available for distributions to the Class P, Subgroup 1 and Class B
Certificates and the Class R-2 Residual Interest as provided herein). With
respect to the Subgroup 2 Certificates, on any Distribution Date, the aggregate
of all distributions to the Class C-Y-2 and Class C-Z-2 Regular Interests (which
amount shall be available for distributions to the Subgroup 2 and Class B
Certificates and the Class R-2 Residual Interest as provided herein). With
respect to the Subgroup 3 Certificates, on any Distribution Date, the aggregate
of all distributions to the Class C-Y-3, Class C-Z-3 and Class X-M Regular
Interests (which amount shall be available for distributions to the Class X,
Subgroup 3 and Class B Certificates and the Class R-2 Residual Interest as
provided herein).

REMIC II Distribution Amount: (I) For any Distribution Date prior to the Credit
Support Depletion Date, the REMIC II Available Distribution Amount for such
Distribution Date shall be distributed to the Certificates and the Class R-2
Residual Interest in the following amounts and priority:

(a) With respect to the Class P and Subgroup 1 Certificates, on any Distribution
Date prior to the Credit Support Depletion Date, to the extent of the REMIC II
Available Distribution Amount for the Subgroup 1 Certificates for such
Distribution Date:

(i) first, to the Class P Certificates, the aggregate for all Class P Mortgage
Loans of the product for each Class P Mortgage Loan of the applicable Class P
Fraction and the sum of (x) scheduled payments of principal on such Class P
Mortgage Loan due on or before the related Due Date in respect of which no
distribution has been made on any previous Distribution Date and which were
received by the Determination Date, or which have been advanced as part of a
Monthly P&I Advance with respect to such Distribution Date, (y) the principal
portion received in respect of such Class P Mortgage Loan during the Prior
Period of (1) Curtailments, (2) Insurance Proceeds, (3) the amount, if any, of
the principal portion of the Purchase Price paid pursuant to a Purchase

                                       42

Obligation or any purchase of a Mortgage Loan permitted hereunder and (4)
Liquidation Proceeds and (z) the principal portion of Payoffs received in
respect of such Class P Mortgage Loan during the Payoff Period;

(ii) second, to the Subgroup 1 Certificates, concurrently, the Interest
Distribution Amounts for such Classes remaining unpaid from previous
Distribution Dates, pro rata according to their respective shares of such unpaid
amounts; provided, however, that on or before the Class 1-A-4 Accretion
Termination Date, the amount that would otherwise be payable to the Class 1-A-4
Certificates pursuant to this clause (I)(a)(ii) will be paid instead as
principal as set forth in clause (I)(a)(iii)(b) of this definition of "REMIC II
Distribution Amount";

(iii) third,

(a) to the Subgroup 1 Certificates, concurrently, the Interest Distribution
Amounts for such Classes for the current Distribution Date, pro rata according
to their respective Interest Distribution Amounts; provided, however, that on or
before the Class 1-A-4 Accretion Termination Date, the amount that would
otherwise be payable to the Class 1-A-4 Certificates pursuant to this clause
(I)(a)(iii)(a) will be paid instead as principal as set forth in clause
(I)(a)(iii)(b) of this definition of "REMIC II Distribution Amount"; and

(b) on or before the Class 1-A-4 Accretion Termination Date, the Class 1-A-4
Accrual Amount, as principal, sequentially, as follows:

(1) first,  to the Class 1-A-2  Certificates,  until the Class  1-A-2  Principal
Balance has been reduced to zero;

(2) second,  to the Class 1-A-3  Certificates,  until the Class 1-A-3  Principal
Balance has been reduced to zero; and

(3) third, to the Class 1-A-4 Certificates; and

(iv) fourth, to the Subgroup 1 Certificates, as principal, the Subgroup 1
Principal Distribution Amount (reduced, on the first Distribution Date, by
$100), sequentially, as follows:

(a) first, to the Class 1-A-5 Certificates, an amount, up to the amount of the
Subgroup 1 Lockout Priority Amount for that Distribution Date;

(b) second, to the Class 1-A-1 Certificates, until the Class 1-A-1 Principal
Balance has been reduced to zero;

(c) third, to the Class 1-A-2 Certificates, until the Class 1-A-2 Principal
Balance has been reduced to zero;

                                       43

(d) fourth, to the Class 1-A-3 Certificates, until the Class 1-A-3 Principal
Balance has been reduced to zero;

(e) fifth, to the Class 1-A-4 Certificates, until the Class 1-A-4 Principal
Balance has been reduced to zero; and

(f) sixth, to the Class 1-A-5 Certificates, until the Class 1-A-5 Principal
Balance has been reduced to zero;

(b) With respect to the Subgroup 2 Certificates, on any Distribution Date prior
to the Credit Support Depletion Date, to the extent of the REMIC II Available
Distribution Amount for the Subgroup 2 Certificates for such Distribution Date:

(i) first, to the Subgroup 2 Certificates, concurrently, the Interest
Distribution Amounts for such Classes remaining unpaid from previous
Distribution Dates, pro rata according to their respective shares of such unpaid
amounts; provided, however, that on or before the Class 2-A-4 Accretion
Termination Date, the amount that would otherwise be payable to the Class 2-A-4
Certificates pursuant to this clause (I)(b)(i) will be paid instead as principal
as set forth in clause (I)(b)(ii)(b) of this definition of "REMIC II
Distribution Amount";

(ii) second,

(a) to the Subgroup 2 Certificates, concurrently, the Interest Distribution
Amounts for such Classes for the current Distribution Date, pro rata according
to their respective Interest Distribution Amounts; provided, however, that on or
before the Class 2-A-4 Accretion Termination Date, the amount that would
otherwise be payable to the Class 2-A-4 Certificates pursuant to this clause
(I)(b)(ii)(a) will be paid instead as principal as set forth in clause
(I)(b)(ii)(b) of this definition of "REMIC II Distribution Amount"; and

(b) on or before the Class 2-A-4 Accretion Termination Date, the Class 2-A-4
Accrual Amount, as principal, sequentially, as follows:

(1) first,  to the Class 2-A-2  Certificates,  until the Class  2-A-2  Principal
Balance has been reduced to zero;

(2) second,  to the Class 2-A-3  Certificates,  until the Class 2-A-3  Principal
Balance has been reduced to zero; and

(3) third, to the Class 2-A-4 Certificates; and

(iii)  third,  to the  Subgroup 2  Certificates,  as  principal,  the Subgroup 2
Principal Distribution Amount, sequentially, as follows:

                                       44

(a) first, to the Class 2-A-5 and Class 2-A-6 Certificates, pro rata, an amount,
up to the amount of the Subgroup 2 Lockout Priority Amount for that Distribution
Date;

(b) second, to the Class 2-A-1 Certificates, until the Class 2-A-1 Principal
Balance has been reduced to zero;

(c) third, to the Class 2-A-2 Certificates, until the Class 2-A-2 Principal
Balance has been reduced to zero;

(d) fourth, to the Class 2-A-3 Certificates, until the Class 2-A-3 Principal
Balance has been reduced to zero;

(e) fifth, to the Class 2-A-4 Certificates, until the Class 2-A-4 Principal
Balance has been reduced to zero; and

(f) sixth, to the Class 2-A-5 and Class 2-A-6 Certificates, pro rata, until the
Class 2-A-5 and Class 2-A-6 Principal Balances have each been reduced to zero;

(c) With respect to the Subgroup 3 and Class X Certificates, on any Distribution
Date prior to the Credit Support Depletion Date, to the extent of the REMIC II
Available Distribution Amount for the Subgroup 3 Certificates for such
Distribution Date:

(i) first, to the Subgroup 3 and Class X Certificates, concurrently, the
Interest Distribution Amounts for such Classes remaining unpaid from previous
Distribution Dates, pro rata according to their respective shares of such unpaid
amounts; provided, however, that on or before the Class 3-A-2 Accretion
Termination Date, the amount that would otherwise be payable to the Class 3-A-2
Certificates pursuant to this clause (I)(c)(i) will be paid instead as principal
as set forth in clause (I)(c)(ii)(b) of this definition of "REMIC II
Distribution Amount";

(ii) second,

(a) to the Subgroup 3 and Class X Certificates, concurrently, the Interest
Distribution Amounts for such Classes for the current Distribution Date, pro
rata according to their respective Interest Distribution Amounts; provided,
however, that on or before the Class 3-A-2 Accretion Termination Date, the
amount that would otherwise be payable to the Class 3-A-2 Certificates pursuant
to this clause (I)(c)(ii)(a) will be paid instead as principal as set forth in
clause (I)(c)(ii)(b) of this definition of "REMIC II Distribution Amount"; and

(b) on or before the Class 3-A-2 Accretion Termination Date, the Class 3-A-2
Accrual Amount, as principal, sequentially, as follows:

(1) first,  to the Class 3-A-1  Certificates,  until the Class  3-A-1  Principal
Balance has been reduced to zero; and

                                       45

(2) second, to the Class 3-A-2 Certificates; and

(iii)  third,  to the  Subgroup 3  Certificates,  as  principal,  the Subgroup 3
Principal Distribution Amount, sequentially, as follows:

(a) first, to the Class 3-A-3 Certificates, an amount, up to the amount of the
Subgroup 3 Lockout Priority Amount for that Distribution Date;

(b) second, to the Class 3-A-1 Certificates, until the Class 3-A-1 Principal
Balance has been reduced to zero;

(c) third, to the Class 3-A-2 Certificates, until the Class 3-A-2 Principal
Balance has been reduced to zero; and

(d) fourth, to the Class 3-A-3 Certificates, until the Class 3-A-3 Principal
Balance has been reduced to zero; and

(d) With respect to the Subgroup 1, Subgroup 2, Subgroup 3, Class P and Class B
Certificates and the Class R-2 Residual Interest, on any Distribution Date prior
to the Credit Support Depletion Date, to the extent of the REMIC II Available
Distribution Amounts for the Subgroup 1, Subgroup 2 and Subgroup 3 Certificates
for such Distribution Date remaining after the payment of the amounts pursuant
to paragraphs (I)(a), (I)(b) and (I)(c) of this definition of "REMIC II
Distribution Amount":

(i) first, to the Class P Certificates, to the extent of amounts otherwise
available to pay the Subordinate Principal Distribution Amount (without regard
to clause (B) of the definition thereof) on such Distribution Date and to the
extent not paid to such Class of Certificates on previous Distribution Dates
pursuant to clause (I)(d)(ii) of this definition of "REMIC II Distribution
Amount," principal in an amount equal to the applicable Class P Fraction of any
Realized Loss on a Class P Mortgage Loan incurred prior to the Prior Period
(other than a Realized Loss which, pursuant to the definition of "Realized
Loss," is allocated by Pro Rata Allocation);

(ii) second, to the Class P Certificates, to the extent of amounts otherwise
available to pay the Subordinate Principal Distribution Amount (without regard
to clause (B) of the definition thereof) on such Distribution Date, principal in
an amount equal to the applicable Class P Fraction of any Realized Loss on a
Class P Mortgage Loan incurred in the Prior Period (other than a Realized Loss
which, pursuant to the definition of "Realized Loss," is allocated by Pro Rata
Allocation); provided, that any amounts distributed in respect of losses
pursuant to paragraph (I)(d)(i) or this paragraph (I)(d)(ii) of this definition
of "REMIC II Distribution Amount" shall not cause a reduction in the Class P
Principal Balance;

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

                                       46

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

(v) fifth, 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;

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

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

(viii) eighth, 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;

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

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

(xi) eleventh, 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;

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

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

(xiv) fourteenth, 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;

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

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

                                       47

(xvii) seventeenth, 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;

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

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

(xx) twentieth, 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;

(xxi) twenty-first, to each Class of Certificates in order of seniority (which,
from highest to lowest, shall be as follows: the Class P, Subgroup 1, Subgroup 2
and Subgroup 3 Certificates of equal seniority, 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 REMIC II Available Distribution Amounts for
the Subgroup 1, Subgroup 2 and Subgroup 3 Certificates, up to the amount of
unreimbursed Realized Losses allocable to principal previously allocated or to
be allocated on such Distribution Date to such Class, if any; provided, however,
that in the case of Classes of Certificates of equal seniority, the amount
distributable to such Classes shall be allocated among such Classes according to
the amount of losses allocated thereto; provided, further, that any amounts
distributed pursuant to this paragraph (I)(d)(xxi) of this definition of "REMIC
II Distribution Amount" shall not cause a reduction in the Class Principal
Balances of any of the Certificates; and

(xxii) twenty-second, to the Class R-2 Residual Interest, the Residual
Distribution Amounts for the Subgroup 1, Subgroup 2 and Subgroup 3 Certificates
for such Distribution Date.

Notwithstanding  the foregoing  paragraph (I)(d) of this definition of "REMIC II
Distribution Amount,"

(X) on any Distribution Date on which both of the following conditions specified
in clauses (1) and (2) are met:

(1) the aggregate Class Principal Balance of any of the Subgroup 1 Certificates,
Subgroup 2 Certificates or the Subgroup 3 Certificates has been reduced to zero,
and

(2) either (a) the Class B Percentage for such Distribution Date is less than
200% of the Class B Percentage as of the Closing Date or (b) the outstanding
principal balance of the Mortgage Loans in any of Subgroup 1, Subgroup 2 or
Subgroup 3 delinquent 60 days or more averaged over the last six months
(including Mortgage Loans in foreclosure and Mortgage Loans the Mortgaged

                                       48

Property of which is held by REMIC I and acquired by foreclosure or deed in lieu
of foreclosure), as a percentage of the related Subordinate Component Balance,
is greater than or equal to 50%,

all principal received or advanced with respect to the Mortgage Loans in the
Subgroup related to the Class A Certificates that have been paid in full (after
distributions of principal to the Class P Certificates pursuant to paragraph
(I)(a)(i), (I)(d)(i) and (I)(d)(ii) above, if applicable) shall be paid as
principal to the remaining Class A Certificates that have been not been paid in
full to the extent of and in reduction of the Class Principal Balances thereof
(and, in the case of the Subgroup 1 Certificates, in the order of priority of
paragraph (I)(a)(iv)(a)-(f) above; in the case of the Subgroup 2 Certificates,
in the order of priority of paragraph (I)(b)(iii)(a)-(f) above; and, in the case
of the Subgroup 3 Certificates, in the order of priority of paragraph
(I)(c)(iii)(a)-(d) above), prior to any distributions of principal to the Class
B Certificates pursuant to paragraph (I)(d) above; provided, however, that if
there are two Subgroups with outstanding Class A Certificates, then such
principal will be distributed between those Subgroups pro rata according to the
aggregate Class Principal Balance of the Class A Certificates of such Subgroup,
and

(Y) if on any Distribution Date any of Subgroup 1, Subgroup 2 or Subgroup 3 is
an Undercollateralized Subgroup and the other such Subgroup or Subgroups is an
Overcollateralized Subgroup, then the REMIC II Available Distribution Amount for
the Certificates related to the Overcollateralized Subgroup or Subgroups, to the
extent remaining following distributions of interest and principal to the
Subgroup 1, Subgroup 2, Subgroup 3 and Class P Certificates pursuant to
paragraph (I)(a), (I)(b) or (I)(c) above, as applicable, shall be paid in the
following priority: (1) first, such remaining amount, up to the Total Transfer
Amount for each Undercollateralized Subgroup, pro rata according to the Total
Transfer Amount for each such Undercollateralized Subgroup, shall be distributed
(a) first, to the Class A Certificates related to each Undercollateralized
Subgroup, in payment of any portion of the Interest Distribution Amounts for
such Classes of Certificates remaining unpaid from such Distribution Date or
previous Distribution Dates, pro rata according to their respective shares of
such unpaid amounts, and (b) second, to the Class A Certificates related to each
such Undercollateralized Subgroup, as principal (and, in the case of the
Subgroup 1 Certificates, in the order of priority of paragraph (I)(a)(iv)(a)-(f)
above; in the case of the Subgroup 2 Certificates, in the order of priority of
paragraph (I)(b)(iii)(a)-(f) above; and, in the case of the Subgroup 3
Certificates, in the order of priority of paragraph (I)(c)(iii)(a)-(d) above),
and (2) second, any remaining amount shall be distributed pursuant to paragraph
(I)(d) above.

(II) For any Distribution Date on or after the Credit Support Depletion Date,
the REMIC II Available Distribution Amount for such Distribution Date shall be
distributed to the outstanding Classes of Certificates and the Class R-2
Residual Interest in the following amounts and priority:

(a) With respect to the Subgroup 1 Certificates, on each Distribution Date on or
after the Credit Support Depletion Date, to the extent of the REMIC II Available
Distribution Amount for the Subgroup 1 Certificates for such Distribution Date:

                                       49

(i) first, to the Class P Certificates, principal in the amount that would
otherwise be distributed to such Class on such Distribution Date pursuant to
clause (I)(a)(i) of this definition of "REMIC II Distribution Amount";

(ii) second, to the Subgroup 1 Certificates, the amount payable to such Classes
of Certificates on prior Distribution Dates pursuant to clause (I)(a)(iii) or
(II)(a)(iii) of this definition of "REMIC II Distribution Amount," and remaining
unpaid, pro rata according to such amount payable to the extent of amounts
available;

(iii) third, to the Subgroup 1 Certificates, concurrently, the Interest
Distribution Amounts for such Classes of Certificates for the current
Distribution Date, pro rata according to such amount payable to the extent of
amounts available;

(iv) fourth, to the Subgroup 1 Certificates, pro rata according to Class
Principal Balance, as principal, the Subgroup 1 Senior Principal Distribution
Amount; and

(v) fifth, after any payments to the Subgroup 2 and Subgroup 3 Certificates
pursuant to the last paragraph of this definition of "REMIC II Distribution
Amount," to the Class R-2 Residual Interest, the Residual Distribution Amount
for the Subgroup 1 Certificates for such Distribution Date.

(b) With respect to the Subgroup 2 Certificates, on each Distribution Date on or
after the Credit Support Depletion Date, to the extent of the REMIC II Available
Distribution Amount for the Subgroup 2 Certificates for such Distribution Date:

(i) first, to the Subgroup 2 Certificates, the amount payable to such Classes of
Certificates on prior Distribution Dates pursuant to clause (I)(b)(ii) or
(II)(b)(ii) of this definition of "REMIC II Distribution Amount," and remaining
unpaid, pro rata according to such amount payable to the extent of amounts
available;

(ii) second, to the Subgroup 2 Certificates, concurrently, the Interest
Distribution Amounts for such Classes of Certificates for the current
Distribution Date, pro rata according to such amount payable to the extent of
amounts available;

(iii) third, to the Subgroup 2 Certificates, pro rata according to Class
Principal Balance, as principal, the Subgroup 2 Senior Principal Distribution
Amount; and

(iv) fourth, after any payments to the Subgroup 1 and Subgroup 3 Certificates
pursuant to the last paragraph of this definition of "REMIC II Distribution
Amount," to the Class R-2 Residual Interest, the Residual Distribution Amount
for the Subgroup 2 Certificates for such Distribution Date.

(c) With respect to the Subgroup 3 Certificates, on each Distribution Date on or
after the Credit Support Depletion Date, to the extent of the REMIC II Available
Distribution Amount for the Subgroup 3 Certificates for such Distribution Date:

(i) first, to the Subgroup 3 Certificates, the amount payable to such Classes of
Certificates on prior Distribution Dates pursuant to clause (I)(c)(ii) or
(II)(c)(ii) of this definition of "REMIC II Distribution Amount," and remaining
unpaid, pro rata according to such amount payable to the extent of amounts
available;

(ii) second, to the Subgroup 3 Certificates, concurrently, the Interest
Distribution Amounts for such Classes of Certificates for the current
Distribution Date, pro rata according to such amount payable to the extent of
amounts available;

(iii) third, to the Subgroup 3 Certificates, pro rata according to Class
Principal Balance, as principal, the Subgroup 3 Senior Principal Distribution
Amount; and

(iv) fourth, after any payments to the Subgroup 1 and Subgroup 2 Certificates
pursuant to the last paragraph of this definition of "REMIC II Distribution
Amount," to the Class R-2 Residual Interest, the Residual Distribution Amount
for the Subgroup 3 Certificates for such Distribution Date.

                                       50

If on any Distribution Date any of Subgroup 1, Subgroup 2 or Subgroup 3 is an
Undercollateralized Subgroup and the other such Subgroup or Subgroups is an
Overcollateralized Subgroup, then the REMIC II Available Distribution Amount for
the Certificates related to the Overcollateralized Subgroup, to the extent
remaining following distributions of interest and principal to the Subgroup 1,
Subgroup 2 and Subgroup 3 Certificates pursuant to paragraph (II)(a)(i) through
(II)(a)(iv), paragraph (II)(b)(i) through (II)(b)(iii) or paragraph (II)(c)(i)
through (II)(c)(iii), as applicable, shall be paid in the following priority:
(1) first, such remaining amount, up to the Total Transfer Amount for each
Undercollateralized Subgroup, pro rata according to the Total Transfer Amount
for each such Undercollateralized Subgroup, shall be distributed (a) first, to
the Class A Certificates related to such Undercollateralized Subgroup, in
payment of any portion of the Interest Distribution Amounts for such Classes of
Certificates remaining unpaid from such Distribution Date or previous
Distribution Dates, pro rata according to their respective shares of such unpaid
amounts, and (b) second, to the Class A Certificates related to such
Undercollateralized Subgroup, as principal, pro rata according to Class
Principal Balance, and (2) second, any remaining amount shall be distributed
pursuant to paragraph (II)(a)(v), (II)(b)(iv) and (II)(c)(iv) above, as
applicable.

REMIC II Regular Interests: The Classes of undivided beneficial interests in
REMIC II designated as "regular interests" in the table titled "REMIC II
Interests" in the Preliminary Statement hereto. The REMIC II Regular Interests,
together with the Class R-2 Residual Interest, shall be deemed to be a separate
series of beneficial interests in the assets of the Trust consisting of the
REMIC II Assets pursuant to Section 3806(b)(2) of the Statutory Trust Statute.

                                       51

Residual Certificates:  The Class R Certificates.

Residual Distribution Amount: For any Distribution Date, with respect to the
Class R-1 Residual Interest, any portion of the REMIC I Available Distribution
Amounts for Subgroup 1, Subgroup 2 and Subgroup 3 remaining after all
distributions of such REMIC I Available Distribution Amounts pursuant to clauses
(a), (b), (c) and (d) (other than the last subclause of clause (d)) of the
definition of "REMIC I Distribution Amount."

For any Distribution Date, with respect to the Class R-2 Residual Interest and
for the Subgroup 1, Subgroup 2 and Subgroup 3 Certificates, any portion of the
REMIC II Available Distribution Amount for the Subgroup 1, Subgroup 2 and
Subgroup 3 Certificates, respectively, remaining after all distributions of such
REMIC II Available Distribution Amount pursuant to clauses (I)(a), (I)(b),
(I)(c), (I)(d), (II)(a), (II)(b) and (II)(c), as applicable, of the definition
of "REMIC II Distribution Amount" (other than the distributions pursuant to the
last subclause of clauses (I)(d), (II)(a), (II)(b) and (II)(c).

Upon termination of the obligations created by this Agreement and liquidation of
REMIC I and REMIC II, the amounts which remain on deposit in the Certificate
Account after payment to the Holders of the REMIC I Regular Interests 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-1 and Class
R-2 Residual Interests 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

                                       52

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 P, Class X,  Subgroup 1, Subgroup 2, Subgroup 3
and Residual Certificates.

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 fee paid to the Servicer thereof to
perform primary servicing functions for the Master Servicer with respect to such
Mortgage Loan, equal to the per annum rate set forth for each Mortgage Loan in
the Mortgage Loan Schedule on 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 Officer: Any officer of the Master Servicer 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,
$4,000,396, 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) $4,000,396 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,

                                       53

lightning, windstorm, hail, explosion, riot, riot attending a strike, civil
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
4.04(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 from time to time.

Step Down Percentage: For any Distribution Date, the percentage indicated below:

      Distribution Date Occurring In         Step Down Percentage
      ------------------------------         --------------------
      June 2004 through May 2009                      0%
      June 2009 through May 2010                      30%
      June 2010 through May 2011                      40%
      June 2011 through May 2012                      60%
      June 2012 through May 2013                      80%
      June 2013 and thereafter                       100%

Stripped  Interest  Rate:  For each Mortgage  Loan,  the excess,  if any, of the
Pass-Through Rate for such Mortgage Loan over 6.000% per annum.

Subgroup: Subgroup 1, Subgroup 2 or Subgroup 3, as applicable.

Subgroup 1: The group of Mortgage Loans (or portions of Mortgage Loans)
comprised of the Subgroup 1 Loans.

                                       54

Subgroup 1 Certificates: The Class 1-A-1, Class 1-A-2, Class 1-A-3, Class 1-A-4
and Class 1-A-5 Certificates.

Subgroup 1 Loans:  The following Mortgage Loans or portions thereof:

(i) the Mortgage Loans with Pass-Through Rates less than or equal to 5.000%;

(ii) 75% of the Principal  Balance of any Mortgage Loan with a Pass-Through Rate
equal to 5.125%;

(iii) 50% of the Principal Balance of any Mortgage Loan with a Pass-Through Rate
equal to 5.250%; and

(iv) 25% of the Principal  Balance of any Mortgage Loan with a Pass-Through Rate
equal to 5.375%.

Subgroup 1 Lockout Adjusted Percentage: (i) For any Distribution Date occurring
before June 2009, 0% and (ii) for any Distribution Date occurring in or after
June 2009, the Subgroup 1 Lockout Percentage.

Subgroup 1 Lockout Liquidation Amount: For any Distribution Date, the aggregate,
for each Subgroup 1 Loan which became a Liquidated Mortgage Loan during the
Prior Period, of the lesser of (i) the Subgroup 1 Lockout Adjusted Percentage of
the Subgroup 1 Senior Percentage of the Principal Balance of such Mortgage Loan
(exclusive of the Class P Fraction of such balance for any Class P Mortgage
Loan) and (ii) the Subgroup 1 Lockout Adjusted Percentage of the Subgroup 1
Senior Prepayment Percentage of the Liquidation Principal with respect to such
Mortgage Loan.

Subgroup 1 Lockout Percentage: For any Distribution Date, the Class 1-A-5
Principal Balance, divided by the aggregate Principal Balance of the Subgroup 1
Certificates, in each case immediately before such Distribution Date.

Subgroup 1 Lockout Prepayment Percentage: For any Distribution Date, the product
of (i) the Subgroup 1 Lockout Percentage and (ii) the Step Down Percentage.

Subgroup 1 Lockout Priority Amount: For any Distribution Date, the sum of (i)
the Subgroup 1 Lockout Adjusted Percentage of the Subgroup 1 Senior Percentage
of the Principal Payment Amount for Subgroup 1 (exclusive of the Class P
Fraction of such balance for any Class P Mortgage Loan), (ii) the Subgroup 1
Lockout Prepayment Percentage of the Subgroup 1 Senior Prepayment Percentage of
the Principal Prepayment Amount for Subgroup 1 (exclusive of the Class P
Fraction of such balance for any Class P Mortgage Loan) and (iii) the Subgroup 1
Lockout Liquidation Amount.

Subgroup 1 Senior Principal Distribution Amount: For any Distribution Date, an
amount equal to the sum of (a) the Subgroup 1 Senior Percentage of the Principal
Payment Amount for Subgroup 1 (exclusive of the portion thereof attributable to
principal distributions to the Class P Certificates pursuant to clauses
(I)(a)(i) and (II)(a)(i) of the definition of "REMIC II Distribution Amount"),
(b) the Subgroup 1 Senior Prepayment Percentage of the Principal Prepayment

                                       55

Amount for Subgroup 1 (exclusive of the portion thereof attributable to
principal distributions to the Class P Certificates pursuant to clauses
(I)(a)(i) and (II)(a)(i) of the definition of "REMIC II Distribution Amount")
and (c) the Subgroup 1 Senior Liquidation Amount.

Subgroup 1 Senior Liquidation Amount: For any Distribution Date, the sum of (A)
the aggregate, for each Subgroup 1 Loan which became a Liquidated Mortgage Loan
during the Prior Period, of the lesser of: (i) the Subgroup 1 Senior Percentage
of the Principal Balance of such Mortgage Loan (or such portion thereof)
(exclusive of the Class P Fraction thereof, with respect to any Class P Mortgage
Loan) and (ii) the Subgroup 1 Senior Prepayment Percentage of the Liquidation
Principal with respect to such Mortgage Loan ( or such portion thereof) and (B)
the Subgroup 1 Senior Prepayment Percentage of any Subsequent Recoveries for
Subgroup 1 for such Distribution Date.

Subgroup 1 Senior Percentage: For any Distribution Date, the lesser of (i) 100%
and (ii) the aggregate Class Principal Balance of the Subgroup 1 Certificates
and Class R Certificates divided by the aggregate Principal Balance of the
Subgroup 1 Loans (exclusive of the Class P Fraction thereof with respect to any
Class P Mortgage Loan), in each case immediately before such Distribution Date.

Subgroup 1 Senior Prepayment Percentage, Subgroup 2 Senior Prepayment Percentage
or Subgroup 3 Senior Prepayment Percentage : For any Distribution Date, each of
the Subgroup 1 Senior Prepayment Percentage, the Subgroup 2 Senior Prepayment
Percentage and the Subgroup 3 Senior Prepayment Percentage shall equal 100%,
unless (i) the Subgroup 1 Senior Percentage for such Distribution Date is less
than or equal to the Subgroup 1 Senior Percentage as of the Closing Date, the
Subgroup 2 Senior Percentage for such Distribution Date is less than or equal to
the Subgroup 2 Senior Percentage as of the Closing Date and the Subgroup 3
Senior Percentage for such Distribution Date is less than or equal to the
Subgroup 3 Senior Percentage as of the Closing Date, (ii) such Distribution Date
occurs on or after the fifth anniversary of the first Distribution Date and
(iii) the following tests specified in clauses (a) through (f) are met with
respect to each of Subgroup 1, Subgroup 2 and Subgroup 3:

(a) the mean aggregate Principal Balance as of the Distribution Date in each of
the immediately preceding six calendar months of the Subgroup 1 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 less than
or equal to 50% of the Subordinate Component Balance for Subgroup 1 as of the
current Distribution Date,

(b) the mean aggregate Principal Balance as of the Distribution Date in each of
the immediately preceding six calendar months of the Subgroup 2 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 less than
or equal to 50% of the Subordinate Component Balance for Subgroup 2 as of the
current Distribution Date,

                                       56

(c) the mean aggregate Principal Balance as of the Distribution Date in each of
the immediately preceding six calendar months of the Subgroup 3 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 less than
or equal to 50% of the Subordinate Component Balance for Subgroup 3 as of the
current Distribution Date,

(d) cumulative Realized Losses on the Subgroup 1 Loans allocated to the Class B
Certificates, as a percentage of the Subordinate Component Balance for Subgroup
1 as of the Closing Date, are less than or equal to, for any Distribution Date
(1) before the sixth anniversary of the first Distribution Date, 30%, (2) on or
after the sixth anniversary but before the seventh anniversary of the first
Distribution Date, 35%, (3) on or after the seventh anniversary but before the
eighth anniversary of the first Distribution Date, 40%, (4) on or after the
eighth anniversary but before the ninth anniversary of the first Distribution
Date, 45%, and (5) on or after the ninth anniversary of the first Distribution
Date, 50%,

(e) cumulative Realized Losses on the Subgroup 2 Loans allocated to the Class B
Certificates, as a percentage of the Subordinate Component Balance for Subgroup
2 as of the Closing Date, are less than or equal to, for any Distribution Date
(1) before the sixth anniversary of the first Distribution Date, 30%, (2) on or
after the sixth anniversary but before the seventh anniversary of the first
Distribution Date, 35%, (3) on or after the seventh anniversary but before the
eighth anniversary of the first Distribution Date, 40%, (4) on or after the
eighth anniversary but before the ninth anniversary of the first Distribution
Date, 45%, and (5) on or after the ninth anniversary of the first Distribution
Date, 50%, and

(f) cumulative Realized Losses on the Subgroup 3 Loans allocated to the Class B
Certificates, as a percentage of the Subordinate Component Balance for Subgroup
3 as of the Closing Date, are less than or equal to, for any Distribution Date
(1) before the sixth anniversary of the first Distribution Date, 30%, (2) on or
after the sixth anniversary but before the seventh anniversary of the first
Distribution Date, 35%, (3) on or after the seventh anniversary but before the
eighth anniversary of the first Distribution Date, 40%, (4) on or after the
eighth anniversary but before the ninth anniversary of the first Distribution
Date, 45%, and (5) on or after the ninth anniversary of the first Distribution
Date, 50%,

in which case the Subgroup 1 Senior Prepayment Percentage, the Subgroup 2 Senior
Prepayment Percentage and the Subgroup 3 Senior Prepayment Percentage shall be
calculated as follows: (1) for any such Distribution Date on or after the fifth
anniversary but before the sixth anniversary of the first Distribution Date, the
Subgroup 1 Senior Percentage, the Subgroup 2 Senior Percentage or the Subgroup 3
Senior Percentage, as applicable, for such Distribution Date plus 70% of the
Subordinate Percentage for the related Subgroup for such Distribution Date; (2)
for any such Distribution Date on or after the sixth anniversary but before the
seventh anniversary of the first Distribution Date, the Subgroup 1 Senior
Percentage, Subgroup 2 Senior Percentage or the Subgroup 3 Senior Percentage, as
applicable, for such Distribution Date plus 60% of the Subordinate Percentage
for the related Subgroup for such Distribution Date; (3) for any such

                                       57

Distribution Date on or after the seventh anniversary but before the eighth
anniversary of the first Distribution Date, the Subgroup 1 Senior Percentage,
Subgroup 2 Senior Percentage or the Subgroup 3 Senior Percentage, as applicable,
for such Distribution Date plus 40% of the Subordinate Percentage for the
related Subgroup for such Distribution Date; (4) for any such Distribution Date
on or after the eighth anniversary but before the ninth anniversary of the first
Distribution Date, the Subgroup 1 Senior Percentage, Subgroup 2 Senior
Percentage or the Subgroup 3 Senior Percentage, as applicable, for such
Distribution Date plus 20% of the Subordinate Percentage for the related
Subgroup for such Distribution Date; and (5) for any such Distribution Date
thereafter, the Subgroup 1 Senior Percentage, Subgroup 2 Senior Percentage or
the Subgroup 3 Senior Percentage, as applicable, for such Distribution Date.

If on any Distribution Date the allocation to the Subgroup 1, Subgroup 2 or
Subgroup 3 Certificates of Principal Prepayments in the percentage required
would reduce the aggregate Class Principal Balance of such Certificates below
zero, the Subgroup 1 Senior Prepayment Percentage, the Subgroup 2 Senior
Prepayment Percentage or the Subgroup 3 Senior Prepayment Percentage, as
applicable, for such Distribution Date shall be limited to the percentage
necessary to reduce such Class Principal Balance to zero. Notwithstanding the
foregoing, however, on each Distribution Date, the Class P Certificates shall
receive the applicable Class P Fraction of all principal payments, including,
without limitation, Principal Prepayments, received in respect of Class P
Mortgage Loans.

Subgroup 1 Subordinate Balance: For any date of determination, an amount equal
to the then outstanding aggregate Principal Balance of the Subgroup 1 Loans
reduced by the sum of the aggregate Class Principal Balance of the Subgroup 1,
Class P and Residual Certificates.

Subgroup 1 Subordinate Percentage: For any Distribution Date, the excess of 100%
over the Subgroup 1 Senior Percentage for such date.

Subgroup 1 Subordinate Prepayment Percentage: For any Distribution Date, the
excess of 100% over the Subgroup 1 Senior Prepayment Percentage for such
Distribution Date; provided, however, that if the aggregate Class Principal
Balance of the Subgroup 1 and Class R Certificates has been reduced to zero,
then the Subgroup 1 Subordinate Prepayment Percentage shall equal 100%.

Subgroup 2: The group of Mortgage Loans (or portions of Mortgage Loans)
comprised of the Subgroup 2 Loans.

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

Subgroup 2 Loans:  The following Mortgage Loans or portions thereof:

(i) 25% of the Principal  Balance of any Mortgage Loan with a Pass-Through  Rate
equal to 5.125%;

(ii) 50% of the Principal  Balance of any Mortgage Loan with a Pass-Through Rate
equal to 5.250%;

                                       58

(iii) 75% of the Principal Balance of any Mortgage Loan with a Pass-Through Rate
equal to 5.375%;

(iv) the Mortgage Loans with Pass-Through Rates equal to 5.500%;

(v) 80% of the Principal  Balance of any Mortgage Loan with a Pass-Through  Rate
equal to 5.600%;

(vi) 75% of the Principal  Balance of any Mortgage Loan with a Pass-Through Rate
equal to 5.625%;

(vii) 70% of the Principal Balance of any Mortgage Loan with a Pass-Through Rate
equal to 5.650%;

(viii) 50% of the  Principal  Balance of any Mortgage  Loan with a  Pass-Through
Rate equal to 5.750%; and

(ix) 25% of the Principal  Balance of any Mortgage Loan with a Pass-Through Rate
equal to 5.875%.

Subgroup 2 Lockout Adjusted Percentage: (i) For any Distribution Date occurring
before June 2009, 0% and (ii) for any Distribution Date occurring in or after
June 2009, the Subgroup 2 Lockout Percentage.

Subgroup 2 Lockout Liquidation Amount: For any Distribution Date, the aggregate,
for each Subgroup 2 Loan which became a Liquidated Mortgage Loan during the
Prior Period, of the lesser of (i) the Subgroup 2 Lockout Adjusted Percentage of
the Subgroup 2 Senior Percentage of the Principal Balance of such Mortgage Loan
and (ii) the Subgroup 2 Lockout Adjusted Percentage of the Subgroup 2 Senior
Prepayment Percentage of the Liquidation Principal with respect to such Mortgage
Loan.

Subgroup 2 Lockout Percentage: For any Distribution Date, the aggregate Class
Principal Balance of the Class 2-A-5 and Class 2-A-6 Certificates, divided by
the aggregate Principal Balance of the Subgroup 2 Certificates, in each case
immediately before such Distribution Date.

Subgroup 2 Lockout Prepayment Percentage: For any Distribution Date, the product
of (i) the Subgroup 2 Lockout Percentage and (ii) the Step Down Percentage.

Subgroup 2 Lockout Priority Amount: For any Distribution Date, the sum of (i)
the Subgroup 2 Lockout Adjusted Percentage of the Subgroup 2 Senior Percentage
of the Principal Payment Amount for Subgroup 2, (ii) the Subgroup 2 Lockout
Prepayment Percentage of the Subgroup 2 Senior Prepayment Percentage of the
Principal Prepayment Amount for Subgroup 2 and (iii) the Subgroup 2 Lockout
Liquidation Amount.

Subgroup 2 Senior Principal Distribution Amount: For any Distribution Date, an
amount equal to the sum of (a) the Subgroup 2 Senior Percentage of the Principal
Payment Amount for Subgroup 2, (b) the Subgroup 2 Senior Prepayment Percentage
of the Principal Prepayment Amount for Subgroup 2 and (c) the Subgroup 2 Senior
Liquidation Amount.

                                       59

Subgroup 2 Senior Liquidation Amount: For any Distribution Date, the sum of (A)
the aggregate, for each Subgroup 2 Loan which became a Liquidated Mortgage Loan
during the Prior Period, of the lesser of: (i) the Subgroup 2 Senior Percentage
of the Principal Balance of such Mortgage Loan (or such portion thereof) and
(ii) the Subgroup 2 Senior Prepayment Percentage of the Liquidation Principal
with respect to such Mortgage Loan (or such portion thereof) and (B) the
Subgroup 2 Senior Prepayment Percentage of any Subsequent Recoveries for
Subgroup 2 for such Distribution Date.

Subgroup 2 Senior Percentage: For any Distribution Date, the lesser of (i) 100%
and (ii) the aggregate Class Principal Balance of the Subgroup 2 Certificates
divided by the aggregate Principal Balance of the Subgroup 2 Loans, in each case
immediately before such Distribution Date.

Subgroup 2 Senior  Prepayment  Percentage:  See the  definition  of  "Subgroup 1
Senior  Prepayment  Percentage,  Subgroup  2  Senior  Prepayment  Percentage  or
Subgroup 3 Senior Prepayment Percentage."

Subgroup 2 Subordinate Balance: For any date of determination, an amount equal
to the then outstanding aggregate Principal Balance of the Subgroup 2 Loans
reduced by the aggregate Class Principal Balance of the Subgroup 2 Certificates.

Subgroup 2 Subordinate Percentage: For any Distribution Date, the excess of 100%
over the Subgroup 2 Senior Percentage for such date.

Subgroup 2 Subordinate Prepayment Percentage: For any Distribution Date, the
excess of 100% over the Subgroup 2 Senior Prepayment Percentage for such
Distribution Date; provided, however, that if the aggregate Class Principal
Balance of the Subgroup 2 Certificates has been reduced to zero, then the
Subgroup 2 Subordinate Prepayment Percentage shall equal 100%.

Subgroup 3: The group of Mortgage Loans (or portions of Mortgage Loans)
comprised of the Subgroup 3 Loans.

Subgroup  3  Certificates:   The  Class  3-A-1,  Class  3-A-2  and  Class  3-A-3
Certificates.

Subgroup 3 Loans:  The following Mortgage Loans or portions thereof:

(i) 20% of the Principal  Balance of any Mortgage Loan with a Pass-Through  Rate
equal to 5.600%;

(ii) 25% of the Principal  Balance of any Mortgage Loan with a Pass-Through Rate
equal to 5.625%;

(iii) 30% of the Principal Balance of any Mortgage Loan with a Pass-Through Rate
equal to 5.625%;

(iv) 50% of the Principal  Balance of any Mortgage Loan with a Pass-Through Rate
equal to 5.750%;

                                       60

(v) 75% of the Principal  Balance of any Mortgage Loan with a Pass-Through  Rate
equal to 5.875%; and

(ii) the Mortgage Loans with Pass-Through Rates greater than or equal to 6.000%.

Subgroup 3 Lockout Adjusted Percentage: (i) For any Distribution Date occurring
before June 2009, 0% and (ii) for any Distribution Date occurring in or after
June 2009, the Subgroup 3 Lockout Percentage.

Subgroup 3 Lockout Liquidation Amount: For any Distribution Date, the aggregate,
for each Subgroup 3 Loan which became a Liquidated Mortgage Loan during the
Prior Period, of the lesser of (i) the Subgroup 3 Lockout Adjusted Percentage of
the Subgroup 3 Senior Percentage of the Principal Balance of such Mortgage Loan
and (ii) the Subgroup 3 Lockout Adjusted Percentage of the Subgroup 3 Senior
Prepayment Percentage of the Liquidation Principal with respect to such Mortgage
Loan.

Subgroup 3 Lockout Percentage: For any Distribution Date, the Class 3-A-3
Principal Balance, divided by the aggregate Principal Balance of the Subgroup 3
Certificates, in each case immediately before such Distribution Date.

Subgroup 3 Lockout Prepayment Percentage: For any Distribution Date, the product
of (i) the Subgroup 3 Lockout Percentage and (ii) the Step Down Percentage.

Subgroup 3 Lockout Priority Amount: For any Distribution Date, the sum of (i)
the Subgroup 3 Lockout Adjusted Percentage of the Subgroup 3 Senior Percentage
of the Principal Payment Amount for Subgroup 3, (ii) the Subgroup 3 Lockout
Prepayment Percentage of the Subgroup 3 Senior Prepayment Percentage of the
Principal Prepayment Amount for Subgroup 3 and (iii) the Subgroup 3 Lockout
Liquidation Amount.

Subgroup 3 Senior Principal Distribution Amount: For any Distribution Date, an
amount equal to the sum of (a) the Subgroup 3 Senior Percentage of the Principal
Payment Amount for Subgroup 3, (b) the Subgroup 3 Senior Prepayment Percentage
of the Principal Prepayment Amount for Subgroup 3 and (c) the Subgroup 3 Senior
Liquidation Amount.

Subgroup 3 Senior Liquidation Amount: For any Distribution Date, the sum of (A)
the aggregate, for each Subgroup 3 Loan which became a Liquidated Mortgage Loan
during the Prior Period, of the lesser of: (i) the Subgroup 3 Senior Percentage
of the Principal Balance of such Mortgage Loan (or such portion thereof) and
(ii) the Subgroup 3 Senior Prepayment Percentage of the Liquidation Principal
with respect to such Mortgage Loan (or such portion thereof) and (B) the
Subgroup 3 Senior Prepayment Percentage of any Subsequent Recoveries for
Subgroup 3 for such Distribution Date.

Subgroup 3 Senior Percentage: For any Distribution Date, the lesser of (i) 100%
and (ii) the aggregate Class Principal Balance of the Subgroup 3 Certificates
divided by the aggregate Principal Balance of the Subgroup 3 Loans, in each case
immediately before such Distribution Date.

                                       61

Subgroup 3 Senior  Prepayment  Percentage:  See the  definition  of  "Subgroup 1
Senior  Prepayment  Percentage,  Subgroup  2  Senior  Prepayment  Percentage  or
Subgroup 3 Senior Prepayment Percentage."

Subgroup 3 Subordinate Balance: For any date of determination, an amount equal
to the then outstanding aggregate Principal Balance of the Subgroup 3 Loans
reduced by the Class Principal Balance of the Subgroup 3 Certificates.

Subgroup 3 Subordinate Percentage: For any Distribution Date, the excess of 100%
over the Subgroup 3 Senior Percentage for such date.

Subgroup 3 Subordinate Prepayment Percentage: For any Distribution Date, the
excess of 100% over the Subgroup 3 Senior Prepayment Percentage for such
Distribution Date; provided, however, that if the Class Principal Balance of the
Subgroup 3 Certificates has been reduced to zero, then the Subgroup 3
Subordinate Prepayment Percentage shall equal 100%.

Subordinate Certificates:  The Class B Certificates.

Subordinate Component Balance: With respect to Subgroup 1 for any date of
determination, the then outstanding aggregate Principal Balance of the Subgroup
1 Loans (less the applicable Class P Fraction thereof with respect to any Class
P Mortgage Loan) minus the then outstanding aggregate Class Principal Balance of
the Subgroup 1 and Residual Certificates. With respect to Subgroup 2 for any
date of determination, the then outstanding aggregate Principal Balance of the
Subgroup 2 Loans minus the then outstanding aggregate Class Principal Balance of
the Subgroup 2 Certificates. With respect to Subgroup 3 for any date of
determination, the then outstanding aggregate Principal Balance of the Subgroup
3 Loans minus the then outstanding aggregate Class Principal Balance of the
Subgroup 3 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 for Subgroup 1, Subgroup 2 and
Subgroup 3, over the sum of the Subgroup 1 Senior Liquidation Amount, the
Subgroup 2 Senior Liquidation Amount and the Subgroup 3 Senior Liquidation
Amount for such Distribution Date.

Subordinate  Percentage:  The  Subgroup  1  Subordinate  Percentage,  Subgroup 2
Subordinate Percentage or Subgroup 3 Subordinate Percentage, as applicable.

Subordinate Principal Distribution Amount: For any Distribution Date, the excess
of (A) the sum of (i) the Subgroup 1 Subordinate Percentage of the Principal
Payment Amount for Subgroup 1 (exclusive of the portion thereof attributable to
principal distributions to the Class P Certificates pursuant to clause (I)(a)(i)
of the definition of "REMIC II Distribution Amount"), (ii) the Subgroup 2
Subordinate Percentage of the Principal Payment Amount for Subgroup 2, (iii) the
Subgroup 3 Subordinate Percentage of the Principal Payment Amount for Subgroup
3, (iv) the Subordinate Principal Prepayments Distribution Amount (without
regard to the proviso in the definition thereof) and (v) the Subordinate
Liquidation Amount over (B) the amounts required to be distributed to the Class
P Certificates pursuant to clauses (I)(d)(i) and (I)(d)(ii) of the definition of
"REMIC II Distribution Amount" on such Distribution Date.

                                       62

On 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
clause (I)(d) of the definition of "REMIC II Distribution Amount" except as
otherwise stated in such definition. Notwithstanding the foregoing, on any
Distribution Date prior to distributions on such date, if the Subordination
Level for any Class of Class B Certificates is less than such Subordination
Level as of the Closing Date, the pro rata portion of the Subordinate Principal
Prepayments Distribution Amount otherwise allocable to the Class or Classes of
Class B Certificates junior to such Class will be distributed to the most senior
Class of Class B Certificates for which the Subordination Level is less than the
Subordination Level as of the Closing Date, and to the Class or Classes of Class
B Certificates senior thereto, 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 sum of (i) the Subgroup 1 Subordinate Prepayment Percentage of the
Principal Prepayment Amount for Subgroup 1 (exclusive of the portion thereof
attributable to principal distributions to the Class P Certificates pursuant to
clause (I)(a)(i) of the definition of "REMIC II Distribution Amount"), (ii) the
Subgroup 2 Subordinate Prepayment Percentage of the Principal Prepayment Amount
for Subgroup 2 and (iii) the Subgroup 3 Subordinate Prepayment Percentage of the
Principal Prepayment Amount for Subgroup 3; provided, however, that if the
amount specified in clause (B) of the definition of "Subordinate Principal
Distribution Amount" is greater than the sum of the amounts specified in clauses
(A)(i), (A)(ii), (A)(iii) and (A)(v) of such definition, then the Subordinate
Principal Prepayments Distribution Amount shall be reduced by the amount of such
excess.

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 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 and allocations of Realized Losses on the Mortgage Loans
on such date.

Subsequent Recoveries: For any Distribution Date and any Subgroup, 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 (or portions of Mortgage Loans) in such
Subgroup after such Mortgage Loans (or portions thereof) became Liquidated
Mortgage Loans, for each such Mortgage Loan (or portions thereof) up to the
amount of Realized Losses, if any, previously allocated in respect of such
Mortgage Loan (or portions thereof) 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: With respect to each of REMIC I and REMIC II, 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

                                       63

Certificate. The Company is hereby appointed to act as the Tax Matters Person
for REMIC I and REMIC II 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 and REMIC II, 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 and REMIC II, to perform the functions of such Tax Matters Person as
provided herein. If the Tax Matters Person for REMIC I and REMIC II 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).

Total Transfer Amount: For any Distribution Date and for any Undercollateralized
Subgroup, an amount equal to the sum of the Interest Transfer Amount and the
Principal Transfer Amount for such Undercollateralized Subgroup.

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-S2 Trust, a Delaware
statutory trust, created pursuant to this Agreement.

Trustee:  U.S.  Bank  National  Association,  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.

                                       64

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 each Class of
Certificates (other than the Class R Certificates) pro rata according to the
amount of interest accrued but unpaid thereon, in reduction thereof.

Uncompensated Interest Shortfall shall be allocated to the REMIC I Regular
Interests pro rata according to the amount of interest accrued but unpaid on
each such Class, in reduction thereof.

Undercollateralized Subgroup: For any Distribution Date, Subgroup 1, if
immediately prior to such Distribution Date the aggregate Class Principal
Balance of the Subgroup 1 and Residual Certificates is greater than the
aggregate Principal Balance of the Subgroup 1 Loans (less the applicable Class P
Fraction thereof with respect to each Class P Mortgage Loan); for any
Distribution Date, Subgroup 2, if immediately prior to such Distribution Date
the Class Principal Balance of the Subgroup 2 Certificates is greater than the
aggregate Principal Balance of the Subgroup 2 Loans; and for any Distribution
Date, Subgroup 3, if immediately prior to such Distribution Date the Class
Principal Balance of the Subgroup 3 Certificates is greater than the aggregate
Principal Balance of the Subgroup 3 Loans.

Underwriters: Goldman, Sachs & Co.

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

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.

                                       65

                                   ARTICLE II

    Creation of the Trust; Conveyance of the Mortgage Pool Assets and REMIC I
              Regular Interests; 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-S2 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 and the REMIC II Assets;

(ii) to issue the REMIC I Regular Interests, the Class R-1 and Class R-2
Residual Interests and the Certificates;

(iii) to make distributions to the REMIC I Regular Interests and 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.

U.S. Bank National Association 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 expressly set forth hereunder, and U.S. Bank National Association hereby
accepts such appointment and the Trust created hereby. Christiana Bank & Trust
Company 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 Christiana Bank & Trust Company 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 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 U.S. Bank National Association or Christiana Bank & Trust
Company 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.

                                       66

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 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.

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;

                                       67

(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;

(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
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;

                                       68

(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 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
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

(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

                                       69

interest in the Mortgage Pool 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.

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.

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

                                       70

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
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
"U.S. Bank National Association, as Custodian/Trustee, without recourse" or to
"WaMu Mortgage Pass-Through Certificates Series 2004-S2 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.

                                       71

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-1 Residual Interest is hereby designated as the sole class of "residual
interest" in REMIC I for purposes of Section 860G(a)(2) of the Code. The REMIC I
Regular Interests and the Class R-1 Residual Interest shall together be deemed
to be a separate series of beneficial interests in the assets of the Trust
consisting of the REMIC I Assets pursuant to Section 3806(b)(2) of the Statutory
Trust Statute.

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 Holders of the REMIC
I Regular Interests and the Class R-1 Residual Interest 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 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 the REMICs.

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

                                       72

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-1 Residual Interest.
Notwithstanding anything to the contrary contained herein, the Trustee is hereby
authorized to retain from amounts otherwise distributable to the Class R-1
Residual Interest 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 as Trustee of the Trust for the benefit of the holders of the REMIC I
Regular Interests and the Class R-1 Residual Interest. 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 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

                                       73

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 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 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 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 REMIC I Regular Interests or the Class R-1 Residual Interest.

                                       74

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 relating to a Mortgage Loan that is
not a Cooperative Loan 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) 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;

                                       75

(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 that is not a Cooperative 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;

(xi) Each Mortgage Loan with a Loan-to-Value Ratio as of the Cut-Off Date in
excess of 80% was 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
relating to a Mortgage Loan that is not a Cooperative Loan 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;

                                       76

(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 96.82% (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 3.18% (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 no Mortgage Loan will be secured by Mortgaged Properties
which were investor properties of the related Mortgagors;

(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;

(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;

(xxiii) The Company used no adverse selection procedures in selecting the
Mortgage Loans from among the outstanding fixed-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 each Cooperative Loan, the Cooperative Stock that is
pledged as security for the Cooperative Loan is held by a person as a
tenant-stockholder (as defined in Section 216 of the Code) in a cooperative
housing corporation (as defined in Section 216 of the Code);

(xxv) Each Cooperative Loan is secured by a valid, subsisting and enforceable
(except as such enforcement may be limited by laws affecting the enforcement of
creditors' rights generally and principles of equity) perfected first lien and
security interest in the related Cooperative Stock securing the related Mortgage
Note, subject only to (a) liens of the Cooperative for unpaid assessments
representing the Mortgagor's pro rata share of the Cooperative's payments for
its blanket mortgage, current and future real property taxes, insurance
premiums, maintenance fees and other assessments to which like collateral is
commonly subject, and (b) other matters to which like collateral is commonly
subject which do not materially interfere with the benefits of the security
intended to be provided by the Security Agreement;

(xxvi) 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

                                       77

enforcement of such Mortgage Loan or of the related Mortgage by or on behalf of
the Trustee will not be materially adversely affected by the absence of the
original Mortgage Note (or portion thereof, as applicable);

(xxvii) Based upon an appraisal of the Mortgaged Property securing each Mortgage
Loan, approximately 97.74% (by Principal Balance) of the Mortgage Loans had a
current Loan-to-Value Ratio less than or equal to 80%, approximately 2.26% (by
Principal Balance) of the Mortgage Loans had a current Loan-to-Value Ratio
greater than 80% but less than or equal to 95% and no Mortgage Loan had a
current Loan-to-Value Ratio greater than 95%;

(xxviii) Approximately 66.82% (by Principal Balance) of the Mortgage Loans were
originated for the purpose of refinancing existing mortgage debt, including
cash-out refinancings; and approximately 33.18% (by Principal Balance) of the
Mortgage Loans were originated for the purpose of purchasing the Mortgaged
Property;

(xxix) Not less than approximately 83.20% (by Principal Balance) of the Mortgage
Loans were originated under full documentation programs;

(xxx) 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;
and

(xxxi) 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).

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
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 (xxx) 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

                                       78

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 REMIC I Regular
Interests and the Class R-1 Residual Interest or the Trustee on behalf of the
Holders of the REMIC I Regular Interests and the Class R-1 Residual Interest.

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 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 REMIC I Regular Interests and the Class R-1 Residual
Interest. In connection therewith, as of the Closing Date, in exchange for the
Mortgage Pool Assets, the Trustee on behalf of the Trust does hereby issue to
the Company the REMIC I Regular Interests and the Class R-1 Residual Interest.

SECTION 2.10. Conveyance of REMIC I 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 REMIC II Assets.
Pursuant to Section 3818 of the Statutory Trust Statute, the REMIC I Regular
Interests shall not be cancelled and shall be held as treasury interests owned
by the Trust. The Trustee acknowledges that the REMIC II Assets are held by it
as Trustee of the Trust for the benefit of the holders of the Certificates. It
is the express intent of the parties hereto that the conveyance of the REMIC II
Assets to the Trust by the Company as provided in this Section 2.10 be, and be
construed as, an absolute sale of the REMIC II Assets. It is, further, not the
intention of the parties that such conveyance be deemed the grant of a security
interest in the REMIC II 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 REMIC II 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 REMIC II Assets, then

(a) this Agreement shall constitute a security agreement;

(b) the conveyance provided for in this Section 2.10 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 REMIC I Regular Interests, including without limitation all rights
represented thereby in and to the Mortgage Pool Assets and the proceeds thereof;

                                       79

(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 REMIC II 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 this 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.

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
2.10, and to enter into a Custodial Agreement for such purpose; provided,
however, that the Trustee shall be and remain liable for actions of any such
Custodian only to the extent it would otherwise be responsible for such 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
documents, instruments, and property held by it at any time are held by it for
the benefit of the Trust.

SECTION 2.11.     REMIC Election for REMIC II.

The Tax Matters Person shall, on behalf of REMIC II, elect to treat REMIC II 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 II for its first taxable
year.

The Closing Date is hereby designated as the "startup day" of REMIC II 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 II are hereby designated as "regular
interests" in REMIC II for purposes of Section 860G(a)(1) of the Code. The Class
R-2 Residual Interest is hereby designated as the sole class of "residual
interest" in REMIC II for purposes of Section 860G(a)(2) of the Code. The REMIC
II Regular Interests and the Class R-2 Residual Interest shall together be
deemed to be a separate series of beneficial interests in the assets of the
Trust consisting of the REMIC II Assets pursuant to Section 3806(b)(2) of the
Statutory Trust Statute.

                                       80

The parties intend that the affairs of REMIC II shall constitute, and that the
affairs of REMIC II shall be conducted so as to qualify it as, a REMIC. In
furtherance of such intention, the Tax Matters Person shall, on behalf of REMIC
II: (a) prepare and file, or cause to be prepared and filed, a federal tax
return using a calendar year as the taxable year for REMIC II when and as
required by the REMIC provisions and other applicable federal income tax laws;
(b) make an election, on behalf of REMIC II, to be treated as a REMIC on the
federal tax return of REMIC II 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 Holders of the Class R-2 Residual
Interest all information reports as and when required to be provided to them in
accordance with the REMIC provisions; (d) conduct the affairs of REMIC II at all
times that any of the Certificates are outstanding so as to maintain the status
of REMIC II 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 II; and (f) pay the amount of any
federal prohibited transaction penalty taxes imposed on REMIC II 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 from REMIC II 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.

In the event that any tax is imposed on "prohibited transactions" of REMIC II as
defined in Section 860F of the Code and not paid by the Company pursuant to
clause (f) of the preceding paragraph, such tax shall be charged against amounts
otherwise distributable to the Holders of the Class R-2 Residual Interest.
Notwithstanding anything to the contrary contained herein, the Company is hereby
authorized to retain from amounts otherwise distributable to the Holders of the
Class R-2 Residual Interest on any Distribution Date sufficient funds to
reimburse the Company for the payment of such tax (to the extent that the
Company has not been previously reimbursed therefor).

SECTION 2.12. Acknowledgement of Transfer of REMIC II Assets; Authentication of
Certificates. The Trustee hereby acknowledges and accepts on behalf of the Trust
the assignment to the Trust of the REMIC II Assets and declares that as of the
Closing Date it holds and shall hold any documents constituting a part of the
REMIC II Assets, and the REMIC II 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 (other than the Class R Certificates) and the Class R-2
Residual Interest. In connection therewith, as of the Closing Date, in exchange
for the REMIC II 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  2.13.  Legal  Title.  Legal  title to all assets of the Trust  shall be
vested at all times in the Trust as a separate legal entity.

SECTION 2.14. 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 extent permitted

                                       81

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 2.15. 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 (xxxi) 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 and for the benefit of the Certificateholders 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

                                       82

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 collectibility 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

                                       83

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 any REMIC 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 collectibility of, such Mortgage Loan would not be
adversely affected thereby and that REMIC I and REMIC II would not fail to
continue to qualify as REMICs under the Code as a result thereof and that no tax
on "prohibited transactions" or "contributions" after the startup day would be
imposed on any REMIC 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 REMIC I Regular Interests and the Class R-1 Residual Interest, 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 REMIC I
Regular Interests and the Class R-1 Residual Interest 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 and each Servicer shall obtain (to the extent generally
commercially available) and maintain fidelity bond and errors and omissions
coverage acceptable to Fannie Mae or Freddie Mac with respect to their
obligations under this Agreement and the applicable Selling and Servicing
Contract, respectively. The Master Servicer or each Servicer, as applicable,
shall establish escrow accounts for, or pay when due (by means of an advance),
any tax liens in connection with the Mortgaged Properties that are not paid by

                                       84

the Mortgagors when due to the 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 amounts related to the Mortgage Loans required by
the Selling and Servicing Contracts to be so deposited. 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. Such proceeds (other than proceeds from any Special Primary Insurance
Policy), if not required for the restoration or repair of the related Mortgaged
Property, 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.;

(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.

                                       85

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 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
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

                                       86

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 May
1, 2004, among Washington Mutual Mortgage Securities Corp., as Depositor and
Master Servicer, and U.S. Bank National Association, as the Trustee, and
Christiana Bank & Trust Company, as the Delaware Trustee, for the benefit of
WaMu Mortgage Pass-Through Certificates Series 2004-S2 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 REMIC I Regular Interests and the Class R-1 Residual Interest 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
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.

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

                                       87

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;

(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 4.04(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.

                                       88

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 or the applicable
Servicer shall keep and maintain separate accounting for each Mortgage Loan, for
the purpose of justifying any such withdrawals.

(b) The Master Servicer (or the applicable Servicer, if such Servicer holds and
maintains a Buydown Fund Account) is authorized 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 pursuant to
Section 7.01(a) hereof that it has determined to be Nonrecoverable Advances.

(d) Each Servicer is authorized to make withdrawals, from time to time, from the
related Custodial Account for P&I, (i) to pay to itself, with respect to the
related Mortgage Loans, the Servicing Fee and (ii) to reimburse itself for
expenses to the same extent that the Master Servicer is authorized to make
withdrawals to reimburse the Servicer for expenses pursuant to clauses (i), (ii)
and (iv) of Section 3.05(a), in the case of each of clause (d)(i) and (d)(ii),
to the extent no prior withdrawals of such amounts have been made by the
Servicer or the Master Servicer.

SECTION 3.06. Maintenance of Primary Insurance Policies; Collections Thereunder.
The Master Servicer shall use commercially reasonable efforts to keep, and 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, in the manner set forth in the applicable Selling and Servicing
Contract, 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

                                       89

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 from 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 or the applicable
Servicer shall be responsible for paying 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

                                       90

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 the REMICs
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.

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

                                       91

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 provided in 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
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

                                       92

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
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,
REMIC II 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

                                       93

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 or the Certificate Account the amounts
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

                                       94

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
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.]

                                       95

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
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 Holders of REMIC I Regular Interests and Class
R-1 Residual Interest. On each Distribution Date, the Trustee (or any duly
appointed paying agent) (i) shall be deemed to have distributed from the
Certificate Account the REMIC I Distribution Amount to the Holders of the REMIC
I Regular Interests and to have deposited such amount for their benefit into the
Certificate Account and (ii) from the Certificate Account shall distribute to
the Class R Certificateholders, in accordance with the written statement
received from the Master Servicer pursuant to Section 4.02(b), the sum of (a)
the Excess Liquidation Proceeds and (b) the amounts to be distributed to the
Holders of the Class R-1 Residual Interest pursuant to the definition of "REMIC
I Distribution Amount" for such Distribution Date. Amounts distributed pursuant
to clause (ii) above shall be distributed by wire transfer in immediately
available funds for the account of each Class R Certificateholder, or by any
other means of payment acceptable to each Class R 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

                                       96

and at the address of such Holder appearing in the Certificate Register.
Notwithstanding any other provision of this Agreement, no actual distributions
pursuant to clause (i) of this Section 4.01 shall be made on account of the
deemed distributions described in this paragraph except in the event of a
liquidation of REMIC II and not REMIC I.

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. 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
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.

                                       97

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) Principal Prepayments, (vi) Liquidation Principal,
(vii) Subsequent Recoveries, (viii) the principal portion of Realized Losses
(after giving effect to any reduction thereof by application of any Cumulative
Carry-Forward Subsequent Recoveries Amount), (ix) the Residual Distribution
Amount and (x) 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 definitions of "REMIC I
Distribution Amount" and "REMIC II Distribution Amount," Section 4.01 and
Section 4.04 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 each Subgroup; 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.  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 REMIC II
Available Distribution Amount for such Distribution Date and distribute, from
the amount so withdrawn, to the extent of the REMIC II Available Distribution
Amount, the REMIC II Distribution Amount to the Certificateholders (including

                                       98

the Class R Certificateholders with respect to any distribution to the Holders
of the Class R-2 Residual Interest), 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 means of payment acceptable to the insurer under the
respective Special Primary Insurance Policy. 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 REMIC II 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 4.04(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 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:
(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 4.05. 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 Corporate Trust home page on the world
wide web. Such web page is currently located at

                                       99

"corporatetrust.statestreet.com." Mortgage-Backed Securities information is
currently available by clicking the "Bondholder Reporting" button and selecting
the appropriate transaction. 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."

                                   ARTICLE V

                                The Certificates

SECTION 5.01.     The Certificates.

(a) The Certificates shall be substantially in the forms set forth in Exhibit A
and B 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

                                      100

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
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.

                                      101

(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.

(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

                                      102

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
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

                                      103

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,
and REMIC II to cease to qualify as a REMIC and will not create a risk that (1)
REMIC I and REMIC II 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
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 and REMIC II, while not a
Disqualified Organization, shall be the tax matters person for the related REMIC
within the meaning of Section 6231(a)(7) of the Code and Treasury Regulation
Section 1.860F-4(d).

                                      104

(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 18 of the
form attached hereto as Exhibit J and (ii) only if the representation set forth
in such paragraph 18 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).

(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

                                      105

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 Sections 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
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.

                                      106

(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
Underwriter 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 Corporate Trust Office of the Trustee or at the office of U.S. Bank National
Association, U.S. Bank Trust New York, 100 Wall Street, Suite 1600, New York, NY
10005, Attention: Corporate Trust Window, 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 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.

                                      107

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 II (or with
respect to the Class R Certificates, the residual ownership interests in REMIC I
and REMIC II) 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 Section 4.04 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
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

                                      108

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;

(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

                                      109

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 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, at its option,
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
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.

                                      110

SECTION 5.10. Office for Transfer of Certificates. The Trustee shall maintain in
Massachusetts and in New York, New York, an office or agency where Certificates
may be surrendered for registration of transfer or exchange. The Corporate Trust
Office and U.S. Bank National Association, U.S. Bank Trust New York, 100 Wall
Street, Suite 1600, New York, NY 10005, Attention: Corporate Trust Window are
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
under any liability to the Trust, the Holders of the REMIC I Regular Interests
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,

                                      111

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
Master Servicer, shall furnish the Company and the Trustee with its most recent

                                      112

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 II; 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 II; 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

                                      113

(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 II, 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)
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.

                                      114

(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 II; 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 II, 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
II 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
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

                                      115

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.

                                      116

                                  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 to it 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 II
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.

(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

                                      117

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.

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 II;
provided, however, that if the payment within a reasonable time to the Trustee
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 (as in the case
of the Initial Custodian) or designated by the Company;

                                      118

(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 or the other trustee (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;

(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; and

(ix) Except as expressly provided in this Agreement, in no event shall the
Trustee be under any duty or obligation to monitor, determine, investigate or
compel compliance by the Trust with the requirements of the Statutory Trust
Statute.

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 or the Trust,
as applicable, 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 or the Trust, as applicable, 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.

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.

                                      119

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 and any expenses which arise out of or are imposed upon the
Trustee or the Delaware Trustee in connection with the creation, operation or
termination of the Trust) except any such expense or disbursement as may arise
from its own 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, REMIC II or REMIC II 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

                                      120

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.

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 II 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
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.

                                      121

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
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

                                      122

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 an 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
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

                                      123

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, Section 4.04(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 an 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.

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

                                      124

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 REMIC I Regular Interests or 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.

SECTION 8.15. Limitation of Liability. It is expressly understood and agreed by
the parties hereto that (a) each of the representations, undertakings and
agreements herein made on the part of the Trust is made and intended not as
personal representations, undertakings and agreements by the Trustee but is made
and intended for the purpose of binding only the Trust and (b) under no
circumstances shall the Trustee be personally liable for the payment of any
indebtedness or expenses of the Trust or be liable for the breach or failure of
any obligation, representation, warranty or covenant made or undertaken by the
Trust under this Agreement.

                                   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 any 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

                                      125

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 any REMIC formed under this Agreement, any such appraisal to be
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 any 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 any 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 any 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) Notice of any termination, 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 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

                                      126

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 Delaware
Trustee shall prepare, the Trustee, the Delaware Trustee and any other trustee
hereunder shall sign, and the Delaware Trustee (upon the Trustee's consent
acting at the direction of the Master Servicer) 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 this
Section 9.01 and 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 and REMIC II 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 and REMIC II 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 and REMIC II as described in Section 860F of the Code, or (ii) cause
REMIC I or REMIC II 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 and REMIC II 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 REMIC II; and

                                      127

(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 as agent of the
Trust shall sell all of the assets of REMIC I and REMIC II to the Master
Servicer for cash in the amount specified in Section 9.01.

(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 upon the written request of the Tax Matters Person and
the Trustee and to take such other action in connection therewith as may be
reasonably requested by the Tax Matters Person or the Trustee.

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 REMIC II, or to assure the conveyance to the Trust of any property included
in REMIC I or REMIC II;

(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

                                      128

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
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 any 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 II 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 REMIC II, 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 on direction by the Trustee, but only upon direction
accompanied by an Opinion of Counsel to the effect that such recordation
materially and beneficially affects the interests of the Certificateholders.
Without limiting the foregoing, the Trustee shall make the filings required by
Chapter 182 of the Massachusetts General Laws.

                                      129

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
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 II 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.

                                      130

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.

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
laws 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.

                                      131

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;

(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 4.05, 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

                                      132

statements or determinations are required to be provided to Certificateholders.
With respect to the reports described in the second paragraph of Section 4.05,
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.

                                      133

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

                              U.S. BANK NATIONAL ASSOCIATION,
                              as Trustee

                              By: /s/ David Duclos
                                   Name:  David Duclos
                                   Title: Vice President

                              CHRISTINA BANK & TRUST COMPANY,
                              as Delaware Trustee

                              By: /s/ James M. Young
                                   Name:  James. M. Young
                                   Title: Assistant Vice President

             [Signature page to Pooling and Servicing Agreement for
                     Washington Mutual MSC Series 2004-S2]

                         ACKNOWLEDGEMENT OF CORPORATION

         STATE OF WASHINGTON        )
                                    )  SS.
         COUNTY OF KING             )

     I certify that I know or have  satisfactory  evidence that Barbara Loper is
the person who appeared before me, and said person  acknowledged  that he signed
this  instrument,  on  oath  stated  that.  he was  authorized  to  execute  the
instrument  and  acknowledged  it as the Vice  President  of  WASHINGTON  MUTUAL
MORTGAGE  SECURITIES  CORP.,  to be the free and voluntary act of such party for
the uses and purposes mentioned therein.

         Dated this 25th day of May, 2004.

        /s/ Chriselda Landon
         Notary Public in and for the State of Washington,
         residing at Seattle
         My commission expires:  2/26/2007

                                 ACKNOWLEDGEMENT

         COMMONWEALTH OF MASSACHUSETTS      )
                                            )  SS.
         COUNTY OF SUFFOLK                  )

     On this ___ day of May 2004  before  me, a Notary  Public in and for said
State,  personally appeared David Duclos, Vice President  personally known to me
(or  proved to me on the basis of  satisfactory  evidence)  to be the  person(s)
whose name(s) is/are  subscribed to the within instrument and acknowledged to me
that he/she/they executed the same in his/her/their authorized capacit(ies), and
that by  his/her/their  signature(s)  on the instrument  the  person(s),  or the
entity upon behalf of which the person(s) acted, executed the instrument.

         WITNESS my hand and official seal.

         Signature /s/ Winnie L. Chen

         (SEAL) Winnie L. Chen
                Notary Public
                My Commission Expires March 26, 2010

                                 ACKNOWLEDGEMENT

         STATE OF DELAWARE                           )
                                                     )  SS.
         COUNTY OF NEWCASTLE                         )

         On this 19th day of May 2004 before me, a Notary Public in and for
said State, personally appeared James M. Young, personally known to me
(or proved to me on the basis of satisfactory evidence) to be the person(s)
whose name(s) is/are subscribed to the within instrument and acknowledged to me
that he/she/they executed the same in his/her/their authorized capacit(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

         WITNESS my hand and official seal.

         Signature /s/ Matthew C. Stepnowski

         (SEAL) Matthew C. Stepnowski
                Notary Public
                State of Delaware
                My Commission Expires August 20, 2005

         Appendix 1: Definition of Class C-Y Principal Reduction Amounts

         Copies of Appendix 1 (which has been intentionally omitted from this
filing) may be obtained from Washington Mutual Mortgage Securities Corp. or U.S.
Bank National Association 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 U.S. Bank National Association,

               David Duclos
               Corporate Trust Services
               U.S. Bank National Association
               One Federal Street
               Boston, MA 02110
               Telephone: (617) 603-6402
               Facsimile: (617) 603-6637

                                    Exhibit A
                                CUSIP 92922F QB7

                     WaMu MORTGAGE PASS-THROUGH CERTIFICATE

                                   Class 1-A-1

Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another 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-S2 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 May 26, 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-S2  Portion of the Class 1-A-1  Principal  Balance as of the Cut-Off
                Date Evidenced by this Certificate: $54,795,000.00

Class 1-A-1 Certificate Interest Rate: 5.000%

Cut-Off Date: May 1, 2004

First Distribution Date: June 25, 2004

Last Scheduled Distribution Date: June 25, 2034

Class 1-A-1 Principal Balance
as of the Cut-Off Date: $54,795,000.00

                                   Cede & Co.
                                Registered Owner

                                      A-1

                                    Exhibit A
                                CUSIP 92922F QC5

                     WaMu MORTGAGE PASS-THROUGH CERTIFICATE

                                   Class 1-A-2

Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another 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-S2 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 May 26, 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-S2  Portion of the Class 1-A-2  Principal  Balance as of the Cut-Off
                Date Evidenced by this Certificate: $5,597,000.00

Class 1-A-2 Certificate Interest Rate: 5.000%

Cut-Off Date: May 1, 2004

First Distribution Date: June 25, 2004

Last Scheduled Distribution Date: June 25, 2034

Class 1-A-2 Principal Balance
as of the Cut-Off Date: $5,597,000.00

                                   Cede & Co.
                                Registered Owner

                                      A-2

                                    Exhibit A
                                CUSIP 92922F QD3

                     WaMu MORTGAGE PASS-THROUGH CERTIFICATE

                                   Class 1-A-3

Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another 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-S2 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 May 26, 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-S2  Portion of the Class 1-A-3  Principal  Balance as of the Cut-Off
                Date Evidenced by this Certificate: $3,414,000.00

Class 1-A-3 Certificate Interest Rate: 5.000%

Cut-Off Date: May 1, 2004

First Distribution Date: June 25, 2004

Last Scheduled Distribution Date: June 25, 2034

Class 1-A-3 Principal Balance
as of the Cut-Off Date: $3,414,000.00

                                   Cede & Co.
                                Registered Owner

                                      A-3

                                    Exhibit A
                                CUSIP 92922F QE1

                     WaMu MORTGAGE PASS-THROUGH CERTIFICATE

                                   Class 1-A-4

Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another 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-S2 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 May 26, 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-S2  Portion of the Class 1-A-4  Principal  Balance as of the Cut-Off
                Date Evidenced by this Certificate: $7,750,000.00

Class 1-A-4 Certificate Interest Rate: 5.000%

Cut-Off Date: May 1, 2004

First Distribution Date: June 25, 2004

Last Scheduled Distribution Date: June 25, 2034

Class 1-A-4 Principal Balance
as of the Cut-Off Date: $7,750,000.00

                                   Cede & Co.
                                Registered Owner

                                      A-4

                                    Exhibit A
                                CUSIP 92922F QF8

                     WaMu MORTGAGE PASS-THROUGH CERTIFICATE

                                   Class 1-A-5

Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another 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-S2 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 May 26, 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-S2  Portion of the Class 1-A-5  Principal  Balance as of the Cut-Off
                Date Evidenced by this Certificate: $8,217,000.00

Class 1-A-5 Certificate Interest Rate: 5.000%

Cut-Off Date: May 1, 2004

First Distribution Date: June 25, 2004

Last Scheduled Distribution Date: June 25, 2034

Class 1-A-5 Principal Balance
as of the Cut-Off Date: $8,217,000.00

                                   Cede & Co.
                                Registered Owner

                                      A-5

                                    Exhibit A
                                CUSIP 92922F QG6

                     WaMu MORTGAGE PASS-THROUGH CERTIFICATE

                                   Class 2-A-1

Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another 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-S2 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 May 26, 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-S2  Portion of the Class 2-A-1  Principal  Balance as of the Cut-Off
                Date Evidenced by this Certificate: $175,570,000.00

Class 2-A-1 Certificate Interest Rate: 5.500%

Cut-Off Date: May 1, 2004

First Distribution Date: June 25, 2004

Last Scheduled Distribution Date: June 25, 2034

Class 2-A-1 Principal Balance
as of the Cut-Off Date: $175,570,000.00

                                   Cede & Co.
                                Registered Owner

                                      A-6

                                    Exhibit A
                                CUSIP 92922F QH4

                     WaMu MORTGAGE PASS-THROUGH CERTIFICATE

                                   Class 2-A-2

Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another 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-S2 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 May 26, 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-S2  Portion of the Class 2-A-2  Principal  Balance as of the Cut-Off
                Date Evidenced by this Certificate: $18,902,000.00

Class 2-A-2 Certificate Interest Rate: 5.500%

Cut-Off Date: May 1, 2004

First Distribution Date: June 25, 2004

Last Scheduled Distribution Date: June 25, 2034

Class 2-A-2 Principal Balance
as of the Cut-Off Date: $18,902,000.00

                                   Cede & Co.
                                Registered Owner

                                      A-7

                                    Exhibit A
                                CUSIP 92922F QJ0

                     WaMu MORTGAGE PASS-THROUGH CERTIFICATE

                                   Class 2-A-3

Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another 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-S2 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 May 26, 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-S2  Portion of the Class 2-A-3  Principal  Balance as of the Cut-Off
                Date Evidenced by this Certificate: $13,711,000.00

Class 2-A-3 Certificate Interest Rate: 5.500%

Cut-Off Date: May 1, 2004

First Distribution Date: June 25, 2004

Last Scheduled Distribution Date: June 25, 2034

Class 2-A-3 Principal Balance
as of the Cut-Off Date: $13,711,000.00

                                   Cede & Co.
                                Registered Owner

                                      A-8

                                    Exhibit A
                                CUSIP 92922F QK7

                     WaMu MORTGAGE PASS-THROUGH CERTIFICATE

                                   Class 2-A-4

Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another 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-S2 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 May 26, 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-S2  Portion of the Class 2-A-4  Principal  Balance as of the Cut-Off
                Date Evidenced by this Certificate: $23,200,000.00

Class 2-A-4 Certificate Interest Rate: 5.500%

Cut-Off Date: May 1, 2004

First Distribution Date: June 25, 2004

Last Scheduled Distribution Date: June 25, 2034

Class 2-A-4 Principal Balance
as of the Cut-Off Date: $23,200,000.00

                                   Cede & Co.
                                Registered Owner

                                      A-9

                                    Exhibit A
                                CUSIP 92922F QL5

                     WaMu MORTGAGE PASS-THROUGH CERTIFICATE

                                   Class 2-A-5

Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another 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-S2 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 May 26, 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-S2 Portion of
                                                              the Class 2-A-5
                                                              Principal Balance
                                                              as of the Cut-Off
                                                              Date Evidenced by
                                                              this Certificate:
                                                              $25,990,000.00

Class 2-A-5 Certificate Interest Rate: 5.500%

Cut-Off Date: May 1, 2004

First Distribution Date: June 25, 2004

Last Scheduled Distribution Date: June 25, 2034

Class 2-A-5 Principal Balance
as of the Cut-Off Date: $25,990,000.00

                                   Cede & Co.
                                Registered Owner

                                      A-10

                                    Exhibit A
                                CUSIP 92922F QM3

                     WaMu MORTGAGE PASS-THROUGH CERTIFICATE

                                   Class 2-A-6

Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another 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-S2 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 May 26, 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.

The Class 2-A-6 Certificates will provide credit support to certain Classes of
Certificates, as described in the Trust Agreement.

Series 2004-S2  Portion of the Class 2-A-6  Principal  Balance as of the Cut-Off
                Date Evidenced by this Certificate: $575,000.00

Class 2-A-6 Certificate Interest Rate: 5.500%

Cut-Off Date: May 1, 2004

First Distribution Date: June 25, 2004

Last Scheduled Distribution Date: June 25, 2034

Class 2-A-6 Principal Balance
as of the Cut-Off Date: $575,000.00

                                   Cede & Co.
                                Registered Owner

                                      A-11

                                    Exhibit A
                                CUSIP 92922F QN1

                     WaMu MORTGAGE PASS-THROUGH CERTIFICATE

                                   Class 3-A-1

Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another 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-S2 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 May 26, 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-S2  Portion of the Class 3-A-1  Principal  Balance as of the Cut-Off
                Date Evidenced by this Certificate: $41,998,000.00

Class 3-A-1 Certificate Interest Rate: 6.000%

Cut-Off Date: May 1, 2004

First Distribution Date: June 25, 2004

Last Scheduled Distribution Date: June 25, 2034

Class 3-A-1 Principal Balance
as of the Cut-Off Date: $41,998,000.00

                                   Cede & Co.
                                Registered Owner

                                      A-12

                                    Exhibit A
                                CUSIP 92922F QP6

                     WaMu MORTGAGE PASS-THROUGH CERTIFICATE

                                   Class 3-A-2

Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another 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-S2 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 May 26, 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-S2  Portion of the Class 3-A-2  Principal  Balance as of the Cut-Off
                Date Evidenced by this Certificate: $3,102,000.00

Class 3-A-2 Certificate Interest Rate: 6.000%

Cut-Off Date: May 1, 2004

First Distribution Date: June 25, 2004

Last Scheduled Distribution Date: June 25, 2034

Class 3-A-2 Principal Balance
as of the Cut-Off Date: $3,102,000.00

                                   Cede & Co.
                                Registered Owner

                                      A-13

                                    Exhibit A
                                CUSIP 92922F QQ4

                     WaMu MORTGAGE PASS-THROUGH CERTIFICATE

                                   Class 3-A-3

Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another 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-S2 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 May 26, 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-S2  Portion of the Class 3-A-3  Principal  Balance as of the Cut-Off
                Date Evidenced by this Certificate: $5,178,000.00

Class 3-A-3 Certificate Interest Rate: 6.000%

Cut-Off Date: May 1, 2004

First Distribution Date: June 25, 2004

Last Scheduled Distribution Date: June 25, 2034

Class 3-A-3 Principal Balance
as of the Cut-Off Date: $5,178,000.00

                                   Cede & Co.
                                Registered Owner

                                      A-14

                                    Exhibit A
                                CUSIP 92922F QR2

                     WaMu MORTGAGE PASS-THROUGH CERTIFICATE

                                     Class X

Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another 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-S2 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 May 26, 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-S2  Portion of the Class X Notional  Amount as of the Cut-Off  Date
                 Evidenced by this Certificate: $195,291.00

Class X Certificate Interest Rate: 6.000%, applied to the
Class X Notional Amount

Cut-Off Date: May 1, 2004

First Distribution Date: June 25, 2004

Last Scheduled Distribution Date: June 25, 2034

Class X Principal Balance
as of the Cut-Off Date: $0.00

Class X Notional Amount
as of the Cut-Off Date: $195,291.00

                                   Cede & Co.
                                Registered Owner

                                      A-15

                                    Exhibit A
                                CUSIP 92922F QS0

                     WaMu MORTGAGE PASS-THROUGH CERTIFICATE

                                     Class P

Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another 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-S2 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 May 26, 2004. Interest is not
payable with respect to this Certificate.

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-S2  Portion of the Class P Principal  Balance as of the Cut-Off Date
                Evidenced by this Certificate: $437,448.00

Class P Certificate Interest Rate: 0.00%

Cut-Off Date: May 1, 2004

First Distribution Date: June 25, 2004

Last Scheduled Distribution Date: June 25, 2034

Class P Principal Balance
as of the Cut-Off Date: $437,448.00

                                   Cede & Co.
                                Registered Owner

                                      A-16

                                    Exhibit A
                                CUSIP 92922F QT8

                     WaMu MORTGAGE PASS-THROUGH CERTIFICATE

                                    Class B-1

Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another pool of assets consisting of beneficial interests in
another 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-S2 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 May 26, 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

                                      A-17

         (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 UNDERWRITER 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-S2 Portion of the Class B-1 Principal Balance as of the Cut-Off Date
                Evidenced by this Certificate: $6,002,000.00

Class B-1 Certificate Interest Rate: Variable

Cut-Off Date: May 1, 2004

First Distribution Date: June 25, 2004

Last Scheduled Distribution Date: June 25, 2034

Class B-1 Principal Balance
as of the Cut-Off Date: $6,002,000.00

                                   Cede & Co.
                                Registered Owner

                                      A-18

                                    Exhibit A
                                CUSIP 92922F QU5

                     WaMu MORTGAGE PASS-THROUGH CERTIFICATE

                                    Class B-2

Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another 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-S2 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 May 26, 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,
         (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

                                      A-19

         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 UNDERWRITER 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-S2 Portion of the Class B-2 Principal Balance as of the Cut-Off Date
               Evidenced by this Certificate: $2,200,000.00

Class B-2 Certificate Interest Rate: Variable

Cut-Off Date: May 1, 2004

First Distribution Date: June 25, 2004

Last Scheduled Distribution Date: June 25, 2034

Class B-2 Principal Balance
as of the Cut-Off Date: $2,200,000.00

                                   Cede & Co.
                                Registered Owner

                                      A-20

                                    Exhibit A
                                CUSIP 92922F QV3

                     WaMu MORTGAGE PASS-THROUGH CERTIFICATE

                                    Class B-3

Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another 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-S2 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 May 26, 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

                                      A-21

         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 UNDERWRITER 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-S2 Portion of the Class B-3 Principal Balance as of the Cut-Off Date
                Evidenced by this Certificate: $1,200,000.00

Class B-3 Certificate Interest Rate: Variable

Cut-Off Date: May 1, 2004

First Distribution Date: June 25, 2004

Last Scheduled Distribution Date: June 25, 2034

Class B-3 Principal Balance
as of the Cut-Off Date: $1,200,000.00

                                   Cede & Co.
                                Registered Owner

                                      A-22

                                    Exhibit A
                                CUSIP 92922F QX9

                     WaMu MORTGAGE PASS-THROUGH CERTIFICATE

                                    Class B-4

Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another 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-S2 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 May 26, 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 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-S2 Portion of the Class B-4 Principal Balance as of the Cut-Off Date
               Evidenced by this Certificate: $1,000,000.00

Class B-4 Certificate Interest Rate: Variable

Cut-Off Date: May 1, 2004

First Distribution Date: June 25, 2004

Last Scheduled Distribution Date: June 25, 2034

Class B-4 Principal Balance
as of the Cut-Off Date: $1,000,000.00

                                ----------------
                                Registered Owner

                                      A-23

                                    Exhibit A
                                CUSIP 92922F QY7

                     WaMu MORTGAGE PASS-THROUGH CERTIFICATE

                                    Class B-5

Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another 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-S2 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 May 26, 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 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-S2 Portion of the Class B-5 Principal Balance as of the Cut-Off Date
               Evidenced by this Certificate: $801,000.00

Class B-5 Certificate Interest Rate: Variable

Cut-Off Date: May 1, 2004

First Distribution Date: June 25, 2004

Last Scheduled Distribution Date: June 25, 2034

Class B-5 Principal Balance
as of the Cut-Off Date: $801,000.00

                                ----------------
                                Registered Owner

                                      A-24

                                    Exhibit A
                                CUSIP 92922F QZ4

                     WaMu MORTGAGE PASS-THROUGH CERTIFICATE

                                    Class B-6

Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another 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-S2 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 May 26, 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 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-S2 Portion of the Class B-6 Principal Balance as of the Cut-Off Date
               Evidenced by this Certificate: $400,052.00

Class B-6 Certificate Interest Rate: Variable

Cut-Off Date: May 1, 2004

First Distribution Date: June 25, 2004

Last Scheduled Distribution Date: June 25, 2034

Class B-6 Principal Balance
as of the Cut-Off Date: $400,052.00

                                ----------------
                                Registered Owner

                                      A-25

                                    Exhibit B
                                CUSIP 92922F QW1

                     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-S2 Trust. Solely for U.S. federal income tax purposes, this Certificate
represents "residual interests" in "real estate mortgage investment conduits,"
as those terms are defined in Sections 860G and 860D, respectively, of the
Internal Revenue Code of 1986, as amended.

Series 2004-S2 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:  5.000%.  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: May 1, 2004

First Distribution Date: June 25, 2004

Last Scheduled Distribution Date: June 25, 2034

Class R Principal Balance as of the Cut-Off Date: $100.00

                               ------------------
                                Registered Owner
                            Certificate No. _________

                                      B-1

         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 (i) 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, and (ii) a pool of assets ("REMIC II")
consisting of interests in REMIC I. REMIC I and REMIC II were created pursuant
to a Pooling and Servicing Agreement, dated as of the Cut-Off Date stated above
(the "Pooling Agreement"), among the Company, U.S. Bank National Association, as
Trustee (the "Trustee"), and Christiana Bank & Trust Company, 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 portions (if any) then distributable on the Certificates
of this Class of (i) the REMIC I Available Distribution Amount for such
Distribution Date, as specified in Section 4.01 of the Pooling Agreement, and
(ii) the REMIC II Available Distribution Amount for such Distribution Date, as
specified in Section 4.04 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.

                                      B-2

         IN WITNESS WHEREOF, the Trust has caused this Certificate to be duly
executed.

                              WaMu MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2004-S2 TRUST

                              By:   U.S. BANK NATIONAL ASSOCIATION, as Trustee

                                    By:
                                        ---------------------------------------

                    (TRUSTEE'S CERTIFICATE OF AUTHENTICATION)

                  This is one of the Certificates referred to in the
within-mentioned Pooling Agreement.

U.S. BANK NATIONAL ASSOCIATION, as Trustee

By:
    ----------------------------------------

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

                                      B-3

                   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 and REMIC II.

         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 II. 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.

         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.

                                      B-4

         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.

                                      B-5

                                   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.

                                      B-6

                                    Exhibit C

                                   [Reserved]

                                      C-1

                                    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
U.S. Bank National Association 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 U.S. Bank National Association,

               David Duclos
               Corporate Trust Services
               U.S. Bank National Association
               One Federal Street
               Boston, MA 02110
               Telephone: (617) 603-6402
               Facsimile: (617) 603-6637

                                      D-1

                                    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

                                      E-1

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:
(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
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

                                      E-2

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

                                    Exhibit F

                       FORM OF TRANSFEROR CERTIFICATE FOR
                         JUNIOR SUBORDINATE CERTIFICATES

                                     [Date]

U.S. Bank National Association, as Trustee
One Federal Street, Third Floor
Boston, MA 02110
Attn:  Corporate Trust Department, Washington Mutual 2004-S2

Re:  Purchase of  Washington  Mutual  Mortgage  Securities  Corp.  WaMu Mortgage
     Pass-Through Certificates Series 2004-S2, 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

                                    Exhibit G

                       FORM OF TRANSFEREE'S AGREEMENT FOR
                         JUNIOR SUBORDINATE CERTIFICATES

                                     [Date]

U.S. Bank National Association, as Trustee
One Federal Street, Third Floor
Boston, MA 02110
Attn:  Corporate Trust Department, Washington Mutual 2004-S2

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-S2,  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 May 1, 2004 (the "Pooling
Agreement"), by and among Washington Mutual Mortgage Securities Corp.
("Washington Mutual"), U.S. Bank National Association, as trustee (the
"Trustee"), and Christiana Bank & Trust Company, as Delaware trustee, of the
Washington Mutual Mortgage Securities Corp. WaMu Mortgage Pass-Through
Certificates, Series 2004-S2.

                  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;

                  (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.

                  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:

                                    Exhibit H

                   FORM OF ADDITIONAL MATTER INCORPORATED INTO
       THE FORM OF THE CERTIFICATES (OTHER THAN THE CLASS R 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 II") consisting of
interests in another 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 and REMIC II were created pursuant to a Pooling and
Servicing Agreement, dated as of the Cut-Off Date stated above (the "Pooling
Agreement"), among the Company, U.S. Bank National Association, as Trustee (the
"Trustee"), and Christiana Bank & Trust Company, 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 REMIC II Available Distribution Amount
for such Distribution Date then distributable on the Certificates of this Class,
as specified in Section 4.04 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.

         IN WITNESS WHEREOF, the Trust has caused this Certificate to be duly
executed.

                            WaMu MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2004-S2 TRUST

                            By:   U.S. BANK NATIONAL ASSOCIATION, as Trustee

                                  By:
                                      ----------------------------------------------------

                    (TRUSTEE'S CERTIFICATE OF AUTHENTICATION)

This is one of the Certificates referred to in the within-mentioned Pooling Agreement.

U.S. BANK NATIONAL ASSOCIATION, as Trustee

By:
    ----------------------------------------

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

                   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 II.

         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 II. 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
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.

                                   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.

                                    Exhibit I

                             TRANSFEROR CERTIFICATE

                                     [Date]

U.S. Bank National Association, as Trustee
One Federal Street, Third Floor
Boston, MA 02110
Attn:  Corporate Trust Department, Washington Mutual 2004-S2

         Re:      Washington Mutual Mortgage Securities Corp.
                  WaMu Mortgage Pass-Through Certificates, Series 2004-S2, 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-S2,
Class R (the "Certificate"), pursuant to Section 5.01 of the Pooling and
Servicing Agreement (the "Pooling Agreement"), dated as of May 1, 2004 among
Washington Mutual Mortgage Securities Corp., as depositor and master servicer
(the "Company"), U.S. Bank National Association, as trustee (the "Trustee"), and
Christiana Bank & Trust Company, 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.

         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:
                                         --------------------------------------

                                    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.)

                  5. That the Owner is aware that the Trustee will not register
the Transfer of the Class R-1 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.

                  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:

[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

                        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;

                  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 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 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

         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 * * *

                                    Exhibit K

                                   [Reserved]

                                    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 May 1,
2004 among Washington Mutual Mortgage Securities Corp., as Depositor and Master
Servicer, U.S. Bank National Association, as Trustee, and Christiana Bank &
Trust Company, 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 May 26, 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.

                  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:

Taxpayer Identification:                             Taxpayer Identification:
No.:                                                 No.:
Date:                                                Date:

                              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

         ___ 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

                             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

                              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 reaffirmation of this certification by the undersigned as of the date of such
purchase.

                                      L-2-1

                                  ________________________________________
                                  Print Name of Buyer

                                  By:
                                       Name:
                                       Title:

                                  Date:

                                  IF AN ADVISER:

                                  ________________________________________
                                  Print Name of Buyer

                                  By:
                                       Name:
                                       Title:

                                  Date:

(SEAL)

                                     L-2-2

                                    Exhibit M

                                     [Date]

[Company]

Re:  Pooling  and  Servicing  Agreement  dated  as of May 1,  2004 by and  among
     Washington  Mutual  Mortgage  Securities  Corp.,  as  Depositor  and Master
     Servicer, U.S. Bank National Association, as Trustee, and Christiana Bank &
     Trust Company, as Delaware trustee,  relating to Washington Mutual Mortgage
     Securities Corp. WaMu Mortgage Pass-Through Certificates, Series 2004-S2

Ladies and Gentlemen:

         In accordance with Section 2.07 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 2.04 of the Pooling and Servicing Agreement and has
determined that (i) all documents required (in the case of instruments described
in clauses (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 2.05
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:

                                    EXHIBIT N

                             BENEFIT PLAN AFFIDAVIT

U.S. Bank National Association, as Trustee (the "Trustee") One Federal Street,
Third Floor
Boston, MA 02110
Attn: Corporate Trust Department, Washington Mutual 2004-S2

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-S2  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 May 1, 2004, by and among Washington
         Mutual, the Trustee and the Delaware Trustee thereunder, and relating
         to the Trust).

                                      N-1

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:

                                      N-2

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

                                    Exhibit O

                             BENEFIT PLAN AFFIDAVIT

U.S. Bank National Association, as Trustee (the "Trustee") One Federal Street,
Third Floor
Boston, MA 02110
Attn: Corporate Trust Department, Washington Mutual 2004-S2

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-S2  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 May 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

                  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

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-3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00067-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00067-of-00352.parquet"}]]