Document:

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                                                                     EXHIBIT 4.2

                                                                  EXECUTION COPY

                    FREMONT MORTGAGE SECURITIES CORPORATION,

                                  as Purchaser

                                       and

                           FREMONT INVESTMENT & LOAN,

                                  as Originator

                        MORTGAGE LOAN PURCHASE AGREEMENT

                           Dated as of August 1, 2004

                  Fixed-Rate and Adjustable-Rate Mortgage Loans

                         Fremont Home Loan Trust 2004-C,
                   Mortgage-Backed Certificates, Series 2004-C

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                                TABLE OF CONTENTS

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                                 ARTICLE I DEFINITIONS AND SCHEDULES

Section 1.01.  Definitions...........................................................................      1

                    ARTICLE II SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE

Section 2.01.  Sale of Mortgage Loans................................................................      1
Section 2.02.  Obligations of the Originator Upon Sale...............................................      2
Section 2.03.  Payment of Purchase Price for the Mortgage Loans......................................      3

                   ARTICLE III REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH

Section 3.01.  Originator's Representations and Warranties Relating to the Mortgage Loans............      3
Section 3.02.  Additional Originator's Representations and Warranties................................      3
Section 3.03.  Remedies for Breach of Representations and Warranties.................................      6

                                  ARTICLE IV ORIGINATOR'S COVENANTS

Section 4.01.  Covenants of the Originator...........................................................      9

                    ARTICLE V INDEMNIFICATION WITH RESPECT TO THE MORTGAGE LOANS

Section 5.01.  Indemnification.......................................................................      9

                                       ARTICLE VI TERMINATION

Section 6.01.  Termination...........................................................................     10

                                ARTICLE VII MISCELLANEOUS PROVISIONS

Section 7.01.  Amendment.............................................................................     10
Section 7.02.  Governing Law.........................................................................     10
Section 7.03.  Notices...............................................................................     10
Section 7.04.  Severability of Provisions............................................................     11
Section 7.05.  Counterparts..........................................................................     11
Section 7.06.  Further Agreements....................................................................     11
Section 7.07.  Intention of the Parties..............................................................     12
Section 7.08.  Successors and Assigns:  Assignment of Purchase Agreement.............................     13
Section 7.09.  Survival..............................................................................     13
Section 7.10.  Third Party Beneficiaries.............................................................     13
Section 7.11.  Confidentiality.......................................................................     13
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Exhibit A:   Representations and Warranties Relating to the Mortgage Loans

Exhibit B:   Appendix E of the Standard & Poor's Glossary for File Format for
             LEVELS(R) Version 5.6 Revised

Schedule A:  Mortgage Loan Schedule

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      THIS MORTGAGE LOAN PURCHASE AGREEMENT, dated as of August 1, 2004 (the
"Agreement"), is made and entered into between Fremont Investment & Loan (the
"Originator" or "Fremont") and Fremont Mortgage Securities Corporation (the
"Purchaser").

                               W I T N E S S E T H

      WHEREAS, the Originator is the owner of the notes or other evidence of
indebtedness (collectively, the "Mortgage Notes") so indicated on Schedule A
attached hereto and the other documents or instruments constituting the Mortgage
File (collectively, the "Mortgage Loans"); and

      WHEREAS, the Originator, as of the date hereof, owns the mortgages
(collectively, the "Mortgages") on the properties (collectively, the "Mortgaged
Properties") securing the Mortgage Loans, including rights to (a) any property
acquired by foreclosure or deed in lieu of foreclosure or otherwise and (b) the
proceeds of any insurance policies covering such Mortgage Loans or the related
Mortgaged Properties or the obligors on such Mortgage Loans; and

      WHEREAS, the parties hereto desire that the Originator sell the Mortgage
Loans to the Purchaser pursuant to the terms of this Agreement; and

      WHEREAS, pursuant to the terms of that certain Pooling and Servicing
Agreement dated as of August 1, 2004 (the "Pooling and Servicing Agreement")
among the Purchaser, as depositor, Fremont, as originator and servicer, HSBC
Bank USA, National Association, as trustee (the "Trustee"), Wells Fargo Bank,
N.A., as master servicer (in such capacity, the "Master Servicer") and trust
administrator (in such capacity, the "Trust Administrator"), the Purchaser will
convey the Mortgage Loans to Fremont Home Loan Trust 2004-C (the "Trust").

      NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:

                                   ARTICLE I

                            DEFINITIONS AND SCHEDULES

      Section 1.01. Definitions.

      Any capitalized term used but not defined herein and below shall have the
meaning assigned thereto in the Pooling and Servicing Agreement.

                                   ARTICLE II

                SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE

      Section 2.01. Sale of Mortgage Loans.

      The Originator, concurrently with the execution and delivery of this
Agreement, does hereby sell, transfer, assign, set over, and otherwise convey to
the Purchaser, without recourse,

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(i) all of its right, title and interest in and to each of the Mortgage Loans,
including the related principal balance of such Mortgage Loan as of the Cut-off
Date (the "Cut-off Date Principal Balance") and interest and principal received
on or with respect thereto after the Cut-off Date, other than such amounts which
were due on the Mortgage Loans on or before the Cut-off Date; (ii) property
which secured such Mortgage Loan and which has been acquired by foreclosure,
deed in lieu of foreclosure or otherwise; (iii) its interest in any insurance
policies in respect of the Mortgage Loans; (iv) all of its right, title and
interest in and to the Certificate Cap Agreements; and (v) all proceeds of the
conversion, voluntary or involuntary, of any of the foregoing into cash or other
liquid property.

      Section 2.02. Obligations of the Originator Upon Sale.

      In connection with the transfer pursuant to Section 2.01 hereof, the
Originator further agrees, at its own expense, on or prior to the Closing Date
or as otherwise indicated in this Section 2.02, (a) to indicate in its books,
records and computer systems that the Mortgage Loans have been sold to the
Purchaser pursuant to this Agreement, (b) to deliver to the Purchaser and the
Trustee a computer file containing a true and complete list of all such Mortgage
Loans specifying for each Mortgage Loan, as of the Cut-off Date, (i) its account
number and (ii) the Cut-off Date Principal Balance and such file, which forms a
part of Schedule I to the Pooling and Servicing Agreement, shall also be marked
as Schedule A to this Agreement and is hereby incorporated into and made a part
of this Agreement and (c) for each Mortgage Loan that is not a MERS Mortgage
Loan, to execute an Assignment of Mortgage in blank for each Mortgage Loan.

      In connection with such conveyance by the Originator, the Originator shall
on behalf of the Purchaser deliver to, and deposit with the Trust Administrator,
as custodian on behalf of the Trustee, as assignee of the Purchaser, the
Mortgage Files relating to the Mortgage Loans on or before the Closing Date in
the manner set forth in Section 2.01 of the Pooling and Servicing Agreement.

      The Purchaser hereby acknowledges its acceptance of all right, title and
interest to the Mortgage Loans and other property, now existing or hereafter
created, conveyed to it pursuant to Section 2.01 hereof.

      The parties hereto intend that the transaction set forth herein be a
non-recourse sale by the Originator to the Purchaser of all of the Originator's
right, title and interest in and to the Mortgage Loans and other property
described above. Nonetheless, in the event the transaction set forth herein is
deemed not to be a sale, the Originator hereby grants to the Purchaser a
security interest in all of the Originator's right, title and interest in, to
and under the Mortgage Loans and other property described above, whether now
existing or hereafter created, to secure all of the Originator's obligations
hereunder, and this Agreement shall constitute a security agreement under
applicable law. The Originator and the Purchaser shall, to the extent consistent
with this Agreement, take such actions as may be necessary to ensure that, if
this Agreement were deemed to create a security interest in the Mortgage Loans,
such security interest would be deemed to be a perfected security interest of
first priority under applicable law and will be maintained as such throughout
the term of the Pooling and Servicing Agreement.

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      Section 2.03. Payment of Purchase Price for the Mortgage Loans.

      In consideration of the sale of the Mortgage Loans from the Originator to
the Purchaser on the Closing Date, the Purchaser agrees to pay to the Originator
on the Closing Date by transfer of immediately available funds, an amount equal
to the gross proceeds received from the sale of the Offered Certificates and to
transfer to the Originator or its designee on the Closing Date the Class C, P
and R Certificates (collectively, the "Purchase Price"). The Originator shall
pay, and be billed directly for, all reasonable expenses incurred by the
Purchaser in connection with the issuance of the Certificates, including,
without limitation, printing fees incurred in connection with the prospectus
relating to the Certificates, fees and expenses of Purchaser's counsel, fees of
the rating agencies requested to rate the Certificates, accountant's fees and
expenses and the fees and expenses of the Trustee and the Trust Administrator
and other out-of-pocket costs, if any.

                                  ARTICLE III

               REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH

      Section 3.01. Originator's Representations and Warranties Relating to the
Mortgage Loans.

      The Originator represents and warrants to the Purchaser the
representations and warranties set forth in Exhibit A attached hereto with
respect to each Mortgage Loan as of the Closing Date (or as of such date
specifically provided therein).

      Section 3.02. Additional Originator's Representations and Warranties.

      The Originator represents, warrants and covenants to the Purchaser as of
the Closing Date (or as of such other date specifically provided herein) that:

      (a) The Originator is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation or
formation and has all licenses necessary to carry on its business as now being
conducted and is licensed, qualified and in good standing in each state wherein
it owns or leases any material properties or where a Mortgaged Property is
located, if the laws of such state require licensing or qualification in order
to conduct business of the type conducted by the Originator, and in any event
the Originator is in compliance with the laws of any such state to the extent
necessary to ensure the enforceability of the related Mortgage Loan in
accordance with the terms of this Agreement; the Originator has the full
corporate power, authority and legal right to hold, transfer and convey the
Mortgage Loans and to execute and deliver this Agreement and to perform its
obligations hereunder; the execution, delivery and performance of this Agreement
(including all instruments of transfer to be delivered pursuant to this
Agreement) by the Originator and the consummation of the transactions
contemplated hereby have been duly and validly authorized; this Agreement and
all agreements contemplated hereby have been duly executed and delivered and
constitute the valid, legal, binding and enforceable obligations of the
Originator, regardless of whether such enforcement is sought in a proceeding in
equity or at law; and all requisite corporate action has

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been taken by the Originator to make this Agreement and all agreements
contemplated hereby valid and binding upon the Originator in accordance with
their terms;

      (b) Neither the execution and delivery of this Agreement, the acquisition
or origination of the Mortgage Loans by the Originator, the sale of the Mortgage
Loans to the Purchaser, the consummation of the transactions contemplated hereby
and by the Pooling and Servicing Agreement, nor the fulfillment of or compliance
with the terms and conditions of this Agreement, will conflict with or result in
a breach of any of the terms, conditions or provisions of the Originator's
charter, by-laws or other organizational documents or any legal restriction or
any agreement or instrument to which the Originator is now a party or by which
it is bound, or constitute a default or result in an acceleration under any of
the foregoing, or result in the violation of any law, rule, regulation, order,
judgment or decree to which the Originator or its property is subject, or result
in the creation or imposition of any lien, charge or encumbrance that would have
material adverse effect upon any of its properties pursuant to the terms of any
mortgage, contract, deed of trust or other instrument, or impair the ability of
the Purchaser to realize on the Mortgage Loans, impair the value of the Mortgage
Loans, or impair the ability of the Purchaser to realize the full amount of any
insurance benefits accruing pursuant to this Agreement;

      (c) The Originator does not believe, nor does it have any reason or cause
to believe, that it cannot perform each and every covenant contained in this
Agreement. The Originator is solvent and the sale of the Mortgage Loans will not
cause the Originator to become insolvent. The sale of the Mortgage Loans is not
undertaken with the intent to hinder, delay or defraud any of Originator's
creditors;

      (d) Immediately prior to the delivery of each Mortgage Loan, the
Originator was the owner of the related Mortgage and the indebtedness evidenced
by the related Mortgage Note, in the event that it retains record title, it
shall retain such record title to each Mortgage, each related Mortgage Note and
the related Mortgage Files with respect thereto in trust for the Purchaser or
its assignee as the owner thereof and only for the purpose of servicing and
supervising the servicing of each such Mortgage Loan;

      (e) There is no action, suit, proceeding or investigation pending or, to
the best of the Originator's knowledge, threatened against the Originator,
before any court, administrative agency or other tribunal (i) asserting the
invalidity of this Agreement, (ii) seeking to prevent the consummation of any of
the transactions contemplated by this Agreement, (iii) which, either in any one
instance or in the aggregate, is likely to result in any material adverse change
in the business, operations, financial condition, properties or assets of the
Originator, or in any material impairment of the right or ability of the
Originator to carry on its business substantially as now conducted, or in any
material liability on the part of the Originator, or which would draw into
question the validity of this Agreement or the Mortgage Loans or of any action
taken or to be taken in connection with the obligations of the Originator
contemplated herein, or which would be likely to impair materially the ability
of the Originator to perform under the terms of this Agreement, (iv) relating to
fraud, or (v) relating to predatory lending, or the Originator's origination,
servicing or closing practices which is likely to result in any material adverse
change in the business, operations, financial condition, properties or assets of
the Originator.

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      (f) No consent, approval, authorization or order of, or registration or
filing with, or notice to any court or governmental agency is required for the
execution, delivery and performance by the Originator of or compliance by the
Originator with this Agreement or the Mortgage Loans, the delivery of a portion
of the Mortgage Files to the Trustee or the sale of the Mortgage Loans or the
consummation of the transactions contemplated by this Agreement, or if required,
such approval has been obtained prior to the Closing Date;

      (g) The consummation of the transactions contemplated by this Agreement
are in the ordinary course of business of the Originator, and the transfer,
assignment and conveyance of the Mortgage Notes and the Mortgages by the
Originator pursuant to this Agreement are not subject to the bulk transfer or
any similar statutory provisions in effect in any applicable jurisdiction;

      (h) Neither this Agreement nor any information, statement, tape, diskette,
report, form, or other document furnished or to be furnished by the Originator
pursuant to this Agreement or any Transaction Agreement or in connection with
the transactions contemplated hereby contains or will contain any material
untrue statement of fact;

      (i) The Originator, as Servicer, has the facilities, procedures, and
experienced personnel necessary for the sound servicing of mortgage loans of the
same type as the Mortgage Loans. The Originator is duly qualified, licensed,
registered and otherwise authorized under all applicable federal, state and
local laws, and regulations, and is in good standing to enforce, originate, sell
mortgage loans, and service mortgage loans in each jurisdiction wherein the
Mortgaged Properties are located;

      (j) The Originator is a member of MERS in good standing, and will comply
in all material respects with the rules and procedures of MERS in connection
with the servicing of the MERS Mortgage Loans for as long as such Mortgage Loans
are registered with MERS.

      (k) The Mortgage Loans were not intentionally selected from among the
outstanding one- to four-family mortgage loans in the Originator's portfolio at
the Closing Date as to which the representations and warranties set forth in
Exhibit A could not be made;

      (l) The Originator has delivered to the Purchaser financial statements as
to its last three complete fiscal years and any later quarter ended more than 60
days prior to the execution of this Agreement. All such financial statements
fairly present the pertinent results of operations and changes in financial
position for each of such periods and the financial position at the end of each
such period of the Originator and its subsidiaries and have been prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved, except as set forth in the notes thereto or as
required by the Originator's regulator. There has been no change in the
business, operations, financial condition, properties or assets of the
Originator since the date of the Originator's financial statements that would
have a material adverse effect on its ability to perform its obligations under
this Agreement;

      (m) The Originator has been advised by its independent certified public
accountants that under generally accepted accounting principles the transfer of
the Mortgage Loans may be treated as a sale on the books and records of the
Originator and the Originator has determined

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that the disposition of the Mortgage Loans pursuant to this Agreement will be
afforded sale treatment for tax and accounting purposes;

      (n) The consideration received by the Originator upon the sale of the
Mortgage Loans under this Agreement constitutes fair consideration and
reasonably equivalent value for the Mortgage Loans;

      (o) The Originator's decision to purchase or originate any mortgage loan
or to deny any mortgage loan application is an independent decision based upon
Originator's underwriting guidelines, and is in no way made as a result of
Purchaser's decision to purchase, or not to purchase, or the price Purchaser may
offer to pay for, any such mortgage loan, if originated;

      (p) The Originator makes the following additional representations and
warranties:

            (i) This Agreement conforms to all statutory and regulatory
      requirements applicable to the Originator. This Agreement is (a) executed
      contemporaneously with the agreement reached by the Originator and the
      Purchaser, (b) approved by a specific corporate or banking association
      resolution by the board of directors of the Originator, which approval
      shall be reflected in the minutes of said board, and (c) continuously,
      from the time of its execution, an official record of the Originator;

            (ii) This Agreement has been duly and validly authorized by a
      specific corporate or banking association resolution by the board of
      directors of the Originator. A copy of such resolution, certified by the
      corporate secretary of the Originator or attested to by a vice president
      or higher officer of the Originator has been provided to the Purchaser;
      and

            (iii) The Originator will maintain a copy of this Agreement in its
      official books and records.

      Section 3.03. Remedies for Breach of Representations and Warranties.

      It is understood and agreed that the representations and warranties set
forth in Sections 3.01 and 3.02 shall survive the sale of the Mortgage Loans to
the Purchaser and shall inure to the benefit of the Purchaser and the Trustee,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment or the examination or lack of examination of any Mortgage File. With
respect to the representations and warranties contained herein that are made to
the knowledge or the best knowledge of the Originator or as to which the
Originator has no knowledge, if it is discovered that the substance of any such
representation and warranty is inaccurate and the inaccuracy materially and
adversely affects the value of the Mortgage Loan or Loans, or the interest
therein of the Purchaser or the Purchaser's assignee, designee or transferee,
then notwithstanding such lack of knowledge with respect to the substance of
such representation and warranty being inaccurate at the time the representation
and warranty was made, such inaccuracy shall be deemed a breach of the
applicable representation and warranty. Upon discovery by the Originator, the
Servicer, the Master Servicer, the Trust Administrator, the Trustee or the
Purchaser of a breach of any of the foregoing representations and warranties
that

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materially and adversely affects the value of any Mortgage Loan or the interest
of the Purchaser or the Trustee (or which materially and adversely affects the
value of a Mortgage Loan or the interests of the Purchaser or the Trustee in
such Mortgage Loan in the case of a representation and warranty relating to a
particular Mortgage Loan), the party discovering such breach shall give prompt
written notice to the other parties.

      Within 60 days of the earlier of either discovery by or notice to the
Originator of any breach of a representation or warranty that materially and
adversely affects the value of a Mortgage Loan or the interest of the Purchaser,
the Class IA insurer or the Trustee in such Mortgage Loan, the Originator shall
use its best efforts promptly to cure such breach in all material respects. If
such breach is not so cured, the Originator shall, (i) if such 60-day period
expires prior to the second anniversary of the Closing Date, remove such
Mortgage Loan (a "Deleted Mortgage Loan") from the Trust Fund and substitute in
its place a Qualified Substitute Mortgage Loan or Loans, in the manner and
subject to the conditions set forth in this Section and the Pooling and
Servicing Agreement; or (ii) repurchase the affected Mortgage Loan or Mortgage
Loans from the Trustee at the Purchase Price in the manner set forth in this
Section and in the Pooling and Servicing Agreement; provided, however, that any
such substitution pursuant to (i) above shall not be effected prior to the
delivery to the Trustee and the Trust Administrator of an Opinion of Counsel
required by Section 2.04 of the Pooling and Servicing Agreement, if any. The
Originator shall promptly reimburse the Trustee, the Master Servicer and the
Trust Administrator for any actual out-of-pocket expenses reasonably incurred by
the Trustee, the Master Servicer and the Trust Administrator in respect of
enforcing the remedies for such breach.

      At the time of substitution or repurchase of any deficient Mortgage Loan,
the Purchaser and Originator shall arrange for the reassignment of the deficient
or repurchased Mortgage Loan to the Originator, including delivery to the
Trustee of a Request for Release substantially relating to the Deleted Mortgage
Loan, and the delivery to the Originator of any documents held by the Trustee
relating to the deficient or repurchased Mortgage Loan. In the event the
Purchase Price is deposited in the Collection Account, the Originator shall,
simultaneously with such deposit, give written notice to the Purchaser that such
deposit has taken place. Upon such repurchase, the Mortgage Loan Schedule shall
be amended to reflect the withdrawal of the repurchased Mortgage Loan from this
Agreement and, if applicable, the substitution of the applicable Qualified
Substitute Mortgage Loan or Loans.

      If pursuant to this Section 3.03 the Originator repurchases or substitutes
a Mortgage Loan that is a MERS Mortgage Loan, the Originator shall, at the
Originator's expense, either (i) cause MERS to execute and deliver an Assignment
of Mortgage in recordable form to transfer the Mortgage from MERS to the
Originator and shall cause such Mortgage to be removed from registration on the
MERS(R) System in accordance with MERS' rules and regulations or (ii) cause MERS
to designate on the MERS(R) System the Originator as the beneficial holder of
such Mortgage Loan.

      As to any Deleted Mortgage Loan for which the Originator substitutes a
Qualified Substitute Mortgage Loan or Loans, the Originator shall effect such
substitution by delivering to the Purchaser or its designee for such Qualified
Substitute Mortgage Loan or Loans the

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Mortgage File and such other documents and agreements as are required by the
Pooling and Servicing Agreement, with the Mortgage Note endorsed as required
therein. No substitution is permitted to be made in any calendar month after the
Determination Date for such month.

      The amount, if any, by which (x) the aggregate principal balance of all
such Qualified Substitute Mortgage Loans as of the date of substitution is less
than (y) the sum of the aggregate Stated Principal Balance of all such Deleted
Mortgage Loans (after application of the scheduled principal portion of the
monthly payments due in the month of substitution) (the "Substitution Adjustment
Amount") plus an amount equal to the aggregate of any unreimbursed Advances with
respect to such Deleted Mortgage Loans shall be deposited in the Collection
Account by the Originator on or before the Business Day immediately preceding
the Distribution Date in the month succeeding the calendar month during which
the Originator became obligated hereunder to repurchase or replace the related
Mortgage Loan. Upon any such substitution and the deposit to the Collection
Account of any required Substitution Adjustment Amount, the Trustee or the
custodian, as applicable, shall release the Mortgage File held for the benefit
of the Certificateholders relating to such Deleted Mortgage Loan and shall
execute and deliver at the Originator's direction such instruments of transfer
or assignment prepared by the Originator, in each case without recourse, as
shall be necessary to transfer title to the Originator, or its designee, of the
Trustee's interest in any Deleted Mortgage Loan substituted pursuant to this
Section 3.03. Upon such substitution, the Qualified Substitute Mortgage Loans
shall be subject to the terms of this Agreement in all respects, and the
Originator shall be deemed to have made with respect to such Qualified
Substitute Mortgage Loan or Loans, as of the date of substitution, the
covenants, representations and warranties set forth in Subsections 3.01 and 3.02
hereof.

      One or more mortgage loans may be substituted for one or more Deleted
Mortgage Loans. The determination of whether a mortgage loan is a Qualified
Substitute Mortgage Loan may be satisfied on an individual basis. Alternatively,
if more than one mortgage loan is to be substituted for one or more Deleted
Mortgage Loans, the characteristics of such mortgage loans and Deleted Mortgage
Loans shall be aggregated or calculated on a weighted average basis, as
applicable, in determining whether such mortgage loans are Qualified Substitute
Mortgage Loans.

      In the event that the Originator shall have repurchased a Mortgage Loan,
the Purchase Price therefor shall be deposited in the Collection Account on or
before the Business Day immediately preceding the Distribution Date in the month
following the month during which the Originator became obligated hereunder to
repurchase or replace such Mortgage Loan and upon such deposit of the Purchase
Price and receipt of a Request for Release in the form of Exhibit J to the
Pooling and Servicing Agreement, the Trustee or the custodian, as applicable,
shall release the related Mortgage File held for the benefit of the
Certificateholders to the Originator or its designee, and the Trustee shall
execute and deliver at such Person's direction such instruments of transfer or
assignment prepared by such Person, in each case without recourse, as shall be
necessary to transfer title to the Originator or its designee of the Trustee's
interest in such Mortgage Loan.

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      It is understood and agreed that the representations and warranties set
forth in Section 3.01 shall survive delivery of the respective Mortgage Files to
the Trustee on behalf of the Purchaser.

      It is understood and agreed that the obligations of the Originator set
forth in this Section 3.03 to cure, repurchase or substitute for a defective
Mortgage Loan and to indemnify the Purchaser as provided in Section 5.01
constitute the sole remedies of the Purchaser respecting a missing or defective
document or a breach of the representations and warranties contained in Section
3.01.

                                   ARTICLE IV

                             ORIGINATOR'S COVENANTS

      Section 4.01. Covenants of the Originator.

      The Originator hereby covenants that except for the transfer hereunder, it
will not sell, pledge, assign or transfer to any other Person, or grant, create,
incur, assume or suffer to exist any Lien on any Mortgage Loan, or any interest
therein; it will notify the Trustee, as assignee of the Purchaser, of the
existence of any Lien on any Mortgage Loan immediately upon discovery thereof;
and it will defend the right, title and interest of the Trustee, as assignee of
the Purchaser, in, to and under the Mortgage Loans, against all claims of third
parties claiming through or under the Originator; provided, however, that
nothing in this Section 4.01 shall prevent or be deemed to prohibit the
Originator from suffering to exist upon any of the Mortgage Loans any Liens for
municipal or other local taxes and other governmental charges if such taxes or
governmental charges shall not at the time be due and payable or if the
Originator shall currently be contesting the validity thereof in good faith by
appropriate proceedings and shall have set aside on its books adequate reserves
with respect thereto.

                                   ARTICLE V

               INDEMNIFICATION WITH RESPECT TO THE MORTGAGE LOANS

      Section 5.01. Indemnification.

      (a) The Originator agrees to indemnify and to hold the Purchaser, each of
its officers and directors and each person or entity who controls the Purchaser
or such person, the Trustee and each Certificateholder harmless against any and
all claims, losses, penalties, fines, forfeitures, legal fees and related costs,
judgments, and any other costs, fees and expenses that the Purchaser or any such
person or entity and any Certificateholder may sustain in any way (i) related to
the failure of the Originator to perform its duties in compliance with the terms
of this Agreement, (ii) arising from a breach by the Originator of its
representations and warranties in Section 3.01 or (iii) related to the
origination or prior servicing of the Mortgage Loans by reason of any acts,
omissions, or alleged acts or omissions of the Originator or any servicer. The
Originator shall promptly notify the Purchaser and the Trustee if a claim is
made by a third party with respect to this Agreement. The Originator shall
assume the defense of any such claim and

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pay all expenses in connection therewith, including reasonable counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against the Purchaser or any such person or entity and/or the Trustee or any
Certificateholder in respect of such claim.

                                   ARTICLE VI

                                   TERMINATION

      Section 6.01. Termination.

      The respective obligations and responsibilities of the Originator and the
Purchaser created hereby shall terminate, except for the Originator's indemnity
obligations as provided herein, upon the termination of the Trust as provided in
Article IX of the Pooling and Servicing Agreement.

                                  ARTICLE VII

                            MISCELLANEOUS PROVISIONS

      Section 7.01. Amendment.

      This Agreement may be amended from time to time by the Originator and the
Purchaser by written agreement signed by the parties hereto.

      Section 7.02. Governing Law.

      This Agreement shall be governed by and construed in accordance with the
laws of the State of New York and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws (without
regard to its material conflict of laws rules).

      Section 7.03. 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 mail, postage prepaid, addressed as follows:

            if to the Originator:

            Fremont Investment & Loan
            175 North Riverview Drive
            Anaheim, California 92808
            Attention:  Senior Vice President - Finance

            with a copy to:

            Fremont General Corporation
            2020 Santa Monica Boulevard
            Santa Monica, California 90404

                                       10
<PAGE>

            Attention:  General Counsel

or such other address as may hereafter be furnished to the Purchaser in writing
by the Originator.

            if to the Purchaser:

            Fremont Mortgage Securities Corporation
            175 North Riverview Drive
            Anaheim, California 92808
            Attention:  Senior Vice President - Treasurer

            with a copy to:

            Fremont General Corporation
            2020 Santa Monica Boulevard
            Santa Monica, California 90404
            Attention:  General Counsel

or such other address as may hereafter be furnished to Fremont in writing by the
Purchaser.

      Section 7.04. Severability of Provisions.

      If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be held invalid for any reason whatsoever, 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.

      Section 7.05. Counterparts.

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

      Section 7.06. Further Agreements.

      The parties hereto each agree to execute and deliver to the other such
additional documents, instruments or agreements as may be necessary or
reasonable and appropriate to effectuate the purposes of this Agreement or in
connection with the issuance of any Series of Certificates representing
interests in the Mortgage Loans.

      Without limiting the generality of the foregoing, as a further inducement
for the Purchaser to purchase the Mortgage Loans from the Originator, the
Originator will cooperate with the Purchaser in connection with the sale of any
of the securities representing interests in the Mortgage Loans. In that
connection, the Originator will provide to the Purchaser any and all information
and appropriate verification of information, whether through letters of its
auditors

                                       11
<PAGE>

and counsel or otherwise, as the Purchaser shall reasonably request and will
provide to the Purchaser such additional representations and warranties,
covenants, opinions of counsel, letters from auditors, and certificates of
public officials or officers of the Originator as are reasonably required in
connection with such transactions and the offering of investment grade
securities rated by the Rating Agencies.

      Without limiting the foregoing, the Originator agrees to deliver to the
Purchaser the following documents and opinions in connection with the issuance
of the Fremont Home Loan Trust 2004-C, Mortgage-Backed Certificates, Series
2004-C (the "Certificates") on or before the Closing Date:

            1. one or more opinions of counsel addressed to the Purchaser, and
      to any Person designated by the Purchaser, in a form reasonably acceptable
      to the Purchaser, from counsel to the Originator as to due incorporation
      and good standing, due authorization, execution and delivery by Fremont of
      related agreements for which Fremont is a signatory; the enforceability of
      such documents by Fremont; and other corporate matters;

            2. an opinion of counsel to the Originator, addressed to the
      Purchaser, and to any Person designated by the Purchaser, in a form
      acceptable to the Purchaser, addressing the characterization of the
      transfer of the Mortgage Loans from the Originator to the Purchaser;

            3. an indemnification agreement executed by and among Fremont, Bear,
      Stearns & Co. Inc., Credit Suisse First Boston LLC, Goldman, Sachs & Co.,
      Greenwich Capital Markets, Inc. and Lehman Brothers Inc. for losses as a
      result of material misstatements and omissions in the information provided
      by or on behalf of the parties thereto and their affiliates for inclusion
      in the prospectus supplement or any other offering document relating to
      the Certificates; and

            4. a statement rendered by counsel for Fremont to the Purchaser and
      the Underwriters as to the lack of material misstatements and omissions in
      the information provided by Fremont for inclusion in the prospectus
      supplement or any other offering document relating to the Certificates.

      In addition, the Originator shall sign the certification for the benefit
of Wells Fargo Bank, N.A., relating to the Form 10-K relating to the Trust to be
filed on or before March 31, 2005. The Originator shall execute the Pooling and
Servicing Agreement in its capacity as originator and servicer and will make the
representations and warranties set forth in Sections 3.01 and 3.02 herein to the
Trustee in the Pooling and Servicing Agreement.

      Section 7.07. Intention of the Parties.

      It is the intention of the parties that the Purchaser is purchasing, and
the Originator is selling, the Mortgage Loans rather than pledging such Mortgage
Loans to secure a loan by the Purchaser to the Originator. Accordingly, the
parties hereto each intend to treat the transaction

                                       12
<PAGE>

as a sale by the Originator, and a purchase by the Purchaser, of the Mortgage
Loans. The Purchaser will have the right to review the Mortgage Loans and the
related Mortgage Files to determine the characteristics of the Mortgage Loans
which will affect the federal income tax consequences of owning the Mortgage
Loans and the Originator will cooperate with all reasonable requests made by the
Purchaser in the course of such review.

      Section 7.08. Successors and Assigns: Assignment of Purchase Agreement.

      This Agreement shall bind and inure to the benefit of and be enforceable
by the Originator, the Purchaser and the Trustee. The obligations of the
Originator under this Agreement cannot be assigned or delegated to a third party
without the consent of the Purchaser which consent shall be at the Purchaser's
sole discretion, except that the Purchaser acknowledges and agrees that the
Originator may assign its obligations hereunder to any Person into which the
Originator is merged or any corporation resulting from any merger, conversion or
consolidation to which the Originator is a party or any Person succeeding to the
business of the Originator. The parties hereto acknowledge that the Purchaser is
acquiring the Mortgage Loans for the purpose of contributing them to a trust
that will issue a Series of Certificates representing undivided interests in
such Mortgage Loans. As an inducement to the Purchaser to purchase the Mortgage
Loans, the Originator acknowledges and consents to the assignment by the
Purchaser directly or indirectly through an affiliate to the Trustee of all of
the Purchaser's rights against the Originator pursuant to this Agreement insofar
as such rights relate to Mortgage Loans transferred to the Trustee and to the
enforcement or exercise of any right or remedy against the Originator pursuant
to this Agreement by the Trustee. Such enforcement of a right or remedy by the
Trustee shall have the same force and effect as if the right or remedy had been
enforced or exercised by the Purchaser directly.

      Section 7.09. Survival.

      The representations and warranties set forth in Sections 3.01 and 3.02 and
the provisions of Article V hereof shall survive the purchase of the Mortgage
Loans hereunder.

      Section 7.10. Third Party Beneficiaries.

      The Trustee and the Trust Administrator are the intended third-party
beneficiaries of this Agreement.

      Section 7.11. Confidentiality.

      The parties hereto understand and agree that personal information relating
to the borrowers under the Mortgage Loans subject of this Agreement, including,
names, addresses, social security numbers and/or other identifying information
(collectively, the "Borrower Information") is confidential, and the Purchaser,
and each person that acquires an interest in the Mortgage Loans through the
Purchaser, agrees to hold such Borrower Information confidential and not to
divulge such information to anyone except (a) to the extent required by law or
judicial order or to enforce its rights or remedies under any agreements
executed in connection with the sale contemplated hereunder or any agreements
executed in connection with the securitization of

                                       13
<PAGE>

the Mortgage Loans, (b) to the extent such information enters into the public
domain other than through the wrongful act of the Purchaser or any person that
acquires an interest in the Mortgage Loans through the Purchaser or (c) as is
necessary in working with legal counsel, auditors, agents, rating agencies,
taxing authorities or other governmental agencies.

                                       14
<PAGE>

      IN WITNESS WHEREOF, the Originator and the Purchaser have caused their
names to be signed to this Mortgage Loan Purchase Agreement by their respective
officers thereunto duly authorized as of the day and year first above written.

                                     FREMONT MORTGAGE SECURITIES CORPORATION,
                                         as Purchaser

                                     By: /s/ Jeff Crusinberry
                                         ------------------------------------
                                         Name:  Jeff Crusinberry
                                         Title:  VP

                                     FREMONT INVESTMENT & LOAN,
                                         as Originator

                                     By: /s/ Jeff Crusinberry
                                         ------------------------------------
                                         Name:  Jeff Crusinberry
                                         Title:  SVP

                                       15
<PAGE>

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

      On the 30th day of August, 2004 before me, a Notary Public in and for said
State, personally appeared Jeff Crusinberry, known to me to be a Vice President
of FREMONT MORTGAGE SECURITIES CORPORATION, the corporation that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.

      IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.

/s/ Elisa B. Avina
------------------------
Notary Public

<PAGE>

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

      On the 30th day of August, 2004 before me, a Notary Public in and for said
State, personally appeared Jeff Crusinberry, known to me to be a Sr. Vice
President of FREMONT INVESTMENT & LOAN, the corporation that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.

      IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.

/s/ Elisa B. Avina
-----------------------
Notary Public

<PAGE>

                                    EXHIBIT A

          Representations and Warranties Relating to the Mortgage Loans

      I. The Originator hereby represents and warrants to the Purchaser, with
respect to each Mortgage Loan that is a Mortgage Loan as of the Closing Date (or
in the case of certain specified representations and warranties, as of the
Cut-off Date) or as of such other date specifically provided herein (except that
with respect to any Qualified Substitute Mortgage Loan such representations and
warranties shall be as of the date of substitution and made by the Originator),
that:

      (a) Mortgage Loans as Described. The information set forth in the Mortgage
Loan Schedule is complete, true and correct in all material respects as of the
Cut-off Date;

      (b) Payments Current. As of the Cut-off Date, other than with respect to
not more than 1.00% of the Mortgage Loans, all payments required to be made up
to the Closing Date for the Mortgage Loan under the terms of the Mortgage Note,
other than payments not yet one month delinquent, have been made and credited.
No payment required under the Mortgage Loan is one month or more delinquent nor
has any payment under the Mortgage Loan been delinquent for more than one month
at any time since the origination of the Mortgage Loan;

      (c) No Outstanding Charges. As of the Cut-off Date, other than with
respect to not more than 1.00% of the Mortgage Loans, and except for payment
defaults of less than one month, there are no defaults in complying with the
terms of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed but is not yet due and payable. The
Originator has not advanced funds, or induced, solicited or knowingly received
any advance of funds by a party other than the Mortgagor, directly or
indirectly, for the payment of any amount required under the Mortgage Loan,
except for interest accruing from the date of the Mortgage Note or date of
disbursement of the Mortgage Loan proceeds, whichever is earlier, to the date
which precedes by one month the Due Date of the first installment of principal
and interest;

      (d) Original Terms Unmodified. The terms of the Mortgage Note and Mortgage
have not been impaired, waived, altered or modified in any respect, from the
date of origination except by a written instrument which has been recorded, if
necessary to protect the interests of the Purchaser, and which has been
delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing, and the terms of which are reflected in the Mortgage Loan
Schedule. No Mortgage Loan has been modified so as to restructure the payment
obligations or re-age the Mortgage Loan. The substance of any such waiver,
alteration or modification has been approved by the title insurer, if any, to
the extent required by the policy, and its terms are reflected on the Mortgage
Loan Schedule, if applicable. No Mortgagor has been released, in whole or in
part, except in connection with an assumption agreement, approved by the title
insurer, to the extent required by the policy, and which assumption agreement is
part of the Mortgage Loan File delivered to the Custodian or to such other
Person as the Purchaser shall designate in writing and the terms of which are
reflected in the Mortgage Loan Schedule;

                                      A-1
<PAGE>

      (e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part, or subject to
any right of rescission, set-off, counterclaim or defense, including without
limitation the defense of usury, and no such right of rescission, set-off,
counterclaim or defense has been asserted with respect thereto, and no Mortgagor
was a debtor in any state or federal bankruptcy or insolvency proceeding at, or
subsequent to, the time the Mortgage Loan was originated;

      (f) Hazard Insurance. Pursuant to the terms of the Mortgage, all buildings
or other improvements upon the Mortgaged Property are insured by a generally
acceptable insurer against loss by fire, hazards of extended coverage and such
other hazards as are customary in the area where the Mortgaged Property is
located. If required by the National Flood Insurance Act of 1968, as amended,
each Mortgage Loan is covered by a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
as in effect. All individual insurance policies contain a standard mortgagee
clause naming the Originator and its successors and assigns as mortgagee, and
all premiums thereon have been paid and such policies may not be reduced,
terminated or cancelled without 30 days' prior written notice to the mortgagee.
The Mortgage obligates the Mortgagor thereunder to maintain the hazard insurance
policy at the Mortgagor's cost and expense, and on the Mortgagor's failure to do
so, authorizes the holder of the Mortgage to obtain and maintain such insurance
at such Mortgagor's cost and expense, and to seek reimbursement therefor from
the Mortgagor. Where required by state law or regulation, the Mortgagor has been
given an opportunity to choose the carrier of the required hazard insurance,
provided the policy is not a "master" or "blanket" hazard insurance policy
covering a condominium, or any hazard insurance policy covering the common
facilities of a planned unit development. The hazard insurance policy is the
valid and binding obligation of the insurer, is in full force and effect, and
will be in full force and effect and inure to the benefit of the Purchaser upon
the consummation of the transactions contemplated by this Agreement. The
Originator has not engaged in, and has no knowledge of the Mortgagor's or any
servicer's having engaged in, any act or omission which would impair the
coverage of any such policy, the benefits of the endorsement provided for
herein, or the validity and binding effect of such policy, including, without
limitation, no unlawful fee, commission, kickback or other unlawful compensation
or value of any kind has been or will be received, retained or realized by any
attorney, firm or other person or entity, and no such unlawful items have been
received, retained or realized by the Originator;

      (g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity and disclosure laws, all predatory and abusive lending
laws or unfair and deceptive practices laws applicable to the Mortgage Loan,
including, without limitation, any provisions relating to Prepayment Penalties,
have been complied with; the consummation of the transactions contemplated
hereby will not involve the violation of any such laws or regulations.
Originator shall maintain in its possession, available for the Purchaser's
inspection, and shall deliver to the Purchaser upon demand, evidence of
compliance with all such requirements;

                                      A-2
<PAGE>

      (h) No Satisfaction of Mortgage. The Mortgage has not been satisfied,
canceled, subordinated or rescinded, in whole or in part, and the Mortgaged
Property has not been released from the lien of the Mortgage, in whole or in
part, nor has any instrument been executed that would effect any such release,
cancellation, subordination or rescission. The Originator has not waived the
performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Originator waived any default resulting from any action or inaction by the
Mortgagor;

      (i) Location and Type of Mortgaged Property. The Mortgaged Property is a
fee simple property located in the state identified in the Mortgage Loan
Schedule except that with respect to real property located in jurisdictions in
which the use of leasehold estates for residential properties is a
widely-accepted practice, the Mortgaged Property may be a leasehold estate and
consists of a single parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, or an individual
residential condominium unit in a low-rise condominium project, or an individual
unit in a planned unit development and that no residence or dwelling is (i) a
mobile home or (ii) a manufactured home. As of the date of origination, no
portion of the Mortgaged Property was used for commercial purposes, and since
the date of origination, no portion of the Mortgaged Property has been used for
commercial purposes; provided, that Mortgaged Properties which contain a home
office shall not be considered as being used for commercial purposes as long as
the Mortgaged Property has not been altered for commercial purposes and is not
storing any chemicals or raw materials other than those commonly used for
homeowner repair, maintenance and/or household purposes;

      (j) Valid First. Each Mortgage is a valid and subsisting first lien of
record on a single parcel of real estate constituting the Mortgaged Property,
including all buildings and improvements on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time, with respect to the related Mortgage Loan,
which exceptions are generally acceptable to prudent mortgage lending companies,
and such other exceptions to which similar properties are commonly subject and
which do not individually, or in the aggregate, materially and adversely affect
the benefits of the security intended to be provided by such Mortgage. The lien
of the Mortgage is subject only to:

            (i) the lien of current real property taxes and assessments not yet
      due and payable;

            (ii) covenants, conditions and restrictions, rights of way,
      easements and other matters of the public record as of the date of
      recording acceptable to prudent mortgage lending institutions generally
      and specifically referred to in the lender's title insurance policy
      delivered to the originator of the Mortgage Loan and (A) specifically
      referred to or otherwise considered in the appraisal made for the
      originator of the Mortgage Loan or (B) which do not adversely affect the
      Appraised Value of the Mortgaged Property set forth in such appraisal; and

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

                                      A-3
<PAGE>

      Mortgage or the use, enjoyment, value or marketability of the related
      Mortgaged Property.

Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien and first priority security
interest on the property described therein and the Originator has full right to
sell and assign the same to Purchaser;

      (k) Validity of Mortgage Documents. The Mortgage Note and the Mortgage and
any other agreement executed and delivered by a Mortgagor in connection with a
Mortgage Loan are genuine, and each is the legal, valid and binding obligation
of the maker thereof enforceable in accordance with its terms (including,
without limitation, any provisions therein relating to Prepayment Penalties),
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other similar laws relating to or
affecting the rights of creditors generally, and by general equity principles
(regardless of whether such enforcement is considered a proceeding in equity or
a law). All parties to the Mortgage Note, the Mortgage and any other such
related agreement had legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note, the Mortgage and any such agreement, and
the Mortgage Note, the Mortgage and any other such related agreement have been
duly and properly executed by other such related parties. The documents,
instruments and agreements submitted for loan underwriting were not falsified
and contain no untrue statement of material fact or omit to state a material
fact required to be stated therein or necessary to make the information and
statements therein not misleading. No fraud, error, omission, misrepresentation,
gross negligence or similar occurrence with respect to a Mortgage Loan has taken
place on the part of any Person, including without limitation, the Mortgagor,
any appraiser, any builder or developer, or any other party involved in the
origination or servicing of the Mortgage Loan. The Originator has reviewed all
of the documents constituting the Servicing File;

      (l) Full Disbursement of Proceeds. The Mortgage Loan has been closed and
the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;

      (m) Ownership. Immediately prior to the sale of the Mortgage Loan
hereunder on the Closing Date, the Originator is the sole owner of record and
holder of the Mortgage Loan and the indebtedness evidenced by each Mortgage Note
and upon the sale of the Mortgage Loans to the Purchaser, the Originator will
retain the Mortgage Files or any part thereof not delivered to the Custodian,
the Purchaser or the Purchaser's designee, in trust only for the purpose of
servicing and supervising the servicing of each Mortgage Loan. The Mortgage Loan
is not assigned or pledged, and the Originator has good, indefeasible and
marketable title thereto, and has full right to transfer and sell the Mortgage
Loan to the Purchaser free and clear of any encumbrance, equity, participation
interest, lien, pledge, charge, claim or security interest, and has full right
and authority subject to no interest or participation of, or agreement with, any
other party, to sell and assign each Mortgage Loan pursuant to this Agreement
and following the sale of each Mortgage

                                      A-4
<PAGE>

Loan, the Purchaser will own such Mortgage Loan free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest. The Originator intends to relinquish all rights to possess,
control and monitor the Mortgage Loan. After the Closing Date, the Originator
will have no right to modify or alter the terms of the sale of the Mortgage Loan
and the Originator will have no obligation or right to repurchase the Mortgage
Loan or substitute another Mortgage Loan, except as provided in this Agreement;

      (n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (i) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (ii) either (A) organized
under the laws of such state, or (B) qualified to do business in such state, or
(C) a federal savings and loan association, a savings bank or a national bank
having a principal office in such state, or (iii) not doing business in such
state;

      (o) LTV. No Mortgage Loan was originated with an LTV greater than 100%;

      (p) Title Insurance. The Mortgage Loan is covered by an ALTA lender's
title insurance policy, or with respect to any Mortgage Loan for which the
related Mortgaged Property is located in California a CLTA lender's title
insurance policy, and each such title insurance policy is issued by a title
insurer and qualified to do business in the jurisdiction where the Mortgaged
Property is located, insuring the Originator, its successors and assigns, as to
the first priority lien of the Mortgage in the original principal amount of the
Mortgage Loan, subject only to the exceptions contained in clauses (i), (ii) and
(iii) of paragraph (j) above, and in the case of Adjustable Rate Mortgage Loans,
against any loss by reason of the invalidity or unenforceability of the lien
resulting from the provisions of the Mortgage providing for adjustment to the
Mortgage Interest Rate and Monthly Payment. Where required by state law or
regulation, the Mortgagor has been given the opportunity to choose the carrier
of the required mortgage title insurance. Additionally, such lender's title
insurance policy affirmatively insures ingress and egress, and against
encroachments by or upon the Mortgaged Property or any interest therein. The
title policy does not contain any special exceptions (other than the standard
exclusions) for zoning and uses and has been marked to delete the standard
survey exception or to replace the standard survey exception with a specific
survey reading. The Originator, its successor and assigns, are the sole insureds
of such lender's title insurance policy, and such lender's title insurance
policy is valid and remains in full force and effect and will be in force and
effect upon the consummation of the transactions contemplated by this Agreement.
No claims are pending under such lender's title insurance policy, and no prior
holder of the related Mortgage, including the Originator, has done, by act or
omission, anything which would impair the coverage of such lender's title
insurance policy, including without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Originator;

      (q) No Defaults. As of the Cut-off Date, other than with respect to not
more than 3.25% of the Group II Mortgage Loans that are 30-59 days delinquent,
and other than payment delinquencies of less than one month, there is no
default, breach, violation or event which would permit acceleration existing
under the Mortgage or the Mortgage Note and no event which, with

                                      A-5
<PAGE>

the passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event which would
permit acceleration, and as of the Closing Date neither the Originator nor any
of its affiliates nor any of their respective predecessors, have waived any
default, breach, violation or event which would permit acceleration;

      (r) No Mechanics' Liens. As of the date of origination and to the best of
the Originator's knowledge as of the Closing Date, there are no mechanics' or
similar liens or claims which have been filed for work, labor or material (and
no rights are outstanding that under law could give rise to such liens)
affecting the related Mortgaged Property which are or may be liens prior to, or
equal or coordinate with, the lien of the related Mortgage;

      (s) Location of Improvements; No Encroachments. All improvements which
were considered in determining the Appraised Value of the Mortgaged Property lay
wholly within the boundaries and building restriction lines of the Mortgaged
Property, and no improvements on adjoining properties encroach upon the
Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;

      (t) Origination; Payment Terms. The Mortgage Loan was originated by a
mortgagee approved by the Secretary of Housing and Urban Development pursuant to
Sections 203 and 211 of the National Housing Act, savings and loan association,
a savings bank, a commercial bank, credit union, insurance company or other
similar institution which is supervised and examined by a federal or state
authority. The documents, instruments and agreements submitted for loan
underwriting were not falsified and contain no untrue statement of material fact
or omit to state a material fact required to be stated therein or necessary to
make the information and statements therein not misleading. No Mortgage Loan
contains terms or provisions which would result in negative amortization.
Principal payments on the Mortgage Loan (other than a Mortgage Loan that does
not provide for payment of principal for a period of twenty-four to thirty-six
months after the date of origination (such Mortgage Loan, an "Interest Only
Mortgage Loan")) commenced no more than sixty days after funds were disbursed in
connection with the Mortgage Loan. The Mortgage Interest Rate as well as the
Lifetime Rate Cap and the Periodic Mortgage Interest Rate Cap are as set forth
on the Mortgage Loan Schedule. With respect to any Mortgage Loan other than an
Interest Only Mortgage Loan, the Mortgage Note is payable in equal monthly
installments of principal and interest, which installments of interest, with
respect to Adjustable Rate Mortgage Loans, are subject to change due to the
adjustments to the Mortgage Interest Rate on each Mortgage Interest Rate
Adjustment Date, with interest calculated and payable in arrears, sufficient to
amortize the Mortgage Loan fully by the stated maturity date, over an original
term of not more than thirty years from commencement of amortization. None of
the Mortgage Loans allows for conversion of the interest rate thereon from an
adjustable rate to a fixed rate. No Mortgage Loan is a simple interest mortgage
loan;

      (u) Customary Provisions. The Mortgage contains customary and enforceable
provisions such as to render the rights and remedies of the holder thereof
adequate for the realization against the Mortgaged Property of the benefits of
the security provided thereby, including, (i) in the case of a Mortgage
designated as a deed of trust, by trustee's sale, and (ii) otherwise by judicial
foreclosure. Upon default by a Mortgagor on a Mortgage Loan and foreclosure on,
or trustee's sale of, the Mortgaged Property pursuant to the proper procedures,

                                      A-6
<PAGE>

the holder of the Mortgage Loan will be able to deliver good and merchantable
title to the Mortgaged Property. There is no homestead or other exemption
available to a Mortgagor which would interfere with the right to sell the
Mortgaged Property at a trustee's sale or the right to foreclose the Mortgage,
subject to applicable federal and state laws and judicial precedent with respect
to bankruptcy and right of redemption or similar law;

      (v) Conformance with Underwriting Guidelines. The Mortgage Loan was
underwritten in accordance with the Underwriting Guidelines in effect as of the
date of origination of such Mortgage Loan (as described in the Prospectus
Supplement). The Mortgage Note and Mortgage are on forms generally acceptable to
Freddie Mac or Fannie Mae and the Originator has not made any representations to
a Mortgagor that are inconsistent with the mortgage instruments used;

      (w) Occupancy of the Mortgaged Property. As of the Closing Date the
Mortgaged Property is lawfully occupied under applicable law. All inspections,
licenses and certificates required to be made or issued with respect to all
occupied portions of the Mortgaged Property and, with respect to the use and
occupancy of the same, including but not limited to certificates of occupancy
and fire underwriting certificates, have been made or obtained from the
appropriate authorities;

      (x) No Additional Collateral. The Mortgage Note is not and has not been
secured by any collateral except the lien of the corresponding Mortgage and the
security interest of any applicable security agreement or chattel mortgage
referred to in clause (j) above;

      (y) Deeds of Trust. In the event the Mortgage constitutes a deed of trust,
a trustee, authorized and duly qualified under applicable law to serve as such,
has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a reconveyance of
the deed of trust or a trustee's sale after default by the Mortgagor;

      (z) Condominiums/Planned Unit Developments. If the Mortgaged Property is a
condominium unit or a planned unit development (other than a de minimis planned
unit development) such condominium or planned unit development project is
acceptable to Originator and underwritten in accordance with the Underwriting
Guidelines;

      (aa) Transfer of Mortgage Loans. The Assignment of Mortgage with respect
to each Mortgage Loan is in recordable form and is acceptable for recording
under the laws of the jurisdiction in which the Mortgaged Property is located.
The transfer, assignment and conveyance of the Mortgage Notes and the Mortgages
by the Originator is not subject to the bulk transfer or similar statutory
provisions in effect in any applicable jurisdiction;

      (bb) Due-On-Sale. The Mortgage contains an enforceable provision (except
as such enforcement may be effected by bankruptcy and insolvency laws or by
general principals of equity) for the acceleration of the payment of the unpaid
principal balance of the Mortgage Loan in the event that the Mortgaged Property
is sold or transferred without the prior written consent of the mortgagee
thereunder, and to the best of the Originator's knowledge, such provision is
enforceable;

                                      A-7
<PAGE>

      (cc) Assumability. None of the Mortgage Loans are, by their terms,
assumable;

      (dd) No Buydown Provisions; No Graduated Payments or Contingent Interests.
The Mortgage Loan does not contain provisions pursuant to which Monthly Payments
are paid or partially paid with funds deposited in any separate account
established by the Originator, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;

      (ee) Consolidation of Future Advances. Any future advances made to the
Mortgagor prior to the Cut-off Date have been consolidated with the outstanding
principal amount secured by the Mortgage, and the secured principal amount, as
consolidated, bears a single interest rate and single repayment term. The lien
of the Mortgage securing the consolidated principal amount is expressly insured
as having first lien priority by a title insurance policy, an endorsement to the
policy insuring the mortgagee's consolidated interest or by other title
evidence. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan;

      (ff) Mortgaged Property Undamaged; No Condemnation Proceedings. There is
no proceeding pending or, to the best of the Originator's knowledge, threatened
for the total or partial condemnation of the Mortgaged Property. As of the
Closing Date, the Mortgaged Property is undamaged by waste, fire, earthquake or
earth movement, windstorm, flood, tornado or other casualty so as to affect
adversely the value of the Mortgaged Property as security for the Mortgage Loan
or the use for which the premises were intended and each Mortgaged Property is
inhabitable under applicable state and local laws;

      (gg) Collection Practices; Escrow Deposits; Interest Rate Adjustments. The
origination, servicing and collection practices used by the Originator with
respect to the Mortgage Loan have been in all respects in compliance with
Accepted Servicing Practices, applicable laws and regulations, and have been in
all respects legal and proper and prudent in the mortgage origination and
servicing business. With respect to escrow deposits and Escrow Payments, all
such payments are in the possession of, or under the control of, the Originator
and there exist no deficiencies in connection therewith for which customary
arrangements for repayment thereof have not been made. All Escrow Payments have
been collected in full compliance with state and federal law and the provisions
of the related Mortgage Note and Mortgage. An escrow of funds is not prohibited
by applicable law and has been established in an amount sufficient to pay for
every item that remains unpaid and has been assessed but is not yet due and
payable. No escrow deposits or Escrow Payments or other charges or payments due
the Originator have been capitalized under the Mortgage or the Mortgage Note.
All Mortgage Interest Rate adjustments have been made in strict compliance with
state and federal law and the terms of the related Mortgage and Mortgage Note on
the related Interest Rate Adjustment Date. If, pursuant to the terms of the
Mortgage Note, another index was selected for determining the Mortgage Interest
Rate, the same index was used with respect to each Mortgage Note which required
a new index to be selected, and such selection did not conflict with the terms
of the related Mortgage Note. The Originator executed and delivered any and all
notices required under applicable law and the terms of the related Mortgage Note
and Mortgage regarding the

                                      A-8
<PAGE>

Mortgage Interest Rate and the Monthly Payment adjustments. Any interest
required to be paid pursuant to state, federal and local law has been properly
paid and credited;

      (hh) Conversion to Fixed Interest Rate. With respect to Adjustable Rate
Mortgage Loans, the Mortgage Loan is not a Convertible Mortgage Loan;

      (ii) No Violation of Environmental Laws. To the best of the Originator's
knowledge, the Mortgaged Property is free from any and all toxic or hazardous
substances and there exists no violation of any local, state or federal
environmental law, rule or regulation. To the best of the Originator's
knowledge, there is no pending action or proceeding directly involving the
Mortgaged Property in which compliance with any environmental law, rule or
regulation is an issue; there is no violation of any environmental law, rule or
regulation with respect to the Mortgage Property; and nothing further remains to
be done to satisfy in full all requirements of each such law, rule or regulation
constituting a prerequisite to use and enjoyment of said property;

      (jj) Servicemembers Civil Relief Act. The Mortgagor has not notified the
Originator, and the Originator has no knowledge of any relief requested or
allowed to the Mortgagor under the Servicemembers Civil Relief Act;

      (kk) Appraisal. The Mortgage File contains an appraisal of the related
Mortgaged Property signed prior to the approval of the Mortgage Loan application
by a qualified appraiser, duly appointed by the related originator, who had no
interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfy
the requirements of the Financial Institutions Reform, Recovery, and Enforcement
Act of 1989 and the regulations promulgated thereunder, all as in effect on the
date the Mortgage Loan was originated;

      (ll) Disclosure Materials. The Mortgagor has received all disclosure
materials required by, and the Originator has complied with, all applicable law
with respect to the making of the Mortgage Loans;

      (mm) Construction or Rehabilitation of Mortgaged Property. No Mortgage
Loan was made in connection with the construction or rehabilitation of a
Mortgaged Property or facilitating the trade-in or exchange of a Mortgaged
Property;

      (nn) Value of Mortgaged Property. The Originator has no knowledge of any
circumstances existing that could reasonably be expected to adversely affect the
value or the marketability of any Mortgaged Property or Mortgage Loan or to
cause the Mortgage Loans to prepay during any period materially faster or slower
than similar mortgage loans originated to the same Underwriting Guidelines held
by the Originator generally secured by properties in the same geographic area as
the related Mortgaged Property;

      (oo) No Defense to Insurance Coverage. The Originator has caused or will
cause to be performed any and all acts required to preserve the rights and
remedies of the Purchaser in any insurance policies applicable to the Mortgage
Loans including, without limitation, any necessary notifications of insurers,
assignments of policies or interests therein, and establishments of

                                      A-9
<PAGE>

coinsured, joint loss payee and mortgagee rights in favor of the Purchaser. No
action has been taken or failed to be taken, no event has occurred and no state
of facts exists or has existed on or prior to the Closing Date (whether or not
known to the Originator on or prior to such date) which has resulted or will
result in an exclusion from, denial of, or defense to coverage under any
applicable, special hazard insurance policy, or bankruptcy bond (including,
without limitation, any exclusions, denials or defenses which would limit or
reduce the availability of the timely payment of the full amount of the loss
otherwise due thereunder to the insured) whether arising out of actions,
representations, errors, omissions, negligence, or fraud of the Originator, the
related Mortgagor or any party involved in the application for such coverage,
including the appraisal, plans and specifications and other exhibits or
documents submitted therewith to the insurer under such insurance policy, or for
any other reason under such coverage, but not including the failure of such
insurer to pay by reason of such insurer's breach of such insurance policy or
such insurer's financial inability to pay;

      (pp) Escrow Analysis. With respect to each Mortgage with an Escrow
Account, the Originator has within the last twelve months (unless such Mortgage
was originated within such twelve month period) analyzed the required Escrow
Payments for each Mortgage and adjusted the amount of such payments so that,
assuming all required payments are timely made, any deficiency will be
eliminated on or before the first anniversary of such analysis, or any overage
will be refunded to the Mortgagor, in accordance with RESPA and any other
applicable law;

      (qq) Prior Servicing. Each Mortgage Loan has been serviced in all material
respects in compliance with Accepted Servicing Practices and the Originator has
reported or caused to be reported, the Mortgagor credit files to each of the
three primary credit repositories monthly in a timely manner;

      (rr) Leaseholds. If the Mortgage Loan is secured by a long-term
residential lease, (i) the lessor under the lease holds a fee simple interest in
the land; (ii) the terms of such lease expressly permit the mortgaging of the
leasehold estate, the assignment of the lease without the lessor's consent and
the acquisition by the holder of the Mortgage of the rights of the lessee upon
foreclosure or assignment in lieu of foreclosure or provide the holder of the
Mortgage with substantially similar protections; (iii) the terms of such lease
do not (A) allow the termination thereof upon the lessee's default without the
holder of the Mortgage being entitled to receive written notice of, and
opportunity to cure, such default, (B) allow the termination of the lease in the
event of damage or destruction as long as the Mortgage is in existence, (C)
prohibit the holder of the Mortgage from being insured (or receiving proceeds of
insurance) under the hazard insurance policy or policies relating to the
Mortgaged Property or (D) permit any increase in rent other than pre-established
increases set forth in the lease; (iv) the original term of such lease is not
less than 15 years; (v) the term of such lease does not terminate earlier than
five years after the maturity date of the Mortgage Note; and (vi) the Mortgaged
Property is located in a jurisdiction in which the use of leasehold estates in
transferring ownership in residential properties is a widely accepted practice;

      (ss) Prepayment Penalty. The Mortgage Loan is subject to a prepayment
penalty as provided in the related Mortgage Note except as set forth on the
Mortgage Loan Schedule. With respect to each Mortgage Loan that has a prepayment
penalty feature, each such prepayment penalty is enforceable and will be
enforced by the Originator, as servicer of the Mortgage Loan,

                                      A-10
<PAGE>

for the benefit of the Purchaser, and each prepayment penalty is permitted
pursuant to federal, state and local law. Each such prepayment penalty is in an
amount equal to the maximum amount permitted under applicable law and no such
prepayment penalty may be imposed for a term in excess of three (3) years. With
respect to any Mortgage Loan that contains a provision permitting imposition of
a prepayment penalty upon a prepayment prior to maturity: (i) prior to the
loan's origination, the borrower agreed to such prepayment penalty in exchange
for a monetary benefit, including but not limited to a rate or fee reduction,
(ii) originator has available programs that offered the option of obtaining a
mortgage loan that did not require payment of such a prepayment penalty and
prior to the Mortgage Loan's origination, the Mortgage Loan was available to the
Mortgagor with and without the prepayment penalty, (iii) the prepayment penalty
was disclosed to the borrower in the loan documents pursuant to applicable state
and federal law, and (iv) notwithstanding any state or federal law to the
contrary, the Servicer shall not impose such prepayment penalty in any instance
when the mortgage debt is accelerated as the result of the borrower's default in
making the loan payments;

      (tt) Predatory Lending Regulations. None of the Mortgage Loans are (i)
covered by the Home Ownership and Equity Protection Act of 1994 as amended or
(ii) in violation of, or classified as "high cost", "threshold," "covered" or
"predatory" loans under, any other applicable state, federal or local law (or a
similarly classified loan using different terminology under a law imposing
heightened regulatory scrutiny or additional legal liability for residential
mortgage loans having high interest rates, points and/or fees);

      (uu) Single-Premium Credit Life Insurance Policy. In connection with the
origination of any Mortgage Loan, no proceeds from any Mortgage Loan were used
to finance or acquire single-premium credit insurance policies; No Mortgagor was
required to purchase any credit life, disability, accident or health insurance
product as a condition of obtaining the extension of credit. No Mortgagor
obtained a prepaid single-premium credit life, disability, accident or health
insurance policy in connection with the origination of the Mortgage Loan;

      (vv) Tax Service Contract; Flood Certification Contract. Each Mortgage
Loan is covered by a paid in full, life of loan, tax service contract and a paid
in full, life of loan, flood certification contract and each of these contracts
is assignable to the Purchaser;

      (ww) Qualified Mortgage. Each Mortgage Loan is a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code;

      (xx) Regarding the Mortgagor. The Mortgagor is one or more natural persons
and/or trustees for an Illinois land trust;

      (yy) Recordation. Each original Mortgage was recorded and, except for
those Mortgage Loans subject to the MERS identification system, all subsequent
assignments of the original Mortgage (other than the assignment to the
Purchaser) have been recorded in the appropriate jurisdictions wherein such
recordation is necessary to perfect the lien thereof as against creditors of the
Originator, or is in the process of being recorded;

      (zz) Credit Scores. Except as permitted by the Underwriting Guidelines,
each Mortgagor has a non-zero credit score;

                                      A-11
<PAGE>

      (aaa) Compliance with Anti-Money Laundering Laws. The Originator has
complied with all applicable anti-money laundering laws and regulations,
including without limitation the USA Patriot Act of 2001 (collectively, the
"Anti-Money Laundering Laws"); to the extent required to comply with the
Anti-Money Laundering Laws, as of the Closing Date, the Originator has
established an anti-money laundering compliance program as required by the
Anti-Money Laundering Laws, has conducted the requisite due diligence in
connection with the origination of each Mortgage Loan for purposes of the
Anti-Money Laundering Laws, including with respect to the legitimacy of the
applicable Mortgagor and the origin of the assets used by the said Mortgagor to
purchase the property in question, and maintains, and will maintain, sufficient
information to identify the applicable Mortgagor for purposes of the Anti-Money
Laundering Laws;

      (bbb) Georgia Fair Lending Act. There is no Mortgage Loan that was
originated on or after October 1, 2002 and on or prior to March 7, 2003, which
is secured by property located in the State of Georgia. There is no Mortgage
Loan that was originated on or after March 7, 2003 that is a "high cost home
loan" as defined under the Georgia Fair Lending Act;

      (ccc) New York State Banking Law. There is no Mortgage Loan that (a) is
secured by property located in the State of New York; (b) had an original
principal balance of $300,000 or less, and (c) has an application date on or
after April 1, 2003, the terms of which loan equal or exceed either the annual
percentage rate or the points and fees threshold for "high-cost home loans," as
defined in Section 6-L of the New York State Banking Law;

      (ddd) New Jersey Mortgage Loans. All Mortgage Loans originated in New
Jersey on or after November 27, 2003 are ratable by Standard & Poor's, Fitch
Ratings and Moody's;

      (eee) New Mexico Mortgage Loans. There is no Mortgage Loan that was
originated on or after January 1, 2004, and is a "high-cost" loan subject to the
New Mexico Home Loan Protection Act.

      (fff) MERS Designations. With respect to each MERS Designated Mortgage
Loan, the Originator has designated the Custodian as the Investor and no Person
is listed as Interim Funder on the MERS(R) System;

      (ggg) Delivery to the Custodian. The Mortgage Note, the Mortgage, the
Assignment of Mortgage and any other documents required to be delivered with
respect to each Mortgage Loan pursuant to this Agreement and the Pooling and
Servicing Agreement, have been delivered to the Trust Administrator in its
capacity as Custodian all in compliance with the specific requirements of this
Agreement and the Pooling and Servicing Agreement;

      (hhh) Reports. On or prior to the Closing Date, the Originator has
provided the Custodian and the Purchaser with a MERS Report listing the
Custodian as the Investor with respect to each MERS Designated Mortgage Loan;

      (iii) Payoffs. No Mortgage Loans prepaid in full prior to the Closing
Date;

      (jjj) Credit Information. As to each consumer report (as defined in the
Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Originator to the

                                      A-12
<PAGE>

Purchaser, the Originator has full right and authority and is not precluded by
law or contract from furnishing such information to the Purchaser and the
Purchaser is not precluded by the terms of the Mortgage Loan Documents from
furnishing the same to any subsequent or prospective purchaser of such Mortgage.
The Originator shall hold the Purchaser harmless from any and all damages,
losses, costs and expenses (including attorney's fees) arising from disclosure
of credit information in connection with the Purchaser's secondary marketing
operations and the purchase and sale of mortgages. The Originator has or has
caused the related servicer to, for each Mortgage Loan, fully furnish, in
accordance with the Fair Credit Reporting Act and its implementing regulations,
accurate and complete information (e.g., favorable and unfavorable) on its
borrower credit files to Equifax, Experian and Trans Union Credit Information
Company (three of the credit repositories), on a monthly basis;

      (kkk) Origination Practices. Each Mortgagor was assigned the highest
credit grade available with respect to a mortgage loan product offered by such
Mortgage Loan's originator, taking into account the credit history, debt to
income ratio and loan requirement of such Mortgagor; and

      (lll) No Mortgage Loan is a High Cost Loan or Covered Loan, as applicable
(as such terms are defined in Appendix E of the Standard & Poor's Glossary For
File Format For LEVELS(R) Version 5.6 Revised (attached hereto as Exhibit B).

      II. The Originator hereby further represents and warrants to the
Purchaser, with respect to each Group I Mortgage Loan as of the Closing Date or
as of such other date specifically provided herein (except that with respect to
any Qualified Substitute Mortgage Loan such representations and warranties shall
be as of the date of substitution and made by the Originator), that:

            (a) Each Mortgage Loan is in compliance with the anti-predatory
lending eligibility for purchase requirements of Fannie Mae's Selling Guide;

            (b) No Mortgage Loan is a "High-Cost Home Loan" as defined in
the Arkansas Home Loan Protection Act effective July 16, 2003 (Act 1340 of
2003);

            (c) No Mortgage Loan is a "High-Cost Home Loan" as defined in the
Kentucky high-cost home loan statute effective June 24, 2003 (Ky. Rev. Stat.
Section 360.100);

            (d) No Mortgage Loan is a "High-Cost Home Loan" as defined in the
New Jersey Home Ownership Act effective November 27, 2003 (N.J.S.A. 46:10B-22 et
seq.);

            (e) No Mortgage Loan is a "High-Cost Home Loan" as defined in the
New Mexico Home Loan Protection Act effective January 1, 2004 (N.M. Stat.
Ann. Sections 58-21A-1 et seq.);

            (f) No Mortgage Loan is a "High-Risk Home Loan" as defined in the
Illinois High-Risk Home Loan Act effective January 1, 2004 (815 Ill. Comp. Stat.
137/1 et seq.);

                                      A-13
<PAGE>

            (g) Each Mortgagor was assigned the highest credit grade available
with respect to a mortgage loan product offered by such Mortgage Loan's
originator, taking into account the credit history, debt to income ratio and
loan requirement of such Mortgagor;

            (h) The methodology used in underwriting the extension of credit for
each Mortgage Loan employs, in part, objective mathematical principles which
relate the borrower's income, assets and liabilities to the proposed payment and
such underwriting methodology does not rely on the extent of the borrower's
equity in the collateral as the principal determining factor in approving such
credit extension. Such underwriting methodology is designed to determine that at
the time of origination (application/approval) the borrower had a reasonable
ability to make timely payments on the Mortgage Loan;

            (i) All points and fees related to each Mortgage Loan were disclosed
in writing to the borrower in accordance with applicable state and federal law
and regulation. Except in the case of a Mortgage Loan in an original principal
amount of less than $60,000 which would have resulted in an unprofitable
origination, no borrower was charged "points and fees" (whether or not financed)
in an amount greater than 5% of the principal amount of such loan, such 5%
limitation is calculated in accordance with Fannie Mae's anti-predatory lending
requirements as set forth in the Fannie Mae Selling Guide;

            (j) All fees and charges (including finance charges) and whether or
not financed, assessed, collected or to be collected in connection with the
origination and servicing of each Mortgage Loan has been disclosed in writing to
the borrower in accordance with applicable state and federal law and regulation;
and

            (k) The Servicer will transmit full-file credit reporting data for
each Mortgage Loan pursuant to Fannie Mae Guide Announcement 95-19 and that for
each Mortgage Loan, Servicer agrees it shall report one of the following
statuses each month as follows: new origination, current, delinquent (30-, 60-,
90-days, etc.), foreclosed, or charged-off.

                                      A-14
<PAGE>

                                    EXHIBIT B

                APPENDIX E OF THE STANDARD & POOR'S GLOSSARY FOR
                  FILE FORMAT FOR LEVELS(R) VERSION 5.6 REVISED

                              REVISED July 7, 2004

APPENDIX E - STANDARD & POOR'S ANTI-PREDATORY LENDING CATEGORIZATION

Standard & Poor's has categorized loans governed by anti-predatory lending laws
in the Jurisdictions listed below into three categories based upon a combination
of factors that include (a) the risk exposure associated with the assignee
liability and (b) the tests and thresholds set forth in those laws. Note that
certain loans classified by the relevant statute as Covered are included in
Standard & Poor's High Cost Loan Category because they included thresholds and
tests that are typical of what is generally considered High Cost by the
industry.

STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION

<TABLE>
<CAPTION>
                                                                                                   Category under
                                   Name of Anti-Predatory Lending                                 Applicable Anti-
 State/Jurisdiction                      Law/Effective Date                                     Predatory Lending Law
---------------------    ----------------------------------------------------------     ------------------------------------
<S>                      <C>                                                            <C>
Arkansas                 Arkansas Home Loan Protection Act, Ark. Code Ann. sections     High Cost Home Loan
                         23-53-101 et seq.

                         Effective July 16, 2003

Cleveland Heights, OH    Ordinance No. 72-2003 (PSH), Mun. Code sections                Covered Loan
                         757.01 et seq.

                         Effective June 2, 2003

Colorado                 Consumer Equity Protection, Colo. Stat. Ann.sections           Covered Loan
                         5-3.5-101 et seq.

                         Effective for covered loans offered or entered into on or
                         after January 1, 2003. Other provisions of the Act took
                         effect on June 7, 2002

Connecticut              Connecticut Abusive Home Loan Lending Practices Act,           High Cost Home Loan
                         Conn. Gen. Stat.sections 36a-746 et seq.

                         Effective October 1, 2001

District of Columbia     Home Loan Protection Act, D.C. Codes sections 26-1151.01       Covered Loan
                         et seq.
</TABLE>

                                      B-1
<PAGE>
STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION

<TABLE>
<CAPTION>
                                                                                                   Category under
                                    Name of Anti-Predatory Lending                                 Applicable Anti-
 State/Jurisdiction                      Law/Effective Date                                     Predatory Lending Law
---------------------    ----------------------------------------------------------     ------------------------------------
<S>                      <C>                                                            <C>
                         Effective for loans closed on or after January 28, 2003

Florida                  Fair Lending Act, Fla. Stat. Ann sections 494.0078 et seq.     High Cost Home Loan

                         Effective October 2, 2002

Georgia (Oct. 1,         Georgia Fair Lending Act, Ga. Code Ann. sections 7-6A-1        High Cost Home Loan
2002 - Mar. 6, 2003)     et seq.

                         Effective October 1, 2002 - March 6, 2003

Georgia as amended       Georgia Fair Lending Act, Ga. Code Ann sections 7-6A-1         High Cost Home Loan
(Mar. 7, 2003 -          et seq.
current)
                         Effective for loans closed on or after March 7, 2003

HOEPA Section 32         Home Ownership and Equity Protection Act of 1994, 15           High Cost Loan
                         U.S.C. section 1639, 12 C.F.R. sections 226.32 and 226.34

                         Effective October 1, 1995, amendments October 1, 2002

Illinois                 High Risk Home Loan Act, Ill. Comp. Stat. tit. 815,            High Risk Home Loan
                         sections 137/5 et seq.

                         Effective January 1, 2004 (prior to this date, regulations
                         under Residential Mortgage License Act effective from May
                         14, 2001)

Kansas                   Consumer Credit Code, Kan. Stat. Ann sections 16a-1-101 et     High Loan to Value Consumer Loan
                         seq.                                                           (id. section 16a-3-207) and;

                         Sections 16a-1-301 and 16a-3-207 became effective              High APR Consumer Loan (id. section
                         April 14, 1999; Section 16a-3-308a became effective            16a-3-308a)
                         July 1, 1999

Kentucky                 2003 KY H.B. 287 - High Cost Home Loan Act, Ky. Rev. Stat.     High Cost Home Loan
                         sections 360.100 et seq.

                         Effective June 24, 2003
</TABLE>

                                      B-2
<PAGE>
STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION

<TABLE>
<CAPTION>
                                                                                                   Category under
                                   Name of Anti-Predatory Lending                                 Applicable Anti-
 State/Jurisdiction                      Law/Effective Date                                     Predatory Lending Law
---------------------    ----------------------------------------------------------     ------------------------------------
<S>                      <C>                                                            <C>
Maine                    Truth in Lending, Me. Rev. Stat. tit. 9-A, sections            High Rate High Fee Mortgage
                         8-101 et seq.

                         Effective September 29, 1995 and as amended from time to
                         time

Massachusetts            Part 40 and Part 32, 209 C.M.R. section 32.00 et seq.          High Cost Home Loan
                         and 209 C.M.R. sections 40.01 et seq.

                         Effective March 22, 2001 and amended from time to time

Nevada                   Assembly Bill No. 284, Nev. Rev. Stat. sections 598D.010       Home Loan
                         et seq.

                         Effective October 1, 2003

New Jersey               New Jersey Home Ownership Security Act of 2002, N.J. Rev.      High Cost Home Loan
                         Stat. sections 46:10B-22 et seq.

                         Effective for loans closed on or after November 27, 2003

New Mexico               Home Loan Protection Act, N.M. Rev. Stat. sections             High Cost Home Loan
                         58-21A-1 et seq.

                         Effective as of January 1, 2004; Revised as of February
                         26, 2004

New York                 N.Y. Banking Law Article 6-l                                   High Cost Home Loan

                         Effective for applications made on or after April 1, 2003

North Carolina           Restrictions and Limitations on High Cost Home Loans,          High Cost Home Loan
                         N.C. Gen. Stat. sections 24-1.1E et seq.

                         Effective July 1, 2000; amended October 1, 2003
                         (adding open-end lines of credit)

Ohio                     H.B. 386 (codified in various sections of the Ohio Code),      Covered Loan
                         Ohio Rev. Code Ann. sections 1349.25 et seq.

                         Effective May 24, 2002
</TABLE>

                                      B-3
<PAGE>
STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION

<TABLE>
<CAPTION>
                                                                                                   Category under
                                   Name of Anti-Predatory Lending                                 Applicable Anti-
 State/Jurisdiction                      Law/Effective Date                                     Predatory Lending Law
---------------------    ----------------------------------------------------------     ------------------------------------
<S>                      <C>                                                            <C>
Oklahoma                 Consumer Credit Code (codified in various sections of          Subsection 10 Mortgage
                         Title 14A)

                         Effective July 1, 2000; amended effective January 1, 2004

South Carolina           South Carolina High Cost and Consumer Home Loans Act,          High Cost Home Loan
                         S.C. Code Ann. sections 37-23-10 et seq.

                         Effective for loans taken on or after January 1, 2004

West Virginia            West Virginia Residential Mortgage Lender, Broker and          West Virginia Mortgage Loan Act Loan
                         Servicer Act, W. Va. Code Ann. sections 31-17-1 et seq.

                         Effective June 5, 2002
</TABLE>

STANDARD & POOR'S COVERED LOAN CATEGORIZATION

<TABLE>
<CAPTION>
                                                                                             Category under
                                    Name of Anti-Predatory Lending                          Applicable Anti-
 State/Jurisdiction                        Law/Effective Date                              Predatory Lending Law
---------------------    ----------------------------------------------------------     ------------------------
<S>                      <C>                                                            <C>
Georgia (Oct. 1, 2002    Georgia Fair Lending Act, Ga. Code Ann. sections 7-6A-1        Covered Loan
- Mar 6,2003)

                         Effective October 1, 2002 - March 6, 2003

New Jersey               New Jersey Home Ownership Security Act of 2002, N.J. Rev.      Covered Home Loan
                         Stat. sections 46:10B-22 et seq.

                         Effective November 27, 2003 - July 5, 2004
</TABLE>

                                      B-4
<PAGE>

STANDARD & POOR'S HOME LOAN CATEGORIZATION

<TABLE>
<CAPTION>
                                                                                             Category under
                                     Name of Anti-Predatory Lending                         Applicable Anti-
 State/Jurisdiction                          Law/Effective Date                           Predatory Lending Law
---------------------    ----------------------------------------------------------     ------------------------
<S>                      <C>                                                            <C>
Georgia (Oct. 1, 2002    Georgia Fair Lending Act, Ga. Code Ann. sections 7-6A-1        Home Loan
- Mar 6,2003)

                         Effective October 1, 2002 - March 6, 2003

New Jersey               New Jersey Home Ownership Security Act of 2002, N.J.           Home Loan
                         Rev. Stat. sections 46:10B-22 et seq.

                         Effective for loans closed on or after November 27, 2003

New Mexico               Home Loan Protection Act, N.M. Rev. Stat. sections             Home Loan
                         58-21A-1 et seq.

                         Effective as of January 1, 2004; Revised as of February
                         26, 2004

North Carolina           Restrictions and Limitations on High Cost Home Loans,          Consumer Home Loan
                         N.C. Gen. Stat. sections 24-1.1E et seq.

                         Effective July 1, 2000; amended October 1, 2003
                         (adding open-end lines of credit)

South Carolina           South Carolina High Cost and Consumer Home Loans Act,          Consumer Home Loan
                         S.C. Code Ann. sections 37-23-10 et seq.

                         Effective for loans taken on or after January 1, 2004
</TABLE>

                                      B-5
<PAGE>

                                                                      SCHEDULE A

                             MORTGAGE LOAN SCHEDULE

                      [One file with Trust Administrator]exv4w1

 

EXHIBIT 4.1

COMPOSITE COPY AS AMENDED

THROUGH AMENDMENT NO. 1

EXECUTED DECEMBER 27, 2002

NOBLE AFFILIATES

THRIFT AND PROFIT SHARING PLAN

(As Amended and Restated Effective as of November 1, 2001)

 

 

NOBLE AFFILIATES

THRIFT AND PROFIT SHARING PLAN

(As Amended and Restated Effective as of November 1, 2001)

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page

	PREAMBLE	 	 
	 	 	1	 
	ARTICLE I.	 	DEFINITIONS AND CONSTRUCTION
	 	 	1	 
	 	 	Section 1.1 Definitions
	 	 	1	 
	 	 	Section 1.2 Construction
	 	 	7	 
	ARTICLE II.	 	ELIGIBILITY AND PARTICIPATION
	 	 	7	 
	 	 	Section 2.1 Eligibility and Participation
	 	 	7	 
	ARTICLE III.	 	CONTRIBUTIONS, ALLOCATIONS AND FORFEITURES
	 	 	7	 
	 	 	Section 3.1 PreTax Contributions
	 	 	7	 
	 	 	Section 3.2 Matching Contributions
	 	 	8	 
	 	 	Section 3.3 Discretionary Contributions
	 	 	8	 
	 	 	Section 3.4 Payment of Contributions
	 	 	8	 
	 	 	Section 3.5 Return of Employer Contributions
	 	 	9	 
	 	 	Section 3.6 Allocation of Contributions
	 	 	9	 
	 	 	Section 3.7 Application and Allocation of Forfeitures
	 	 	12	 
	 	 	Section 3.8 Rollover Contributions
	 	 	13	 
	 	 	Section 3.9 Catch-Up Contributions
	 	 	13	 
	ARTICLE IV.	 	TRUST FUND
	 	 	13	 
	 	 	Section 4.1 Trust and Trustee
	 	 	13	 
	 	 	Section 4.2 Trust Investment Options
	 	 	13	 
	ARTICLE V.	 	VESTING
	 	 	14	 
	 	 	Section 5.1 Fully Vested Accounts
	 	 	14	 
	 	 	Section 5.2 Disability or Death Vesting
	 	 	14	 
	 	 	Section 5.3 Period of Service or Age Vesting
	 	 	14	 
	ARTICLE VI.	 	VALUATIONS AND DISTRIBUTIONS
	 	 	15	 
	 	 	Section 6.1 Valuation and Adjustment of Accounts
	 	 	15	 
	 	 	Section 6.2 Time and Form of Distribution
	 	 	15	 
	 	 	Section 6.3 Distribution of Retirement and Disability Benefits
	 	 	15	 
	 	 	Section 6.4 Distribution of Death Benefit
	 	 	15	 
	 	 	Section 6.5 Distribution of Separation from Employment Benefit
	 	 	16	 
	 	 	Section 6.6 In-Service Withdrawals
	 	 	17	 
	 	 	Section 6.7 Distributions to Minors and Persons Under Legal Disability
	 	 	18	 

-ii-

 

	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Section 6.8 Plan Loans
	 	 	18	 
	 	 	Section 6.9 Qualified Domestic Relations Orders
	 	 	19	 
	 	 	Section 6.10 Transfer of Eligible Rollover Distribution
	 	 	20	 
	ARTICLE VII.	 	PLAN ADMINISTRATION
	 	 	21	 
	 	 	Section 7.1 Employee Benefits Committee
	 	 	21	 
	 	 	Section 7.2 Powers, Duties and Liabilities of the Committee
	 	 	21	 
	 	 	Section 7.3 Rules, Records and Reports
	 	 	21	 
	 	 	Section 7.4 Administration Expenses and Taxes
	 	 	22	 
	ARTICLE VIII.	 	AMENDMENT AND TERMINATION
	 	 	22	 
	 	 	Section 8.1 Amendment
	 	 	22	 
	 	 	Section 8.2 Termination
	 	 	22	 
	ARTICLE IX.	 	TOP-HEAVY PROVISIONS
	 	 	23	 
	 	 	Section 9.1 Top-Heavy Definitions
	 	 	23	 
	 	 	Section 9.2 Minimum Contribution Requirement
	 	 	24	 
	 	 	Section 9.3 Minimum Vesting Schedule
	 	 	24	 
	ARTICLE X.	 	MISCELLANEOUS GENERAL PROVISIONS
	 	 	25	 
	 	 	Section 10.1 Spendthrift Provision
	 	 	25	 
	 	 	Section 10.2 Claims Procedure
	 	 	25	 
	 	 	Section 10.3 Maximum Contribution Limitation
	 	 	25	 
	 	 	Section 10.4 Employment Noncontractual
	 	 	26	 
	 	 	Section 10.5 Limitations on Responsibility
	 	 	26	 
	 	 	Section 10.6 Merger or Consolidation
	 	 	26	 
	 	 	Section 10.7 Applicable Law
	 	 	26	 
	 	 	Section 10.8 USERRA Compliance
	 	 	27	 

-iii-

 

NOBLE AFFILIATES

THRIFT AND PROFIT SHARING PLAN

(As Amended and Restated Effective as of November 1, 2001)

     THIS THRIFT AND PROFIT SHARING PLAN, made and executed by NOBLE
AFFILIATES, INC., a Delaware corporation (the “Company”),

W I T N E S S E T H:

     WHEREAS, the Company has heretofore established for the benefit of its
employees a qualified profit sharing plan, known as the Noble Affiliates Thrift
and Profit Sharing Plan, that was amended and restated in its entirety most
recently effective as of January 1, 2000; and

     WHEREAS, the Company now desires to continue said profit sharing plan
without interruption by amending and restating its plan document in its
entirety to make certain changes;

     NOW, THEREFORE, in consideration of the premises and pursuant to Section
8.1 thereof, the Noble Affiliates Thrift and Profit Sharing Plan is hereby
amended and restated in its entirety to read as follows:

ARTICLE I.

DEFINITIONS AND CONSTRUCTION

     Section 1.1 Definitions. Unless the context clearly indicates otherwise,
when used in this Plan:

     (a) “Affiliated Company” means any corporation or organization,
other than an Employer, which is a member of a controlled group of
corporations (within the meaning of Section 414(b) of the Code) or of an
affiliated service group (within the meaning of Section 414(m) of the
Code) with respect to which an Employer is also a
member, and any other incorporated or unincorporated trade or
business which along with an Employer is under common control (within the
meaning of the regulations from

 

 

time to time promulgated by the Secretary
of the Treasury pursuant to Section 414(c) of the Code); provided,
however, that for the purposes of Section 10.3 of the Plan, Section
414(b) and (c) of the Code shall be applied as modified by Section 415(h)
of the Code.

     (b) “After-Tax Account” means the account established and maintained
under this Plan by the Committee to record a Participant’s interest under
this Plan attributable to amounts credited to his or her After-Tax
Account under the Previous Plan as in effect on October 31, 2001.

     (c) “Basic Compensation” means the cash remuneration, including
overtime, payable by an Employer to an Employee for personal services
rendered to the Employer prior to reduction for any Pre-Tax Contributions
made by such Employer to this Plan on behalf of such Employee and prior
to reduction for any compensation reduction amounts elected by such
Employee for qualified transportation fringe benefits (within the meaning
of Section 132(f) of the Code) or benefits pursuant to the Noble
Affiliates, Inc. Cafeteria Plan, but excluding incentive payments,
bonuses, allowances, commissions, deferred compensation payments and any
other extraordinary remuneration; provided, however, that the Basic
Compensation of an Employee taken into account under the Plan for any
Plan Year commencing after December 31, 2001, shall not exceed $200,000
(as adjusted to take into account any cost-of-living increases authorized
pursuant to Section 401(a)(17)(B) of the Code).

     (d) “Code” means the Internal Revenue Code of 1986, as amended.

     (e) “Committee” means the Employee Benefits Committee appointed by
the Board of Directors of the Company to administer the Plan.

     (f) “Company” means Noble Energy, Inc.

     (g) “Company Stock” means the common stock of Noble
Energy, Inc.

     (h) “Compensation” means the sum of (i) wages within the meaning of
Section 3401(a) of the Code and all other payments of remuneration to an
Employee by an Employer (in the course of the Employer’s trade or
business) for which the Employer is required to furnish the Employee a
written statement under Sections 6041(d), 6051(a)(3) and 6052 of the
Code, but determined without regard to any rules that limit the
remuneration included in wages based on the nature or location of the
employment or the services performed (such as the exception for
agricultural labor in Section 3401(a)(2) of the Code), (ii) any Pre-Tax
Contributions made by an Employer to this Plan on behalf of such
Employee, (iii) any salary reduction amounts elected by such Employee for
the purchase of benefits pursuant to a cafeteria plan (within the meaning
of Section 125(d) of the Code) maintained by an Employer, and (iv) any
salary reduction amounts elected by
such Employee for qualified transportation fringe benefits (within
the meaning of Section 132(f) of the Code); provided, however, that
except for purposes of determining whether an Employee is a Highly
Compensated Employee or a Key Employee within the meaning

-2-

 

of Section
9.1(c), the Compensation of an Employee taken into account under the Plan
for any Plan Year commencing after December 31, 2001, shall not exceed
$200,000 (as adjusted to take into account any cost-of-living increases
authorized pursuant to Section 401(a)(17)(B) of the Code).

     (i) “Covered Employee” means any Employee other than an Employee who
is (i) a nonresident alien who receives no earned income from an Employer
which constitutes income from sources within the United States, (ii) an
individual who is treated by an Employer at the time of the performance
of his or her services as either a leased employee (within the meaning of
Section 414(n) of the Code) or an independent contractor, or (iii) a
member of a collective bargaining unit with which an Employer negotiates
and with respect to whom no coverage under this Plan has been provided by
collective bargaining agreement.

     (j) “Discretionary Contribution” means a contribution made by an
Employer to this Plan pursuant to Section 3.3.

     (k) The “Early Retirement Date” of a Participant means the day such
Participant has both attained the age of 55 years and completed a
five-year Period of Service.

     (l) “Employee” means any individual employed by an Employer.

     (m) “Employer” shall include the Company, Samedan Oil Corporation,
Noble Gas Marketing, Inc. and any other incorporated or unincorporated
trade or business which may subsequently adopt this Plan with the consent
of the Board of Directors of the Company.

     (n) “Employer Matching Account” means the account established and
maintained under this Plan by the Committee to record a Participant’s
interest under this Plan attributable to contributions made by an
Employer for such Participant pursuant to Sections 3.2 and 3.3,
forfeitures applied pursuant to Section 3.7 and amounts credited to his
or her Employer Matching Account under the Previous Plan as in effect on
October 31, 2001.

     (o) “Employment Date” means the date an Employee first performs an
Hour of Service.

     (p) “Highly Compensated Employee” means for a Plan Year:

     (1) any Employee who during such Plan Year or the preceding
Plan Year was at any time a 5-percent owner (as defined in Section
416(i)(1) of the Code) of an Employer or Affiliated Company; or

-3-

 

     (2) any Employee who during the preceding Plan Year received
Compensation greater than $80,000 (as adjusted to take into account
any cost-of-living increases authorized pursuant to Section
414(q)(1) of the Code) and is in the group consisting of the top
20% (when ranked on the basis of Compensation received during such
preceding year) of all Employees, except those excluded pursuant to
Section 414(q)(5) of the Code.

Solely for purposes of this definition, (i) an employee of an Affiliated
Company shall be deemed to be an Employee, (ii) compensation received
from an Affiliated Company shall be deemed to be Compensation, and (iii)
a nonresident alien who receives no earned income from an Employer or
Affiliated Company which constitutes income from sources within the
United States shall not be considered an Employee.

     (q) “Hour of Service” means an hour for which an Employee is
directly or indirectly compensated or entitled to compensation (including
back pay, regardless of mitigation of damages) by an Employer for the
performance of duties for an Employer or for reasons (such as vacation,
sickness or disability) other than the performance of duties for an
Employer. In addition, an Employee will be credited with 8.5 Hours of
Service per day, subject to a maximum of 45 hours per week and 195 hours
per calendar month, for any customary work period during which such
Employee is on leave of absence authorized by his or her Employer.
Leaves of absence shall be granted by an Employer to its Employees on a
uniform, nondiscriminatory basis. An Employee’s Hours of Service shall
be credited to the appropriate Plan Years or eligibility computation
period determined in accordance with the provisions of Section
2530.200b-2(b) and (c) of the Department of Labor Regulations, which are
incorporated herein by this reference. In determining Hours of Service
for the purposes of this Plan, periods of employment by an Affiliated
Company and periods of employment as a leased employee (within the
meaning of Section 414(n) of the Code) of an Employer or Affiliated
Company shall be deemed to be periods of employment by an Employer. In
lieu of maintaining detailed daily records of the Hours of Service to be
credited to salaried Employees whose hours are not required to be counted
and recorded by a separate federal statute such as the Fair Labor
Standards Act, for purposes of this Plan each such Employee shall be
credited with 45 Hours of Service for each week during which such
Employee would otherwise be required to be credited with at least one
Hour of Service under the foregoing provisions of this definition.

     (r) “Matching Contribution” means a contribution made by an Employer
to this Plan pursuant to Section 3.2.

     (s) The “Normal Retirement Date” of a Participant means the day such
Participant attains the age of 65 years.

     (t) “One Year Break in Service” means a 12 consecutive month Period
of Severance during which an Employee fails to complete a single Hour of
Service.

-4-

 

     (u) “Participant” means any individual who was a participant in the
Previous Plan or has elected to participate in this Plan pursuant to
Section 2.2, and whose Vested Interest under this Plan has not been fully
distributed.

     (v) “Period of Service” means the sum, rounded downward to the
nearest whole year, of each period of time commencing with an Employee’s
Employment Date or Reemployment Date and ending on the first date
thereafter a Period of Severance begins (except as provided in subsection
(x) of this Section in the case of an Employee’s maternity or paternity
leave of absence). Included in such sum to be credited to an Employee
shall be each period of time during which the Employee is on an
authorized leave of absence for reasons of vacation, sickness, layoff or
another occasion designated and applied by an Employer or Affiliated
Company on a nondiscriminatory basis, but in no event exceeding one year
in length. A Period of Service also includes any Period of Severance of
less than 12 consecutive months. If an Employee who has no vested right
to any amount credited to his or her Employer Matching Account incurs a
One Year Break in Service, such Employee shall forfeit his or her prior
Period of Service unless he or she completes an additional one-year
Period of Service before the number of his or her consecutive One Year
Breaks in Service equals five. In determining the Period of Service
under the Plan of a Participant who is first employed by an Employer
during the 12-month period ending on October 31, 1997, any employment by
Energy Development Corporation of such Participant during the 60-month
period ending on October 31, 1996, shall be deemed to be employment by an
Employer; provided, however, that employment by Energy Development
Corporation shall not be taken into account for purposes of the right of
such Participant to make in-service withdrawals pursuant to Section
6.6(a).

     (w) “Period of Severance” means a period of time commencing with the
date an Employee ceases to be employed by an Employer or Affiliated
Company for reasons of Retirement, Permanent Disability, death, being
discharged, or voluntarily ceasing employment, or with the first
anniversary of the date of his or her absence for any other reason, and
ending with the date such Employee resumes employment with an Employer or
Affiliated Company; provided, however, that solely for purposes of
determining whether an Employee incurs a One Year Break in Service, the
Period of Severance of an Employee who is absent from work due to the
pregnancy of the Employee, the birth of a child of the Employee, the
placement of a child with the Employee in connection with the adoption of
such child by such Employee, or caring for such child for a period
beginning immediately following such birth or placement shall not
commence until the second anniversary of the first date of such absence
and the period between the first and second
anniversaries of the first date of such absence shall be considered
neither a Period of Service nor a Period of Severance.

     (x) “Permanent Disability” means the total and permanent incapacity
of a Participant to perform the usual duties of his or her employment
with an Employer or Affiliated Company as determined by the Committee.
Such incapacity shall be deemed to exist when certified by a physician
acceptable to the Committee.

-5-

 

     (y) “Plan” means this Noble Affiliates Thrift and Profit Sharing
Plan effective as of November 1, 2001, and as from time to time in effect
thereafter.

     (z) “Plan Year” means the calendar year.

     (aa) “Pre-Tax Account” means the account established and maintained
under this Plan by the Committee to record a Participant’s interest under
this Plan attributable to contributions made by an Employer on behalf of
such Participant pursuant to Section 3.1 and amounts credited to his or
her Pre-Tax Account under the Previous Plan as in effect on October 31,
2001.

     (bb) “Pre-Tax Contribution” means a contribution made by an Employer
to this Plan on behalf of a Participant pursuant to Section 3.1.

     (cc) “Previous Plan” means the Noble Affiliates Thrift and Profit
Sharing Plan as in effect from time to time prior to November 1, 2001.

     (dd) “Qualified Deferral Agreement” means an agreement between and
Employer and a Participant whereby the Participant agrees to reduce Basic
Compensation or forego an increase in Basic Compensation for the purposes
of Section 401(k) of the Code, and the Employer agrees to contribute the
amount of said reduction or foregone Basic Compensation to the Plan on
behalf of the Participant.

     (ee) “Reemployment Date” means the date an Employee first performs
an Hour of Service following a Period of Severance.

     (ff) “Retirement” means the termination of a Participant’s
employment with an Employer or Affiliated Company on or after his or her
Early or Normal Retirement Date for any reason other than death or
transfer to the employ of another Employer or Affiliated Company.

     (gg) “Rollover Account” means the account established and maintained
under this Plan by the Committee to record a Participant’s interest under
this Plan attributable to Rollover Property contributed by such
Participant to this Plan pursuant to Section 3.8 and any amounts credited
to his or her Rollover Account under the Previous Plan as in effect on
October 31, 2001.

     (hh) “Rollover Property” means (i) property the value of which is
includable in the gross income of the transferor but which would be
excluded from such gross income under Section 402(c), 403(a)(4),
403(b)(8), 408(d)(3) or 457(e)(16) of the Code if transferred to the Plan
and (ii) property distributed from a plan qualified under Section 401(a)
of the Code the value of which is not includable in the gross income of
the transferor.

-6-

 

     (ii) “Trust” means, as the context requires, the trust agreement
and/or the trust fund referred to in Section 4.1.

     (jj) “Trustee” means the individual or corporate trustee or trustees
from time to time appointed and acting as trustee or trustees of the
Trust established pursuant to the Plan.

     (kk) The “Vested Interest” of a Participant means the then vested
portion of the amount credited to the Accounts of such Participant at the
particular point in time in question.

     Section 1.2 Construction. The titles to the Articles and the headings of
the Sections in this Plan are placed herein for convenience of reference only
and in case of any conflict the text of this instrument, rather than such
titles or headings, shall control. Whenever a noun or pronoun is used in this
Plan in plural form and there be only one person or entity within the scope of
the word so used, or in singular form and there be more than one person or
entity within the scope of the word so used, such noun or pronoun shall have a
plural or singular meaning as appropriate under the circumstance.

ARTICLE II.

ELIGIBILITY AND PARTICIPATION

     Section 2.1 Eligibility and Participation. Each Covered Employee who is a
participant in the Previous Plan on October 31, 2001, shall be eligible to
participate in this Plan as of November 1, 2001. Each other Covered Employee
may elect, in the manner prescribed by the Committee, to become a Participant
in this Plan on the first day of any pay period commencing after the making of
such election. If a Participant ceases to be a Covered Employee, such
Participant shall remain a Participant under the Plan until his or her Vested
Interest has been fully distributed pursuant to the Plan, but no contributions
shall be made to the Plan for or on behalf of such Participant while he or she
is not a Covered Employee. If a former Participant is thereafter reemployed as
a Covered Employee, he or she shall be eligible to elect to resume
participating in the Plan as of the date of such reemployment.

ARTICLE III.

CONTRIBUTIONS, ALLOCATIONS AND FORFEITURES

     Section 3.1 Pre-Tax Contributions. Each Participant may elect to have
his or her Employer make a Pre-Tax Contribution to the Plan for each pay period
in an amount equal to a specified whole percentage, not in excess of 15%, of
his or her Basic Compensation for that pay period. All such contributions
shall be made by uniform payroll deductions pursuant to a Qualified Deferral
Agreement which authorizes the Employer to pay such contributions to the

-7-

 

Trustee on behalf of the Participant. A Participant may change the applicable
percentage of such payroll deductions as of the first day of any pay period, or
at any time suspend his or her election to have Pre-Tax Contributions made to
the Plan, provided that notice of such change or suspension is given to or in
the manner directed by the Committee or its designee within such reasonable
period of time prior to the effective date thereof as the Committee may
require. Any provision of this Plan to the contrary notwithstanding, the
amount of Pre-Tax Contributions made to the Plan pursuant to this Section on
behalf of the Participant shall not exceed $11,000 (or such greater dollar
limitation as may apply pursuant to Section 402(g) of the Code) for any
calendar year. If the amount of Pre-Tax Contributions and any other elective
deferrals (within the meaning of Section 402(g)(3) of the Code) made on a
Participant’s behalf for any taxable year of such Participant exceeds such
dollar limitation, then if such Participant notifies the Committee of the
amount of Pre-Tax Contributions that exceeded that limitation within such
reasonable period of time prior to the first April 15 following such year as
the Committee may prescribe in its discretion, the excess Pre-Tax Contributions
(along with any income allocable thereto for such year, but not for the gap
period following such year) may be distributed to such Participant no later
than such April 15. The income allocable to any excess Pre-Tax Contributions
for a Participant for a taxable year shall be determined by multiplying the
amount of income allocable to such Participant’s Pre-Tax Account for such year
by a fraction, the numerator of which is the amount of excess Pre-Tax
Contributions for such year and the denominator of which is the sum of the
amount credited to such Participant’s Pre-Tax Account as of the beginning of
such year plus the amount of such Participant’s Pre-Tax Contributions for such
year. An Employer may amend or revoke any Participant’s Qualified Deferral
Agreement at any time during a Plan Year if such amendment or revocation is
deemed by such Employer to be necessary or appropriate to ensure that the
requirements of Sections 3.6 and 10.3 are met for such year.

     Section 3.2 Matching Contributions. In addition to the contributions
made pursuant to Section 3.1, for each pay period commencing after December 31,
1997, an Employer shall make a Matching Contribution to the Plan for each
Participant in an amount equal to 100% of the portion of the Pre-Tax
Contribution made by such Employer on behalf of such Participant for such
period which does not exceed 6% of his or her Basic Compensation for such
period.

     Section 3.3 Discretionary Contributions. In addition to Pre-Tax and
Matching Contributions, an Employer by action of its President may elect for
any Plan Year to make a Discretionary Contribution to the Plan in an amount to
be determined by the President.

     Section 3.4 Payment of Contributions. All Pre-Tax Contributions made for
a pay period shall be paid to the Trustee in cash as soon as practicable after
the end of such pay period, but no later than the 15th business day after the
end of the month in which such pay period ends. Except as otherwise provided
in this Section, the Matching Contributions made to the Plan by an Employer for
a pay period shall be paid to the Trustee in cash no later than 30 days after
the end of the month in which such pay period ends. Any Matching Contributions
an Employer is required to make by Section 3.2 and the Discretionary
Contributions made to the Plan by an Employer for a Plan Year shall be paid to
the Trustee in cash no later than the time prescribed by

-8-

 

law, including
extensions thereof, for the filing of the Employer’s federal income tax return
for such year.

     Section 3.5 Return of Employer Contributions. Contributions made to this
Plan are conditioned upon being currently deductible under Section 404 of the
Code. Any provision of this Plan to the contrary notwithstanding, upon an
Employer’s request, any such contribution or portion thereof made to this Plan
by such Employer which (i) was made under a mistake of fact which is
subsequently discovered, or (ii) is disallowed as a deduction under Section 404
of the Code, shall be returned to such Employer to the extent not previously
distributed to Participants or their beneficiaries; provided, however, that the
amounts returnable to an Employer pursuant to this Section shall be reduced by
any Trust losses allocable thereto and shall be returned to such Employer only
if such return is made within one year after the mistaken payment of the
contribution or the date of the disallowance of the deduction, as the case may
be. Except as provided in this Section, no contribution made by an Employer
pursuant to this Plan shall ever revert to or be recoverable by any Employer.

     Section 3.6 Allocation of Contributions.

     (a) The Committee shall establish and maintain an After-Tax Account,
a Pre-Tax Account and an Employer Matching Account for each Participant.
All amounts attributable to after-tax contributions made by a Participant
pursuant to the Previous Plan shall be credited to such Participant’s
After-Tax Account. All amounts attributable to pre-tax contributions
made by an Employer for a Participant pursuant to the Previous Plan and
all Pre-Tax Contributions made by an Employer on behalf of such
Participant pursuant to Section 3.1 shall be credited to such
Participant’s Pre-Tax Account. All amounts attributable to matching
contributions made by an Employer for a Participant pursuant to the
Previous Plan and all Matching Contributions made by an Employer for such
Participant pursuant to Section 3.2, along with any forfeitures applied
pursuant to Section 3.7 to reduce a Matching Contribution which would
otherwise have been made
for such Participant, shall be credited to such Participant’s
Employer Matching Account. Any Discretionary Contribution made by an
Employer pursuant to Section 3.3 for a Plan Year shall be allocated among
and credited to the Employer Matching Accounts of those Participants who
were in the employ (or on authorized leave of absence from) an Employer
or Affiliated Company on the last day of such Plan Year, or whose
Retirement, Permanent Disability or death occurred during that year while
in the employ of (or on authorized leave of absence from) an Employer or
Affiliated Company, in the proportion that the Compensation of each such
Participant while both a Participant and a Covered Employee during that
year bears to the Compensation of all such Participants while both
Participants and Covered Employees during that year.

     (b) Any provision of this Plan to the contrary notwithstanding, if
for any Plan Year the actual deferral percentage for the group of Highly
Compensated Employees eligible to elect to have Pre-Tax Contributions
made during such Plan Year fails to satisfy one of the following tests:

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     (1) the actual deferral percentage for said group of Highly
Compensated Employees is not more than the actual deferral
percentage for all other Employees eligible to elect to have
Pre-Tax Contributions made during such Plan Year multiplied by
1.25, or

     (2) the excess of the actual deferral percentage for said
group of Highly Compensated Employees over the actual deferral
percentage for all other Employees eligible to elect to have
Pre-Tax Contributions made during such Plan Year is not more than
two percentage points and the actual deferral percentage for said
group of Highly Compensated Employees is not more than the actual
deferral percentage for all other Employees eligible to elect to
have Pre-Tax Contributions made during such Plan Year multiplied by
two,

then the actual deferral percentage of Participants who are members of
said group of Highly Compensated Employees shall be reduced by reducing
the Pre-Tax Contributions made for such Plan Year on behalf of the Highly
Compensated Employees with the largest individual actual deferral
percentages to the largest uniform actual deferral percentage (commencing
with the Highly Compensated Employee with the largest actual deferral
percentage and reducing his or her actual deferral percentage to the
extent necessary to satisfy one of the above tests or to lower such
actual deferral percentage to the actual deferral percentage of the
Highly Compensated Employee with the next highest actual deferral
percentage, and repeating this process as necessary) that permits the
actual deferral percentage for said group of Highly Compensated Employees
to satisfy one of said tests. For purposes of this subsection, the term
“actual deferral percentage” for a specified group of Employees for a
Plan Year means the average of the ratios (calculated separately for each
Employee in such group and after any distributions to Highly Compensated
Employees required to satisfy the dollar limitation described in Section
3.1) of (i) the aggregate amount of Pre-Tax Contributions made to the
Plan on behalf of each
such Employee for that year, to (ii) the amount of such Employee’s
Compensation for that year. If two or more plans that include cash or
deferred arrangements are considered as one plan for purposes of Section
401(a)(4) or 410(b) of the Code (other than for purposes of the average
benefit percentage test), the cash or deferred arrangements included in
such plans shall be treated as one arrangement for purposes of this
subsection. If a Highly Compensated Employee is a participant in two or
more cash or deferred arrangements of an Employer, then for purposes of
determining the actual deferral ratio of such Employee, all such cash or
deferred arrangements (other than those that may not be permissively
aggregated) shall be treated as one cash or deferred arrangement.

     (c) The aggregate amount of any Pre-Tax Contributions made on behalf
of Participants which, following any distribution required to satisfy the
dollar limitation described in Section 3.1, cannot be credited to the
Pre-Tax Accounts for a Plan Year because of the limitation contained in
subsection (b) of this Section (along with any income allocable to such
contributions for such Plan Year, but not for the gap period following
such Plan Year) shall be distributed to such Participants no later than
2 1/2

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months after the end of such year on the basis of the amount of
Pre-Tax Contributions made for each such Participant (commencing with the
Highly Compensated Employee with the largest amount of Pre-Tax
Contributions for such Plan Year and reducing his or her Pre-Tax
Contributions to the extent necessary or to lower such amount to the
amount of Pre-Tax Contributions of the Highly Compensated Employee with
the next highest amount of Pre-Tax Contributions, and repeating this
process as necessary). The income allocable to any such excess
contributions for a Participant for a Plan Year shall be determined by
multiplying the amount of income allocable to such Participant’s Pre-Tax
Account for such year by a fraction, the numerator of which is the amount
of the excess contributions for such year and the denominator of which is
the sum of the amount credited to such Participant’s Pre-Tax Account as
of the beginning of such year plus the amount of such Participant’s
Pre-Tax Contributions for such year. If any portion of a Pre-Tax
Contribution made by an Employer on behalf of a Participant is
distributed to such Participant pursuant to the foregoing provisions of
this subsection, any portion of a Matching Contribution (along with any
income allocable thereto) made for such Participant that matches the
distributed Pre-Tax Contribution shall be forfeited.

     (d) Any provision of this Plan to the contrary notwithstanding, if
for any Plan Year the contribution percentage for the group of Highly
Compensated Employees eligible to receive an allocation of Matching
Contributions for such Plan Year fails to satisfy one of the following
tests:

     (1) the contribution percentage for said group of Highly
Compensated Employees is not more than the contribution percentage
for all other Employees eligible to receive an allocation of
Matching Contributions for such Plan Year multiplied by 1.25, or

     (2) the excess of the contribution percentage for said group
of Highly Compensated Employees over the contribution percentage
for all other Employees eligible to receive an allocation of
Matching Contributions for such Plan Year is not more than two
percentage points and the contribution percentage for said group of
Highly Compensated Employees is not more than the contribution
percentage for all other Employees eligible to receive an
allocation of Matching Contributions for such Plan Year multiplied
by two,

then the contribution percentage for Participants who are members of said
group of Highly Compensated Employees shall be reduced by reducing the
Matching Contributions made for such Plan Year for the Highly Compensated
Employees with the largest individual contribution percentages to the
largest uniform contribution percentage (commencing with the Highly
Compensated Employee with the largest contribution percentage and
reducing his or her contribution percentage to the extent necessary to
satisfy one of the above tests or to lower such contribution percentage
to the contribution percentage of the Highly Compensated Employee with
the next highest contribution percentage, and repeating this process as
necessary) that permits the contribution percentage for said group of
Highly Compensated Employees to satisfy one of said tests.

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For purposes
of this subsection, the term “contribution percentage” for a specified
group of Employees for a Plan Year means the average of the ratios
(calculated separately for each Employee in such group and after
application of the reduction provisions of subsection (b) of this Section
and the forfeiture provisions of subsection (c) of this Section) of (i)
the aggregate amount of Matching Contributions (and at the election of
the Company, the Pre-Tax Contributions) made to the Plan for or on behalf
of each such Employee for that year, to (ii) the amount of such
Employee’s Compensation for that year. If two or more plans to which
matching contributions or employee after-tax contributions are made are
considered as one plan for purposes of Section 410(b) of the Code (other
than for purposes of the average benefit percentage test), such plans
shall be treated as one plan for purposes of determining the contribution
percentages for this subsection. If a Highly Compensated Employee is a
participant in two or more plans to which matching contributions or
employee after-tax contributions are made, then for purposes of
determining the contribution ratio of such Employee, all such plans
(other than those that may not be permissively aggregated) shall be
treated as one plan.

     (e) The aggregate amount of any Matching Contributions made for
Participants which cannot be credited to the Employer Matching Accounts
for a Plan Year because of the limitation contained in subsection (d) of
this Section (along with any income allocable to such contributions for
such Plan Year, but not for the gap period following such Plan Year)
shall be forfeited if forfeitable, but if not forfeitable, distributed to
such Participants no later than 2 1/2 months after the end of such year
on the basis of the amount of Matching Contributions made for each such
Participant (commencing with the Highly Compensated Employee with the
largest amount of Matching Contributions for such Plan Year and reducing
his or her Matching Contributions to the extent necessary or to lower
such amount to the amount of Matching
Contributions of the Highly Compensated Employee with the next
highest amount of Matching Contributions, and repeating this process as
necessary). The income allocable to any such excess aggregate
contributions for a Participant for a Plan Year shall be determined by
multiplying the amount of income allocable to such Participant’s Employer
Matching Account for such year by a fraction, the numerator of which is
the amount of the excess aggregate contributions for such year and the
denominator of which is the sum of the amount credited to such
Participant’s Employer Matching Account as of the beginning of such year
plus the amount of the Matching Contributions made for such Participant
for such year.

     Section 3.7 Application and Allocation of Forfeitures. As soon as
practicable after the valuation of all Accounts at the end of each Plan Year,
all amounts forfeited during that Plan Year shall first be applied to restore
any forfeited Employer Matching Accounts with respect to which a repayment has
been made pursuant to Section 6.5(b) or 6.6, and any forfeitures in excess of
the amount needed to restore any such Account shall be applied to reduce the
amount of the earliest subsequent contributions an Employer would otherwise be
required to make to the Plan pursuant to Section 3.2.

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     Section 3.8 Rollover Contributions. With the consent of the Committee,
any Covered Employee (regardless of whether he or she is a Participant) may
contribute Rollover Property in the form of cash to the Plan. Each
contribution of Rollover Property shall be credited to a separate Rollover
Account to be established and maintained for the benefit of the contributing
Employee. An Employee who is not a Participant, but for whom a Rollover
Account is being maintained, shall be accorded all of the rights and privileges
of a Participant under the Plan except that no contributions (other than
contributions of Rollover Property) shall be made for or on behalf of such
Employee until he or she meets the eligibility and participation requirements
of Article II.

     Section 3.9 Catch-Up Contributions. All Employees who are eligible to
make Pre-Tax Contributions under this Plan and who have attained age 50 before
the close of the Plan Year shall be eligible to make catch-up contributions in
accordance with, and subject to the limitations of, Section 414(v) of the Code
and the regulations thereunder. Such catch-up contributions shall be credited
under the Plan for the benefit of the contributing Participants in accordance
with such procedures as may be specified by the Committee, and shall not be
taken into account for purposes of the provisions of the Plan implementing the
required limitations of Sections 402(g) and 415 of the Code. The Plan shall
not be treated as failing to satisfy the provisions of the Plan implementing
the requirements of Section 401(k)(3), 401(k)(11), 401(k)(12), 410(b) or 416 of
the Code, as applicable, by reason of the making of such catch-up
contributions. No Matching Contributions shall be made with respect to
catch-up contributions.

ARTICLE IV.

TRUST FUND

     Section 4.1 Trust and Trustee. All of the contributions paid to the
Trustee pursuant to this Plan and the Previous Plan, together with the income
therefrom and the increments thereof, shall be held in trust by the Trustee
under the terms and provisions of the separate trust agreement between the
Trustee and the Company, a copy of which is attached hereto and incorporated
herein by this reference for all purposes, establishing a trust fund known as
the NOBLE AFFILIATES THRIFT AND PROFIT SHARING PLAN TRUST for the exclusive
benefit of the Participants and their beneficiaries.

     Section 4.2 Trust Investment Options. In accordance with the provisions
of the Trust and subject to such procedures as the Committee may prescribe from
time to time for application to all Participants on a uniform and
nondiscriminatory basis, each Participant (i) shall direct the Trustee to
invest the amounts credited to such Participant’s Accounts under the Plan in
the Company Stock investment option and/or one or more of the other investment
options (which may include segregated investment brokerage-type accounts the
investment of which is directed by a Participant or his or her designee)
authorized by the Committee for the purposes of the Trust, and (ii) may from
time to time prospectively change his or her investment directions with respect
to such amounts. The Committee, in its absolute discretion, shall adopt rules
and procedures for periodically notifying each Participant of the existence and
nature of each Trust

-13-

 

investment option. If a Participant dies prior to
receiving the full amount distributable to him or her under the Plan, such
Participant’s investment authority under this Section shall vest in and be
exercisable by his or her beneficiary as determined under Section 6.4. Any
provision of the Plan or Trust to the contrary notwithstanding, no fiduciary
with respect to the Plan or Trust shall have any duty to review any investment
to be acquired, held or disposed of pursuant to the directions of a Participant
or beneficiary or to make any recommendations with respect to the disposition
or retention of any investment held for the Account of such Participant or
beneficiary, nor shall any such fiduciary have any responsibility or liability
whatsoever for any loss or diminution in value which results from the
investment directions of a Participant or beneficiary or his or her failure to
give such investment directions.

ARTICLE V.

VESTING

     Section 5.1 Fully Vested Accounts. The amounts credited to a
Participant’s Pre-Tax Account, After-Tax Account and Rollover Account shall be
fully vested at all times.

     Section 5.2 Disability or Death Vesting. In the event of the occurrence
of a Participant’s Permanent Disability or death while in the employ of (or on
authorized leave of absence from) an Employer or Affiliated Company, the amount
credited to the Participant’s Employer Matching Account shall be fully vested.

     Section 5.3 Period of Service or Age Vesting. Unless sooner vested
pursuant to Section 5.2:

     (a) The amount credited to the Employer Matching Account of a
Participant who completes an Hour of Service after December 31, 2001,
shall vest in accordance with the following schedule:

	 	 	 	 	 
	Period of Service	 	 
	Completed by Participant
	 	Percentage Vested

	Less than 3 years

	 	None

	3 or more years

	 	 	100	%

     (b) The amount credited to the Employer Matching Account of a
Participant who does not complete an Hour of Service after December 31,
2001, shall vest in accordance with the Plan as in effect on December 31,
2001.

Subject to Section 6.5(b), if a Participant’s Employer Matching Account is not
vested, it shall be forfeited upon the date such Participant incurs five
consecutive One Year Breaks in Service. The foregoing provisions of this
Section to the contrary notwithstanding, the amount credited to the

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Employer
Matching Account of a Participant who is credited with an Hour of Service on or
after the date he or she attains age 65 shall be fully vested.

ARTICLE VI.

VALUATIONS AND DISTRIBUTIONS

     Section 6.1 Valuation and Adjustment of Accounts. All Accounts shall be
valued and adjusted on an annual or more frequent basis in accordance with the
provisions of the Trust and such uniform and nondiscriminatory rules and
procedures as may be established from time to time by the Committee in its
absolute discretion.

     Section 6.2 Time and Form of Distribution. Distribution to a
Participant or beneficiary under this Article shall be made no later than 60
days after the end of the Plan Year during which such Participant or
beneficiary becomes entitled to distribution pursuant to this Article. In
addition and any provision of this
Plan to the contrary notwithstanding, (i) each Participant who becomes
entitled to a distribution under the Plan in an amount exceeding $5,000
(determined without regard to such Participant’s Rollover Account) may elect to
defer the distribution to a date no later than April 1 of the calendar year
following the calendar year in which such Participant attains age 70 1/2, and
(ii) in the case of a Participant who is a 5-percent owner (as defined in
Section 416(i) of the Code) or at the election of any other Participant who
attains age 70 1/2 prior to January 1, 2001, distribution to such Participant
under the Plan shall be made or commence being made no later than April 1 of
the calendar year following the calendar year in which the Participant attains
age 70 1/2. Distributions that commence being made pursuant to the preceding
sentence to a Participant who has not separated from the employment of an
Employer or Affiliated Company shall be equal to the minimum amounts required
to be distributed pursuant to Section 401(a)(9) of the Code and the final and
temporary regulations thereunder, including their incidental death benefit
requirement. All distributions and withdrawals under this Article shall be
made in cash; provided, however, that a Participant shall have the right to
elect on a form prescribed by the Committee to receive Company Stock, with cash
in lieu of fractional shares, for any distribution or withdrawal from his or
her Accounts to the extent invested in Company Stock.

     Section 6.3 Distribution of Retirement and Disability Benefits. Upon the
Retirement or Permanent Disability of a Participant, the Vested Interest of
such Participant shall be distributed by the Trustee at the direction of the
Committee to such Participant in a single distribution; provided, however, that
no such distribution shall be made to a Participant prior to his or her
attainment of age 65 unless (i) such Participant elects to receive such
distribution, or (ii) the value of such distribution is not more than $5,000
(determined without regard to such Participant’s Rollover Account).

     Section 6.4 Distribution of Death Benefit. Upon the death of a
Participant, the Vested Interest of such Participant shall be distributed by
the Trustee at the direction of the Committee in a single distribution to such
Participant’s beneficiary or beneficiaries determined in

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accordance with this
Section. Any amount payable under the Plan upon the death of a married
Participant shall be distributed to the surviving spouse of such Participant
unless such Participant designates otherwise with the written consent of his or
her spouse which is witnessed by a member of the Committee or a notary public.
Any amount payable under the Plan upon the death of a Participant who is not
married or who is married but has designated, as provided above, a beneficiary
other than his or her spouse, shall be distributed to the beneficiary or
beneficiaries designated by such Participant. Such designation of beneficiary
or beneficiaries shall be made in writing on a form prescribed by the Committee
and, when filed with or as directed by the Committee, shall become effective
and remain in effect until changed by the Participant by the filing of a new
beneficiary designation form with or as directed by the Committee. If an
unmarried Participant fails to so designate a beneficiary, or in the event all
of a Participant’s designated beneficiaries are individuals who predecease such
Participant, then the Committee shall direct the Trustee to distribute the
amount payable under the Plan to such Participant’s surviving spouse, if any,
but if none, to such Participant’s estate.
All distributions under this Section shall be made as soon as practicable
following a Participant’s death.

     Section 6.5 Distribution of Separation from Employment Benefit.

     (a) If a Participant separates from the employment of an Employer or
Affiliated Company for any reason other than his or her Retirement,
Permanent Disability, death or transfer to the employment of another
Employer or Affiliated Company, the Accounts of such Participant shall be
retained in trust and shall continue to be credited with applicable
earnings as provided in Section 6.1, and the Vested Interest of such
Participant shall be distributed to him or her by the Trustee at the
direction of the Committee by payment of the entire amount in a single
distribution as soon as practicable after such Participant’s Normal
Retirement Date (or, if the Participant dies prior to such date, the
Vested Interest of such Participant shall be distributed upon his or her
death in accordance with Section 6.4); provided, however, that (i) each
such Participant shall have the right to elect on a form prescribed by
the Committee to receive a cash-out distribution of his or her Vested
Interest as soon as practicable and (ii) the Committee shall require a
cash-out distribution of any such Participant’s Vested Interest which
does not exceed $5,000 (determined without regard to such Participant’s
Rollover Account). Any provision of this Plan to the contrary
notwithstanding, for purposes of distributing an amount credited to a
Participant’s Pre-Tax Account, a Participant shall not be treated as
having separated from the employment of an Employer or Affiliated Company
prior to the time that such amount can be distributed from the Plan to
such Participant without violating Section 401(k) of the Code.

     (b) If a Participant who has no Vested Interest (determined for this
purpose without regard to his or her Pre-Tax Account) separates from the
employment of an Employer or Affiliated Company for any reason other than
his or her Retirement, Permanent Disability, death or transfer to the
employment of another Employer or Affiliated Company, such Participant
shall be deemed to have received a cash-out distribution at the time of
such separation from employment and his or her Employer Matching Account
shall be forfeited at such time; provided, however, that if such

-16-

 

Participant is reemployed as a Covered Employee prior to incurring five
consecutive One Year Breaks in Service, the full amount forfeited from
such Participant’s Employer Matching Account shall be restored to such
Account out of current-year forfeitures or, if such forfeitures are
insufficient, by an additional Employer contribution. If a Participant
who receives a cash-out distribution under subsection (a) of this Section
has no vested right to any amount credited to his or her Employer
Matching Account at the time of such distribution, unless previously
forfeited such Account shall be forfeited at such time; provided,
however, that if such Participant is reemployed as a Covered Employee
prior to incurring five consecutive One Year Breaks in Service, the full
amount forfeited from such Participant’s Employer Matching Account shall
be restored to such Account out of current-year forfeitures or, if such
forfeitures are insufficient, by an additional Employer
contribution. If a Participant who has not yet incurred five
consecutive One Year Breaks in Service receives a distribution under
subsection (a) of this Section on account of his or her attainment of age
65 and such Participant’s Employer Matching Account is not vested at time
of such distribution, unless previously forfeited such Account shall be
forfeited upon the earlier of the date of such Participant’s death or the
date such Participant incurs five consecutive One Year Breaks in Service
unless such Participant is reemployed by an Employer or Affiliated
Company prior to such date.

     Section 6.6 In-Service Withdrawals. At any time while in the employ of
an Employer or Affiliated Company, a Participant may make:

     (a) A withdrawal of all or a portion of the total amount credited to
his or her Employer Matching Account and/or After-Tax Account if he or
she has completed a five-year Period of Service;

     (b) A withdrawal of all or a portion of the amount credited to his
or her fully-vested Accounts if he or she has attained the age of
59 1/2;

     (c) A withdrawal of all or a portion of the amount credited to his
or her Rollover Account; and

     (d) A hardship withdrawal of (i) such amount of Pre-Tax
Contributions credited to his or her Pre-Tax Account under this Plan or
the Previous Plan after December 31, 1988, and (ii) such amount credited
to his or her Pre-Tax Account under the Previous Plan as of December 31,
1988, as the Committee shall determine to be necessary to satisfy an
immediate and heavy financial need of such Participant;

provided, however, that (i) no withdrawal may be made unless notice of such
withdrawal is given by the withdrawing Participant to or in the manner directed
by the Committee or its designee within such period of time prior to the end of
such month as the Committee may prescribe in its discretion, and (ii) no
withdrawal may be made by a Participant to whom a loan from the Trust is then
outstanding unless the Committee is satisfied that such loan will remain
nontaxable and fully secured by the withdrawing Participant’s Vested Interest
following such withdrawal. The Committee shall direct the Trustee to
distribute any withdrawn amount to such

-17-

 

Participant as soon as practicable
after the valuation and adjustment of accounts at the end of said month.

     A hardship withdrawal will be considered to be made on account of an
immediate and heavy financial need of a Participant only if the Committee
determines that such withdrawal is on account of (i) expenses for medical care
described in Section 213(d) of the Code previously incurred by such Participant
or his or her spouse or dependents (as defined in Section 152 of the Code) or
necessary for such individuals to obtain such care, (ii) costs directly related
to the purchase of a principal residence for such Participant (excluding
mortgage payments), (iii) payment of tuition and related educational fees for
the next 12 months of post-secondary education for such Participant or his or
her spouse, children or dependents (as so defined), or (iv)
payments necessary to prevent the eviction of such Participant from his or
her principal residence or foreclosure on the mortgage of such residence. A
hardship withdrawal will be considered to be necessary to satisfy an immediate
and heavy financial need of a Participant only if the Committee determines that
(i) the amount of such withdrawal is not in excess of the amount of such need
plus any amounts necessary to pay any federal, state or local income taxes or
penalties reasonably anticipated to result from the withdrawal, and (ii) such
Participant has obtained all distributions and withdrawals, other than hardship
withdrawals, and all nontaxable loans currently available under all plans
maintained by the Employers. Any provision of this Plan to the contrary
notwithstanding, (i) if a Participant makes a hardship withdrawal prior to
January 1, 2002, (A) no Pre-Tax Contributions shall be made on behalf of such
Participant for 12 months after receipt of such withdrawal, and (B) the Pre-Tax
Contributions made on behalf of such Participant for the calendar year
immediately following the calendar year of such withdrawal shall not exceed the
amount by which the dollar limitation described in Section 3.1 for such next
calendar year exceeds the amount of the Pre-Tax Contributions made on behalf of
such Participant for the calendar year of such withdrawal, and (ii) if a
Participant makes a hardship withdrawal after December 31, 2001, no Pre-Tax
Contributions shall be made on behalf of such Participant for six months after
receipt of such withdrawal.

     Section 6.7 Distributions to Minors and Persons Under Legal Disability.
If any distribution under the Plan becomes payable to a minor or other person
under a legal disability, such distribution may be made to the duly appointed
guardian or other legal representative of the estate of such minor or person
under legal disability.

     Section 6.8 Plan Loans. Subject to such conditions and limitations as
the Committee may from time to time prescribe for application to all
Participants and beneficiaries on a uniform basis, at the request of a
Participant or beneficiary of a deceased Participant who is a party in interest
(within the meaning of Section 3(14) of the Employee Retirement Income Security
Act of 1974, as amended) as to the Plan (hereinafter called the “Borrower”) the
Committee shall direct the Trustee to loan to such Borrower from his or her
Accounts an amount of money which, when added to the total outstanding balance
of all other loans to such Borrower from the Trust or from a qualified employer
plan (within the meaning of Section 72(p) of the Code) maintained by an
Employer or Affiliated Company, does not exceed the lesser of (i) $50,000
(reduced, however, by the excess, if any, of the highest total outstanding
balance of all such other loans during the one-year period ending on the day
before the date such loan is made, over the

-18-

 

outstanding balance of all such
other loans on the date such loan is made), or (ii) one-half of such
Participant’s Vested Interest under the Plan (or, in the case of a loan to a
beneficiary, one-half of such beneficiary’s Accounts). Any such loan made to a
Borrower shall be evidenced by a promissory note or other evidence of
indebtedness payable to the Trustee, shall bear a reasonable rate of interest,
shall be secured by one-half of the Participant’s Vested Interest under the
Plan (or, in the case of a loan to a beneficiary, one-half of such
beneficiary’s Accounts), shall be repayable in substantially equal payments no
less frequently than quarterly and shall be repayable within five years. Any
provision of this Plan to the contrary notwithstanding, the promissory note or
other evidence of indebtedness evidencing
any such loan shall be held by the Trustee as a segregated investment
allocated to and made solely for the benefit of the Account or Accounts of the
Borrower from which such loan was made.

     Section 6.9 Qualified Domestic Relations Orders. Any provision of this
Plan to the contrary notwithstanding:

     (a) The Committee shall establish and maintain for each alternate
payee named with respect to a Participant under a domestic relations
order which is determined by the Committee to be a qualified domestic
relations order (as defined in Section 414(p) of the Code) such separate
Accounts as the Committee may deem to be necessary or appropriate to
reflect such alternate payee’s interest in the Accounts of such
Participant. Such alternate payee’s Accounts shall be credited with the
alternate payee’s interest in the Participant’s Accounts as determined
under such qualified domestic relations order. The alternate payee may
change investment direction with respect to his or her Account balances
in accordance with Section 4.2 in the same manner as the Participant.

     (b) Except to the extent otherwise provided in the qualified
domestic relations order naming an alternate payee with respect to a
Participant, (i) the alternate payee may designate a beneficiary on a
form prescribed by and filed with or as directed by the Committee, (ii)
if no such beneficiary is validly designated or if the designated
beneficiary is a person who predeceases the alternate payee, the
beneficiary of the alternate payee shall be the alternate payee’s estate,
and (iii) the beneficiary of the alternate payee shall be accorded under
the Plan all of the rights and privileges of the beneficiary of a
Participant.

     (c) An alternate payee named with respect to a Participant shall be
entitled to receive a distribution from the Plan in accordance with the
qualified domestic relations order naming such alternate payee. Such
distribution may be made only in a form provided under the Plan and shall
include only such amounts as are vested. If a qualified domestic
relations order so provides, a lump sum distribution of the total vested
amount credited to the alternate payee’s Accounts may be made to the
alternate payee at any time prior to the date the Participant named in
such qualified domestic relations order attains his or her earliest
retirement age (as defined in Section 414(p)(4)(B) of the Code). To the
extent provided by a qualified domestic relations order, the alternate
payee named with respect to a Participant may make withdrawals (other
than hardship withdrawals) from his or her Accounts in accordance with
Section 6.6 in the same manner as a

-19-

 

Participant who has completed the
Period of Service completed by the Participant with respect to whom such
alternate payee was named under said qualified domestic relations order.

     (d) If a portion of any unvested amount credited to the Employer
Matching Account of a Participant named in the qualified domestic
relations order is credited to the Employer Matching Account of the
alternate payee named in such qualified domestic relations order, the
portion credited to the alternate payee’s Employer Matching Account
shall vest and/or be forfeited at the same time and in the same
manner as the Participant’s Employer Matching Account.

     Section 6.10 Transfer of Eligible Rollover Distribution. If a
Participant is entitled to receive an eligible rollover distribution (as
defined in Section 402(c) of the Code and the regulations thereunder, which
exclude, among other distributions, any hardship distribution) from the Plan,
such Participant may elect to have the Committee direct the Trustee to transfer
the entire amount of such distribution directly to any of the following
specified by such Participant: an individual retirement account described in
Section 408(a) of the Code, an individual retirement annuity described in
Section 408(b) of the Code (other than an endowment contract), a defined
contribution plan qualified under Section 401(a) of the Code the terms of which
permit rollover contributions, an annuity plan described in Section 403(a) of
the Code, an annuity contract described in Section 403(b) of the Code or an
eligible deferred compensation plan described in Section 457(b) of the Code
which is maintained by an eligible employer described in Section 457(e)(1)(A)
of the Code and which agrees to separately account for rollover contributions.
However, this Section shall apply to the portion of an eligible rollover
distribution that is not includable in gross income only if such Participant
elects to have the Committee direct the Trustee to transfer such portion
directly to any of the following specified by such Participant: an individual
retirement account described in Section 408(a) of the Code, an individual
retirement annuity described in Section 408(b) of the Code (other than an
endowment contract) or a defined contribution plan qualified under Section
401(a) of the Code the terms of which permit rollover contributions and which
agrees to separately account for the portion of a rollover contribution that is
includable in gross income and the portion thereof that is not includable in
gross income. This Section shall apply to the surviving spouse of a deceased
Participant and to an alternate payee under a qualified domestic relations
order (as defined in Section 414(p) of the Code) who is the spouse or former
spouse of the Participant specified in the qualified domestic relations order
as if such surviving spouse or alternate payee were a Participant. A
distributee of an eligible rollover distribution of $500 or more who is
entitled to make an election under this Section may specify that some portion
less than the entire amount of such distribution be transferred in accordance
with this Section, but only if the portion specified is $500 or more. This
Section shall not apply to eligible rollover distributions to a distributee for
a calendar year if all such distributions from the Plan to such distributee
within such calendar year are reasonably expected to total less than $200.

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ARTICLE VII.

PLAN ADMINISTRATION

     Section 7.1 Employee Benefits Committee. The plan administrator of the
Plan shall be an Employee Benefits Committee composed of at least three
individuals appointed by the Board of Directors of the Company.
Each member of the Committee so appointed shall serve in such office until
his or her death, resignation or removal by the Board of Directors of the
Company. The Board of Directors of the Company may remove any member of the
Committee at any time by giving written notice thereof to the members of the
Committee. Vacancies shall likewise be filled from time to time by the Board
of Directors of the Company. The members of the Committee shall receive no
remuneration from the Plan for their services as Committee members.

     Section 7.2 Powers, Duties and Liabilities of the Committee. The
Committee shall have discretionary and final authority to interpret and
implement the provisions of the Plan, including without limitation authority to
determine eligibility for benefits under the Plan, and shall perform all of the
duties and exercise all of the powers and discretion granted to it under the
terms of the Plan. The Committee shall act by a majority of its members at the
time in office and such action may be taken either by a vote at a meeting or in
writing without a meeting. The Committee may by such majority action authorize
any one or more of its members to execute any document or documents on behalf
of the Committee, in which event the Committee shall notify the Trustee in
writing of such action and the name or names of its member or members so
authorized to act. Every interpretation, choice, determination or other
exercise by the Committee of any discretion given either expressly or by
implication to it shall be conclusive and binding upon all parties directly or
indirectly affected, without restriction, however, on the right of the
Committee to reconsider and redetermine such actions. In performing any duty
or exercising any power herein conferred, the Committee shall in no event
perform such duty or exercise such power in any manner which discriminates in
favor of Highly Compensated Employees. The Employers shall indemnify each
member of the Committee and hold such member harmless from and against any
claim, cost, expense (including reasonable attorneys’ fees), judgment or
liability (including any sum paid in settlement of a claim with the approval of
the Company) arising out of any act or omission to act as a member of the
Committee, except in the case of willful misconduct.

     Section 7.3 Rules, Records and Reports. The Committee may adopt such
rules and procedures for the administration of the Plan as are consistent with
the terms hereof, and shall keep adequate records of the Committee’s
proceedings and acts and of the status of the Participants’ Accounts. The
Committee may employ such agents, accountants and legal counsel (who may be
agents, accountants or legal counsel for an Employer) as may be appropriate for
the administration of the Plan. The Committee shall annually provide each
Participant with a report reflecting the status of his or her Accounts in the
Trust and shall cause such other information, documents or reports to be
prepared, provided and/or filed as may be necessary to comply with the
provisions of the Employee Retirement Income Security Act of 1974 or any other
law.

-21-

 

     Section 7.4 Administration Expenses and Taxes. Unless otherwise paid by
the Employers in their discretion, the Committee shall direct the Trustee to
pay all reasonable and necessary expenses (including the fees of agents,
accountants and legal counsel) incurred by the Committee in connection with the
administration of the Plan. Should any tax of any character (including
transfer taxes) be levied
upon the Trust assets or the income therefrom, such tax shall be paid from
and charged against the assets of the Trust.

ARTICLE VIII.

AMENDMENT AND TERMINATION

     Section 8.1 Amendment. The Board of Directors of the Company shall have
the right and power at any time and from time to time to amend this Plan, in
whole or in part, on behalf of all Employers. Any such amendment made by the
Board of Directors of the Company shall be made by or pursuant to a resolution
duly adopted by the Board of Directors of the Company, and shall be evidenced
by such resolution or by a written instrument executed by such person as the
Board of Directors of the Company shall authorize for such purpose. The
President of the Company shall have the right and power at any time and from
time to time to amend this Plan to change the matching percentage specified in
Section 3.2 to any other matching percentage (including 0%) that does not
exceed 100%. Any such amendment made by the President of the Company shall be
evidenced by a written instrument executed by the President of the Company.
With the consent of the Board of Directors of the Company and subject to such
procedure as it may prescribe, the Board of Directors of each Employer shall
have the right and power at any time and from time to time to amend this Plan,
in whole or in part, with respect to the Plan’s application to the Participants
of the particular amending Employer and the assets held in the Trust for their
benefit, or to transfer such assets or any portion thereof to a new trust for
the benefit of such Participants. However, in no event shall any amendment or
new trust permit any portion of the trust fund to be used for or diverted to
any purpose other than the exclusive benefit of the Participants and their
beneficiaries, nor shall any amendment or new trust reduce a Participant’s
Vested Interest under the Plan. The Company shall in writing notify the
Committee of any amendment to the Plan.

     Section 8.2 Termination. The Board of Directors of the Company shall
have the right and power at any time to terminate this Plan on behalf of all
Employers, or to terminate this Plan as it applies to the Participants who are
or were employees of any particular Employer, by giving written notice of such
termination to the Committee and Trustee. Any provision of this Plan to the
contrary notwithstanding, upon the termination or partial termination of the
Plan as to any Employer, or in the event any Employer should completely
discontinue making contributions to the Plan without formally terminating it,
all amounts credited to the Accounts of the affected Participants of that
particular Employer shall be fully vested.

-22-

 

ARTICLE IX.

TOP-HEAVY PROVISIONS

     Section 9.1 Top-Heavy Definitions. Unless the context clearly indicates
otherwise, when used in this Article:

     (a) “Top-Heavy Plan” means this Plan if, as of the Determination
Date, the aggregate of the Accounts of Key Employees under the Plan
exceeds 60% of the aggregate of the Accounts of all Participants and
former Participants under the Plan. The aggregate of the Accounts of
any Participant or former Participant shall include any distributions
(other than related rollovers or transfers from the Plan within the
meaning of regulations under Section 416(g) of the Code) made from such
individual’s Accounts during the Plan Year (or in the case of
distributions made for any reason other than severance from employment,
death or disability, during the Plan Year or any of the four preceding
Plan Years), but shall not include any unrelated rollovers or transfers
(within the meaning of regulations under Section 416(g) of the Code) made
to such individual’s Accounts after December 31, 1983. The Accounts of
any Participant or former Participant who (i) is not a Key Employee for
the Plan Year in question but who was a Key Employee in a prior Plan
Year, or (ii) has not completed an Hour of Service during the one-year
period ending on the Determination Date, shall not be taken into account.
The determination of whether the Plan is a Top-Heavy Plan shall be made
after aggregating all other plans of an Employer and any Affiliated
Company qualifying under Section 401(a) of the Code in which a Key
Employee is a participant or which enables such a plan to meet the
requirements of Section 401(a)(4) or 410 of the Code, and after
aggregating any other plan of an Employer or Affiliated Company, which is
not already aggregated, if such aggregation group would continue to meet
the requirements of Sections 401(a)(4) and 410 of the Code and if such
permissive aggregation thereby eliminates the top-heavy status of any
plan within such permissive aggregation group. The determination of
whether this Plan is a Top-Heavy Plan shall be made in accordance with
Section 416(g) of the Code.

     (b) “Determination Date” means, for purposes of determining whether
the Plan is a Top-Heavy Plan for a particular Plan Year, the last day of
the preceding Plan Year.

     (c) “Key Employee” means any Employee or former Employee (including
a beneficiary of such Employee or former Employee) who at any time during
the Plan Year is:

     (1) an officer of the Employer who has Compensation for such
Plan Year greater than $130,000 (as adjusted pursuant to Section
416(i)(1) of the Code to take into account any cost-of-living
increase);

     (2) a person owning (or considered as owning within the
meaning of

-23-

 

Section 318 of the Code) more than 5% of the outstanding stock
of an Employer or stock possessing more than 5% of the total
combined voting power of all stock of an Employer; or

     (3) a person who has Compensation for such Plan Year from an
Employer of more than $150,000 and who would be described in
paragraph (2) hereof if 1% were substituted for 5% in each place it
appears in such paragraph.

For the purposes of applying Section 318 of the Code to this subsection
(c), subparagraph (C) of Section 318(a)(2) of the Code shall be applied
by substituting 5% for 50%. The rules of subsections (b), (c) and (m) of
Section 414 of the Code shall not apply for purposes of determining
ownership in an Employer under this subsection (c).

     (d) “Non-Key Employee” means any Employee or former Employee
(including a beneficiary of such Employee or former Employee) who is not
a Key Employee.

     Section 9.2 Minimum Contribution Requirement. Any provision of this Plan
to the contrary notwithstanding, if the Plan is a Top-Heavy Plan for any Plan
Year commencing after December 31, 1983, then the Employers will contribute to
the Employer Matching Account of each Non-Key Employee who is both eligible to
participate and in the employ of an Employer on the last day of such Plan Year,
an amount which, when added to the total amount of Matching Contributions,
Discretionary Contributions and forfeitures otherwise allocable under the Plan
to such Non-Key Employee for such year, shall equal the lesser of (i) 3% of
such Non-Key Employee’s Compensation for such year or (ii) the amount of
Pre-Tax Contributions, Matching Contributions, Discretionary Contributions and
forfeitures (expressed as a percentage of Compensation) allocable under the
Plan to the Key Employee for whom such percentage is the highest for the Plan
Year after taking into account contributions under other defined contribution
plans maintained by the Employer in which a Key Employee is a participant (as
well as any other plan of an Employer which enables such a plan to meet the
requirements of Section 401(a)(4) or 410 of the Code); provided, however, that
no minimum contribution shall be made for a Non-Key Employee under this Section
for any Plan Year if the Employer maintains another qualified plan under which
a minimum benefit or contribution is being accrued or made for such Plan Year
for the Non-Key Employee in accordance with Section 416(c) of the Code. A
Non-Key Employee who is not a Participant, but for whom a contribution is made
pursuant to this Section, shall be accorded all of the rights and privileges of
a Participant under the Plan except that no contributions (other than
contributions pursuant to this Section) shall be made for or on behalf of such
Non-Key Employee until he or she meets the participation requirements of
Section 2.2.

     Section 9.3 Minimum Vesting Schedule. Any provision of this Plan to the
contrary notwithstanding, if the Plan is a Top-Heavy Plan for any Plan Year
commencing after December 31, 1983, then effective as of the first day of such
Plan Year with respect to Participants who complete an Hour of Service on
or after such day, the vesting schedule provided in Section 5.3(a) shall be
applied as if to read as follows:

-24-

 

	 	 	 	 	 
	Period of Service	 	 
	Completed by Participant
	 	Percentage Vested

	Less than 3 years

	 	None

	3 or more years

	 	 	100	%

ARTICLE X.

MISCELLANEOUS GENERAL PROVISIONS

     Section 10.1 Spendthrift Provision. No right or interest of any
Participant or beneficiary under the Plan may be assigned, transferred or
alienated, in whole or in part, either directly or by operation of law, and no
such right or interest shall be liable for or subject to any debt, obligation
or liability of such Participant or beneficiary; provided, however, that
nothing herein shall prevent the payment of amounts from a Participant’s
Accounts under the Plan in accordance with the terms of a court order which the
Committee has determined to be a qualified domestic relations order (as defined
in Section 414(p) of the Code).

     Section 10.2 Claims Procedure. If any person (hereinafter called the
“Claimant”) feels that he or she is being denied a benefit to which he or she
is entitled under the Plan, such Claimant may file a written claim for said
benefit with any member of the Committee. Within 60 days of the receipt of
such claim the Committee shall determine and notify the Claimant as to whether
he or she is entitled to such benefit. Such notification shall be in writing
and, if denying the claim for benefit, shall set forth the specific reason or
reasons for the denial, make specific reference to the pertinent provisions of
the Plan, and advise the Claimant that he or she may, within 60 days of the
receipt of such notice, in writing request to appear before the Committee for a
hearing to review such denial. Any such hearing shall be scheduled at the
mutual convenience of the Committee or its designated representative and the
Claimant, and at such hearing the Claimant and/or his or her duly authorized
representative may examine any relevant documents and present evidence and
arguments to support the granting of the benefit being claimed. The final
decision of the Committee with respect to the claim being reviewed shall be
made within 60 days following the hearing thereon and the Committee shall in
writing notify the Claimant of its final decision, again specifying the reasons
therefor and the pertinent provisions of the Plan upon which such decision is
based. The final decision of the Committee shall be conclusive and binding
upon all parties having or claiming to have an interest in the matter being
reviewed.

     Section 10.3 Maximum Contribution Limitation. Any provision of this
Plan to the contrary notwithstanding, the
sum of (i) the Employer contributions, (ii) the forfeitures, and (iii) the
Participant contributions (excluding rollover contributions and employee
contributions to a simplified employee pension allowable as a deduction, each
within the meaning specified in Section 415(c)(2) of the Code), allocated to a
Participant with respect to a Plan Year shall in no event exceed the lesser of
$40,000 (as adjusted to take into account any cost-of-living increases
authorized pursuant to Section 415(d) of the Code) or 100% of such
Participant’s Compensation

-25-

 

for that year. For the purposes of applying the
limitation imposed by this Section, each Employer and its Affiliated Companies
shall be considered a single employer, and all defined contribution plans
(meaning plans providing for individual accounts and for benefits based solely
upon the amounts contributed to such accounts and any forfeitures, income,
expenses, gains and losses allocated to such accounts) described in Section
415(k) of the Code, whether or not terminated, maintained by an Employer or its
Affiliated Companies shall be considered a single plan. If the total amount
allocable to a Participant’s Accounts for a particular Plan Year would, but for
this sentence, exceed the foregoing limitation, the following adjustments shall
be made in the following order to the extent necessary: (i) such Participant’s
Pre-Tax Contributions shall be distributed to such Participant, and (ii) any
Matching Contributions or Discretionary Contributions allocable to such
Participant in excess of the foregoing limitation shall be credited to a
suspense account and thereafter reallocated (prior to the application of any
amounts subsequently credited to the forfeiture account established under
Section 3.7) among the remaining Participants as an additional Discretionary
Contribution in accordance with Section 3.5(a). No adjustment shall be made to
such suspense account to reflect income, profits and losses, expenses or other
transactions affecting the Plan. Any Pre-Tax Contributions distributed to a
Participant pursuant to this Section shall not be taken into account in
determining such Participant’s actual deferral percentage for purposes of
Section 3.6.

     Section 10.4 Employment Noncontractual. The establishment of this Plan
shall not enlarge or otherwise affect the terms of any Employee’s employment
with an Employer and an Employer may terminate the employment of any Employee
as freely and with the same effect as if this Plan had not been adopted.

     Section 10.5 Limitations on Responsibility. The Employers do not
guarantee or indemnify the Trust against any loss or depreciation of its assets
which may occur, nor guarantee the payment of any amount which may become
payable to a Participant or his or her beneficiaries pursuant to the provisions
of this Plan. All payments to Participants and their beneficiaries shall be
made by the Trustee at the direction of the Committee solely from the assets of
the Trust and the Employers shall have no legal obligation, responsibility or
liability for any such payments.

     Section 10.6 Merger or Consolidation. In no event shall this Plan be
merged or consolidated into or with any other plan, nor shall any of its assets
or liabilities be transferred to any other plan, unless each Participant would
be entitled to receive a benefit if the plan in which he or she then
participates terminated immediately following such merger, consolidation or
transfer, which is equal to or greater than the benefit he
or she would have been entitled to receive if the Plan had been terminated
immediately prior to such merger, consolidation or transfer.

     Section 10.7 Applicable Law. This Plan shall be governed and construed
in accordance with the internal laws (and not the principles relating to
conflicts of laws) of the State of Oklahoma except where superseded by federal
law.

-26-

 

     Section 10.8 USERRA Compliance. Notwithstanding any provision of this
Plan to the contrary, contributions, benefits and service credit with respect
to qualified military service will be provided in accordance with Section
414(u) of the Code.

EXECUTION RECITAL AND SIGNATURE PROVISIONS OMITTED

-27-

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