Document:

exv4w3

 

Exhibit 4.3

(Multicurrency—Cross Border)

International Swap and Derivatives Association, Inc.

MASTER AGREEMENT

dated as of August 3, 2006

	 	 	 	 	 
	SWISS RE FINANCIAL PRODUCTS

CORPORATION

	 	and
	 	WELLS FARGO BANK, N.A.,
not individually, but solely
as Trust Administrator on
behalf of the Fremont Home
Loan Trust 2006-B, Mortgage
Backed Certificates, Series
2006-B
	 
	 	 	 	 
	(“Party A”)

	 	 	 	(“Party B”)

have entered and/or anticipate entering into one
or more transactions (each a “Transaction”) that
are or will be governed by this Master Agreement,
which includes the schedule (the “Schedule”), and
the documents and other confirming evidence (each
a “Confirmation”) exchanged between the parties
confirming those Transactions.

Accordingly, the parties agree as follows:—

	1.	 	Interpretation

(a) Definitions. The terms defined in Section 14
and in the Schedule will have the meanings
therein specified for the purpose of this Master
Agreement.

(b) Inconsistency. In the event of any
inconsistency between the provisions of the
Schedule and the other provisions of this Master
Agreement, the Schedule will prevail. In the
event of any inconsistency between the provisions
of any Confirmation and this Master Agreement
(including the Schedule), such Confirmation will
prevail for the purpose of the relevant
Transaction.

(c) Single Agreement. All Transactions are
entered into in reliance on the fact that this
Master Agreement and all Confirmations form a
single agreement between the parties
(collectively referred to as this “Agreement”),
and the parties would not otherwise enter into
any Transactions.

	2.	 	Obligations

	(a)	 	General Conditions.

(i) Each party will make each payment
or delivery specified in each
Confirmation to be made by it,
subject to the other provisions of
this Agreement.

(ii) Payments under this Agreement
will be made on the due date for
value on that date in the place of
the account specified in the relevant
Confirmation or otherwise pursuant to
this Agreement, in freely
transferable funds and in the manner
customary for payments in the
required currency. Where settlement
is by delivery (that is, other than
by payment), such delivery will be
made for receipt on the due date in
the manner customary for the relevant
obligation unless otherwise specified
in the relevant Confirmation or
elsewhere in this Agreement.

(iii) Each obligation of each party
under Section 2(a)(i) is subject to
(1) the condition precedent that no
Event of Default or Potential Event
of Default with respect to the other
party has occurred and is continuing,
(2) the condition precedent that no
Early Termination Date in respect of
the relevant Transaction has occurred
or been effectively designated and
(3) each other applicable condition
precedent specified in this
Agreement.

Copyright © 1992 by International Swap and Derivatives Association, Inc.

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(b) Change of Account. Either party may change its account for receiving a payment or
delivery by giving notice to the other party at least five Local Business Days prior to the
scheduled date for the payment or delivery to which such change applies unless such other party
gives timely notice of a reasonable objection to such change.

	(c)	 	Netting. If on any date amounts would otherwise be payable:—

	 	(i)	 	in the same currency; and
	 
	 	(ii)	 	in respect of the same Transaction,

by each party to the other, then, on such date, each party’s obligation to make payment of any
such amount will be automatically satisfied and discharged and, if the aggregate amount that
would otherwise have been payable by one party exceeds the aggregate amount that would
otherwise have been payable by the other party, replaced by an obligation upon the party by
whom the larger aggregate amount would have been payable to pay to the other party the excess
of the larger aggregate amount over the smaller aggregate amount.

The parties may elect in respect of two or more Transactions that a net amount will be
determined in respect of all amounts payable on the same date in the same currency in respect
of such Transactions, regardless of whether such amounts are payable in respect of the same
Transaction. The election may be made in the Schedule or a Confirmation by specifying that
subparagraph (ii) above will not apply to the Transactions identified as being subject to the
election, together with the starting date (in which case subparagraph (ii) above will not, or
will cease to, apply to such Transactions from such date). This election may be made separately
for different groups of Transactions and will apply separately to each pairing of Offices
through which the parties make and receive payments or deliveries.

	(d)	 	Deduction or Withholding for Tax.

(i) Gross-Up. All payments under this Agreement will be made without any deduction
or withholding for or on account of any Tax unless such deduction or withholding is
required by any applicable law, as modified by the practice of any relevant
governmental revenue authority, then in effect. If a party is so required to deduct
or withhold, then that party (“X”) will:—

(1) promptly notify the other party (“Y”) of such requirement;

(2) pay to the relevant authorities the full amount required to be deducted or
withheld (including the full amount required to be deducted or withheld from
any additional amount paid by X to Y under this Section 2(d)) promptly upon
the earlier of determining that such deduction or withholding is required or
receiving notice that such amount has been assessed against Y;

(3) promptly forward to Y an official receipt (or a certified copy), or other
documentation reasonably acceptable to Y, evidencing such payment to such
authorities; and

(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to the payment
to which Y is otherwise entitled under this Agreement, such additional amount
as is necessary to ensure that the net amount actually received by Y (free and
clear of Indemnifiable Taxes, whether assessed against X or Y) will equal the
full amount Y would have received had no such deduction or withholding been
required. However, X will not be required to pay any additional amount to Y to
the extent that it would not be required to be paid but for:—

(A) the failure by Y to comply with or perform any agreement
contained in Section 4(a)(i), 4(a)(iii) or 4(d); or

(B) the failure of a representation made by Y pursuant to Section
3(f) to be accurate and true unless such failure would not have
occurred but for (I) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the
date on which a Transaction is entered into (regardless of
whether such action is taken or brought with respect to a party
to this Agreement) or (II) a Change in Tax Law.

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	 	(ii)	 	Liability. If:—

(1) X is required by any applicable law, as modified by the practice of any
relevant governmental revenue authority, to make any deduction or
withholding in respect of which X would not be required to pay an additional
amount to Y under Section 2(d)(i)(4);

(2) X does not so deduct or withhold; and

(3) a liability resulting from such Tax is assessed directly against X,

then, except to the extent Y has
satisfied or then satisfies the
liability resulting from such Tax,
Y will promptly pay to X the amount
of such liability (including any
related liability for interest, but
including any related liability for
penalties only if Y has failed to
comply with or perform any
agreement contained in Section
4(a)(i), 4(a)(iii) or 4(d)).

(e) Default Interest; Other Amounts. Prior to the occurrence or effective designation of an
Early Termination Date in respect of the relevant Transaction, a party that defaults in the
performance of any payment obligation will, to the extent permitted by law and subject to
Section 6(c), be required to pay interest (before as well as after judgment) on the overdue
amount to the other party on demand in the same currency as such overdue amount, for the period
from (and including) the original due date for payment to (but excluding) the date of actual
payment, at the Default Rate. Such interest will be calculated on the basis of daily
compounding and the actual number of days elapsed. If, prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction, a party
defaults in the performance of any obligation required to be settled by delivery, it will
compensate the other party on demand if and to the extent provided for in the relevant
Confirmation or elsewhere in this Agreement.

	3.	 	Representations

Each party represents to the other party (which representations will be deemed to be repeated
by each party on each date on which a Transaction is entered into and, in the case of the
representations in Section 3(f), at all times until the termination of this Agreement) that:—

	(a)	 	Basic Representations.

(i) Status. It is duly organised and validly existing under the laws of the
jurisdiction of its organisation or incorporation and, if relevant under such laws, in
good standing;

(ii) Powers. It has the power to execute this Agreement and any other documentation
relating to this Agreement to which it is a party, to deliver this Agreement and any
other documentation relating to this Agreement that it is required by this Agreement
to deliver and to perform its obligations under this Agreement and any obligations it
has under any Credit Support Document to which it is a party and has taken all
necessary action to authorise such execution, delivery and performance;

(iii) No Violation or Conflict. Such execution, delivery and performance do not
violate or conflict with any law applicable to it, any provision of its
constitutional documents, any order or judgment of any court or other agency of
government applicable to it or any of its assets or any contractual restriction
binding on or affecting it or any of its assets;

(iv) Consents. All governmental and other consents that are required to have been
obtained by it with respect to this Agreement or any Credit Support Document to which
it is a party have been obtained and are in full force and effect and all conditions
of any such consents have been complied with; and

(v) Obligations Binding. Its obligations under this Agreement and any Credit Support
Document to which it is a party constitute its legal, valid and binding obligations,
enforceable in accordance with their respective terms (subject to applicable
bankruptcy, reorganisation, insolvency, moratorium or similar laws affecting
creditors’ rights generally and subject, as to enforceability, to equitable principles
of general application (regardless of whether enforcement is sought in a proceeding in
equity or at law)).

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(b) Absence of Certain Events. No Event of Default or Potential Event of Default or, to its
knowledge, Termination Event with respect to it has occurred and is continuing and no such
event or circumstance would occur as a result of its entering into or performing its
obligations under this Agreement or any Credit Support Document to which it is a party.

(c) Absence of Litigation. There is not pending or, to its knowledge, threatened against it or
any of its Affiliates any action, suit or proceeding at law or in equity or before any court,
tribunal, governmental body, agency or official or any arbitrator that is likely to affect the
legality, validity or enforceability against it of this Agreement or any Credit Support
Document to which it is a party or its ability to perform its obligations under this Agreement
or such Credit Support Document.

(d) Accuracy of Specified Information. All applicable information that is furnished in writing
by or on behalf of it to the other party and is identified for the purpose of this Section 3(d)
in the Schedule is, as of the date of the information, true, accurate and complete in every
material respect.

(e) Payer Tax Representation. Each representation specified in the Schedule as being made by it
for the purpose of this Section 3(e) is accurate and true.

(f) Payee Tax Representations. Each representation specified in the Schedule as being made by
it for the purpose of this Section 3(f) is accurate and true.

4. Agreements

Each party agrees with the other that, so long as either party has or may have any obligation
under this Agreement or under any Credit Support Document to which it is a party:—

(a) Furnish Specified Information. It will deliver to the other party or, in certain cases
under subparagraph (iii) below, to such government or taxing authority as the other party
reasonably directs:—

(i) any forms, documents or certificates relating to taxation specified in the Schedule
or any Confirmation;

(ii) any other documents specified in the Schedule or any Confirmation; and

(iii) upon reasonable demand by such other party, any form or document that may be
required or reasonably requested in writing in order to allow such other party or its
Credit Support Provider to make a payment under this Agreement or any applicable Credit
Support Document without any deduction or withholding for or on account of any Tax or
with such deduction or withholding at a reduced rate (so long as the completion,
execution or submission of such form or document would not materially prejudice the
legal or commercial position of the party in receipt of such demand), with any such
form or document to be accurate and completed in a manner reasonably satisfactory to
such other party and to be executed and to be delivered with any reasonably required
certification,

in each case by the date specified in the Schedule or such Confirmation or, if none is
specified, as soon as reasonably practicable.

(b) Maintain Authorisations. It will use all reasonable efforts to maintain in full force and
effect all consents of any governmental or other authority that are required to be obtained by
it with respect to this Agreement or any Credit Support Document to which it is a party and
will use all reasonable efforts to obtain any that may become necessary in the future.

(c) Comply with Laws. It will comply in all material respects with all applicable laws and
orders to which it may be subject if failure so to comply would materially impair its ability
to perform its obligations under this Agreement or any Credit Support Document to which it is a
party.

(d) Tax Agreement. It will give notice of any failure of a representation made by it under
Section 3(f) to be accurate and true promptly upon learning of such failure.

(e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax levied or imposed
upon it or in respect of its execution or performance of this Agreement by a jurisdiction in
which it is incorporated,

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organised, managed and controlled, or considered to have its seat, or in which a branch or
office through which it is acting for the purpose of this Agreement is located (“Stamp Tax
Jurisdiction”) and will indemnify the other party against any Stamp Tax levied or imposed upon
the other party or in respect of the other party’s execution or performance of this Agreement
by any such Stamp Tax Jurisdiction which is not also a Stamp Tax Jurisdiction with respect to
the other party.

	5.	 	Events of Default and Termination Events

(a) Events of Default. The occurrence at any time with respect to a party or, if applicable,
any Credit Support Provider of such party or any Specified Entity of such party of any of the
following events constitutes an event of default (an “Event of Default”) with respect to such
party:—

(i) Failure to Pay or Deliver. Failure by the party to make, when due, any payment
under this Agreement or delivery under Section 2(a)(i) or 2(e) required to be made by
it if such failure is not remedied on or before the third Local Business Day after
notice of such failure is given to the party;

(ii) Breach of Agreement. Failure by the party to comply with or perform any agreement
or obligation (other than an obligation to make any payment under this Agreement or
delivery under Section 2(a)(i) or 2(e) or to give notice of a Termination Event or any
agreement or obligation under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied with
or performed by the party in accordance with this Agreement if such failure is not
remedied on or before the thirtieth day after notice of such failure is given to the
party;

(iii) Credit Support Default.

(1) Failure by the party or any Credit Support Provider of such party to
comply with or perform any agreement or obligation to be complied with or
performed by it in accordance with any Credit Support Document if such
failure is continuing after any applicable grace period has elapsed;

(2) the expiration or termination of such Credit Support Document or the
failing or ceasing of such Credit Support Document to be in full force and
effect for the purpose of this Agreement (in either case other than in
accordance with its terms) prior to the satisfaction of all obligations of
such party under each Transaction to which such Credit Support Document
relates without the written consent of the other party; or

(3) the party or such Credit Support Provider disaffirms, disclaims,
repudiates or rejects, in whole or in part, or challenges the validity of,
such Credit Support Document;

(iv) Misrepresentation. A representation (other than a representation under Section
3(e) or (f)) made or repeated or deemed to have been made or repeated by the party or
any Credit Support Provider of such party in this Agreement or any Credit Support
Document proves to have been incorrect or misleading in any material respect when made
or repeated or deemed to have been made or repeated;

(v) Default under Specified Transaction. The party, any Credit Support Provider of
such party or any applicable Specified Entity of such party (1) defaults under a
Specified Transaction and, after giving effect to any applicable notice requirement or
grace period, there occurs a liquidation of, an acceleration of obligations under, or
an early termination of, that Specified Transaction, (2) defaults, after giving effect
to any applicable notice requirement or grace period, in making any payment or
delivery due on the last payment, delivery or exchange date of, or any payment on
early termination of, a Specified Transaction (or such default continues for at least
three Local Business Days if there is no applicable notice requirement or grace
period) or (3) disaffirms, disclaims, repudiates or rejects, in whole or in part, a
Specified Transaction (or such action is taken by any person or entity appointed or
empowered to operate it or act on its behalf);

(vi) Cross Default. If “Cross Default” is specified in the Schedule as applying to the
party, the occurrence or existence of (1) a default, event of default or other similar
condition or event (however

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described) in respect of such party, any Credit Support Provider of such party or any
applicable Specified Entity of such party under one or more agreements or instruments
relating to Specified Indebtedness of any of them (individually or collectively) in an
aggregate amount of not less than the applicable Threshold Amount (as specified in the
Schedule) which has resulted in such Specified Indebtedness becoming, or becoming
capable at such time of being declared, due and payable under such agreements or
instruments, before it would otherwise have been due and payable or (2) a default by
such party, such Credit Support Provider or such Specified Entity (individually or
collectively) in making one or more payments on the due date thereof in an aggregate
amount of not less than the applicable Threshold Amount under such agreements or
instruments (after giving effect to any applicable notice requirement or grace
period);

(vii) Bankruptcy. The party, any Credit Support Provider of such party or any
applicable Specified Entity of such party:—

(1) is dissolved (other than pursuant to a consolidation, amalgamation or
merger); (2) becomes insolvent or is unable to pay its debts or fails or
admits in writing its inability generally to pay its debts as they become
due; (3) makes a general assignment, arrangement or composition with or for
the benefit of its creditors; (4) institutes or has instituted against it a
proceeding seeking a judgment of insolvency or bankruptcy or any other
relief under any bankruptcy or insolvency law or other similar law affecting
creditors’ rights, or a petition is presented for its winding-up or
liquidation, and, in the case of any such proceeding or petition instituted
or presented against it, such proceeding or petition (A) results in a
judgment of insolvency or bankruptcy or the entry of an order for relief or
the making of an order for its winding-up or liquidation or (B) is not
dismissed, discharged, stayed or restrained in each case within 30 days of
the institution or presentation thereof; (5) has a resolution passed for its
winding-up, official management or liquidation (other than pursuant to a
consolidation, amalgamation or merger); (6) seeks or becomes subject to the
appointment of an administrator, provisional liquidator, conservator,
receiver, trustee, custodian or other similar official for it or for all or
substantially all its assets; (7) has a secured party take possession of all
or substantially all its assets or has a distress, execution, attachment,
sequestration or other legal process levied, enforced or sued on or against
all or substantially all its assets and such secured party maintains
possession, or any such process is not dismissed, discharged, stayed or
restrained, in each case within 30 days thereafter; (8) causes or is subject
to any event with respect to it which, under the applicable laws of any
jurisdiction, has an analogous effect to any of the events specified in
clauses (1) to (7) (inclusive); or (9) takes any action in furtherance of,
or indicating its consent to, approval of, or acquiescence in, any of the
foregoing acts; or

(viii) Merger Without Assumption. The party or any Credit Support Provider of such
party consolidates or amalgamates with, or merges with or into, or transfers all or
substantially all its assets to, another entity and, at the time of such
consolidation, amalgamation, merger or transfer:—

(1) the resulting, surviving or transferee entity fails to assume all the
obligations of such party or such Credit Support Provider under this
Agreement or any Credit Support Document to which it or its predecessor was
a party by operation of law or pursuant to an agreement reasonably
satisfactory to the other party to this Agreement; or

(2) the benefits of any Credit Support Document fail to extend (without the
consent of the other party) to the performance by such resulting, surviving
or transferee entity of its obligations under this Agreement.

(b) Termination Events. The occurrence at any time with respect to a party or, if applicable,
any Credit Support Provider of such party or any Specified Entity of such party of any event
specified below constitutes an Illegality if the event is specified in (i) below, a Tax Event
if the event is specified in (ii) below or a Tax Event Upon Merger if the event is specified in
(iii) below, and, if specified to be applicable, a Credit Event

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Upon Merger if the event is specified pursuant to (iv) below or an Additional
Termination Event if the event is specified pursuant to (v) below:—

(i) Illegality. Due to the adoption of, or any change in, any
applicable law after the date on which a Transaction is entered into,
or due to the promulgation of, or any change in, the interpretation by
any court, tribunal or regulatory authority with competent
jurisdiction of any applicable law after such date, it becomes
unlawful (other than as a result of a breach by the party of Section
4(b)) for such party (which will be the Affected Party):—

(1) to perform any absolute or contingent obligation to make
a payment or delivery or to receive a payment or delivery in
respect of such Transaction or to comply with any other
material provision of this Agreement relating to such
Transaction; or

(2) to perform, or for any Credit Support Provider of such
party to perform, any contingent or other obligation which
the party (or such Credit Support Provider) has under any
Credit Support Document relating to such Transaction;

(ii) Tax Event. Due to (x) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the date on
which a Transaction is entered into (regardless of whether such action
is taken or brought with respect to a party to this Agreement) or (y)
a Change in Tax Law, the party (which will be the Affected Party)
will, or there is a substantial likelihood that it will, on the next
succeeding Scheduled Payment Date (1) be required to pay to the other
party an additional amount in respect of an Indemnifiable Tax under
Section 2(d)(i)(4) (except in respect of interest under Section 2(e),
6(d)(ii) or 6(e)) or (2) receive a payment from which an amount is
required to be deducted or withheld for or on account of a Tax (except
in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) and no
additional amount is required to be paid in respect of such Tax under
Section 2(d)(i)(4) (other than by reason of Section 2(d)(i)(4)(A) or
(B));

(iii) Tax Event Upon Merger. The party (the “Burdened Party”) on the
next succeeding Scheduled Payment Date will either (1) be required to
pay an additional amount in respect of an Indemnifiable Tax under
Section 2(d)(i)(4) (except in respect of interest under Section 2(e),
6(d)(ii) or 6(e)) or (2) receive a payment from which an amount has
been deducted or withheld for or on account of any Indemnifiable Tax
in respect of which the other party is not required to pay an
additional amount (other than by reason of Section 2(d)(i)(4)(A) or
(B)), in either case as a result of a party consolidating or
amalgamating with, or merging with or into, or transferring all or
substantially all its assets to, another entity (which will be the
Affected Party) where such action does not constitute an event
described in Section 5(a)(viii);

(iv) Credit Event Upon Merger. If “Credit Event Upon Merger” is
specified in the Schedule as applying to the party, such party (“X”),
any Credit Support Provider of X or any applicable Specified Entity of
X consolidates or amalgamates with, or merges with or into, or
transfers all or substantially all its assets to, another entity and
such action does not constitute an event described in Section
5(a)(viii) but the creditworthiness of the resulting, surviving or
transferee entity is materially weaker than that of X, such Credit
Support Provider or such Specified Entity, as the case may be,
immediately prior to such action (and, in such event, X or its
successor or transferee, as appropriate, will be the Affected Party);
or

(v) Additional Termination Event. If any “Additional Termination
Event” is specified in the Schedule or any Confirmation as applying,
the occurrence of such event (and, in such event, the Affected Party
or Affected Parties shall be as specified for such Additional
Termination Event in the Schedule or such Confirmation).

(c) Event of Default and Illegality. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an
Event of Default.

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	6.	 	Early Termination

(a) Right to Terminate Following Event of Default. If at any time an Event of
Default with respect to a party (the “Defaulting Party”) has occurred and is
then continuing, the other party (the “Non-defaulting Party”) may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as
an Early Termination Date in respect of all outstanding Transactions. If,
however, “Automatic Early Termination” is specified in the Schedule as applying
to a party, then an Early Termination Date in respect of all outstanding
Transactions will occur immediately upon the occurrence with respect to such
party of an Event of Default specified in Section 5(a)(vii)(l), (3), (5), (6)
or, to the extent analogous thereto, (8), and as of the time immediately
preceding the institution of the relevant proceeding or the presentation of the
relevant petition upon the occurrence with respect to such party of an Event of
Default specified in Section 5(a)(vii)(4) or, to the extent analogous thereto,
(8).

	(b)	 	Right to Terminate Following Termination Event.

(i) Notice. If a Termination Event occurs, an Affected Party will,
promptly upon becoming aware of it, notify the other party, specifying
the nature of that Termination Event and each Affected Transaction and
will also give such other information about that Termination Event as
the other party may reasonably require.

(ii) Transfer to Avoid Termination Event. If either an Illegality
under Section 5(b)(i)(l) or a Tax Event occurs and there is only one
Affected Party, or if a Tax Event Upon Merger occurs and the Burdened
Party is the Affected Party, the Affected Party will, as a condition
to its right to designate an Early Termination Date under Section
6(b)(iv), use all reasonable efforts (which will not require such
party to incur a loss, excluding immaterial, incidental expenses) to
transfer within 20 days after it gives notice under Section 6(b)(i)
all its rights and obligations under this Agreement in respect of the
Affected Transactions to another of its Offices or Affiliates so that
such Termination Event ceases to exist.

If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days
after the notice is given under Section 6(b)(i).

Any such transfer by a party under this Section 6(b)(ii) will be
subject to and conditional upon the prior written consent of the other
party, which consent will not be withheld if such other party’s
policies in effect at such time would permit it to enter into
transactions with the transferee on the terms proposed.

(iii) Two Affected Parties. If an Illegality under Section 5(b)(i)( 1)
or a Tax Event occurs and there are two Affected Parties, each party
will use all reasonable efforts to reach agreement within 30 days
after notice thereof is given under Section 6(b)(i) on action to avoid
that Termination Event.

(iv) Right to Terminate. If:—

(1) a transfer under Section 6(b)(ii) or an agreement under
Section 6(b)(iii), as the case may be, has not been effected
with respect to all Affected Transactions within 30 days
after an Affected Party gives notice under Section 6(b)(i);
or

(2) an Illegality under Section 5(b)(i)(2), a Credit Event
Upon Merger or an Additional Termination Event occurs, or a
Tax Event Upon Merger occurs and the Burdened Party is not
the Affected Party,

either party in the case of an Illegality, the Burdened Party in the
case of a Tax Event Upon Merger, any Affected Party in the case of a
Tax Event or an Additional Termination Event if there is more than one
Affected Party, or the party which is not the Affected Party in the
case of a Credit Event Upon Merger or an Additional Termination Event
if there is only one Affected Party may, by not more than 20 days
notice to the other party and provided that the relevant Termination
Event is then

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continuing, designate a day not earlier than the day such notice is effective as an Early
Termination Date in respect of all Affected Transactions.

	(c)	 	Effect of Designation.

(i) If notice designating an Early Termination Date is given under Section 6(a) or (b),
the Early Termination Date will occur on the date so designated, whether or not the
relevant Event of Default or Termination Event is then continuing.

(ii) Upon the occurrence or effective designation of an Early Termination Date, no further
payments or deliveries under Section 2(a)(i) or 2(e) in respect of the Terminated
Transactions will be required to be made, but without prejudice to the other provisions of
this Agreement. The amount, if any, payable in respect of an Early Termination Date shall
be determined pursuant to Section 6(e).

	(d)	 	Calculations.

(i) Statement. On or as soon as reasonably practicable following the occurrence of an
Early Termination Date, each party will make the calculations on its part, if any,
contemplated by Section 6(e) and will provide to the other party a statement (1) showing,
in reasonable detail, such calculations (including all relevant quotations and specifying
any amount payable under Section 6(e)) and (2) giving details of the relevant account to
which any amount payable to it is to be paid. In the absence of written confirmation from
the source of a quotation obtained in determining a Market Quotation, the records of the
party obtaining such quotation will be conclusive evidence of the existence and accuracy
of such quotation.

(ii) Payment Date. An amount calculated as being due in respect of any Early Termination
Date under Section 6(e) will be payable on the day that notice of the amount payable is
effective (in the case of an Early Termination Date which is designated or occurs as a
result of an Event of Default) and on the day which is two Local Business Days after the
day on which notice of the amount payable is effective (in the case of an Early
Termination Date which is designated as a result of a Termination Event). Such amount will
be paid together with (to the extent permitted under applicable law) interest thereon
(before as well as after judgment) in the Termination Currency, from (and including) the
relevant Early Termination Date to (but excluding) the date such amount is paid, at the
Applicable Rate. Such interest will be calculated on the basis of daily compounding and
the actual number of days elapsed.

(e) Payments on Early Termination. If an Early Termination Date occurs, the following provisions
shall apply based on the parties’ election in the Schedule of a payment measure, either “Market
Quotation” or “Loss”, and a payment method, either the “First Method” or the “Second Method”. If
the parties fail to designate a payment measure or payment method in the Schedule, it will be
deemed that “Market Quotation” or the “Second Method”, as the case may be, shall apply. The amount,
if any, payable in respect of an Early Termination Date and determined pursuant to this Section
will be subject to any Set-off.

(i) Events of Default. If the Early Termination Date results from an Event of Default:—

(1) First Method and Market Quotation. If the First Method and Market Quotation
apply, the Defaulting Party will pay to the Non-defaulting Party the excess, if
a positive number, of (A) the sum of the Settlement Amount (determined by the
Non-defaulting Party) in respect of the Terminated Transactions and the
Termination Currency Equivalent of the Unpaid Amounts owing to the
Non-defaulting Party over (B) the Termination Currency Equivalent of the Unpaid
Amounts owing to the Defaulting Party.

(2) First Method and Loss. If the First Method and Loss apply, the Defaulting
Party will pay to the Non-defaulting Party, if a positive number, the
Non-defaulting Party’s Loss in respect of this Agreement.

(3) Second Method and Market Quotation. If the Second Method and Market
Quotation apply, an amount will be payable equal to (A) the sum of the
Settlement Amount (determined by the

9

 

Non-defaulting Party) in respect of the Terminated Transactions and the
Termination Currency Equivalent of the Unpaid Amounts owing to the
Non-defaulting Party less (B) the Termination Currency Equivalent of the Unpaid
Amounts owing to the Defaulting Party. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party; if it is a negative
number, the Non-defaulting Party will pay the absolute value of that amount to
the Defaulting Party.

(4) Second Method and Loss. If the Second Method and Loss apply, an amount will
be payable equal to the Non-defaulting Party’s Loss in respect of this
Agreement. If that amount is a positive number, the Defaulting Party will pay it
to the Non-defaulting Party; if it is a negative number, the Non-defaulting
Party will pay the absolute value of that amount to the Defaulting Party.

(ii) Termination Events. If the Early Termination Date results from a Termination Event:—

(1) One Affected Party. If there is one Affected Party, the amount payable will
be determined in accordance with Section 6(e)(i)(3), if Market Quotation
applies, or Section 6(e)(i)(4), if Loss applies, except that, in either case,
references to the Defaulting Party and to the Non-defaulting Party will be
deemed to be references to the Affected Party and the party which is not the
Affected Party, respectively, and, if Loss applies and fewer than all the
Transactions are being terminated, Loss shall be calculated in respect of all
Terminated Transactions.

(2) Two Affected Parties. If there are two Affected Parties:—

(A) if Market Quotation applies, each party will determine a Settlement
Amount in respect of the Terminated Transactions, and an amount will be
payable equal to (I) the sum of (a) one-half of the difference between
the Settlement Amount of the party with the higher Settlement Amount
(“X”) and the Settlement Amount of the party with the lower Settlement
Amount (“Y”) and (b) the Termination Currency Equivalent of the Unpaid
Amounts owing to X less (II) the Termination Currency Equivalent of the
Unpaid Amounts owing to Y; and

(B) if Loss applies, each party will determine its Loss in respect of
this Agreement (or, if fewer than all the Transactions are being
terminated, in respect of all Terminated Transactions) and an amount
will be payable equal to one-half of the difference between the Loss of
the party with the higher Loss (“X”) and the Loss of the party with the
lower Loss (“Y”).

If the amount payable is a positive number, Y will pay it to X; if it is a negative
number, X will pay the absolute value of that amount to Y.

(iii) Adjustment for Bankruptcy. In circumstances where an Early Termination Date occurs
because “Automatic Early Termination” applies in respect of a party, the amount determined
under this Section 6(e) will be subject to such adjustments as are appropriate and
permitted by law to reflect any payments or deliveries made by one party to the other
under this Agreement (and retained by such other party) during the period from the
relevant Early Termination Date to the date for payment determined under Section 6(d)(ii).

(iv) Pre-Estimate. The parties agree that if Market Quotation applies an amount
recoverable under this Section 6(e) is a reasonable pre-estimate of loss and not a
penalty. Such amount is payable for the loss of bargain and the loss of protection against
future risks and except as otherwise provided in this Agreement neither party will be
entitled to recover any additional damages as a consequence of such losses.

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	7.	 	Transfer

Subject to Section 6(b)(ii), neither this Agreement nor any interest or obligation in or under this
Agreement may be transferred (whether by way of security or otherwise) by either party without the
prior written consent of the other party, except that: —

(a) a party may make such a transfer of this Agreement pursuant to a consolidation or amalgamation
with, or merger with or into, or transfer of all or substantially all its assets to, another entity
(but without prejudice to any other right or remedy under this Agreement); and

(b) a party may make such a transfer of all or any part of its interest in any amount payable to it
from a Defaulting Party under Section 6(e).

Any purported transfer that is not in compliance with this Section will be void.

	8.	 	Contractual Currency

(a) Payment in the Contractual Currency. Each payment under this Agreement will be made in the
relevant currency specified in this Agreement for that payment (the “Contractual Currency”). To the
extent permitted by applicable law, any obligation to make payments under this Agreement in the
Contractual Currency will not be discharged or satisfied by any tender in any currency other than
the Contractual Currency, except to the extent such tender results in the actual receipt by the
party to which payment is owed, acting in a reasonable manner and in good faith in converting the
currency so tendered into the Contractual Currency, of the full amount in the Contractual Currency
of all amounts payable in respect of this Agreement. If for any reason the amount in the
Contractual Currency so received falls short of the amount in the Contractual Currency payable in
respect of this Agreement, the party required to make the payment will, to the extent permitted by
applicable law, immediately pay such additional amount in the Contractual Currency as may be
necessary to compensate for the shortfall. If for any reason the amount in the Contractual Currency
so received exceeds the amount in the Contractual Currency payable in respect of this Agreement,
the party receiving the payment will refund promptly the amount of such excess.

(b) Judgments. To the extent permitted by applicable law, if any judgment or order expressed in a
currency other than the Contractual Currency is rendered (i) for the payment of any amount owing in
respect of this Agreement, (ii) for the payment of any amount relating to any early termination in
respect of this Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking recovery, after recovery in
full of the aggregate amount to which such party is entitled pursuant to the judgment or order,
will be entitled to receive immediately from the other party the amount of any shortfall of the
Contractual Currency received by such party as a consequence of sums paid in such other currency
and will refund promptly to the other party any excess of the Contractual Currency received by such
party as a consequence of sums paid in such other currency if such shortfall or such excess arises
or results from any variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such judgment or order and
the rate of exchange at which such party is able, acting in a reasonable manner and in good faith
in converting the currency received into the Contractual Currency, to purchase the Contractual
Currency with the amount of the currency of the judgment or order actually received by such party.
The term “rate of exchange” includes, without limitation, any premiums and costs of exchange
payable in connection with the purchase of or conversion into the Contractual Currency.

(c) Separate Indemnities. To the extent permitted by applicable law, these indemnities constitute
separate and independent obligations from the other obligations in this Agreement, will be
enforceable as separate and independent causes of action, will apply notwithstanding any indulgence
granted by the party to which any payment is owed and will not be affected by judgment being
obtained or claim or proof being made for any other sums payable in respect of this Agreement.

(d) Evidence of Loss. For the purpose of this Section 8, it will be sufficient for a party to
demonstrate that it would have suffered a loss had an actual exchange or purchase been made.

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	9.	 	Miscellaneous

(a) Entire Agreement. This Agreement constitutes the entire agreement and understanding of the
parties with respect to its subject matter and supersedes all oral communication and prior writings
with respect thereto.

(b) Amendments. No amendment, modification or waiver in respect of this Agreement will be effective
unless in writing (including a writing evidenced by a facsimile transmission) and executed by each
of the parties or confirmed by an exchange of telexes or electronic messages on an electronic
messaging system.

(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and 6(c)(ii), the obligations
of the parties under this Agreement will survive the termination of any Transaction.

(d) Remedies Cumulative. Except as provided in this Agreement, the rights, powers, remedies and
privileges provided in this Agreement are cumulative and not exclusive of any rights, powers,
remedies and privileges provided by law.

	(e)	 	Counterparts and Confirmations.

(i) This Agreement (and each amendment, modification and waiver in respect of it) may be
executed and delivered in counterparts (including by facsimile transmission), each of which
will be deemed an original.

(ii) The parties intend that they are legally bound by the terms of each Transaction from
the moment they agree to those terms (whether orally or otherwise). A Confirmation shall be
entered into as soon as practicable and may be executed and delivered in counterparts
(including by facsimile transmission) or be created by an exchange of telexes or by an
exchange of electronic messages on an electronic messaging system, which in each case will
be sufficient for all purposes to evidence a binding supplement to this Agreement. The
parties will specify therein or through another effective means that any such counterpart,
telex or electronic message constitutes a Confirmation.

(f) No Waiver of Rights. A failure or delay in exercising any right, power or privilege in respect
of this Agreement will not be presumed to operate as a waiver, and a single or partial exercise of
any right, power or privilege will not be presumed to preclude any subsequent or further exercise,
of that right, power or privilege or the exercise of any other right, power or privilege.

(g) Headings. The headings used in this Agreement are for convenience of reference only and are not
to affect the construction of or to be taken into consideration in interpreting this Agreement.

	10.	 	Offices; Multibranch Parties

(a) If Section 10(a) is specified in the Schedule as applying, each party that enters into a
Transaction through an Office other than its head or home office represents to the other party
that, notwithstanding the place of booking office or jurisdiction of incorporation or organisation
of such party, the obligations of such party are the same as if it had entered into the Transaction
through its head or home office. This representation will be deemed to be repeated by such party on
each date on which a Transaction is entered into.

(b) Neither party may change the Office through which it makes and receives payments or deliveries
for the purpose of a Transaction without the prior written consent of the other party.

(c) If a party is specified as a Multibranch Party in the Schedule, such Multibranch Party may make
and receive payments or deliveries under any Transaction through any Office listed in the Schedule,
and the Office through which it makes and receives payments or deliveries with respect to a
Transaction will be specified in the relevant Confirmation.

	11.	 	Expenses

A Defaulting Party will, on demand, indemnify and hold harmless the other party for and against all
reasonable out-of-pocket expenses, including legal fees and Stamp Tax, incurred by such other party
by reason of the enforcement and protection of its rights under this Agreement or any Credit
Support Document

12

 

to which the Defaulting Party is a party or by reason of the early termination of any Transaction,
including, but not limited to, costs of collection.

	12.	 	Notices

(a) Effectiveness. Any notice or other communication in respect of this Agreement may be given in
any manner set forth below (except that a notice or other communication under Section 5 or 6 may
not be given by facsimile transmission or electronic messaging system) to the address or number or
in accordance with the electronic messaging system details provided (see the Schedule) and will be
deemed effective as indicated:—

(i) if in writing and delivered in person or by courier, on the date it is delivered;

(ii) if sent by telex, on the date the recipient’s answerback is received;

(iii) if sent by facsimile transmission, on the date that transmission is received by a
responsible employee of the recipient in legible form (it being agreed that the burden of
proving receipt will be on the sender and will not be met by a transmission report
generated by the sender’s facsimile machine);

(iv) if sent by certified or registered mail (airmail, if overseas) or the equivalent
(return receipt requested), on the date that mail is delivered or its delivery is
attempted; or

(v) if sent by electronic messaging system, on the date that electronic message is
received,

unless the date of that delivery (or attempted delivery) or that receipt, as applicable, is not a
Local Business Day or that communication is delivered (or attempted) or received, as applicable,
after the close of business on a Local Business Day, in which case that communication shall be
deemed given and effective on the first following day that is a Local Business Day.

(b) Change of Addresses. Either party may by notice to the other change the address, telex or
facsimile number or electronic messaging system details at which notices or other communications
are to be given to
it.

	13.	 	Governing Law and Jurisdiction

(a) Governing Law. This Agreement will be governed by and construed in accordance with the law
specified in the Schedule.

(b) Jurisdiction. With respect to any suit, action or proceedings relating to this Agreement
(“Proceedings”), each party irrevocably:—

(i) submits to the jurisdiction of the English courts, if this Agreement is expressed to
be governed by English law, or to the non-exclusive jurisdiction of the courts of the
State of New York and the United States District Court located in the Borough of Manhattan
in New York City, if this Agreement is expressed to be governed by the laws of the State
of New York; and

(ii) waives any objection which it may have at any time to the laying of venue of any
Proceedings brought in any such court, waives any claim that such Proceedings have been
brought in an inconvenient forum and further waives the right to object, with respect to
such Proceedings, that such court does not have any jurisdiction over such party.

Nothing in this Agreement precludes either party from bringing Proceedings in any other
jurisdiction (outside, if this Agreement is expressed to be governed by English law, the
Contracting States, as defined in Section 1(3) of the Civil Jurisdiction and Judgments Act 1982 or
any modification, extension or reenactment thereof for the time being in force) nor will the
bringing of Proceedings in any one or more jurisdictions preclude the bringing of Proceedings in
any other jurisdiction.

(c) Service of Process. Each party irrevocably appoints the Process Agent (if any) specified
opposite its name in the Schedule to receive, for it and on its behalf, service of process in any
Proceedings. If for any

13

 

reason any party’s Process Agent is unable to act as such, such party will promptly notify the
other party and within 30 days appoint a substitute process agent acceptable to the other party.
The parties irrevocably consent to service of process given in the manner provided for notices in
Section 12. Nothing in this Agreement will affect the right of either party to serve process in any
other manner permitted by law.

(d) Waiver of Immunities. Each party irrevocably waives, to the fullest extent permitted by
applicable law, with respect to itself and its revenues and assets (irrespective of their use or
intended use), all immunity on the grounds of sovereignty or other similar grounds from (i) suit,
(ii) jurisdiction of any court, (iii) relief by way of injunction, order for specific performance
or for recovery of property, (iv) attachment of its assets (whether before or after judgment) and
(v) execution or enforcement of any judgment to which it or its revenues or assets might otherwise
be entitled in any Proceedings in the courts of any jurisdiction and irrevocably agrees, to the
extent permitted by applicable law, that it will not claim any such immunity in any Proceedings.

14. Definitions

As used in this Agreement:—

“Additional Termination Event” has the meaning specified in Section 5(b).

“Affected Party” has the meaning specified in Section 5(b).

“Affected Transactions” means (a) with respect to any Termination Event consisting of an
Illegality, Tax Event or Tax Event Upon Merger, all Transactions affected by the occurrence of such
Termination Event and (b) with respect to any other Termination Event, all Transactions.

“Affiliate” means, subject to the Schedule, in relation to any person, any entity controlled,
directly or indirectly, by the person, any entity that controls, directly or indirectly, the person
or any entity directly or indirectly under common control with the person. For this purpose,
“control” of any entity or person means ownership of a majority of the voting power of the entity
or person.

“Applicable Rate” means:—

(a) in respect of obligations payable or deliverable (or which would have been but for Section
2(a)(iii)) by a Defaulting Party, the Default Rate;

(b) in respect of an obligation to pay an amount under Section 6(e) of either party from and after
the date (determined in accordance with Section 6(d)(ii)) on which that amount is payable, the
Default Rate;

(c) in respect of all other obligations payable or deliverable (or which would have been but for
Section 2(a)(iii)) by a Non-defaulting Party, the Non-default Rate; and

(d) in all other cases, the Termination Rate.

“Burdened Party” has the meaning specified in Section 5(b).

“Change in Tax Law” means the enactment, promulgation, execution or ratification of, or any change
in or amendment to, any law (or in the application or official interpretation of any law) that
occurs on or after the date on which the relevant Transaction is entered into.

“consent” includes a consent, approval, action, authorisation, exemption, notice, filing,
registration or exchange control consent.

“Credit Event Upon Merger” has the meaning specified in Section 5(b).

“Credit Support Document” means any agreement or instrument that is specified as such in this
Agreement.

“Credit Support Provider” has the meaning specified in the Schedule.

“Default Rate” means a rate per annum equal to the cost (without proof or evidence of any actual
cost) to the relevant payee (as certified by it) if it were to fund or of funding the relevant
amount plus 1% per annum.

14

 

“Defaulting Party” has the meaning specified in Section 6(a).

“Early Termination Date” means the date determined in accordance with Section 6(a) or 6(b)(iv).

“Event of Default” has the meaning specified in Section 5(a) and, if applicable, in the Schedule.

“Illegality” has the meaning specified in Section 5(b).

“Indemnifiable Tax” means any Tax other than a Tax that would not be imposed in respect of a
payment under this Agreement but for a present or former connection between the jurisdiction of the
government or taxation authority imposing such Tax and the recipient of such payment or a person
related to such recipient (including, without limitation, a connection arising from such recipient
or related person being or having been a citizen or resident of such jurisdiction, or being or
having been organised, present or engaged in a trade or business in such jurisdiction, or having or
having had a permanent establishment or fixed place of business in such jurisdiction, but excluding
a connection arising solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this Agreement or a Credit
Support Document).

“law” includes any treaty, law, rule or regulation (as modified, in the case of tax matters, by the
practice of any relevant governmental revenue authority) and “lawful” and “unlawful” will be
construed accordingly.

“Local Business Day” means, subject to the Schedule, a day on which commercial banks are open for
business (including dealings in foreign exchange and foreign currency deposits) (a) in relation to
any obligation under Section 2(a)(i), in the place(s) specified in the relevant Confirmation or, if
not so specified, as otherwise agreed by the parties in writing or determined pursuant to
provisions contained, or incorporated by reference, in this Agreement, (b) in relation to any other
payment, in the place where the relevant account is located and, if different, in the principal
financial centre, if any, of the currency of such payment, (c) in relation to any notice or other
communication, including notice contemplated under Section 5(a)(i), in the city specified in the
address for notice provided by the recipient and, in the case of a notice contemplated by Section
2(b), in the place where the relevant new account is to be located and (d) in relation to Section
5(a)(v)(2), in the relevant locations for performance with respect to such Specified Transaction.

“Loss” means, with respect to this Agreement or one or more Terminated Transactions, as the case
may be, and a party, the Termination Currency Equivalent of an amount that party reasonably
determines in good faith to be its total losses and costs (or gain, in which case expressed as a
negative number) in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost of funding or, at
the election of such party but without duplication, loss or cost incurred as a result of its
terminating, liquidating, obtaining or reestablishing any hedge or related trading position (or any
gain resulting from any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each applicable condition
precedent) on or before the relevant Early Termination Date and not made, except, so as to avoid
duplication, if Section 6(e)(i)(1) or (3) or 6(e)(ii)(2)(A) applies. Loss does not include a
party’s legal fees and out-of-pocket expenses referred to under Section 11. A party will determine
its Loss as of the relevant Early Termination Date, or, if that is not reasonably practicable, as
of the earliest date thereafter as is reasonably practicable. A party may (but need not) determine
its Loss by reference to quotations of relevant rates or prices from one or more leading dealers in
the relevant markets.

“Market Quotation” means, with respect to one or more Terminated Transactions and a party making
the determination, an amount determined on the basis of quotations from Reference Market-makers.
Each quotation will be for an amount, if any, that would be paid to such party (expressed as a
negative number) or by such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document with respect to the
obligations of such party) and the quoting Reference Market-maker to enter into a transaction (the
“Replacement Transaction”) that would have the effect of preserving for such party the economic
equivalent of any payment or delivery (whether the underlying obligation was absolute or contingent
and assuming the satisfaction of each applicable condition precedent) by the parties under Section
2(a)(i) in respect of such Terminated Transaction or group of Terminated Transactions that would,
but for the occurrence of the relevant Early Termination Date, have

15

 

been required after that date. For this purpose, Unpaid Amounts in respect of the Terminated
Transaction or group of Terminated Transactions are to be excluded but, without limitation, any
payment or delivery that would, but for the relevant Early Termination Date, have been required
(assuming satisfaction of each applicable condition precedent) after that Early Termination Date is
to be included. The Replacement Transaction would be subject to such documentation as such party
and the Reference Market-maker may, in good faith, agree. The party making the determination (or
its agent) will request each Reference Market maker to provide its quotation to the extent
reasonably practicable as of the same day and time (without regard to different time zones) on or
as soon as reasonably practicable after the relevant Early Termination Date. The day and time as of
which those quotations are to be obtained will be selected in good faith by the party obliged to
make a determination under Section 6(e), and, if each party is so obliged, after consultation with
the other. If more than three quotations are provided, the Market Quotation will be the arithmetic
mean of the quotations, without regard to the quotations having the highest and lowest values. If
exactly three such quotations are provided, the Market Quotation will be the quotation remaining
after disregarding the highest and lowest quotations. For this purpose, if more than one quotation
has the same highest value or lowest value, then one of such quotations shall be disregarded. If
fewer than three quotations are provided, it will be deemed that the Market Quotation in respect of
such Terminated Transaction or group of Terminated Transactions cannot be determined.

“Non-default Rate” means a rate per annum equal to the cost (without proof or evidence of any
actual cost) to the Non-defaulting Party (as certified by it) if it were to fund the relevant
amount.

“Non-defaulting Party” has the meaning specified in Section 6(a).

“Office” means a branch or office of a party, which may be such party’s head or home office.

“Potential Event of Default” means any event which, with the giving of notice or the lapse of time
or both, would constitute an Event of Default.

“Reference Market-makers” means four leading dealers in the relevant market selected by the party
determining a Market Quotation in good faith (a) from among dealers of the highest credit standing
which satisfy all the criteria that such party applies generally at the time in deciding whether to
offer or to make an extension of credit and (b) to the extent practicable, from among such dealers
having an office in the same city.

“Relevant Jurisdiction” means, with respect to a party, the jurisdictions (a) in which the party is
incorporated, organised, managed and controlled or considered to have its seat, (b) where an Office
through which the party is acting for purposes of this Agreement is located, (c) in which the party
executes this Agreement and (d) in relation to any payment, from or through which such payment is
made.

“Scheduled Payment Date” means a date on which a payment or delivery is to be made under Section
2(a)(i) with respect to a Transaction.

“Set-off” means set-off, offset, combination of accounts, right of retention or withholding or
similar right or requirement to which the payer of an amount under Section 6 is entitled or subject
(whether arising under this Agreement, another contract, applicable law or otherwise) that is
exercised by, or imposed on, such payer.

“Settlement Amount” means, with respect to a party and any Early Termination Date, the sum of:—

(a) the Termination Currency Equivalent of the Market Quotations (whether positive or negative) for
each Terminated Transaction or group of Terminated Transactions for which a Market Quotation is
determined;
and

(b) such party’s Loss (whether positive or negative and without reference to any Unpaid Amounts)
for each Terminated Transaction or group of Terminated Transactions for which a Market Quotation
cannot be determined or would not (in the reasonable belief of the party making the determination)
produce a commercially reasonable result.

“Specified Entity” has the meaning specified in the Schedule.

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“Specified Indebtedness” means, subject to the Schedule, any obligation (whether present or future,
contingent or otherwise, as principal or surety or otherwise) in respect of borrowed money.

“Specified Transaction” means, subject to the Schedule, (a) any transaction (including an agreement
with respect thereto) now existing or hereafter entered into between one party to this Agreement
(or any Credit Support Provider of such party or any applicable Specified Entity of such party) and
the other party to this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap transaction, basis swap,
forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or
equity index option, bond option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including any option with
respect to any of these transactions), (b) any combination of these transactions and (c) any other
transaction identified as a Specified Transaction in this Agreement or the relevant confirmation.

“Stamp Tax” means any stamp, registration, documentation or similar tax.

“Tax” means any present or future tax, levy, impost, duty, charge, assessment or fee of any nature
(including interest, penalties and additions thereto) that is imposed by any government or other
taxing authority in respect of any payment under this Agreement other than a stamp, registration,
documentation or similar tax.

“Tax Event” has the meaning specified in Section 5(b).

“Tax Event Upon Merger” has the meaning specified in Section 5(b).

“Terminated Transactions” means with respect to any Early Termination Date (a) if resulting from a
Termination Event, all Affected Transactions and (b) if resulting from an Event of Default, all
Transactions (in either case) in effect immediately before the effectiveness of the notice
designating that Early Termination Date (or, if “Automatic Early Termination” applies, immediately
before that Early Termination Date).

“Termination Currency” has the meaning specified in the Schedule.

“Termination Currency Equivalent” means, in respect of any amount denominated in the Termination
Currency, such Termination Currency amount and, in respect of any amount denominated in a currency
other than the Termination Currency (the “Other Currency”), the amount in the Termination Currency
determined by the party making the relevant determination as being required to purchase such amount
of such Other Currency as at the relevant Early Termination Date, or, if the relevant Market
Quotation or Loss (as the case may be), is determined as of a later date, that later date, with the
Termination Currency at the rate equal to the spot exchange rate of the foreign exchange agent
(selected as provided below) for the purchase of such Other Currency with the Termination Currency
at or about 11:00 a.m. (in the city in which such foreign exchange agent is located) on such date
as would be customary for the determination of such a rate for the purchase of such Other Currency
for value on the relevant Early Termination Date or that later date. The foreign exchange agent
will, if only one party is obliged to make a determination under Section 6(e), be selected in good
faith by that party and otherwise will be agreed by the parties.

“Termination Event” means an Illegality, a Tax Event or a Tax Event Upon Merger or, if specified to
be applicable, a Credit Event Upon Merger or an Additional Termination Event.

“Termination Rate” means a rate per annum equal to the arithmetic mean of the cost (without proof
or evidence of any actual cost) to each party (as certified by such party) if it were to fund or of
funding such amounts.

“Unpaid Amounts” owing to any party means, with respect to an Early Termination Date, the aggregate
of (a) in respect of all Terminated Transactions, the amounts that became payable (or that would
have become payable but for Section 2(a)(iii)) to such party under Section 2(a)(i) on or prior to
such Early Termination Date and which remain unpaid as at such Early Termination Date and (b) in
respect of each Terminated Transaction, for each obligation under Section 2(a)(i) which was (or
would have been but for Section 2(a) (iii)) required to be settled by delivery to such party on or
prior to such Early Termination Date and which has not been so settled as at such Early Termination
Date, an amount equal to the fair market

17

 

value of that which was (or would have been) required to be delivered as of the originally
scheduled date for delivery, in each case together with (to the extent permitted under applicable
law) interest, in the currency of such amounts, from (and including) the date such amounts or
obligations were or would have been required to have been paid or performed to (but excluding) such
Early Termination Date, at the Applicable Rate. Such amounts of interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. The fair market value of any
obligation referred to in clause (b) above shall be reasonably determined by the party obliged to
make the determination under Section 6(e) or, if each party is so obliged, it shall be the average
of the Termination Currency Equivalents of the fair market values reasonably determined by both
parties.

IN WITNESS WHEREOF the parties have executed this document on the respective dates specified below
with effect from the date specified on the first page of this document.

	 	 	 	 	 
	SWISS RE FINANCIAL PRODUCTS

CORPORATION

	 	WELLS FARGO BANK, N.A., not
individually, but solely as Trust
Administrator on behalf of the
Fremont Home Loan Trust 2006-B,
Mortgage Backed Certificates, Series
2006-B	 	 
	 
	/s/ Robert Spuler 
	 	/s/ Graham Oglesby 	 	 
	 

By: Robert Spuler

	 	 

By: Graham Oglesby
	 	 
	Title: Senior Vice President

	 	Title: Assistant Vice President	 	 
	Date: August 3, 2006

	 	Date: August 3, 2006	 	 

(Signature Page to the ISDA Master Agreement (Pool I) — Fremont 2006-B)

18

 

(Multicurrency — Cross Border)

International Swaps and Derivatives Association, Inc.

SCHEDULE

to the

Master Agreement

dated as of August 3, 2006

between

	 	 	 	 	 
	SWISS RE FINANCIAL
PRODUCTS CORPORATION

	 	and
	 	WELLS FARGO BANK, N.A.,
not individually, but solely
as Trust Administrator on
behalf of the Fremont Home
Loan Trust 2006-B, Mortgage
Backed Certificates, Series
2006-B
	 
	 	 	 	 
	(“Party A”)

	 	 	 	(“Party B”)

Part 1

Termination Provisions.

	(a)	 	“Specified Entity” means in relation to Party A for the purpose of:

	 	 	 	 	 
	 

	 	Section 5(a)(v),
	 	Not Applicable
	 

	 	Section 5(a)(vi),
	 	Not Applicable
	 

	 	Section 5(a)(vii),
	 	Not Applicable
	 

	 	Section 5(b)(iv),
	 	Not Applicable

and in relation to Party B for the purpose of:

	 	 	 	 	 
	 

	 	Section 5(a)(v),
	 	Not Applicable
	 

	 	Section 5(a)(vi),
	 	Not Applicable
	 

	 	Section 5(a)(vii),
	 	Not Applicable
	 

	 	Section 5(b)(iv),
	 	Not Applicable

	(b)	 	“Specified Transaction” will have the meaning specified in Section 14 of this Agreement.

1

 

	(c)	 	Certain Events of Default. The following Events of Default will apply to the parties as
specified below, and the definition of “Event of Default” in Section 14 is deemed to be
modified accordingly:

Section 5(a)(i) (Failure to Pay or Deliver) will apply to Party A and Party B

Section 5(a)(ii) (Breach of Agreement) will not apply to Party A or Party B.

Section 5(a)(iii) (Credit Support Default) will not apply to Party B.

Section 5(a)(iv) (Misrepresentation) will not apply to Party A or Party B.

Section 5(a)(v) (Default under Specified Transaction) will not apply to Party A or Party B.

Section 5(a)(vi) (Cross Default) will not apply to Party A or Party B.

Section 5(a)(vii) (Bankruptcy) will apply to Party A and Party B; provided that clause (2) thereof shall not apply to Party B.

Section 5(a)(viii) (Merger without Assumption) will apply to Party A and will not apply Party B.

	(d)	 	Termination Events. The following Termination Events will apply to the parties as specified
below:

Section 5(b)(i) (Illegality) will apply to Party A and Party B.

Section 5(b)(ii) (Tax Event) will apply to Party A and Party B.

Section 5(b)(iii) (Tax Event upon Merger) will apply to Party A and will not apply to Party B; provided for clarification that Party B may be a Burdened Party for purpose of this provision.

Section 5(b)(iv) (Credit Event upon Merger) will not apply to Party A or Party B.

	(e)	 	The “Automatic Early Termination” provision of Section 6(a) of this Agreement will not apply
to Party A and will not apply to Party B.

	(f)	 	Payments on Early Termination. For the purpose of Section 6(e) of this Agreement:

	 	(i)	 	Market Quotation will apply.
	 
	 	(ii)	 	The Second Method will apply.

	(g)	 	“Termination Currency” means United States Dollars.

	(h)	 	Additional Termination Events. The following Additional Termination Events will apply, in
each case with respect to Party B as the sole Affected Party (unless otherwise provided
below):

	 	(i)	 	Swap Counterparty Downgrade: Party A fails to comply with the Downgrade
Provisions as set forth in Part 5(b). For all purposes of this Agreement, Party A shall
be the sole Affected Party with respect to the occurrence of a Termination Event described
in this Part 1(h)(i).
	 
	 	(ii)	 	Termination of the Trust: The Trust Fund (as defined in the Pooling and
Servicing Agreement, dated as of August 1, 2006, among FREMONT MORTGAGE SECURITIES
CORPORATION, as depositor, Fremont Investment & Loan as sponsor, originator and servicer
Wells Fargo Bank, N.A., as trust administrator, swap administrator and master
servicer and HSBC Bank USA, National Association, as trustee (the Pooling and Servicing
Agreement) is terminated pursuant to the Pooling and Servicing Agreement, provided,
however, that notwithstanding Section 6(b)(iv) of the Agreement, both Party A and Party B
shall have the right to designate an Early Termination Date in respect of this Additional
Termination Event.
	 
	 	(iii)	 	Material and Adverse Change to PSA: The Pooling and Servicing Agreement is
amended or modified without the prior written consent of Party A, where such consent is
required under the terms of the Pooling and Servicing Agreement.

2

 

	 	(iv)	 	Optional Redemption: Irrevocable Notice of Servicer’s intention to exercise
its option to purchase the Mortgage Loans pursuant to Section 9.01 of the Pooling and
Servicing Agreement provided, however, that notwithstanding Section 6(b)(iv) of the
Agreement, both Party A and Party B shall have the right to designate an Early Termination
Date in respect of this Additional Termination Event. If such an Additional Termination
Event occurs then, for purposes of calculating payments on Early Termination pursuant to
Section 6(e), the definition of Notional Amount in the Confirmation shall be deleted in
its entirety and replaced with the following:

“With respect to each Calculation Period, the product of (i) Notional Amount as set
forth in Schedule A attached hereto multiplied by (ii) 250.”

	 	(v)	 	Provision of Information Required by Regulation AB: Party A shall fail to
comply with the provisions of Part 5(s) upon the occurrence of a Swap Disclosure Event.
For all purposes of this Agreement, Party A shall be the sole Affected Party with respect
to the occurrence of a Termination Event described in this Part 1(h)(v).

Part 2

Tax Representations.

	(a)	 	Payer Representations. For the purpose of Section 3(e) of this Agreement, Party A will make
the following representation and Party B will make the following representation:
	 
	 	 	It is not required by any applicable law, as modified by the practice of any relevant
governmental revenue authority, of any Relevant Jurisdiction to make any deduction or
withholding for or on account of any Tax from any payment (other than interest under Section
2(e), 6(d)(ii) or 6(e) of this Agreement) to be made by it to the other party under this
Agreement. In making this representation, it may rely on (i) the accuracy of any
representations made by the other party pursuant to Section 3(f) of this Agreement, (ii) the
satisfaction of the agreement contained in Section 4(a)(i) or 4(a)(iii) of this Agreement and
the accuracy and effectiveness of any document provided by the other party pursuant to Section
4(a)(i) or 4(a)(iii) of this Agreement and (iii) the satisfaction of the agreement of the other
party contained in Section 4(d) of this Agreement, provided that it shall not be a breach of
this representation where reliance is placed on clause (ii) and the other party does not
deliver a form or document under Section 4(a)(iii) of this Agreement by reason of material
prejudice to its legal or commercial position.
	 
	(b)	 	Payee Representations. For the purpose of Section 3(f) of this Agreement, Party A and Party B
make the representations specified below, if any:

	 	(i)	 	Party A represent that it is a corporation duly organized and existing under the laws
of the State of Delaware and is a United States Resident for United States federal tax
purposes.
	 
	 	(ii)	 	Party B represents that it is the Trust Administrator, not in its Individual
Capacity, but solely as Trust Administrator for Fremont Home Loan Trust 2006-B,
Mortgage-Backed Certificates, Series 2006-B under the Pooling and Servicing Agreement.

3

 

Part 3

Agreement to Deliver Documents.

For the purpose of Sections 4(a)(i) and (ii) of this Agreement, each party agrees to deliver the
following documents, as applicable:

	(a)	 	Tax forms, documents or certificates to be delivered are:

	 	 	 	 	 
	Party required	 	 	 	 
	to deliver	 	 	 	 
	document	 	Form/Document/Certificate	 	Date by which to be delivered
	Party A and Party B

	 	Any form or document
required or reasonably
requested to allow the
other party to make
payments under the
Agreement without any
deduction or withholding
for or on account of any
Tax, or with such
deduction or withholding
at a reduced rate.
	 	Promptly upon reasonable
demand by the other party.

	(b)	 	Other documents to be delivered are:

	 	 	 	 	 	 	 
	Party	 	 	 	 	 	 
	required to	 	 	 	 	 	Covered by
	deliver	 	 	 	Date by which to	 	Section 3(d)
	document	 	Form/Document/Certificate	 	be delivered	 	Representation
	Party A and Party B

	 	Incumbency Certificate (or, if available the current
authorized signature book or equivalent authorizing
documentation) specifying the names, titles, authority
and specimen signatures of the persons authorized to
execute this Agreement which sets forth the specimen
signatures of each signatory to this Agreement and each
Confirmation signing on its behalf.
	 	Concurrently with
the execution and
delivery of this
Agreement unless
previously
delivered and still
in full force and
effect.
	 	Yes
	 
	 	 	 	 	 	 
	Party A

	 	Opinions of counsel of Party A reasonably satisfactory
to Party B.
	 	Concurrently with
the execution and
delivery of the
Confirmation.
	 	No
	 
	 	 	 	 	 	 
	Party B

	 	Opinions of counsel of Party B reasonably satisfactory
to Party A.
	 	Concurrently with
the execution and
delivery of the
Confirmation.
	 	No
	 
	 	 	 	 	 	 
	Party A

	 	The Guaranty of Swiss Re dated as of the date hereof.
	 	Concurrently with
the execution and
delivery of the
Confirmation.
	 	No

4

 

	 	 	 	 	 	 	 
	Party	 	 	 	 	 	 
	required to	 	 	 	 	 	Covered by
	deliver	 	 	 	Date by which to	 	Section 3(d)
	document	 	Form/Document/Certificate	 	be delivered	 	Representation
	Party B

	 	An executed copy of the Pooling and Servicing Agreement.
	 	Within 30 days
after the date of
this Agreement.
	 	No
	 
	 	 	 	 	 	 
	Party A

	 	A copy of the most recent annual report of Swiss Re
containing financial statements certified by
independent public accountants and prepared in
accordance with Swiss law.
	 	Concurrently with
the execution and
delivery of this
Agreement and
promptly following
request by Party B
thereafter
	 	Yes

5

 

Part 4.

Miscellaneous.

	(a)	 	Addresses for Notices. For the purposes of Section 12(a) of this Agreement:

     Party A:

Notices should be sent to the address of the relevant branch set out in the relevant
Confirmation (as may be amended from time to time), provided that in the case of notices or
communications relating to Section 5, 6, 7, 11 or 13 to, such notices should be sent to:

	 	 	 	 	 
	 

	 	Address:
	 	Swiss Re Financial Products Corporation
	 

	 	 	 	55 East 52nd Street
	 

	 	 	 	New York, New York 10055
	 

	 	 	 	Attention: Head of Operations
	 

	 	 	 	Facsimile No. (917) 322-7201
	 

	 	With a copy to	 	 
	 
	 	 	 	 
	 

	 	 	 	Swiss Re Financial Products Corporation
	 

	 	 	 	55 East 52nd Street
	 

	 	 	 	New York, New York 10055
	 

	 	 	 	Attention: Legal Department
	 

	 	 	 	Facsimile No.: (212) 317-5474
	 
	 	 	 	 
	 

	 	Party B:	 	 
	 
	 	 	 	 
	 

	 	Address:
	 	Wells Fargo Bank, N.A.
	 

	 	 	 	9062 Old Annapolis Rd.
	 

	 	 	 	Columbia, Maryland 21045
	 

	 	Attn:
	 	Client Manager – Fremont 2006-B
	 

	 	Fax #:
	 	(410) 715-2380
	 

	 	Phone#
	 	(410) 884-2000

	(b)	 	Process Agent. For the purposes of Section 13(c) of this Agreement:
	 
	 	 	Party A appoints as its Process Agent: Not Applicable.
	 
	 	 	Party B appoints as its Process Agent: Not Applicable.
	 
	(c)	 	Offices. With respect to Party A, the provisions of Section 10(a) will apply to this
Agreement.
	 
	(d)	 	Multibranch Party. For the purpose of Section 10(c) of this Agreement:
	 
	 	 	Party A is not a Multibranch Party.

Party B is not a Multibranch Party.
	 
	(e)	 	Calculation Agent. The Calculation Agent is Party A.

(f) Credit Support Document. With respect to Party A, the Guaranty of Swiss Re dated as of the date
hereof.

	(g)	 	Credit Support Provider.

6

 

	 	 	Credit Support Provider means in relation to Party A: Swiss Reinsurance Company (“Swiss Re”)

Credit Support Provider means in relation to Party B: Not Applicable.
	 
	(h)	 	Governing Law. This Agreement will be governed by and construed in accordance with the laws
of the State of New York (without reference to choice of law doctrine other than New York
General Obligations Law Sections 5-1401 and 5-1402).
	 
	(i)	 	Netting of Payments. Subparagraph (ii) of Section 2(c) of this Agreement will apply to all
Transactions (in each case starting from the date of this Agreement).
	 
	(j)	 	“Affiliate.” Each of Party A and Party B shall be deemed to have no Affiliates, including
for purposes of Section 6(b)(ii).
	 
	(k)	 	Jurisdiction. Section 13(b) is hereby amended by: (i) deleting in the second line of
subparagraph (i) thereof the word “non-”, (ii) deleting “; and” from the end of subparagraph 1
and inserting “.” at the end of such provision, and (iii) deleting the final paragraph
thereof.
	 
	(l)	 	Waiver of Jury Trial. Each party waives, to the fullest extent permitted by applicable law,
any right it may have to a trial by jury in respect of any suit, action or proceeding relating
to this Agreement or any Credit Support Document. Each party certifies (i) that no
representative, agent or attorney of the other party or any Credit Support Provider has
represented, expressly or otherwise, that such other party would not, in the event of such a
suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it
and the other party have been induced to enter into this Agreement and provide for any Credit
Support Document, as applicable, by, among other things, the mutual waivers and certifications
in this Section.
	 
	(m)	 	Consent to Recording. Each party (i) consents to the monitoring or recording, at any
time and from time to time, by the other party of any and all communications between
officers or employees of the parties, (ii) waives any further notice of such monitoring
or recording, and (iii) agrees to notify (and, if required by law, obtain the consent of)
its officers and employees with respect to such monitoring or recording. Any such
recording may be submitted in evidence to any court or in any Proceeding for the purpose
of establishing any matters pertinent to this Agreement or any Transaction.
	 
	(n)	 	Severability. If any term, provision, covenant, or condition of this Agreement, or the
application thereof to any party or circumstance, shall be held to be illegal, invalid or
unenforceable (in whole or in part) for any reason, the remaining terms, provisions, covenants
and conditions hereof shall continue in full force and effect as if this Agreement had been
executed with the illegal, invalid or unenforceable portion eliminated, so long as this
Agreement as so modified continues to express, without material change, the original
intentions of the parties as to the subject matter of this Agreement and the deletion of such
portion of this Agreement will not substantially impair the respective benefits or
expectations of the parties to this Agreement.
	 
	 	 	The parties shall endeavor to engage in good faith negotiations to replace any illegal, invalid
or unenforceable term, provision, covenant or condition with a valid or enforceable term,
provision, covenant or condition, the economic effect of which comes as close as possible to
that of the illegal, invalid or unenforceable term, provision, covenant or condition.

7

 

Part 5.

Other Provisions.

	(a)	 	Definitions.
	 
	 	 	This Agreement, including each Confirmation and each Swap Transaction, is subject to the 2000
ISDA Definitions, as amended, supplemented, updated, and superseded from time to time (the
“Definitions”), as published by the International Swaps and Derivatives Association, Inc.
(“ISDA”) and will be governed in all respects by the Definitions (except that references to
“Swap Transactions” shall be deemed to be references to “Transactions”). The Definitions are
incorporated by reference in, and made part of, this Agreement and each Confirmation as if set
forth in full in this Agreement and such Confirmations. In the event of any inconsistency
between the provisions of this Agreement and the Definitions, this Agreement will prevail (and,
in the event of any inconsistency between any Confirmation and the Definitions, the
Confirmation will control). Any reference in a Confirmation to any Definitions which are
amended or supplemented in this Schedule shall be deemed to be a reference to such Definitions
as so amended or supplemented, unless the Confirmation states, by specific reference to any
such amendment or supplement, that such amendment or supplement will not apply in respect of
the Transaction to which such Confirmation relates. Any capitalized terms used but not
otherwise defined in this Agreement shall have the meanings assigned to them (or incorporated
by reference) in the Pooling and Servicing Agreement.
	 
	(b)	 	Downgrade Provisions.
	 
	 	 	Ratings Downgrade Event. It shall be a “Ratings Downgrade Event” if at any time Party A fails
to meet the Required Rating (as such term is defined below). If a Ratings Downgrade Event
occurs, then, within thirty (30) days following the Ratings Downgrade Event (unless, within
thirty (30) days of such Ratings Downgrade Event, each of S&P, Fitch, Moody’s and Dominion
(each a “Rating Agency”) has reconfirmed the rating of the Certificates which was in effect
immediately prior to such Ratings Downgrade Event), Party A shall take one of the following
four actions (each action at Party A’s sole expense):

	 	(A)	 	Replace Itself: Find a party that has the Required Rating and, subject to the
Rating Agency Condition, to whom all of Party A’s interests and obligations under this
Agreement shall be assigned at no cost to Party B, and following which Party A shall
be released from all further obligations under this Agreement, or
	 
	 	(B)	 	Post Collateral: deliver collateral within (30) days of such Ratings
Downgrade Event, pursuant to an ISDA Credit Support Annex (subject to New York Law)
that satisfies the Rating Agency Condition and concurrently with such delivery of
Eligible Collateral, Party A shall cause its counsel to deliver an opinion as to the
enforceability of Counterparty’s security interest in such Eligible Collateral (i.e.
that, notwithstanding Party A’s insolvency, the collateral will be available to meet
swap obligations free from any preference claim or moratorium) that satisfies the
Rating Agency Condition and which will be sufficient to restore the immediately prior
ratings of the Certificates, or
	 
	 	(C)	 	Obtain a Guaranty: Obtain a guaranty of Party A’s obligations under this
Transaction from a third party that meets or exceeds the Approved Ratings Threshold,
in form and substance (that satisfied the Rating Agency Condition) or
	 
	 	(D)	 	Other Arrangement with Ratings Agency Approval: Establish any other
arrangement, subject to the Rating Agency Condition, which will be sufficient to
restore the immediately prior ratings of the Certificates.

8

 

	 	 	If Party A has failed to take one of the aforementioned actions within thirty (30) days of the
Ratings Downgrade Event, then, at the option of Party B, such failure shall constitute an
Additional Termination Event with Party A as the sole Affected Party.
	 
	 	 	“Required Rating” means, with respect to Party A or an entity guaranteeing the obligations of
Party A, (x) either (i) if Party A or such entity has only a long-term rating by Moody’s, a
long-term senior, unsecured debt obligation rating, credit rating or other similar rating (as
the case may be, the “Long-Term Rating”) of at least “Aa3” by Moody’s and if rated “Aa3” by
Moody’s is not on negative credit watch by Moody’s or (ii) if Party A or such entity has a
Long-Term Rating and a short-term rating by Moody’s, a Long-Term Rating of at least “A1” by
Moody’s and a short-term rating of “P-1” by Moody’s and, in each case, such rating is not on
negative credit watch by Moody’s, and (y) (i) a short-term rating of at least “A-1” by S&P or
(ii) if Party A or such entity does not have a short-term rating by S&P, a Long-Term Rating of
at least “A+” by S&P.
	 
	 	 	Subject to the Rating Agency Condition but notwithstanding the foregoing, immediately upon the
occurrence of either of the following conditions, Party A shall find a party acceptable to
Party B, which acceptance, shall not be unreasonably withheld, to whom all of Party A’s
interests and obligations under this Agreement shall be assigned at no cost to Party B, and
following which Party A shall be released from all further obligations under this Agreement:

	 	(1)	 	Party A’s Short Term rating is reduced below “A-3” by S&P or Party A’s
long-term unsecured and unsubordinated debt rating (its “Long Term rating”) is reduced
below “BBB-” by S&P or
	 
	 	(2)	 	S&P or Moody’s withdraws its ratings of Party A.

	 	 	“Rating Agency Condition” means, with respect to any particular proposed act or omission to act
hereunder that the party acting or filing to act must consult with each of Moody’s, S&P and
Fitch, and any rating agency then providing a rating of the Certificates at the request of the
Depositor and receive from each such rating agency a prior written confirmation that the
proposed action or inaction would not cause a downgrade or withdrawal of the then-current
rating on the Certificates.
	 
	(c)	 	Section 3(a) of this Agreement is hereby amended to include the following additional
representations after paragraph 3(a)(v):

(vi) Eligible Contract Participant. It is an “eligible contract participant” as defined in
section 1a(12) of the U.S. Commodity Exchange Act.

(vii) Individual Negotiation. This Agreement and each Transaction hereunder is subject to
individual negotiation by the parties.

(viii) Relationship between Party A and Party B. Subject as provided in Part 5(g), each of
Party A and Party B will be deemed to represent to the other on the date on which it enters
into a Transaction or an amendment thereof that (absent a written agreement between Party A and
Party B that expressly imposes affirmative obligations to the contrary for that Transaction):

(1) Principal. It is acting as principal and not as agent when entering into this Agreement
and each Transaction.

9

 

(2) Non-Reliance. It is acting for its own account and it has made its own independent
decisions to enter into that Transaction and as to whether that Transaction is appropriate
or proper for it based upon its own judgment and upon advice from such advisors as it has
deemed necessary. It is not relying on any communication (written or oral) of the other
party as investment advice or as a recommendation to enter into that Transaction; it being
understood that information and explanations related to the terms and conditions of a
Transaction shall not be considered investment advice or a recommendation to enter into
that Transaction. No communication (written or oral) received from the other party shall be
deemed to be an assurance or guarantee as to the expected results of that Transaction.

(3) Evaluation and Understanding. It is capable of evaluating and understanding (on its own
behalf or through independent professional advice), and understands and accepts, the terms,
conditions and risks of this Agreement and each Transaction hereunder. It is also capable
of assuming, and assumes, all financial and other risks of this Agreement and each
Transaction hereunder.

(4) Status of Parties. The other party is not acting as a fiduciary or an advisor for it in
respect of that Transaction.

	(d)	 	Section 4 is hereby amended by adding the following new agreement:

(f) Actions Affecting Representations. Party B agrees not to take any action during the
term of this Agreement or any Transaction hereunder that renders or could render any of the
representations and warranties in this Agreement untrue, incorrect, or incomplete, and if
any event or condition occurs that renders or could render any such representation untrue,
incorrect, or incomplete, Party B will immediately give written notice thereof to Party A.

	(e)	 	Section 1(c). For purposes of Section 1(c) of the Agreement, this Transaction shall be the
sole Transaction under the Agreement.

	(f)	 	Trustee Administrator Capacity. It is expressly understood and agreed by the parties hereto
that (i) this Agreement is executed and delivered by Wells Fargo Bank, N.A., not individually
or personally but solely as Trust Administrator for FREMONT HOME LOAN TRUST 2006-B,
Mortgage-Backed Certificates, Series 2006-B, in the exercise of the powers and authority
conferred and vested in it under the Pooling and Servicing Agreement, (ii) each of the
representations, undertakings and agreements herein made on the part of FREMONT HOME LOAN
TRUST 2006-B, Mortgage-Backed Certificates, Series 2006-B is made and intended not as personal
representations, undertakings and agreements by Wells Fargo Bank, N.A. but is made
and intended for the purpose of binding only FREMONT HOME LOAN TRUST 2006-B, Mortgage-Backed
Certificates, Series 2006-B, (iii) nothing herein contained shall be construed as creating any
liability on the part of Wells Fargo Bank, N.A. individually or personally, to perform any
covenant either expressed or implied contained herein, all such liability, if any, being
expressly waived by the parties hereto and by any Person claiming by, through or under the
parties hereto and (iv) under no circumstances shall Wells Fargo Bank, N.A. be personally
liable for the payment of any indebtedness or expenses of the Trust or be liable for the
breach or failure of any obligation, representation, warranty or covenant made or undertaken
by Party B under this Agreement or any other related documents.

	(h)	 	Proceedings. Without impairing any right afforded to it under the Pooling and Servicing
Agreement as a third party beneficiary, Party A shall not institute against or cause any other
person to institute against, or join any other person in instituting against the Depositor or
Party B, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any federal or state bankruptcy, dissolution or similar law, for a
period of one year and one day, or if longer

10

 

	 	 	the applicable preference period then in effect, following indefeasible payment in full of the
Certificates. Nothing shall preclude, or be deemed to stop, Party A (i) from taking any
action prior to the expiration of the aforementioned one year and one day period, or if longer
the applicable preference period then in effect, in (A) any case or proceeding voluntarily
filed or commenced by Party B or (B) any involuntary insolvency proceeding filed or commenced
by a Person other than Party A, or (ii) from commencing against Party B or any of the
Collateral any legal action which is not a bankruptcy, reorganization, arrangement, insolvency,
moratorium, liquidation or similar proceeding.

	(i)	 	Change of Account. Section 2(b) of this Agreement is hereby amended by the addition of the
following after the word “delivery” in the first line thereof:-
	 
	 	 	“to another account in the same legal and tax jurisdiction as the original account”
	 
	(j)	 	Pooling and Servicing Agreement.
	 
	 	 	Notwithstanding any of the other provisions of Section 10.01 of the Pooling and Servicing
Agreement, Party B shall not enter into any amendment to Section of the Pooling and Servicing
Agreement which would have a material and adverse effect to the rights and/or obligations of
Party A without the prior written consent of the Party A.
	 
	(k)	 	Set-off. Notwithstanding any provision of this Agreement or any other existing or future
agreements, each of Party A and Party B irrevocably waives as to itself any and all
contractual rights it may have to set off, net, recoup or otherwise withhold or suspend or
condition its payment or performance of any obligation to the other party under this Agreement
against any obligation of one party hereto to the other party hereto arising outside of this
Agreement (which Agreement includes without limitation, the Master Agreement to which this
Schedule is attached, this Schedule and the Confirmation). The provisions for set-off set
forth in Section 6(e) of this Agreement shall not apply for purposes of this Transaction.
	 
	(l)	 	Notice of Certain Events or Circumstances. Each party agrees, upon learning of the
occurrence or existence of any event or condition that constitutes (or that with the giving of
notice or passage of time or both would constitute) an Event of Default or Termination Event
with respect to such party, promptly to give the other party notice of such event or
condition (or, in lieu of giving notice of such event or condition in the case of an event or
condition that with the giving of notice or passage of time or both would constitute an Event
of Default or Termination Event with respect to the party, to cause such event or condition to
cease to exist before becoming an Event of Default or Termination Event); provided that
failure to provide notice of such event or condition pursuant to this Part 5(l) shall not
constitute an Event of Default or a Termination Event.
	 
	(m)	 	Regarding Party A. Party B acknowledges and agrees that Party A has had and will have no
involvement in and, accordingly Party A accepts no responsibility for: (i) the establishment,
structure, or choice of assets of Party B; (ii) the selection of any person performing
services for or acting on behalf of Party B; (iii) the selection of Party A as the
Counterparty; (iv) the terms of the Certificates; (v) the preparation of or passing on the
disclosure and other information contained in any offering circular for the Certificates, the
Pooling and Servicing Agreement, or any other agreements or documents used by Party B or any
other party in connection with the marketing and sale of the Certificates other than
disclosure relating to it included in the Prospectus Supplement; (vi) the ongoing operations
and administration of Party B, including the furnishing of any information to Party B which is
not specifically required under this Agreement; or (vii) any other aspect of Party B’s
existence.

11

 

	(n)	 	Amendments. This Agreement will not be amended unless Party B shall have received (i) prior
written confirmation from each of the Rating Agencies that such amendment will not cause S&P,
Moody’s or Fitch to downgrade or withdraw its then-current ratings of any outstanding
Certificates.
	 
	(o)	 	Gross-up. Section 2(d)(i)(4) shall only apply in the event Party A is “X” and Party B is “Y”
thereunder.
	 
	(p)	 	Payment Dates. Notwithstanding anything to the contrary in the Agreement, (i) Party B will
not be required to make any payment specified in a Confirmation until the next scheduled
Distribution Date (as defined in the Pooling and Servicing Agreement) and (ii) if an amount is
calculated as being due in respect of any Early Termination Date under 6(e) from Party B to
Party A, the payment will be due on the next subsequent Distribution Date or if such Early
Termination Date is the final Distribution Date, on such final Distribution Date
	 
	(q)	 	Swap Administrator. The parties acknowledge
that Wells Fargo Bank, N.A. has been
appointed as “Swap Administrator” under the Swap Administration Agreement, dated as of August
3, 2006, among the Swap Administrator, Party B and FREMONT HOME LOAN TRUST 2006-B (the “Swap
Administration Agreement”) to receive all Net Swap Payments (as defined in the Pooling and
Servicing Agreement) to be made by Party A under this Agreement. Party A agrees that it will
make Net Swap Payments to the Swap Administration Account (as defined in the Pooling and
Servicing Agreement) established by the Swap Administrator.
	 
	(r)	 	Transfer. Section 7 is hereby amended by adding in the third line thereof after the clause
“that: -” the words “provided that the Rating Agency Condition is satisfied.”
	 
	(s)	 	Compliance with Regulation AB. (i) For purposes of Item 1115 of Subpart 229.1100 – Asset
Backed Securities (Regulation AB) (17 C.F.R. ss.ss.229.1100 – 229.1123) (“Regulation AB”)
under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), as amended and interpreted by the Securities and Exchange
Commission and its staff, if the Depositor or Party B makes a determination, acting reasonably
and in good faith, that (x) the applicable “significance percentage” with respect to this
Agreement has been reached, and (y) it has a reporting obligation under the Exchange Act, then
Party A shall, within five (5) Business Days after notice to that effect, at its sole expense,
take one of the following actions (each subject to satisfaction of the applicable requirements
of the Rating Agencies): (1) provide (including, if permitted by Regulation AB, provision by
reference to reports filed pursuant to the Exchange Act or otherwise publicly available
information): (A) the financial data required by Item 301 of Regulation S–K (17 C.F.R.
§229.301), pursuant to Item 1115(b)(1); (B) financial statements meeting the requirements of
Regulation S–X (17 C.F.R. §§210.1–01 through 210.12–29, but excluding 17 C.F.R. ss. 210.3–05
and Article 11 of Regulation S–X (17 C.F.R. ss. ss. 210.11–01 through 210.11–03)), pursuant to
Item 1115(b)(2); or (C) such other financial information as may at the time be required or
permitted to be provided in satisfaction of the requirements of Item 1115(b), together with
accountants consents and/or a procedure letter relating thereto; or (2) secure another entity
able to comply with the requirements of Item 1115(b) of Regulation AB to replace Party A as
party to this Agreement, on substantially similar terms, the debt rating of which entity (or
credit support provider therefor) meets or exceeds the applicable requirements of the
applicable Rating Agencies.

(ii) For so long as the aggregate significance percentage is 10% or more, Party A shall provide
any updates to the information provided pursuant to clause (i)(1) above to the Depositor within
five (5) Business Days following availability thereof (but in no event more than 45 days after
the end of each of Party’s fiscal quarter for any quarterly update, and in no event more than
90 days after the end of each of Party A’s fiscal year for any annual update).

12

 

(iii) All information provided pursuant to clauses (i)(1) and (ii) shall be in a form suitable
for conversion to the format required for filing by the Deposition with the Commission via the
Electronic Data Gathering and Retrieval System (EDGAR). In addition, any such information, if
audited, shall be accompanied by any necessary auditor’s consents or, if such information is
unaudited, shall be accompanied by an appropriate agreed-upon procedures letter from Party A’s
accountants. If permitted by Regulation AB, any such information may be provided by reference
to or incorporation by reference from reports filed pursuant to the Exchange Act.

	(t)	 	Third Party Beneficiary. The Depositor shall be an express third party beneficiary of this
Agreement as if a party hereto to the extent of the Depositor’s rights explicitly specified
herein.

	(u)	 	Non-Recourse. Notwithstanding any provision herein or in the Agreement to the contrary, the
obligations of Party B hereunder are limited recourse obligations of Party B, payable solely
from the Pool I Swap Account and the proceeds thereof, in accordance with the terms of the
Pooling and Servicing Agreement. In the event that the Pool I Swap Account and the proceeds
thereof, should be insufficient to satisfy all claims outstanding and following the
realization of the account held by the Pool I Swap Account and the proceeds thereof, any
claims against or obligations of Party B under the Agreement or any other confirmation
thereunder still outstanding shall be extinguished and thereafter not revive. The Trust
Administrator shall not have liability for any failure or delay in making a payment hereunder
to Party A due to any failure or delay in receiving amounts in the Pool I Swap Account from
the Trust created pursuant to the Pooling and Servicing Agreement.

13

 

IN WITNESS WHEREOF, the parties have executed this document by their duly authorized officers
with effect from the date so specified on the first page hereof.

	 	 	 	 	 
	SWISS RE FINANCIAL
PRODUCTS
CORPORATION

	 	and
	 	WELLS FARGO
BANK, N.A., NOT
INDIVIDUALLY, BUT
SOLELY AS TRUST
ADMINISTRATOR ON
BEHALF OF THE
FREMONT HOME LOAN
TRUST 2006-B,
MORTGAGE-BACKED
CERTIFICATES,
SERIES 2006-B.
	 
	 	 	 	 
	(“Party A”)

	 	 	 	(“Party B”)

	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Robert Spuler 	 	 	 	By:	 	/s/ Graham Oglesby 	 	 
	Name:

	 	Robert Spuler 

	 	 	 	Name:
	 	Graham Oglesby 

	 	 
	Title:

	 	Senior Vice President 	 	 	 	Title:	 	Assistant Vice President 	 	 
	Date: August 3, 2006	 	 	 	Date: August 3, 2006	 	 

(Signature Page for ISDA Schedule (Pool I) — Fremont 2006-B)

14

 

SWISS RE FINANCIAL PRODUCTS CORPORATION

55 East 52nd Street

New York, New York 10055

Fax: (917) 322-7201/Phone: (212) 407-7322

	 	 	 
	To:
	 	Fremont Investment & Loan (“Party B” or “Counterparty”)
	 
	 	 
	Attn:
	 	Jeffery Crusinberry
	Fax No:
	 	(714) 431-1436
	From:
	 	SWISS RE FINANCIAL PRODUCTS CORPORATION (“Party A” or “Swiss Re”)
	Date:
	 	August 3, 2006
	Reference:
	 	1031789

Swap Confirmation

The purpose of this facsimile (this “Confirmation”) is to confirm the terms and conditions of the
Transaction entered into between us on the Trade Date specified below (the “Transaction”). This
Confirmation supersedes any previous Confirmation or other communication with respect to the
Transaction and evidences a complete and binding agreement between us as to the terms of the
Transaction. This Confirmation constitutes a “Confirmation” as referred to in the ISDA Master
Agreement referred to below.

The definitions and provisions contained in the 2000 ISDA Definitions (the “2000 Definitions”), as
published by the International Swaps and Derivatives Association, Inc. (“ISDA”) are incorporated
into this Confirmation. In the event of any inconsistency between the 2000 Definitions and this
Confirmation, this Confirmation will govern for the purposes of the Transaction. References herein
to a “Transaction” shall be deemed to be references to a “Swap Transaction” for the purposes of the
2000 Definitions. Capitalized terms used in this Confirmation and not defined in this Confirmation
or the 2000 Definitions shall have the respective meaning assigned in the Agreement. Each party
hereto agrees to make payment to the other party hereto in accordance with the provisions of this
Confirmation and of the Agreement. In this Confirmation, “Party A” means Swiss Re and “Party B”
means the Counterparty.

This Confirmation supersedes any previous Confirmation or other communication with respect to the
Transaction and evidences a complete and binding agreement between you and us as to the terms of
the Swap Transaction to which this Confirmation relates. This Confirmation is subject to the terms
and conditions of the ISDA Master Agreement dated as of August 3, 2006, between each of Party A and
Party B and shall form a part of and be subject to that ISDA Master Agreement.

Each party represents to the other party that (absent a written agreement between the parties that
expressly imposes affirmative obligations to the contrary): -

	(a)	 	Non-Reliance. It is acting for its own account, and it has made its
own independent decisions to enter into the Transaction and as to
whether the Transaction is appropriate or proper based upon its own
judgement and upon advice from such advisers as it has deemed
necessary. It is not relying on any communication (written or oral) of
the other party as investment advice or as a recommendation to enter
into the Transaction: it being understood that information and
explanations related to the terms and conditions of the Transaction
shall not be considered

1

 

	 	 	investment advice or a recommendation to enter
into the Transaction. No communication (written or oral) received from
the other party shall be deemed to be an assurance or guarantee as to
the expected results of the Transaction.
	 
	(b)	 	Assessment and Understanding. It is capable of assessing the merits of
and understanding (on its own behalf or through independent
professional advice), and understands and accepts, the terms,
conditions and risks of the Transaction. It is also capable of
assuming, and assumes, the risks of the Transaction.
	 
	(c)	 	Status of Parties. The other party is not acting as a fiduciary for or
an adviser to it in respect of the Transaction.

The terms of the particular Transaction to which this Confirmation relates are as follows:

Notional Amount: For each Calculation Period, the Notional Amount shall equal the lesser
of:

	 	 	 
	Notional Amount:
	 	For each Calculation Period, the Notional Amount shall equal the lesser of:
	 
	 	 
	 
	 	A)  the  aggregate   Certificate   Principal   Balance  of  the  Offered   Certificates
	 
	 	immediately prior to the related Distribution Date, and
	 
	 	 
	 
	 	B) the  product  of (i) 250 and (ii) the  Scheduled  Notional  Amount on the  Scheduled
	 
	 	Distribution Date as described in Schedule A below.
	 
	 	 
	Trade Date:
	 	July 24, 2006
	 
	 	 
	Effective Date:
	 	August 3, 2006
	 
	 	 
	Termination Date:
	 	The  earlier of (i) the date on which the  Notional  Amount is zero and (ii) August 25,
	 
	 	2012,  subject to adjustment in accordance with the Following  Business Day Convention,
	 
	 	provided however, the final Fixed Rate Period End Date will use No Adjustment.
	 
	 	 
	Initial Payment:
	 	 
	 
	 	 
	Initial Payment Payer:
	 	Party A
	 
	 	 
	Initial Payment Amount
	 	$2,751,000
	 
	 	 
	Initial Payment Date
	 	August 3, 2006
	 
	 	 
	Fixed Amounts:
	 	 
	 
	 	 
	Fixed Rate Payer:
	 	Party B
	Fixed Rate Payer Period
	 	 
	End Dates:
	 	The 25th  calendar  day of each month  during the Term of this  Transaction,  commencing  September  25,
	 
	 	2006, and ending on August 25, 2012, inclusive, subject to No Adjustment.
	 
	 	 
	Fixed Rate Payer
	 	 

2

 

	 	 	 
	Payment Dates:
	 	Early Payment shall be applicable.  For each Calculation  Period,  the Fixed Rate Payer
	 
	 	Payment  Date shall be the first  Business  Day prior to the  related  Fixed Rate Payer
	 
	 	Period End Date.
	 
	 	 
	Fixed Rate:
	 	5.69%.
	Fixed Rate Day
	 	 
	Count Fraction:
	 	30/360
	 
	 	 
	Floating Amounts:
	 	 
	 
	 	 
	Floating Rate Payer:
	 	Party A
	 
	 	 
	Floating Rate Payer
	 	 
	Period End Dates:
	 	The 25th  calendar  day of each month during the Term of this  Transaction,  commencing
	 
	 	September 25, 2006,  and ending on August 25, 2012,  inclusive,  subject  adjustment in
	 
	 	accordance with Following Business Day adjustment.
	 
	 	 
	Floating Rate Payer
	 	 
	Payment Dates:
	 	Early  Payment  shall be  applicable.  For each  Calculation  Period,  the Floating  Rate
	 
	 	Payer  Payment Date shall be the first  Business Day prior to the related  Floating  Rate
	 
	 	Payer Period End Date.
	 
	 	 
	Floating Rate for initial
	 	 
	Calculation Period:
	 	to be determined
	 
	 	 
	Floating Rate Option:
	 	USD-LIBOR-BBA
	 
	 	 
	Designated Maturity:
	 	One month
	 
	 	 
	Spread:
	 	None
	Floating Rate Day
	 	 
	Count Fraction:
	 	Actual/360
	 
	 	 
	Reset Dates:
	 	The first day of each Calculation Period.
	 
	 	 
	Compounding:
	 	Inapplicable
	 
	 	 
	Business Days:
	 	New York, Maryland, California
	 
	 	 
	Calculation Agent:
	 	Party A
	 
	 	 
	Governing Law
	 	This  Transaction and this  Confirmation  will be governed by and construed in accordance
	 
	 	with the laws of the State of New York  (without  reference  to  choice  of law  doctrine
	 
	 	except Section 5-1401 and Section 5-1402 of the New York General Obligation Law).

3

 

	 	 	 	 
	3. Account Details and
Settlement Information:
	 	Payments to Party A:
	 
	 	JPMorgan Chase Bank
	 
	 	SWIFT: CHASUS33
	 
	 	For the Account of Swiss Re Financial Products Corporation
	 
	 	Account No.: 066-911184
	 
	 	 	 
	 
	 	Payments to Party B:
	 
	 	With respect to the Initial Payment only:
	 
	 	Bank:  	Fremont Investment and Loan
	 
	 	ABA#: 	322286447
	 
	 	 	 
	 
	 	With respect to any other Payments
	 
	 	Wells Fargo Bank, N.A.
	 
	 	Bank: 	ABA 121-000-248
	 
	 	Account#: 	3970771416
	 
	 	Account Name: 	Corporate Trust Clearing
	 
	 	FFC to: 	50936901
	 
	 	Reference: 	 Fremont Home Loan Trust 2006-B, Swap Administration Account
	 
	 	 	 
	4. Notices
	 	Copies of any notices delivered under this Agreement shall be delivered to:
	 
	 	 	 
	 
	 	Address: 	Wells Fargo Bank, N.A.
	 
	 	 	9062 Old Annapolis Rd.
	 
	 	 	Columbia, Maryland 21045
	 
	 	Attn:  	Client Manager – Fremont 2006-B
	 
	 	Fax #: 	(410) 715-2380
	 
	 	Phone# 	(410) 884-2000

4

 

Please confirm that the foregoing correctly sets forth all the terms and conditions of our
agreement with respect to the Transaction by responding within three (3) Business Days by promptly
signing in the space provided below and both (i) faxing the signed copy to Swiss Re Financial (917)
322-7201 and (ii) mailing the signed copy to Swiss Re Financial Products, 55 East 52nd
Street, New York, New York 10053. Your failure to respond within such period shall not affect the
validity or enforceability of the Transaction as against you. This facsimile shall be the only
documentation in respect of the Transaction and accordingly no hard copy versions of this
Confirmation for this Transaction shall be provided unless the Counterparty requests.

	 	 	 
	For and on behalf of

	 	For and on behalf of
	SWISS RE FINANCIAL PRODUCTS

CORPORATION

	 	FREMONT INVESTMENT & LOAN
	 
	/s/ Robert Spuler 
	 	/s/ Jeff Crusinberry 
	 

	 	 
	NAME Robert Spuler

	 	NAME Jeff Crusinberry
	Title Senior Vice President

	 	Title Senior Vice President
	Date: August 3, 2006

	 	Date: August 3, 2006

(Signature Page to Swap Confirmation (Pool I) — Fremont 2006-B)

5

 

Schedule A to the Confirmation dated as of August 3, 2006

Re: Reference Number: SRFP 869628

* All dates subject to adjustment in accordance with the Following Business Day Convention with
respect to each Floating Rate Payer Period End Date and subject to No Adjustment with respect to
each Fixed Rate Payer Period End Date.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Scheduled	 	 	 	 	 	 	 	 	 	Scheduled	 	 
	Period	 	Maximum Swap	 	 	 	 	 	 	 	 	 	Maximum Swap	 	Swap Strike
	Ending Date	 	Notional Amount ($)	 	Swap Strike (%)	 	Period	 	Notional Amount ($)	 	(%)
	9/25/2006
	 	 	3,934,224.00	 	 	 	5.69	 	 	 	9/25/2009	 	 	 	374,352.25	 	 	 	5.69	 
	10/25/2006
	 	 	3,909,338.78	 	 	 	5.69	 	 	 	10/25/2009	 	 	 	365,973.47	 	 	 	5.69	 
	11/25/2006
	 	 	3,879,566.22	 	 	 	5.69	 	 	 	11/25/2009	 	 	 	357,780.67	 	 	 	5.69	 
	12/25/2006
	 	 	3,844,940.99	 	 	 	5.69	 	 	 	12/25/2009	 	 	 	349,769.72	 	 	 	5.69	 
	1/25/2007
	 	 	3,805,515.79	 	 	 	5.69	 	 	 	1/25/2010	 	 	 	341,936.60	 	 	 	5.69	 
	2/25/2007
	 	 	3,761,361.57	 	 	 	5.69	 	 	 	2/25/2010	 	 	 	334,277.38	 	 	 	5.69	 
	3/25/2007
	 	 	3,712,567.48	 	 	 	5.69	 	 	 	3/25/2010	 	 	 	326,788.20	 	 	 	5.69	 
	4/25/2007
	 	 	3,659,240.85	 	 	 	5.69	 	 	 	4/25/2010	 	 	 	319,465.29	 	 	 	5.69	 
	5/25/2007
	 	 	3,601,506.95	 	 	 	5.69	 	 	 	5/25/2010	 	 	 	312,304.97	 	 	 	5.69	 
	6/25/2007
	 	 	3,539,508.72	 	 	 	5.69	 	 	 	6/25/2010	 	 	 	305,303.65	 	 	 	5.69	 
	7/25/2007
	 	 	3,473,411.63	 	 	 	5.69	 	 	 	7/25/2010	 	 	 	298,457.80	 	 	 	5.69	 
	8/25/2007
	 	 	3,404,082.99	 	 	 	5.69	 	 	 	8/25/2010	 	 	 	291,763.99	 	 	 	5.69	 
	9/25/2007
	 	 	3,332,163.64	 	 	 	5.69	 	 	 	9/25/2010	 	 	 	285,218.84	 	 	 	5.69	 
	10/25/2007
	 	 	3,257,800.64	 	 	 	5.69	 	 	 	10/25/2010	 	 	 	278,819.06	 	 	 	5.69	 
	11/25/2007
	 	 	3,181,151.76	 	 	 	5.69	 	 	 	11/25/2010	 	 	 	272,561.45	 	 	 	5.69	 
	12/25/2007
	 	 	3,102,384.83	 	 	 	5.69	 	 	 	12/25/2010	 	 	 	266,442.84	 	 	 	5.69	 
	1/25/2008
	 	 	3,021,676.95	 	 	 	5.69	 	 	 	1/25/2011	 	 	 	260,460.17	 	 	 	5.69	 
	2/25/2008
	 	 	2,939,213.68	 	 	 	5.69	 	 	 	2/25/2011	 	 	 	254,610.42	 	 	 	5.69	 
	3/25/2008
	 	 	2,855,188.12	 	 	 	5.69	 	 	 	3/25/2011	 	 	 	248,890.66	 	 	 	5.69	 
	4/25/2008
	 	 	2,769,799.96	 	 	 	5.69	 	 	 	4/25/2011	 	 	 	243,298.01	 	 	 	5.69	 
	5/25/2008
	 	 	2,681,825.43	 	 	 	5.69	 	 	 	5/25/2011	 	 	 	237,783.30	 	 	 	5.69	 
	6/25/2008
	 	 	2,583,019.50	 	 	 	5.69	 	 	 	6/25/2011	 	 	 	231,964.45	 	 	 	5.69	 
	7/25/2008
	 	 	608,274.17	 	 	 	5.69	 	 	 	7/25/2011	 	 	 	226,755.07	 	 	 	5.69	 
	8/25/2008
	 	 	520,625.26	 	 	 	5.69	 	 	 	8/25/2011	 	 	 	220,774.49	 	 	 	5.69	 
	9/25/2008
	 	 	508,750.29	 	 	 	5.69	 	 	 	9/25/2011	 	 	 	215,825.41	 	 	 	5.69	 
	10/25/2008
	 	 	497,147.70	 	 	 	5.69	 	 	 	10/25/2011	 	 	 	210,985.72	 	 	 	5.69	 
	11/25/2008
	 	 	485,811.13	 	 	 	5.69	 	 	 	11/25/2011	 	 	 	206,253.02	 	 	 	5.69	 
	12/25/2008
	 	 	474,734.39	 	 	 	5.69	 	 	 	12/25/2011	 	 	 	201,624.97	 	 	 	5.69	 
	1/25/2009
	 	 	463,911.40	 	 	 	5.69	 	 	 	1/25/2012	 	 	 	197,099.27	 	 	 	5.69	 
	2/25/2009
	 	 	453,336.28	 	 	 	5.69	 	 	 	2/25/2012	 	 	 	192,673.68	 	 	 	5.69	 
	3/25/2009
	 	 	443,003.24	 	 	 	5.69	 	 	 	3/25/2012	 	 	 	188,346.01	 	 	 	5.69	 
	4/25/2009
	 	 	430,775.52	 	 	 	5.69	 	 	 	4/25/2012	 	 	 	184,114.11	 	 	 	5.69	 
	5/25/2009
	 	 	420,986.73	 	 	 	5.69	 	 	 	5/25/2012	 	 	 	179,975.88	 	 	 	5.69	 
	6/25/2009
	 	 	409,706.62	 	 	 	5.69	 	 	 	6/25/2012	 	 	 	175,929.26	 	 	 	5.69	 
	7/25/2009
	 	 	398,344.13	 	 	 	5.69	 	 	 	7/25/2012	 	 	 	171,972.25	 	 	 	5.69	 
	8/25/2009
	 	 	382,921.22	 	 	 	5.69	 	 	 	8/25/2012	 	 	 	168,102.88	 	 	 	5.69	 

6

 

International Swaps and Derivatives Association, Inc.

NOVATION AGREEMENT

dated as of August 3, 2006 among:

SWISS RE FINANCIAL PRODUCTS CORPORATION. (the “Remaining Party”),

FREMONT INVESTMENT & LOAN (the “Transferor”)

AND

WELLS FARGO BANK, N.A., not individually, but solely as Trust Administrator on behalf of

the Fremont Home Loan Trust 2006-B, Mortgage Backed Certificates, Series 2006-B

(the “Transferee”)

The Transferor and the Remaining Party have entered into a Transaction (the “Old Transaction”),
evidenced by a Confirmation dated as of August 3, 2006 (the “Old Confirmation”) attached hereto
subject to an ISDA Master Agreement dated as of August 3, 2006 (the “Old Agreement”).

The Remaining Party and the Transferee agree to enter into an ISDA Master Agreement and related
Schedule (the “New Agreement”) each dated as of August 3, 2006.

With effect from and including August 3, 2006 (the “Novation Date”) the Transferor wishes to
transfer by novation to the Transferee, and the Transferee wishes to accept the transfer by
novation of, all the rights, liabilities, duties and obligations of the Transferor under and in
respect of the Old Transaction, with the effect that the Remaining Party and the Transferee enter
into a new transaction (the “New Transaction”) between them having terms identical to those of the
Old Transaction, as more particularly described below other than the right of the Transferor .to
receive the Initial Payment as set for in the Old Confirmation.

The Remaining Party wishes to accept the Transferee as its sole counterparty with respect to the
New Transactions.

The Transferor and the Remaining Party wish to have released and discharged, as a result and to the
extent of the transfer described above, their respective obligations under and in respect of the
Old Transaction.

Accordingly, the parties agree as follows: —

1. Definitions.

Terms defined in the ISDA Master Agreement (Multicurrency-Cross Border) as published in 1992 by the
International Swaps and Derivatives Association, Inc., (the “1992 ISDA Master Agreement”) are used
herein as so defined, unless otherwise provided herein.

 

 

 2

2. Transfer, Release, Discharge and Undertakings.

With effect from and including the Novation Date and in consideration of the mutual
representations, warranties and covenants contained in this Novation Agreement and other good and
valuable consideration (the receipt and sufficiency of which are hereby acknowledged by each of the
parties):

	 	(a)	 	the Remaining Party and the Transferor are each released and discharged from further
obligations to each other with respect to the Old Transaction and their respective rights
against each other thereunder are cancelled, provided that such release and discharge shall
not affect any rights, liabilities or obligations of the Remaining Party or the Transferor
with respect to the Initial Payment or other payments or other obligations due and payable
or due to be performed on or prior to the Novation Date, and all such payments and
obligations shall be paid or performed by the Remaining Party or the Transferor in
accordance with the terms of the Old Transaction;
	 
	 	(b)	 	in respect of the New Transaction, the Remaining Party and the Transferee each
undertake liabilities and obligations towards the other and acquire rights against each
other identical in their terms to the Old Transaction (and, for the avoidance of doubt, as
if the Transferee were the Transferor and with the Remaining Party remaining the Remaining
Party, save for any rights, liabilities or obligations of the Remaining Party or the
Transferor with respect to payments or other obligations due and payable or due to be
performed on or prior to the Novation Date); and
	 
	 	(c)	 	the New Transaction shall be governed by and form part of the New Agreement and the Old
Confirmation (which, in conjunction and as deemed modified to be consistent with this
Novation Agreement, shall be deemed to be a Confirmation between the Remaining Party and
the Transferee), and the offices of the Remaining Party and the Transferee for purposes of
the New Transaction shall be New York, NY and Columbia, MD, respectively and the office of
the Transferor for purposes of the Old Transaction shall have been Brea, CA; and
	 
	 	(d)	 	It is expressly understood and agreed by the parties hereto that (i) this Novation
Agreement is executed and delivered by Wells Fargo Bank, National Association, not in its
individual capacity but solely as Trust Administrator under the Pooling and Servicing
Agreement dated as of August 1, 2006 in the exercise of the powers and authority conferred
and vested in it thereunder, (ii) each of the representations, undertakings and agreements
herein made on behalf of the Fremont Home Loan Trust 2006-B is made and intended not as
personal representations of the Trust Administrator but is made and intended for the
purpose of binding only Fremont Home Loan Trust 2006-B, and (iii) under no circumstances
will Wells Fargo Bank, National Association in its individual capacity be personally liable
for the payment of any indebtedness or expenses or be personally liable for the breach or
failure of any obligation, representation, warranty or covenant made or undertaken under
this Novation Agreement, except as its role as Remaining Party.

3. Representations and Warranties.

	 	(a)	 	On the date of this Novation Agreement and on each Novation Date:

	 	(i)	 	Each of the parties makes to each of the other parties those
representations and warranties set forth in Section 3(a) of the 1992 ISDA Master
Agreement with
references in such Section to “this Agreement” or “any Credit Support Document”
being deemed references to this Novation Agreement alone.

 

 

 3

	 	(ii)	 	The Remaining Party and the Transferor each makes to the other, and
the Remaining Party and the Transferee each makes to the other, the representation
set forth in Section 3(b) of the 1992 ISDA Master Agreement, in each case with
respect to the Old Agreement or the New Agreement, as the case may be, and taking
into account the parties entering into and performing their obligations under this
Novation Agreement.
	 
	 	(iii)	 	Each of the Transferor and the Remaining Party represents and
warrants to each other and to the Transferee that :

	 	(A)	 	it has made no prior transfer (whether by way of security
or otherwise) of the Old Agreement or any interest or obligation in respect
of the Old Transaction; and
	 
	 	(B)	 	as of the Novation Date, all obligations of the
Transferor and the Remaining Party under the Old Transaction required to be
performed on or before the Novation Date have been fulfilled.

	 	(b)	 	The Transferor makes no representation or warranty and does not assume any
responsibility with respect to the legality, validity, effectiveness, adequacy or
enforceability of the New Transaction or the New Agreement or any documents relating
thereto and assumes no responsibility for the condition, financial or otherwise, of the
Remaining Party, the Transferee or any other person or for the performance and observance
by the Remaining Party, the Transferee or any other person of any of its obligations under
the New Transaction or the New Agreement or any document relating thereto and any and all
such conditions and warranties, whether express or implied by law or otherwise, are hereby
excluded.

4. Counterparts.

This Novation Agreement (and each amendment, modification and waiver in respect of it) may be
executed and delivered in counterparts (including by facsimile transmission), each of which will
be deemed an original.

5. Costs and Expenses.

The parties will each pay their own costs and expenses (including legal fees) incurred in
connection with this Novation Agreement and as a result of the negotiation, preparation and
execution of this Novation Agreement.

	6.	 	Amendments.

No amendment, modification or waiver in respect of this Novation Agreement will be effective
unless in writing (including a writing evidenced by a facsimile transmission) and executed by
each of the parties or confirmed by an exchange of telexes or electronic messages on an
electronic messaging system.

 

 

 4

7. (a) Governing Law.

This Novation Agreement will be governed by and construed in accordance with the laws of the
State of New York without reference to the conflict of laws provisions thereof.

(b) Jurisdiction.

The terms of Section 13(b) of the 1992 ISDA Master Agreement shall apply to this Novation
Agreement with references in such Section to “this Agreement” being deemed references to
this Novation Agreement alone.

8. Account Details.

	 	 	 	 	 
	 	 	Payments to Remaining Party:
	 
	 	 	 	 
	 
	 	Bank:	 	JPMorgan Chase Bank
	 
	 	ABA #:	 	SWIFT: CHASUS33
	 
	 	 	 	For the Account of Swiss Re Financial Products Corporation
	 
	 	Account #:	 	066-911184
	 
	 	Account Name:	 	 [                 ]
	 
	 	Reference:	 	 [                  ]
	 
	 	 	 	 
	 	 	Payments to Transferee:
	 
	 	 	 	 
	 
	 	Bank:	 	Wells Fargo Bank, N.A.
	 
	 	ABA #:	 	121000248
	 
	 	Account #:	 	3970771416
	 
	 	Account Name:	 	Corporate Trust Clearing
	 
	 	Reference:	 	50936901, Fremont Home Loan Trust 2006-B, Swap Administration Account

 

 

 5

IN WITNESS WHEREOF the parties have executed this Novation Agreement on the respective dates
specified below with effect from and including the Novation Date.

	 	 	 	 	 	 	 
	SWISS RE FINANCIAL PRODUCTS CORPORATION

	 	 
	 	FREMONT INVESTMENT & LOAN	 	 
	 
	/s/ Robert Spuler 
	 	 	 	/s/ Jeff Crusinberry 	 	 
	 

NAME Robert Spuler

	 	 
	 	 

NAME Jeff Crusinberry
	 	 
	Title Senior Vice President

	 	 	 	Title Senior Vice President	 	 
	Date: August 3, 2006

	 	 	 	Date: August 3, 2006	 	 
	 
	 	 	 	 	 	 
	WELLS FARGO BANK, N.A., NOT
INDIVIDUALLY, BUT SOLELY AS TRUST
ADMINISTRATOR ON BEHALF OF THE
FREMONT HOME LOAN TRUST 2006-B,
MORTGAGE-BACKED CERTIFICATES, SERIES
2006-B.
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	/s/ Graham Oglesby 

NAME Graham Oglesby

	 	 	 	 	 	 
	Title Assistant Vice President
	 	 	 	 	 	 
	Date: August 3, 2006
	 	 	 	 	 	 

 

 

 6

[ANNEX]

[Identification of Old Transaction to be discharged]

[Old Confirmation]exv4w4

 

BEAR STEARNS

BEAR STEARNS FINANCIAL PRODUCTS INC.

383 MADISON AVENUE

NEW YORK, NEW YORK 10179

212-272-4009

	 	 	 
	DATE:

	 	August 3, 2006
	 
	 	 
	TO:

	 	Wells Fargo Bank, N.A., not individually, but solely as
Trust Administrator on behalf of Fremont Home Loan Trust 2006-B,
Mortgage Backed Certificates, Series 2006-B
	ATTENTION:

	 	Client Manager — Fremont 2006-B
	TELEPHONE:

	 	(410)884-2000
	FACSIMILE:

	 	(410)715-2380
	 
	 	 
	FROM:

	 	Derivatives Documentation
	TELEPHONE:

	 	212-597-2711
	FACSIMILE:

	 	212-597-9851
	 
	 	 
	SUBJECT:

	 	Mortgage Derivatives Confirmation and Agreement
	 
	 	 
	REFERENCE NUMBER(S):

	 	FXFRENT06B

The purpose of this letter agreement (“Agreement”) is to confirm the terms and conditions of
the Transaction entered into on the Trade Date specified below (the “Transaction”) between Bear
Stearns Financial Products Inc. (“BSFP”) and Wells Fargo Bank, N.A., not individually, but solely
as Trust Administrator on behalf of Fremont Home Loan Trust 2006-B, Mortgage Backed Certificates,
Series 2006-B (“Counterparty”). This Agreement, which evidences a complete and binding agreement
between you and us to enter into the Transaction on the terms set forth below, constitutes a
“Confirmation” as referred to in the “ISDA Form Master Agreement” (as defined below), as well as a
“Schedule” as referred to in the ISDA Form Master Agreement.

1. This Agreement is subject to the 2000 ISDA Definitions (the “Definitions”), as published by
the International Swaps and Derivatives Association, Inc. (“ISDA”). You and we have agreed to
enter into this Agreement in lieu of negotiating a Schedule to the 1992 ISDA Master Agreement
(Multicurrency—Cross Border) form (the “ISDA Form Master Agreement”) but, rather, an ISDA Form
Master Agreement shall be deemed to have been executed by you and us on the date we entered into
the Transaction. Terms capitalized but not defined herein or in the Definitions shall have the
respective meanings attributed to them in the Pooling and Servicing Agreement, dated as of August
1, 2006 among Fremont Mortgage Securities Corporation, as Depositor, Fremont Investment & Loan as
Originator and Servicer, Wells Fargo Bank, N.A., as Trust Administrator, and Master Servicer and
HSBC Bank USA, National Association, as Trustee (the “Pooling and Servicing Agreement”). In the
event of any inconsistency between the provisions of this Agreement and the Definitions or the
ISDA Form Master Agreement, this Agreement shall prevail for
purposes of the Transaction. Each
reference to a “Section” (unless specifically referencing the Pooling and Servicing Agreement) or
to a “Section” “of this Agreement” will be construed as a reference to a Section of the ISDA Form
Master Agreement.

 

 

Reference Number: FXFRENT06B

Wells Fargo Bank, N.A., not individually, but solely as Trust Administrator on behalf of Fremont

Home Loan Trust 2006-B, Mortgage Backed Certificates, Series 2006-B

August 3,2006

Page 2 of 19

2. The terms of the particular Transaction to which this Confirmation relates are as follows:

	 	 	 
	Notional Amount:

	 	For each Calculation
Period, the Notional Amount shall
equal the lesser of:

(i) the Scheduled Notional
Amount for such Calculation
Period as detailed in the
Schedule of Notional Amounts
attached hereto, and

(ii) the aggregate Bond
Principal Balance of the Fremont
Home Loan Trust 2006-B, Pool II
Certificates excluding Class
SL-B1 Certificates, as of the
first day of the relevant
Calculation Period divided by
250

	 	 	 
	Trade Date:

	 	August 3, 2006
	 
	 	 
	Effective Date:

	 	August 3, 2006
	 
	 	 
	Termination Date:

	 	August 25, 2012, subject to
adjustment in accordance with the
Business Day Convention.

	 	 	 	 	 
	Fixed Amounts:	 	 
	 
	 	 	 	 
	 

	 	Fixed Rate Payer:
	 	Counterparty
	 
	 	 	 	 
	 

	 	Fixed Rate Payer Period End

Dates:
	 	The
25th
calendar day of each month during
the Term of this Transaction,
commencing September 25, 2006 and
ending on August 25, 2012, with
No Adjustment.
	 
	 	 	 	 
	 

	 	Fixed Rate Payer Payment

Dates:
	 	Early Payment shall be
applicable. The Fixed Rate Payer
Payment Dates shall be one
Business Day preceding each Fixed
Rate Payer Period End Date.
	 
	 	 	 	 
	 

	 	Fixed Amount:
	 	250 x Fixed Rate x Notional Amount x Fixed Rate Day Count Fraction
	 
	 	 	 	 
	 

	 	Fixed Rate:
	 	 5.78%
	 
	 	 	 	 
	 

	 	Fixed Rate Day Count

Fraction:
	 	 30/360

 

 

Reference Number: FXFRENT06B

Wells Fargo Bank, N.A., not individually, but solely as Trust Administrator on behalf of Fremont

Home Loan Trust 2006-B, Mortgage Backed Certificates, Series 2006-B

August 3, 2006

Page 3 of 19

	 	 	 	 	 
	Floating Amounts:	 	 
	 
	 	 	 	 
	 

	 	Floating Rate Payer:
	 	BSFP
	 
	 	 	 	 
	 

	 	Floating Rate Payer

Period End Dates:
	 	The 25th calendar day of each month
during the Term of this Transaction, commencing
September 25, 2006 and ending on the Termination
Date, subject to adjustment in accordance with the
Business Day Convention.
	 
	 	 	 	 
	 

	 	Floating Rate Payer

Payment Dates:
	 	Early Payment shall be applicable. The
Floating Rate Payer Payment Dates shall be one
Business Day preceding each Floating Rate Payer
Period End Date.
	 
	 	 	 	 
	 

	 	Floating Rate for the

initial Calculation

Period:
	 	 5.42067%
	 
	 	 	 	 
	 

	 	Floating Rate Option:
	 	USD-LIBOR-BBA
	 
	 	 	 	 
	 

	 	Floating Amount:
	 	250 x Floating Rate x Notional Amount x
Floating Rate Day Count Fraction
	 
	 	 	 	 
	 

	 	Spread:
	 	None
	 
	 	 	 	 
	 

	 	Floating Rate Day Count

Fraction:
	 	Actual/360
	 
	 	 	 	 
	 

	 	Reset Dates:
	 	The first day of each Calculation Period.
	 
	 	 	 	 
	 

	 	Compounding:
	 	Inapplicable
	 
	 	 	 	 
	Business Days:	 	New York
	 
	 	 	 	 
	Business Day Convention:	 	Following
	 
	 	 	 	 
	Calculation Agent:	 	BSFP

 

 

Reference Number: FXFRENT06B

Wells Fargo Bank, N.A., not individually, but solely as Trust Administrator on behalf of Fremont

Home Loan Trust 2006-B, Mortgage Backed Certificates, Series 2006-B

August 3,2006

Page 4 of 19

	 	 	 	 	 
	3.

	 	Additional Provisions:
	 	1 ) Each party hereto is hereby
advised and acknowledges that the other
party has engaged in (or refrained
from engaging in) substantial financial
transactions and has taken (or
refrained from taking) other material
actions in reliance upon the entry by
the parties into the Transaction being
entered into on the terms and
conditions set forth herein and in the
Confirmation relating to such
Transaction, as applicable. This
paragraph (1) shall be deemed repeated
on the trade date of each
Transaction.
	 
	 	 	 	 
	4.	 	Provisions Deemed Incorporated in a Schedule to the Master Agreement:

	1)	 	The parties agree that subparagraph (ii) of Section 2(c) of the ISDA Form Master Agreement
will apply to any Transaction.
	 
	2)	 	Termination Provisions. For purposes of the Master Agreement:

(a) “Specified Entity” is not applicable to BSFP or Counterparty for any purpose.

(b) “Specified Transaction” is not applicable to BSFP or Counterparty for any purpose, and,
accordingly, Section 5(a)(v) shall not apply to BSFP or Counterparty.

(c) The “Cross Default” provisions of Section 5(a)(vi) will not apply to BSFP or to Counterparty.

(d) The “Credit Event Upon Merger” provisions of Section 5(b)(iv) will not apply to BSFP or
Counterparty.

(e) The “Bankruptcy” provision of Section 5(a)(vii)(2) of the Agreement will be inapplicable
to Counterparty.

(f) The “Automatic Early Termination” provision of Section 6(a) will not apply to BSFP or to
Counterparty.

(g) Payments on Early Termination. For the purpose of Section 6(e) of this Agreement:

(i) Market Quotation will apply.

(ii) The
Second Method will apply.

(h) “Termination Currency” means United States Dollars.

 

 

Reference Number: FXFRENT06B

Wells Fargo Bank, N.A., not individually, but solely as Trust Administrator on behalf of Fremont

Home Loan Trust 2006-B, Mortgage Backed Certificates, Series 2006-B

August 3, 2006

Page 5 of 19

(i) Tax Event. The provisions of Section 2(d)(i)(4) and 2(d)(ii) of the printed ISDA Form
Master Agreement shall not apply to Counterparty and Counterparty shall not be required to pay any
additional amounts referred to therein.

3) Tax Representations.

(a) Payer Representations. For the purpose of Section 3(e) of this Agreement, each of BSFP and
the Counterparty will make the following representations:

It is not required by any applicable law, as modified by the practice of any relevant
governmental revenue authority, of any Relevant Jurisdiction to make any deduction or
withholding for or on account of any Tax from any payment (other than interest under Section
2(e), 6(d)(ii) or 6(e) of this Agreement) to be made by it to the other party under this
Agreement. In making this representation, it may rely on:

(i) the accuracy of any representations made by the other party pursuant to
Section 3(f) of this Agreement;

(ii) the satisfaction of the agreement contained in Section 4(a)(iii) of this
Agreement and the accuracy and effectiveness of any document provided by the other
party pursuant to Section 4(a)(iii) of this Agreement; and

(iii) the satisfaction of the agreement of the other party contained in Section
4(d) of this Agreement, provided that it shall not be a breach of this
representation where reliance is placed on clause (ii) and the other party does not
deliver a form or document under Section 4(a)(iii) by reason of material prejudice
to its legal or commercial position.

	(b)	 	Payee Representations. For the purpose of Section 3(f) of this Agreement, each of BSFP and
the Counterparty make the following representations.

The following representation will apply to BSFP:

BSFP is a corporation organized under the laws of the State of Delaware and its
U.S. taxpayer identification number is 13-3866307.

The following representation will apply to the Counterparty:

Counterparty represents that it is the Trust Administrator, not in its Individual
Capacity, but solely as Trust Administrator for Fremont Home Loan Trust 2006-B,
Mortgage-Backed Certificates, Series 2006-B under the Pooling and Servicing
Agreement.

4) Documents to be Delivered. For the purpose of Section 4(a):

(1) Tax forms, documents, or certificates to be delivered
are:

 

 

Reference Number: FXFRENT06B

Wells Fargo Bank, N.A., not individually, but solely as Trust Administrator on behalf of Fremont

Home Loan Trust 2006-B, Mortgage Backed Certificates, Series 2006-B

August 3, 2006

Page 6 of 19

	 	 	 	 	 
	Party required to deliver	 	Form/Document/	 	Date by which to
	document	 	Certificate	 	be delivered
	 
	BSFP and the Counterparty

	 	Any document
required or
reasonably requested
to allow the other
party to make
payments under this
Agreement without
any deduction or
withholding for or
on the account of
any Tax or with such
deduction or
withholding at a
reduced rate
	 	Promptly
after the
earlier of (i)
reasonable demand by
either party or (ii)
learning that such
form or document is
required

	(2)	 	Other documents to be delivered are:

	 	 	 	 	 	 	 
	Party required	 	Form/Document/	 	Date by which to	 	Covered by Section 3(d)
	to deliver	 	Certificate	 	be delivered	 	Representation
	document	 	 	 	 	 	 
	 
	BSFP and the
Counterparty

	 	Any documents
required by the
receiving party to
evidence the
authority of the
delivering party or
its Credit Support
Provider, if any,
for it to execute
and deliver this
Agreement, any
Confirmation, and
any Credit Support
Documents to which
it is a party, and
to evidence the
authority of the
delivering party or
its Credit Support
Provider to perform
its obligations
under this
Agreement, such
Confirmation and/or
Credit Support
Document, as the
case
	 	Upon the
execution and
delivery of this
Agreement and such
Confirmation
	 	Yes

 

 

Reference Number: FXFRENT06B

Wells Fargo Bank, N.A., not individually, but solely as Trust Administrator on behalf of Fremont

Home Loan Trust 2006-B, Mortgage Backed Certificates, Series 2006-B

August 3, 2006

Page 7 of l9

	 	 	 	 	 	 	 
	Party required	 	Form/Document/	 	Date by which to	 	Covered by Section 3(d)
	to deliver	 	Certificate	 	be delivered	 	Representation
	document	 	 	 	 	 	 
	 

	 	may be	 	 	 	 
	 
	 	 	 	 	 	 
	BSFP and the
Counterparty

	 	A certificate
of an authorized
officer of the
party, as to the
incumbency and
authority of the
respective officers
of the party
signing this
Agreement, any
relevant Credit
Support Document,
or any
Confirmation, as
the case may
be
	 	Upon the
execution and
delivery of this
Agreement and such
Confirmation
	 	Yes
	 
	 	 	 	 	 	 
	Counterparty

	 	An executed
copy of the Pooling
and Servicing
Agreement
	 	Within 30 days
after the date of
this Agreement.
	 	No

 

 

Reference Number: FXFRENT06B

Wells Fargo Bank, N.A., not individually, but solely as Trust Administrator on behalf of Fremont

Home Loan Trust 2006-B, Mortgage Backed Certificates, Series 2006-B

August 3, 2006

Page 8 of 19

5) Miscellaneous. Miscellaneous

	(a)	 	 Address for Notices: For the purposes of Section 12(a) of this Agreement:

Address for notices or communications to BSFP:

	 	 	 	 	 
	 

	 	Address:
	 	383 Madison Avenue, New York, New York 10179
	 

	 	Attention:
	 	DPC Manager
	 

	 	Facsimile:
	 	(212) 272-5823

with a copy to:

	 	 	 	 	 
	 

	 	Address:
	 	One Metrotech Center North, Brooklyn, New York 11201
	 

	 	Attention:
	 	Derivative Operations — 7th Floor
	 

	 	Facsimile:
	 	(212) 272-1634
	 
	 	 	 	 
	 	 	(For all purposes)

Address for notices or communications to the Counterparty:

	 	 	 	 	 
	 

	 	Address:
	 	Wells Fargo Bank, N.A.
	 

	 	 	 	9062 Old Annapolis Rd.
	 

	 	 	 	Columbia, Maryland 21045
	 

	 	 	 	Attn: Client Manager — Fremont 2006-B
	 

	 	Facsimile:
	 	(410) 715-2380
	 

	 	Phone:
	 	(410) 884-2000
	 
	 	 	 	 
	 	 	(For all purposes)

 

 

Reference Number: FXFRENT06B

Wells Fargo Bank, N.A., not individually, but solely as Trust Administrator on behalf of Fremont

Home Loan Trust 2006-B, Mortgage Backed Certificates, Series 2006-B

August 3, 2006

Page 9 of 19

	(b)	 	Process Agent. For the purpose of Section 13(c):

	 	 	 	 	 
	 	 	BSFP appoints as its
	 

	 	Process Agent:
	 	Not Applicable
	 
	 	 	 	 
	 	 	The Counterparty appoints as its
	 

	 	Process Agent:
	 	Not Applicable

(c) Offices. The provisions of Section 10(a) will not apply to this Agreement; neither BSFP nor the
Counterparty have any Offices other than as set forth in the Notices Section and BSFP agrees that,
for purposes of Section 6(b) of this Agreement, it shall not in future have any Office other than
one in the United States.

	(d)	 	Multibranch Party. For the purpose of Section 10(c) of this
Agreement:
	 
	 	 	BSFP is not a Multibranch Party.
	 
	 	 	The Counterparty is not a Multibranch Party.
	 
	(e)	 	Calculation Agent. The Calculation Agent is BSFP.

	 
	(f)	 	Credit Support Document. Not applicable for either BSFP or the Counterparty.
	 
	(g)	 	Credit Support Provider.
	 
	 	 	BSFP: Not Applicable
	 
	 	 	The Counterparty: Not Applicable

(h) Governing Law. The parties to this Agreement hereby agree that the law of the
State of New York shall govern their rights and duties in whole, without regard to the conflict of
law provisions thereof other than New York General Obligations Law Sections 5-1401 and 5-1402.

(i) Non-Petition. BSFP hereby irrevocably and unconditionally agrees that it will not institute
against, or join any other person in instituting against or cause any other person to institute
against the Counterparty, any bankruptcy, reorganization, arrangement, insolvency, or similar
proceeding under the laws of the United States, or any other jurisdiction for the non-payment of
any amount due hereunder or any other reason until the payment in full of the Certificates (as
defined in the Pooling and Servicing Agreement) and the expiration of a period of one year plus ten
days (or, if longer, the applicable preference period) following such payment.

 

 

Reference Number: FXFRENT06B

Wells Fargo Bank, N.A., not individually, but solely as Trust Administrator on behalf of Fremont

Home Loan Trust 2006-B, Mortgage Backed Certificates, Series 2006-B

August 3, 2006

Page 10 of 19

(j) Severability. If any term, provision, covenant, or condition of this Agreement, or the
application thereof to any party or circumstance, shall be held to be invalid or unenforceable (in
whole or in part) for any reason, the remaining terms, provisions, covenants, and conditions
hereof shall continue in full force and effect as if this Agreement had been executed with the
invalid or unenforceable portion eliminated, so long as this Agreement as so modified continues to
express, without material change, the original intentions of the parties as to the subject matter
of this Agreement and the deletion of such portion of this Agreement will not substantially impair
the respective benefits or expectations of the parties.

The parties shall endeavor to engage in good faith negotiations to replace any invalid or
unenforceable term, provision, covenant or condition with a valid or enforceable term, provision,
covenant or condition, the economic effect of which comes as close as possible to that of the
invalid or unenforceable term, provision, covenant or condition.

(k) Consent to Recording. Each party hereto consents to the monitoring or recording, at any time
and from time to time, by the other party of any and all communications between officers or
employees of the parties, waives any further notice of such monitoring or recording, and agrees
to notify its officers and employees of such monitoring or recording.

(l) Waiver of Jury Trial. Each party waives any right it may have to a trial by jury in respect of
any Proceedings relating to this Agreement or any Credit Support Document.

(m) Limited Set-Off. The provisions for Set-off set forth in Section 6(e) of the ISDA Form Master
Agreement shall not apply for purposes of this Transaction. Notwithstanding any provision of this
Agreement or any other existing or future agreement, each party irrevocably waives any and all
rights it may have to set off, net, recoup or otherwise withhold or suspend or condition payment or
performance of any obligation between it and the other party hereunder against any obligation
between it and the other party under any other agreements.

(n) This Agreement may be executed in several counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument.

(o) Additional Definitional Provisions.

As used in this Agreement, the following terms shall have the meanings set forth below, unless the
context clearly requires otherwise:

“Moody’s” means Moody’s Investors Service, Inc., or any successor.

“S&P” means Standard & Poor’s Ratings Services, or any successor.

(p) Trust Administrator Liability Limitations. It is expressly understood and agreed by the
parties hereto that (a) this Agreement is executed and delivered by Wells Fargo Bank, N.A., not
individually or personally but solely as the Trust Administrator, in the exercise of the powers
and authority

 

 

Reference Number: FXFRENT06B

Wells Fargo Bank, N.A., not individually, but solely as Trust Administrator on behalf of Fremont

Home Loan Trust 2006-B, Mortgage Backed Certificates, Series 2006-B

August 3,2006

Page 11 of 19

conferred and vested in it under the Pooling and Servicing Agreement, (b)
the representations, warranties, covenants, undertakings and agreements
herein made on the part of the Trust are made and intended not as personal
representations, undertakings and agreements by Wells Fargo Bank, N.A. but
are made and intended for the purpose of binding only the Trust, (c)
nothing herein contained shall be construed as creating any liability on
Wells Fargo Bank, N.A., individually or personally, to perform any covenant
either expressed or implied contained herein, all such liability, if any,
being expressly waived by the parties who are signatories to this Agreement
and by any person claiming by, through or under such parties hereto;
provided that nothing in this paragraph shall relieve Wells Fargo Bank,
N.A. from performing its duties and obligations under the Pooling and
Servicing Agreement in accordance with the standard of care set forth
therein and (d) under no circumstances shall Wells Fargo Bank, N.A. be
personally liable for the payment of any indemnity, indebtedness, fees or
expenses of the Trust or be liable for the breach or failure of any
obligation, representation, warranty or covenant made or undertaken by the
Trust under this Agreement.

(q) Additional Provisions. The provisions of Sections 5(a)(ii), 5(a)(iii)
and 5(a)(iv) shall not apply to BSFP or Counterparty.

6) “Affiliate” will have the meaning specified in Section 14 of the ISDA Form
Master Agreement,
provided that BSFP and Counterparty shall not be deemed to have any Affiliates
for purposes of this
Agreement, including for purposes of Section 6(b)(ii).

7) Rating Agency Downgrade. In the event that BSFP’s long-term unsecured and
unsubordinated debt
rating is reduced below “AA-” by S&P or its long-term unsecured and
unsubordinated debt rating is
withdrawn or reduced below “Aa3” by Moody’s (and together with S&P, the “Swap
Rating Agencies”,
and such rating thresholds, “Approved Rating Thresholds”), then within 30 days
after such rating
withdrawal or downgrade, BSFP shall, at its own expense, either (i) seek
another entity to replace
BSFP as party to this Agreement that meets or exceeds the Approved Rating
Thresholds on terms
substantially similar to this Agreement, (ii) subject to the Rating Agency
Condition obtain a guaranty
of, or a contingent agreement of another person with the Approved Rating
Threshold, to honor,
BSFP’s obligations under this Agreement, (iii) subject to the Rating Agency
Condition, post collateral
which will be sufficient to restore the immediately prior ratings of the
Certificates, or (iv) take such
other action as agreed with S&P and Moody’s that satisfies the Rating Agency
Condition. In the event
that BSFP’s long-term unsecured and unsubordinated debt rating is withdrawn or
reduced below
“BBB-” by S&P, then within 10 Business Days after such rating withdrawal or
downgrade, BSFP
shall, and at its own expense, either (i) secure another entity to replace
BSFP as party to this
Agreement that meets or exceeds the Approved Rating Thresholds on terms
substantially similar to
this Agreement, (ii) subject to the Rating Agency Condition obtain a
guaranty of, or a contingent
agreement of another person with the Approved Rating Thresholds, to honor,
BSFP’s obligations
under this Agreement or (iii) take such other action as agreed with S&P and
Moody’s that satisfies the
Rating Agency Condition. BSFP’s failure to do any of the foregoing shall, at
the Counterparty’s
option, constitute an Additional Termination Event with BSFP as the Affected
Party. For purposes of
this provision, “Rating Agency Condition” means, with respect to any
particular proposed act or
omission to act hereunder that the party acting or failing to act must consult
with each of the Swap
Rating Agencies then providing a rating of the Certificates and receive from
each of the Swap Rating

 

 

Reference Number: FXFRENT06B

Wells Fargo Bank, N.A., not individually, but solely as Trust Administrator on behalf of Fremont

Home Loan Trust 2006-B, Mortgage Backed Certificates, Series 2006-B

August 3, 2006

Page 12 of 19

Agencies a prior written confirmation that the proposed action or inaction
would not cause a downgrade or withdrawal of the then-current rating of the
Certificates.

8) Payment Instructions. BSFP hereby agrees that, unless notified in writing
by the Trust Administrator
of other payment instructions, any and all amounts payable by BSFP to the
Counterparty under this
Agreement shall be paid to the Trust Administrator at the account specified in
Section 5.

9) Section 3 of the 1SDA Form Master Agreement is hereby amended by adding at
the end thereof the
following subsection (g):

     “(g) Relationship Between Parties.

Each
party represents to the other party on each date when it
enters into a Transaction that:

          (1) Nonreliance. (i) It is not relying on any statement or
representation of the other party
regarding the Transaction (whether written or oral), other than the
representations expressly made in this
Agreement or the Confirmation in respect of that Transaction and (ii) it
has consulted with its own legal,
regulatory, tax, business, investment, financial and accounting advisors
to the extent it has deemed
necessary, and it has made its own investment, hedging and trading
decisions based upon its own
judgment and upon any advice from such advisors as it has deemed
necessary and not upon any view
expressed by the other party.

          (2) Evaluation
and Understanding.

	 	(i)	 	BSFP is acting for its own account and Wells Fargo
Bank, N.A. is acting in its capacity as Trust Administrator
under the Pooling and Servicing Agreement and not for its
own account. BSFP has made its own independent decisions to
enter into this Transaction and as to whether this
Transaction is appropriate or proper for it based upon its
own judgment and upon advice from such advisors as it has
deemed necessary. It is not relying on any communication
(written or oral) of the other party as investment advice
or as a recommendation to enter into this Transaction; it
being understood that information and explanations related
to the terms and conditions of this Transaction shall not
be considered investment advice or a recommendation to
enter into this Transaction. It has not received from the
other party any assurance or guarantee as to the expected
results of this Transaction.

	 	(ii)	 	It is capable of evaluating
and understanding (on its own behalf or through
independent professional advice), and understands and
accepts, the terms, conditions and risks of this
Transaction. It is also capable of assuming, and assumes,
the financial and other risks of this Transaction.

 

 

Reference Number: FXFRENT06B

Wells Fargo Bank, N.A., not individually, but solely as Trust Administrator on behalf of Fremont

Home Loan Trust 2006-B, Mortgage Backed Certificates, Series 2006-B

August 3,2006

Page 13 of 19

	 	(iii)	 	The other party is not acting
as a fiduciary or an advisor for it in respect of this
Transaction.

(3) Purpose. It is an “eligible swap participant” as such
term is defined in Section 35.1(b)(2) of the regulations (17 C.F.R
35) promulgated under, and an “eligible contract participant” as
defined in Section I(a)(l2) of, the Commodity Exchange Act, as
amended, and it is entering into the Transaction for the purposes
of managing its borrowings or investments, hedging its underlying
assets or liabilities or in connection with a line of business.”

10) Transfer, Amendment and Assignment. No transfer, amendment, waiver,
supplement, assignment or
other modification of this Confirmation shall be permitted by either party
unless each of S&P and
Moody’s has been provided notice of such transfer, amendment, waiver,
supplement, assignment or
other modification and each of S&P and Moody’s confirms in writing (including
by facsimile
transmission) that it will not qualify, downgrade, withdraw or modify its then
current rating of the
Certificates issued pursuant to the Pooling and Servicing Agreement.

11) Compliance with Regulation AB.

(i) BSFP agrees and acknowledges that the Depositor is required under
Regulation AB (as defined in the Pooling and Servicing Agreement), to
disclose certain financial information regarding BSFP or its group of
affiliated entities, if applicable, depending on the aggregate “significance
percentage” of this Agreement and any other derivative contracts between
BSFP or its group of affiliated entities, if applicable, and the Depositor,
as calculated from time to time in accordance with Item 1115 of Regulation
AB.

(ii) It shall be a swap disclosure event (“Swap Disclosure Event”) if, on
any Business Day after the date hereof, the Depositor requests from BSFP
the applicable financial information described in Item 1115 of Regulation
AB (such request to be based on a reasonable determination by the
Depositor, in good faith, that such information is required under
Regulation AB) (the “Company Financial Information”).

(iii) Upon the occurrence of a Swap Disclosure Event, BSFP, at its own
expense, shall (l)(a) either (i) provide to Counterparty and the Depositor
the current Company Financial Information in an EDGAR-compatible format
(for example, such information may be provided in Microsoft Word® or
Microsoft Excel® format but not in .pdf format) or (ii) provide written
consent to Counterparty and the Depositor to incorporation by reference of
such current Company Financial Information that are filed with the
Securities and Exchange Commission in the reports of the Trust filed
pursuant to the Exchange Act, (b) if applicable, cause its outside
accounting firm to provide its consent to filing or incorporation by
reference of such accounting firm’s report relating to their audits of such
current Company Financial Information in the Exchange Act Reports of the
Depositor, and (c) provide to Counterparty and the Depositor any updated
Company Financial Information with respect to BSFP or any entity that
consolidates BSFP within five days of the release of any such updated
Company Financial Information; (2) secure another entity to replace BSFP as
party to this Agreement on terms

 

 

Reference Number: FXFRENT06B

Wells Fargo Bank, N.A., not individually, but solely as Trust Administrator on behalf of Fremont

Home Loan Trust 2006-B, Mortgage Backed Certificates, Series 2006-B

August 3, 2006

Page 14 of 19

substantially similar to this Agreement, which entity (or a guarantor therefor) meets
or exceeds the Approved Rating Thresholds and which satisfies the Rating Agency
Condition and which entity is able to comply with the requirements of Item 1115 of
Regulation AB, or (3) obtain a guaranty of BSFP’s obligations under this Agreement
from an affiliate of BSFP that is able to comply with the financial information
disclosure requirements of Item 1115 of Regulation AB, and cause such affiliate to
provide Company Financial Information and any future Company Financial Information,
such that disclosure provided in respect of such affiliate will satisfy any disclosure
requirements applicable to the Swap Provider.

(iv) BSFP agrees that, in the event that BSFP provides Company Financial Information to
Counterparty and the Depositor in accordance with clause (iii)(a) of this paragraph 11
or causes its affiliate to provide Company Financial Information to Counterparty and
the Depositor in accordance with clause (iii)(c) of this paragraph 11, it will
indemnify and hold harmless Counterparty and the Depositor, its respective directors or
officers and any person controlling Counterparty and the Depositor, from and against
any and all losses, claims, damages and liabilities caused by any untrue statement or
alleged untrue statement of a material fact contained in such Company Financial
Information or caused by any omission or alleged omission to state in such Company
Financial Information a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were made,
not misleading.

(v) If the Depositor reasonably requests, BSFP shall provide such other information as
may be necessary for the Depositor to comply with Item 1115 of Regulation AB.

(vi) The Depositor shall be an express third party beneficiary of this Agreement as if
a party hereto to the extent of Depositor’s rights explicitly specified herein.

12) Additional Termination Events.

(a) If a Rating Agency Downgrade has occurred and BSFP has not complied with Section 7
above,
then an Additional Termination Event shall have occurred with respect to BSFP and BSFP
shall be the
sole Affected Party with respect to such an Additional Termination Event.

(b) If the Trust Administrator is unable to pay the Class A Certificates or fails or
admits in writing its
inability to pay the Class A Certificates as they become due, then an Additional
Termination Event
shall have occurred with respect to Counterparty and Counterparty shall be the sole
Affected Party
with respect to such Additional Termination Event.

(c) If
upon the occurrence of a Swap Disclosure Event (as defined in
paragraph 11(ii)
above) BSFP has
not, within 10 Business Days after such Swap Disclosure Event complied with any of the
provisions
set forth in clause (iii) of paragraph 11 above, then an Additional Termination Event
shall have
occurred with respect to BSFP and BSFP shall be the sole Affected Party with respect to
such
Additional Termination Event.

 

 

Reference Number: FXFRENT06B

Wells Fargo Bank, N.A., not individually, but solely as Trust Administrator on behalf of Fremont

Home Loan Trust 2006-B, Mortgage Backed Certificates, Series 2006-B

August 3, 2006

Page 15 of 19

(d) If at any time, the Servicer provides notice that it will purchase the Pool II
Mortgage Loans
pursuant to Section 9.01 of the Pooling and Servicing Agreement and the Trust
Administrator mails a
Notice of Final Distribution to the Pool II Certificateholders, then an Additional
Termination Event
shall have occurred and Counterparty shall be the sole Affected Party with respect to such
Additional
Termination Event; provided that notwithstanding anything in the first sentence of Section
6(d)(ii) of
the ISDA Form Master Agreement to the contrary, the amount calculated as being due in
respect of
such Additional Termination Event shall be payable on the Distribution Date upon which the
final
distribution is made to the Certificateholders; provided further that for purposes of
determining the
payment under Section 6(e) of the ISDA Form Master Agreement, for all Calculation Periods
beginning after the Early Termination Date, the definition of Notional Amount in the
Confirmation
shall be deleted in its entirety and replaced with the following: “With respect to each
Calculation
Period, the Scheduled Amount for such Calculation Period as set forth in the Schedule of
Scheduled
Amounts attached hereto multiplied by the quotient of (i) the Notional Amount for the
Calculation
Period immediately prior to the Early Termination Date divided by (ii) the Scheduled
Amount for the
Calculation Period immediately prior to the Early Termination Date as set forth in the
Schedule of
Scheduled Amounts attached hereto.

(e) Without the prior written consent of BSFP, Counterparty shall not consent to any
amendment or
supplemental agreement to the Pooling and Servicing Agreement if such amendment or
supplemental
agreement could reasonably be expected to have an adverse effect on the interests of BSFP.
Counterparty will furnish to BSFP a copy of each proposed and each executed amendment or
supplemental agreement and copies of any related Rating Agency
confirmation therewith, if
any. The
failure by Counterparty to comply with the above shall constitute an Additional
Termination Event
hereunder, upon which Counterparty shall be the sole Affected Party and all Transactions
hereunder
shall be Affected Transactions.

 

 

Reference Number: FXFRENT06B

Wells Fargo Bank, N.A., not individually, but solely as Trust Administrator on behalf of Fremont

Home Loan Trust 2006-B, Mortgage Backed Certificates, Series 2006-B

August 3, 2006

Page 16 of 19

NEITHER THE BEAR STEARNS COMPANIES INC. NOR ANY SUBSIDIARY OR AFFILIATE OF THE BEAR
STEARNS COMPANIES INC. OTHER THAN BSFP IS AN OBLIGOR OR A CREDIT SUPPORT PROVIDER ON THIS
AGREEMENT.

	 	 	 	 	 
	6.

	 	Account Details and	 	 
	 

	 	Settlement Information:
	 	Payments to BSFP:
	 

	 	 	 	Citibank, N.A., New York
	 

	 	 	 	ABA Number: 021-0000-89, for the account of
	 

	 	 	 	Bear, Steams Securities Corp.
	 

	 	 	 	Account Number: 0925-3186, for further credit to
	 

	 	 	 	Bear Stearns Financial Products Inc.
	 

	 	 	 	Sub-account Number: 102-04654-1-3
	 

	 	 	 	Attention: Derivatives Department
	 

	 	 	 	 
	 

	 	 	 	Payments to Counterparty:
	 

	 	 	 	Wells Fargo Bank, N.A.
	 

	 	 	 	ABA Number: 121-000-248
	 

	 	 	 	Account Number: 3970771416
	 

	 	 	 	Account Name SAS Clearing
	 

	 	 	 	FFC to Fremont 2006-B
	 

	 	 	 	Acct # 509136901

Counterparty hereby agrees to check this Confirmation and to confirm that the foregoing
correctly sets forth the terms of the Transaction by signing in the space provided below and
returning to BSFP a facsimile of the fully-executed Confirmation to 212-272-9857. To discuss an
inquiry regarding U.S. Transactions, please contact Nick Girardi by telephone at 212-272-8420. For
all other inquiries please contact Derivatives Documentation by telephone at 353-1-402-6233.
Originals will be provided for your execution upon your request.

 

 

Reference Number: FXFRENT06B

Wells Fargo Bank, N.A., not individually, but solely as Trust Administrator on behalf of Fremont

Home Loan Trust 2006-B, Mortgage Backed Certificates, Series 2006-B

August 3, 2006

Page 17 of 19

We are very pleased to have executed this Transaction with you and we look forward to completing
other transactions with you in the near future.

Very truly yours,

BEAR STEARNS FINANCIAL PRODUCTS INC.

	 	 	 	 	 
	By:

	 	/s/ Annie Manevitz	 	 
	 

	 	 	 	 
	 

	 	ANNIE MANEVITZ	 	 
	 

	 	AUTHORIZED SIGNATORY	 	 

Counterparty, acting through its duly authorized signatory, hereby agrees to, accepts and
confirms the terms of the foregoing as of the Trade Date.

WELLS FARGO BANK, N.A., NOT INDIVIDUALLY, BUT SOLELY AS TRUST ADMINISTRATOR
ON BEHALF OF FREMONT HOME LOAN TRUST 2006-B, MORTGAGE-BACKED CERTIFICATES, SERIES
2006-B.

	 	 	 	 	 
	By:
	 	/s/ Graham Oglesby 	 	 
	 

	 	 	 	 
	 

	 	Name: Graham Oglesby	 	 
	 

	 	Title: Assistant Vice President	 	 

 

 

Reference Number: FXFRENT06B

Wells Fargo Bank, N.A., not individually, but solely as Trust Administrator on behalf of Fremont

Home Loan Trust 2006-B, Mortgage Backed Certificates, Series 2006-B

August 3, 2006

Page 17 of 20

We are very pleased to have executed this Transaction with you and we look forward to completing
other transactions with you in the near future.

Very truly yours,

BEAR STEARNS FINANCIAL PRODUCTS INC.

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 

Counterparty, acting through its duly authorized signatory, hereby agrees to, accepts and confirms
the terms of the foregoing as of the Trade Date.

WELLS FARGO BANK, N.A., NOT INDIVIDUALLY, BUT SOLELY AS TRUST ADMINISTRATOR ON
BEHALF OF FREMONT HOME LOAN TRUST 2006-B, MORTGAGE-BACKED CERTIFICATES, SERIES
2006-B.

	 	 	 	 	 	 	 
	By:

	 	/s/ Graham Oglesby	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	As authorized agent or officer for Wells Fargo Bank, N.A., not individually, but solely as
Trust Administrator on behalf of Fremont Home Loan Trust 2006-B, Mortgage Backed Certificates,
Series 2006-B
	 

	 	Name: Graham Oglesby	 	 	 	 
	 

	 	Title: Assistant Vice President	 	 	 	 

 

 

Reference Number: FXFRENT06B

Wells Fargo Bank, N.A., not individually, but solely as Trust Administrator on behalf of Fremont

Home Loan Trust 2006-B, Mortgage Backed Certificates, Series 2006-B

August 3, 2006

Page 18 of 19

SCHEDULE OF NOTIONAL AMOUNTS

(For the purpose of determining (i) the Floating Amounts, all such dates are subject to adjustment in

accordance with the Business Day Convention and (ii) the Fixed Amounts, all such dates are not

subject to adjustment in accordance with any Business Day Convention.)

	 	 	 	 	 	 	 
	 	 	 	 	Scheduled Notional
	From and including	 	To but excluding	 	Amount (USD)
	Effective Date
	 	9/25/2006	 	 	1,060,180.00	 
	9/25/2006
	 	10/25/2006	 	 	1,050,524.00	 
	10/25/2006
	 	11/25/2006	 	 	1,035,500.00	 
	11/25/2006
	 	12/25/2006	 	 	1,019,064.00	 
	12/25/2006
	 	1/25/2007	 	 	1,001,220.00	 
	1/25/2007
	 	2/25/2007	 	 	982,016.00	 
	2/25/2007
	 	3/25/2007	 	 	961,484.00	 
	3/25/2007
	 	4/25/2007	 	 	940,624.00	 
	4/25/2007
	 	5/25/2007	 	 	918,560.00	 
	5/25/2007
	 	6/25/2007	 	 	895,316.00	 
	6/25/2007
	 	7/25/2007	 	 	870,964.00	 
	7/25/2007
	 	8/25/2007	 	 	845,552.00	 
	8/25/2007
	 	9/25/2007	 	 	819,172.00	 
	9/25/2007
	 	10/25/2007	 	 	793,956.00	 
	10/25/2007
	 	11/25/2007	 	 	768,944.00	 
	11/25/2007
	 	12/25/2007	 	 	743,088.00	 
	12/25/2007
	 	1/25/2008	 	 	716,468.00	 
	1/25/2008
	 	2/25/2008	 	 	689,180.00	 
	2/25/2008
	 	3/25/2008	 	 	662,756.00	 
	3/25/2008
	 	4/25/2008	 	 	637,172.00	 
	4/25/2008
	 	5/25/2008	 	 	612,404.00	 
	5/25/2008
	 	6/25/2008	 	 	588,416.00	 
	6/25/2008
	 	7/25/2008	 	 	565,120.00	 
	7/25/2008
	 	8/25/2008	 	 	521,780.00	 
	8/25/2008
	 	9/25/2008	 	 	481,108.00	 
	9/25/2008
	 	10/25/2008	 	 	444,260.00	 
	10/25/2008
	 	11/25/2008	 	 	409,920.00	 
	11/25/2008
	 	12/25/2008	 	 	377,944.00	 
	12/25/2008
	 	1/25/2009	 	 	348,216.00	 
	1/25/2009
	 	2/25/2009	 	 	333,652.00	 
	2/25/2009
	 	3/25/2009	 	 	319,728.00	 
	3/25/2009
	 	4/25/2009	 	 	306,408.00	 
	4/25/2009
	 	5/25/2009	 	 	293,700.00	 
	5/25/2009
	 	6/25/2009	 	 	281,568.00	 

 

 

Reference Number: FXFRENT06B

Wells Fargo Bank, N.A., not individually, but solely as Trust Administrator on behalf of Fremont

Home Loan Trust 2006-B, Mortgage Backed Certificates, Series 2006-B

August 3, 2006

Page 19 of 19

	 	 	 	 	 	 	 
	 	 	 	 	Scheduled Notional
	From and including	 	To but excluding	 	Amount (USD)
	6/25/2009
	 	7/25/2009	 	 	269,988.00	 
	7/25/2009
	 	8/25/2009	 	 	258,952.00	 
	8/25/2009
	 	9/25/2009	 	 	248,432.00	 
	9/25/2009
	 	10/25/2009	 	 	238,416.00	 
	10/25/2009
	 	11/25/2009	 	 	228,884.00	 
	11/25/2009
	 	12/25/2009	 	 	219,820.00	 
	12/25/2009
	 	1/25/2010	 	 	211,208.00	 
	1/25/2030
	 	2/25/2010	 	 	203,036.00	 
	2/25/2010
	 	3/25/2010	 	 	195,292.00	 
	3/25/2010
	 	4/25/2010	 	 	187,956.00	 
	4/25/2010
	 	5/25/2010	 	 	181,016.00	 
	5/25/2010
	 	6/25/2010	 	 	174,464.00	 
	6/25/2010
	 	7/25/2010	 	 	168,284.00	 
	7/25/2010
	 	8/25/2010	 	 	162,464.00	 
	8/25/2010
	 	9/25/2010	 	 	156,992.00	 
	9/25/2010
	 	10/25/2010	 	 	151,044.00	 
	10/25/2010
	 	11/25/2010	 	 	145,416.00	 
	11/25/2010
	 	12/25/2010	 	 	140,100.00	 
	12/25/2010
	 	1/25/2011	 	 	135,092.00	 
	1/25/2011
	 	2/25/2011	 	 	130,372.00	 
	2/25/2011
	 	3/25/2011	 	 	125,936.00	 
	3/25/2011
	 	4/25/2011	 	 	121,776.00	 
	4/25/2011
	 	5/25/2011	 	 	117,876.00	 
	5/25/2011
	 	6/25/2011	 	 	114,236.00	 
	6/25/2011
	 	7/25/2011	 	 	110,844.00	 
	7/25/2011
	 	8/25/2011	 	 	107,696.00	 
	8/25/2011
	 	9/25/2011	 	 	104,780.00	 
	9/25/2011
	 	10/25/2011	 	 	100,452.00	 
	10/25/2011
	 	11/25/2011	 	 	96,332.00	 
	11/25/2011
	 	12/25/2011	 	 	92,420.00	 
	12/25/2011
	 	1/25/2012	 	 	88,704.00	 
	1/25/2012
	 	2/25/2012	 	 	85,176.00	 
	2/25/2012
	 	3/25/2012	 	 	81,832.00	 
	3/25/2012
	 	4/25/2012	 	 	78,672.00	 
	4/25/2012
	 	5/25/2012	 	 	75,676.00	 
	5/25/2012
	 	6/25/2012	 	 	72,852.00	 
	6/25/2012
	 	7/25/2012	 	 	70,212.00	 
	7/25/2012
	 	Termination Date	 	 	67,732.00	 

 

 

BEAR STEARNS FINANCIAL PRODUCTS INC.

383 MADISON AVENUE

NEW YORK, NEW YORK 10179

212-272-4009

	 	 	 
	DATE:

	 	August 3, 2006
	 
	 	 
	TO:

	 	Wells Fargo Bank, N.A.,
not individually, but solely
as Trust Administrator on
behalf of Fremont Home Loan
Trust 2006-B, Mortgage Backed
Certificates, Series 2006-B
	ATTENTION:

	 	Client Manager — Fremont 2006-B
	FACSIMILE:

	 	(410) 715-2380
	 
	 	 
	TO:

	 	Fremont Investment & Loan
	ATTENTION:

	 	Jeffrey Crusinberry
	FACSIMILE:

	 	(714) 431-1436
	 
	 	 
	FROM:

	 	Derivatives Documentation
	TELEPHONE:

	 	212-272-2711
	FACSIMILE:

	 	212-272-9857
	 
	 	 
	RE:

	 	Novation Confirmation
	 
	 	 
	REFERENCE NUMBER(S):

	 	FXFRENT06B- BXFRENT06B

The purpose of this letter is to confirm the terms and conditions of the Novation Transaction
entered into between the parties and effective from the Novation Date specified below. This
Novation Confirmation constitutes a “Confirmation” as referred to in the New Agreement specified
below.

	1.	 	The definitions and provisions contained in the 2004 ISDA Novation Definitions (the
“Definitions”) and the terms and provisions of the 2000 ISDA Definitions, as published by the
International Swaps and Derivatives Association, Inc. and amended from time to time, are
incorporated in this Novation Confirmation. In the event of any inconsistency between (i) the
Definitions, (ii) the 2000 ISDA Definitions, and/or (iii) the Novation Agreement and this
Novation Confirmation, this Novation Confirmation will govern.
	 
	2.	 	The terms of the Novation Transaction to which this Novation Confirmation relates are as
follows:

	 	 	 	 	 
	 

	 	Novation Trade Date:
	 	August 3, 2006
	 

	 	Novation Date:
	 	August 3, 2006
	 

	 	Novated Amount:
	 	USD 1.060, 180.00
	 

	 	Transferor 1:
	 	Fremont Investment & Loan
	 

	 	Transferor 2:
	 	Bear Stearns Bank plc
	 

	 	Transferee 1:
	 	Wells Fargo Bank, N.A., not individually, but solely
as Trust Administrator on behalf of Fremont Home
Loan Trust 2006-B, Mortgage Backed Certificates,
Series 2006-B
	 

	 	Transferee 2:
	 	Bear Stearns Financial Products Inc.
	 
	 

	 	New Agreement (between

Transferee 1 and Transferee 2):
	 	The Master Agreement as defined in the New

Confirmation

 

 

Reference Number: FXFRENT06B- BXFRENT06B- Novation Confirmation

Fremont Investment & Loan

Wells Fargo Bank, N.A., not individually, but solely as Trust Administrator on behalf of Fremont Home Loan

Trust 2006-B, Mortgage Backed Certificates, Series 2006-B

August 3, 2006

Page 2 of 3

	3.	 	The terms of the Old Transaction to which this Novation Confirmation relates, for
identification purposes, are as follows:

	 	 	 	 	 
	 

	 	Trade Date of Old Transaction:
	 	August 1, 2006
	 

	 	Effective Date of Old Transaction:
	 	August 3, 2006
	 

	 	Termination Date of Old Transaction:
	 	August 25, 2012

	4.	 	The terms of the New Transaction to which this Novation Confirmation relates shall be as
specified in the New Confirmation attached hereto as Exhibit A.

	 	 	 	 	 
	 

	 	Full First Calculation Period:
	 	Applicable, commencing on August 3, 2006

	5.	 	Offices:

	 	 	 	 	 
	 

	 	Transferor 1:
	 	Not Applicable
	 

	 	Transferor 2:
	 	Not Applicable
	 

	 	Transferee 1:
	 	Not Applicable
	 

	 	Transferee 2:
	 	Not Applicable

The parties confirm their acceptance to be bound by this Novation Confirmation as of the
Novation Date by executing a copy of this Novation Confirmation and returning a facsimile of the
fully-executed Novation Confirmation to 212-272-9857. The Transferors, by their execution of a copy
of this Novation Confirmation, agrees to the terms of the Novation Confirmation as it relates to
the Old Transaction. The Transferees, by their execution of a copy of this Novation Confirmation,
agrees to the terms of the Novation Confirmation as it relates to the New Transaction.

 

 

Reference Number: FXFRENT06B- BXFRENT06B- Novation Confirmation

Fremont Investment & Loan

Wells Fargo Bank, N.A., not individually, but solely as Trust Administrator on behalf of Fremont Home Loan

Trust 2006-B, Mortgage Backed Certificates, Series 2006-B

August 3, 2006

Page 3 of 3

	 	 	 	 	 	 	 	 	 	 	 	 	 
	FREMONT INVESTMENT & LOAN	 	 	 	BEAR STEARNS BANK PLC
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ Jeff Crusinberry	 	 	 	By:	 	/s/ Mary Brock
	 	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	JEFF CRUSINBERRY

	 	 	 	 	 	Name:	 MARY BROCK
	 
	 

	 	Title:
	 	SENIOR VICE PRESIDENT
	 	 	 	 	 	Title:
	AUTHORIZED SIGNATORY
	 
	 

	 	Date:
	 		 	 	 	 	 	Date:
	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	WELLS FARGO BANK, N.A., NOT INDIVIDUALLY,
BUT SOLELY AS TRUST ADMINISTRATOR ON
BEHALF OF FREMONT HOME LOAN TRUST 2006-B,
MORTGAGE BACKED CERTIFICATES, SERIES
2006-B	 	 	 	BEAR STEARNS FINANCIAL PRODUCTS INC.
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ Graham Oglesby	 	 	 	By:	 	/s/ Annie Manevitz
	 	 	 	 	 	 	 	 	 	 
	Name:

	 	Graham Oglesby
	 	 	 	 	 	Name:	 ANNIE MANEVITZ
	 
	Title:

	 	Assistant Vice President
	 	 	 	 	 	Title:
	 AUTHORIZED SIGNATORY
	 
	Date:

	 	 	 	 	 	 	 	 	 	Date:	 	 

Ln

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