Document:

exv4w2

 

EXHIBIT 4.2

FREMONT MORTGAGE SECURITIES CORPORATION,

as Purchaser

and

FREMONT INVESTMENT & LOAN,

as Originator

MORTGAGE LOAN PURCHASE AGREEMENT

Dated as of September 1, 2006

Fixed-Rate and Adjustable-Rate Mortgage Loans

Fremont Home Loan Trust 2006-C,

Mortgage-Backed Certificates, Series 2006-C

 

 

Table of Contents

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I DEFINITIONS AND SCHEDULES
	 	 	2	 
	 
	 	 	 	 
	Section 1.01. Definitions
	 	 	2	 
	 
	 	 	 	 
	ARTICLE II SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
	 	 	2	 
	Section 2.01. Sale of Mortgage Loans
	 	 	2	 
	Section 2.02. Obligations of the Originator Upon Sale
	 	 	3	 
	Section 2.03. Payment of Purchase Price for the Mortgage Loans
	 	 	4	 
	 
	 	 	 	 
	ARTICLE III REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
	 	 	4	 
	 
	 	 	 	 
	Section 3.01. Originator’s Representations and Warranties Relating to the Mortgage Loans
	 	 	4	 
	Section 3.02. Additional Originator’s Representations and Warranties
	 	 	4	 
	Section 3.03. Remedies for Breach of Representations and Warranties
	 	 	7	 
	 
	 	 	 	 
	ARTICLE IV ORIGINATOR’S COVENANTS
	 	 	10	 
	 
	 	 	 	 
	Section 4.01. Covenants of the Originator
	 	 	10	 
	 
	 	 	 	 
	ARTICLE V INDEMNIFICATION WITH RESPECT TO THE MORTGAGE LOANS
	 	 	10	 
	 
	 	 	 	 
	Section 5.01. Indemnification
	 	 	10	 
	 
	 	 	 	 
	ARTICLE VI TERMINATION
	 	 	11	 
	 
	 	 	 	 
	Section 6.01. Termination
	 	 	11	 
	 
	 	 	 	 
	ARTICLE VII MISCELLANEOUS PROVISIONS
	 	 	11	 
	 
	 	 	 	 
	Section 7.01. Amendment
	 	 	11	 
	Section 7.02. Governing Law
	 	 	11	 
	Section 7.03. Notices
	 	 	11	 
	Section 7.04. Severability of Provisions
	 	 	12	 
	Section 7.05. Counterparts
	 	 	12	 
	Section 7.06. Further Agreements
	 	 	12	 
	Section 7.07. Intention of the Parties
	 	 	13	 
	Section 7.08. Successors and Assigns: Assignment of Purchase Agreemen
	 	 	14	 
	Section 7.09. Survival
	 	 	14	 
	Section 7.10. Third Party Beneficiaries
	 	 	14	 
	Section 7.11. Confidentiality
	 	 	14	 

Fremont 2006-C

Mortgage Loan Purchase Agreement

i

 

	 	 	 
	Exhibit A:

	 	Representations and Warranties Relating to the Mortgage Loans
	 
	 	 
	Exhibit B:

	 	Appendix E of the Standard & Poor’s Glossary for File Format for LEVELSÒ
Version 5.7
	 
	 	 
	Schedule A:

	 	Mortgage Loan Schedule

 

 

     THIS MORTGAGE LOAN PURCHASE AGREEMENT, dated as of September 1, 2006 (the “Agreement”), is
made and entered into between Fremont Investment & Loan (the “Originator” or “Fremont”) and Fremont
Mortgage Securities Corporation (the “Purchaser”).

W
I T N E S S E T H

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

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

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

     WHEREAS, pursuant to the terms of that certain Pooling and Servicing Agreement dated as of
September 1, 2006 (the “Pooling and Servicing Agreement”) among the Purchaser, as depositor,
Fremont, as originator and servicer, HSBC Bank USA, National Association, as trustee (the
“Trustee”), Wells Fargo Bank, N.A., as master servicer (in such capacity, the “Master Servicer”)
and as trust administrator (in such capacity, the “Trust Administrator”), the Purchaser will convey
the Mortgage Loans to Fremont Home Loan Trust 2006-C (the “Trust”).

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

ARTICLE I

DEFINITIONS AND SCHEDULES

     Section 1.01. Definitions.

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

ARTICLE II

SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE

     Section 2.01. Sale of Mortgage Loans.

     The Originator, concurrently with the execution and delivery of this Agreement, does hereby
sell, transfer, assign, set over, and otherwise convey to the Purchaser, without recourse, (i) all
of its right, title and interest in and to each of the Mortgage Loans, including the related

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

     Section 2.02. Obligations of the Originator Upon Sale.

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

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

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

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

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

In consideration of the sale of the Mortgage Loans from the Originator to the Purchaser on the
Closing Date, the Purchaser agrees to pay to the Originator on the Closing Date by transfer of
immediately available funds, an amount equal to $1,754,116,930.94 and to transfer to the Originator
or its designee on the Closing Date the Class C, Class P and Class R Certificates (collectively,
the “Purchase Price”). The Originator shall pay, and be billed directly for, all reasonable
expenses incurred by the Purchaser in connection with the issuance of the Certificates, including,
without limitation, printing fees incurred in connection with the offering documents relating to
the Certificates, fees and expenses of Purchaser’s counsel, fees of the rating agencies requested
to rate the Certificates, accountant’s fees and expenses and the fees and expenses of the Trustee
and the Trust Administrator and other out-of-pocket costs, if any.

ARTICLE III

REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH

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

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

     Section 3.02. Additional Originator’s Representations and Warranties.

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

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

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

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

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

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

     (f) No consent, approval, authorization or order of, or registration or filing with, or notice
to any court or governmental agency is required for the execution, delivery and performance by the
Originator of or compliance by the Originator with this Agreement or the

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Mortgage Loans, the delivery of a portion of the Mortgage Files to the Trustee or the sale of
the Mortgage Loans or the consummation of the transactions contemplated by this Agreement, or if
required, such approval has been obtained prior to the Closing Date;

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

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

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

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

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

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

     (m) The Originator has been advised by its independent certified public accountants that under
generally accepted accounting principles the transfer of the Mortgage Loans may be treated as a
sale on the books and records of the Originator and the Originator has determined that the
disposition of the Mortgage Loans pursuant to this Agreement will be afforded sale treatment for
tax and accounting purposes;

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

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

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

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

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

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

     Section 3.03. Remedies for Breach of Representations and Warranties.

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

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representations and warranties set forth in clauses I(ss), I(tt), I(uu), I(ww), I(bbb),
I(jjj), I(lll) and II of Exhibit A attached hereto will be deemed to materially and adversely
affect the value of any Mortgage Loan or the interest of the Purchaser or the Trustee), the party
discovering such breach shall give prompt written notice to the other parties.

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

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

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

     As to any Deleted Mortgage Loan for which the Originator substitutes a Qualified Substitute
Mortgage Loan or Loans, the Originator shall effect such substitution by delivering to the
Purchaser or its designee for such Qualified Substitute Mortgage Loan or Loans the Mortgage File
and such other documents and agreements as are required by the Pooling and Servicing Agreement,
with the Mortgage Note endorsed as required therein. No substitution is permitted to be made in
any calendar month after the Determination Date for such month.

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

     One or more mortgage loans may be substituted for one or more Deleted Mortgage Loans,
provided, however, that any such substitution shall not be effected prior to the delivery to the
Trustee and the Trust Administrator of an Opinion of Counsel required by Section 2.04 of the
Pooling and Servicing Agreement, if any. The determination of whether a mortgage loan is a
Qualified Substitute Mortgage Loan may be satisfied on an individual basis. Alternatively, if more
than one mortgage loan is to be substituted for one or more Deleted Mortgage Loans, the
characteristics of such mortgage loans and Deleted Mortgage Loans shall be aggregated or calculated
on a weighted average basis, as applicable, in determining whether such mortgage loans are
Qualified Substitute Mortgage Loans.

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

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

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

ARTICLE IV

ORIGINATOR’S COVENANTS

     Section 4.01. Covenants of the Originator.

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

ARTICLE V

INDEMNIFICATION WITH RESPECT TO THE MORTGAGE LOANS

     Section 5.01. Indemnification.

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

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ARTICLE VI

TERMINATION

     Section 6.01. Termination.

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

ARTICLE VII

MISCELLANEOUS PROVISIONS

     Section 7.01. Amendment.

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

     Section 7.02. Governing Law.

     This Agreement shall be governed by and construed in accordance with the laws of the State of
New York, without regard to its material conflict of laws rules (except for Section 5-1401 of the
General Obligations Law which shall apply hereto), and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.

     Section 7.03. Notices.

     All demands, notices and communications hereunder shall be in writing and shall be deemed to
have been duly given if personally delivered at or mailed by registered mail, postage prepaid,
addressed as follows:

if to the Originator:

Fremont Investment & Loan

2727 East Imperial Highway

Brea, California 92821

Attention: Senior Vice President — Finance

with a copy to:

Fremont General Corporation

2425 Olympic Boulevard

Santa Monica, California 90404

Attention: General Counsel

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

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if to the Purchaser:

Fremont Mortgage Securities Corporation

2727 East Imperial Highway

Brea, California 92821

Attention: Senior Vice President — Treasurer

with a copy to:

Fremont General Corporation

2425 Olympic Boulevard

Santa Monica, California 90404

Attention: General Counsel

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

     Section 7.04. Severability of Provisions.

     If any one or more of the covenants, agreements, provisions or terms of this Agreement shall
be held invalid for any reason whatsoever, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions or terms of this
Agreement and shall in no way affect the validity or enforceability of the other provisions of this
Agreement.

     Section 7.05. Counterparts.

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

     Section 7.06. Further Agreements.

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

     Without limiting the generality of the foregoing, as a further inducement for the Purchaser to
purchase the Mortgage Loans from the Originator, the Originator will cooperate with the Purchaser
in connection with the sale of any of the securities representing interests in the Mortgage Loans.
In that connection, the Originator will provide to the Purchaser any and all information and
appropriate verification of information, whether through letters of its auditors and counsel or
otherwise, as the Purchaser shall reasonably request and will provide to the Purchaser such
additional representations and warranties, covenants, opinions of counsel, letters from auditors,
and certificates of public officials or officers of the Originator as are reasonably required in
connection with such transactions and the offering of investment grade securities rated by the
Rating Agencies.

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     Without limiting the foregoing, the Originator agrees to deliver to the Purchaser the
following documents and opinions in connection with the issuance of the Fremont Home Loan Trust
2006-C, Mortgage-Backed Certificates, Series 2006-C (the “Certificates”) on or before the Closing
Date:

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

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

     3. an indemnification agreement executed by and among Fremont, UBS Securities LLC,
Barclays Capital Inc., Deutsche Bank Securities, Goldman, Sachs & Co., Greenwich Capital
Markets, Inc., Hoefer and Arnett, Keefe, Bruyette and Woods, Lehman Brothers Inc.
(collectively, the “Underwriters”) for losses as a result of material misstatements and
omissions in the information provided by or on behalf of the parties thereto and their
affiliates for inclusion in the prospectus supplement or any other offering document
relating to the Certificates; and

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

     In addition, the Originator shall sign the certification for the benefit of Wells Fargo Bank,
N.A., relating to the Form 10-K relating to the Trust to be filed on or before March 31, 2007.
The Originator shall execute the Pooling and Servicing Agreement in its capacity as originator and
servicer and will make the representations and warranties set forth in Sections 3.01 and 3.02
herein to the Trustee in the Pooling and Servicing Agreement.

     Section 7.07. Intention of the Parties.

     It is the intention of the parties that the Purchaser is purchasing, and the Originator is
selling, the Mortgage Loans rather than pledging such Mortgage Loans to secure a loan by the
Purchaser to the Originator. Accordingly, the parties hereto each intend to treat the transaction
as a sale by the Originator, and a purchase by the Purchaser, of the Mortgage Loans. The Purchaser
will have the right to review the Mortgage Loans and the related Mortgage Files to determine the
characteristics of the Mortgage Loans which will affect the federal income tax consequences of
owning the Mortgage Loans and the Originator will cooperate with all reasonable requests made by
the Purchaser in the course of such review.

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

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

     Section 7.09. Survival.

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

     Section 7.10. Third Party Beneficiaries.

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

     Section 7.11. Confidentiality.

     The parties hereto understand and agree that personal information relating to the borrowers
under the Mortgage Loans subject of this Agreement, including, names, addresses, social security
numbers and/or other identifying information (collectively, the “Borrower Information”) is
confidential, and the Purchaser, and each person that acquires an interest in the Mortgage Loans
through the Purchaser, agrees to hold such Borrower Information confidential and not to divulge
such information to anyone except (a) to the extent required by law or judicial order or to enforce
its rights or remedies under any agreements executed in connection with the sale contemplated
hereunder or any agreements executed in connection with the securitization of the Mortgage Loans,
(b) to the extent such information enters into the public domain other than through the wrongful
act of the Purchaser or any person that acquires an interest in the Mortgage Loans through the
Purchaser or (c) as is necessary in working with legal counsel, auditors, agents, rating agencies,
taxing authorities or other governmental agencies.

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

	 	 	 	 	 
	 	 	FREMONT MORTGAGE SECURITIES CORPORATION,
	 	 	   as Purchaser
	 
	 

	 	By:	 	/s/ Jeff Crusinberry
	 

	 	 	 	 
	 

	 	 	 	Name: Jeff Crusinberry
	 

	 	 	 	Title: Vice President
	 
	 	 	 	 
	 	 	FREMONT INVESTMENT & LOAN,
	 	 	   as Originator
	 
	 	 	 	 
	 

	 	By:	 	/s/ Jeff Crusinberry
	 

	 	 	 	 
	 

	 	 	 	Name: Jeff Crusinberry
	 

	 	 	 	Title: Senior Vice President/Finance

(Signature Page One to Mortgage Loan Purchase Agreement)

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	STATE OF CALIFORNIA

	 	)	 	 
	 

	 	) ss.:
	 
	COUNTY OF ORANGE

	 	)	 	 

     On the 6th day of September, 2006 before me, a Notary Public in and for said State, personally
appeared Jeff Crusinberry, known to me to be an officer of FREMONT MORTGAGE SECURITIES CORPORATION,
the corporation that executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such corporation executed
the within instrument.

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

	 	 	 
	/s/ Olga L. Buendia
	 	 
	 

Notary Public

	 	 
	 
	 	 
	My Commission Expires on: December 5th, 2006
	 	 

(Notary Page — Mortgage Loan Purchase Agreement)

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	STATE OF CALIFORNIA

	 	)	 	 
	 

	 	) ss.:	 	 
	COUNTY OF ORANGE

	 	)	 	 

     On the 6th day of September, 2006 before me, a Notary Public in and for said State, personally
appeared Jeff Crusinberry, known to me to be an officer of FREMONT INVESTMENT & LOAN, the
corporation that executed the within instrument, and also known to me to be the person who executed
it on behalf of said corporation, and acknowledged to me that such corporation executed the within
instrument.

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

	 	 	 
	/s/ Olga L. Buendia 
	 	 
	 

Notary Public

	 	 
	 
	 	 
	My Commission Expires on: December 5th, 2006
	 	 

(Notary Page — Mortgage Loan Purchase Agreement)

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EXHIBIT A

Representations and Warranties Relating to the Mortgage Loans

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

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

     (b) Payments Current. As of the Closing Date, other than with respect to (i) not more
than 0.50% of the Mortgage Loans by outstanding principal balance, all payments required to be made
up to the Closing Date for the Mortgage Loan under the terms of the Mortgage Note, other than
payments not yet one month delinquent, have been made and credited. No payment required under the
Mortgage Loan is 90 days or more delinquent;

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

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

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

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

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

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

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

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

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

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

     (iii) with respect to each second lien Mortgage, the first or senior lien on the
related Mortgaged Property; and

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     (iv) other matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to be provided by the
Mortgage or the use, enjoyment, value or marketability of the related Mortgaged Property.

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

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

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

     (m) Ownership. Immediately prior to the sale of the Mortgage Loan hereunder on the
Closing Date, the Originator is the sole owner of record and holder of the Mortgage Loan and the
indebtedness evidenced by each Mortgage Note and upon the sale of the Mortgage Loans to the
Purchaser, the Originator will retain the Mortgage Files or any part thereof not delivered to the
Custodian, the Purchaser or the Purchaser’s designee, in trust only for the purpose of servicing
and supervising the servicing of each Mortgage Loan. The Mortgage Loan is not assigned or pledged,
and the Originator has good, indefeasible and marketable title thereto, and has full right to
transfer and sell the Mortgage Loan to the Purchaser free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest, and has full right and

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

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

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

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

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     (q) No Defaults. As of the Closing Date, other than with respect to (i) not more than
0.50% of the Mortgage Loans by outstanding principal balance, and other than payment delinquencies
of less than one month, there is no default, breach, violation or event which would permit
acceleration existing under the Mortgage or the Mortgage Note and no event which, with the passage
of time or with notice and the expiration of any grace or cure period, would constitute a default,
breach, violation or event which would permit acceleration, and as of the Closing Date neither the
Originator nor any of its affiliates nor any of their respective predecessors, have waived any
default, breach, violation or event which would permit acceleration; in addition, as of the Closing
Date, no Mortgage Loan was in foreclosure, nor are foreclosure proceedings imminent with respect to
any Mortgage Loan;

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

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

     (t) Origination; Payment Terms. The Mortgage Loan was originated by a mortgagee
approved by the Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of the
National Housing Act, savings and loan association, a savings bank, a commercial bank, credit
union, insurance company or other similar institution which is supervised and examined by a federal
or state authority. The documents, instruments and agreements submitted for loan underwriting were
not falsified and contain no untrue statement of material fact or omit to state a material fact
required to be stated therein or necessary to make the information and statements therein not
misleading. No Mortgage Loan contains terms or provisions which would result in negative
amortization. Principal payments on the Mortgage Loan (other than a Mortgage Loan that does not
provide for payment of principal for a period of twenty-four to thirty-six months after the date of
origination (such Mortgage Loan, an “Interest Only Mortgage Loan”)) commenced no more than sixty
days after funds were disbursed in connection with the Mortgage Loan. The Mortgage Interest Rate
as well as the Lifetime Rate Cap and the Periodic Mortgage Interest Rate Cap are as set forth on
the Mortgage Loan Schedule. With respect to any Mortgage Loan other than an Interest Only Mortgage
Loan and Balloon Mortgage Loan, the Mortgage Note is payable in equal monthly installments of
principal and interest, which installments of interest, with respect to Adjustable Rate Mortgage
Loans, are subject to change due to the adjustments to the Mortgage Interest Rate on each Mortgage
Interest Rate Adjustment Date, with interest calculated and payable in arrears, sufficient to
amortize the Mortgage Loan fully by the stated maturity date, over an original term of not more
than thirty years from commencement of amortization. Each Balloon Mortgage Loan has on original
term to maturity of 30 years and an amortization schedule of 40 years. None of the Mortgage Loans
allows for conversion of the interest rate thereon from an adjustable rate to a fixed rate. No
Mortgage Loan is a simple interest mortgage loan;

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     (u) Customary Provisions. The Mortgage contains customary and enforceable provisions
such as to render the rights and remedies of the holder thereof adequate for the realization
against the Mortgaged Property of the benefits of the security provided thereby, including, (i) in
the case of a Mortgage designated as a deed of trust, by trustee’s sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and foreclosure on, or
trustee’s sale of, the Mortgaged Property pursuant to the proper procedures, the holder of the
Mortgage Loan will be able to deliver good and merchantable title to the Mortgaged Property. There
is no homestead or other exemption available to a Mortgagor which would interfere with the right to
sell the Mortgaged Property at a trustee’s sale or the right to foreclose the Mortgage, subject to
applicable federal and state laws and judicial precedent with respect to bankruptcy and right of
redemption or similar law;

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

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

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

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

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

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

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

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

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

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

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

     (gg) Collection Practices; Escrow Deposits; Interest Rate Adjustments. The
origination, servicing and collection practices used by the Originator with respect to the Mortgage
Loan have been in all respects in compliance with Accepted Servicing Practices, applicable laws and
regulations, and have been in all respects legal and proper and prudent in the mortgage origination
and servicing business. With respect to escrow deposits and Escrow Payments, all such payments are
in the possession of, or under the control of, the Originator and there exist no deficiencies in
connection therewith for which customary arrangements for repayment thereof have not been made.
All Escrow Payments have been collected in full compliance with state and federal law and the
provisions of the related Mortgage Note and Mortgage. An escrow of funds is not prohibited by
applicable law and has been established in an amount sufficient to pay for every item that remains
unpaid and has been assessed but is not yet due and payable. No escrow deposits or Escrow Payments
or other charges or payments due the Originator have been capitalized under the Mortgage or the
Mortgage Note. All Mortgage

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Interest Rate adjustments have been made in strict compliance with state and federal law and
the terms of the related Mortgage and Mortgage Note on the related Interest Rate Adjustment Date.
If, pursuant to the terms of the Mortgage Note, another index was selected for determining the
Mortgage Interest Rate, the same index was used with respect to each Mortgage Note which required a
new index to be selected, and such selection did not conflict with the terms of the related
Mortgage Note. The Originator executed and delivered any and all notices required under applicable
law and the terms of the related Mortgage Note and Mortgage regarding the Mortgage Interest Rate
and the Monthly Payment adjustments. Any interest required to be paid pursuant to state, federal
and local law has been properly paid and credited;

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

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

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

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

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

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

     (nn) Value of Mortgaged Property. The Originator has no knowledge of any
circumstances existing that could reasonably be expected to adversely affect the value or the
marketability of any Mortgaged Property or Mortgage Loan or to cause the Mortgage Loans to

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prepay during any period materially faster or slower than similar mortgage loans originated to
the same Underwriting Guidelines held by the Originator generally secured by properties in the same
geographic area as the related Mortgaged Property;

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

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

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

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

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the maturity date of the Mortgage Note; and (vi) the Mortgaged Property is located in a
jurisdiction in which the use of leasehold estates in transferring ownership in residential
properties is a widely accepted practice;

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

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

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

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

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

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

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

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

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

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

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

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

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

     (fff) Arkansas Mortgage Loans. No Mortgage Loan is a “High-Cost Home Loan” as defined
in the Arkansas Home Loan Protection Act effective July 16, 2003 (Act 1340 of 2003);

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

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

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     (iii) No Mortgage Loan is a “High-Cost Home Mortgage Loan” as defined in the Massachusetts
Predatory Home Loan Practices Act, effective November 7, 2004 (Mass. Ann. Laws Ch. 183C);

     (jjj) No Mortgage Loan is a “High Cost Home Loan” as defined in the Indiana Home Loan
Practices Act, effective January 1, 2005 (Ind. Code Ann. Sections 24-9-1 through 24-9-9);

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

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

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

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

     (ooo) Credit Information. As to each consumer report (as defined in the Fair Credit
Reporting Act, Public Law 91-508) or other credit information furnished by the Originator to the
Purchaser, the Originator has full right and authority and is not precluded by law or contract from
furnishing such information to the Purchaser and the Purchaser is not precluded by the terms of the
Mortgage Loan Documents from furnishing the same to any subsequent or prospective purchaser of such
Mortgage. The Originator shall hold the Purchaser harmless from any and all damages, losses, costs
and expenses (including attorney’s fees) arising from disclosure of credit information in
connection with the Purchaser’s secondary marketing operations and the purchase and sale of
mortgages. The Originator has or has caused the related servicer to, for each Mortgage Loan, fully
furnish, in accordance with the Fair Credit Reporting Act and its implementing regulations,
accurate and complete information (e.g., favorable and unfavorable) on its borrower credit files to
Equifax, Experian and Trans Union Credit Information Company (three of the credit repositories), on
a monthly basis;

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

     (qqq) No Arbitration Provision. No Mortgage Loan originated on or after August 1,
2004 requires the borrower to submit to arbitration to resolve any dispute arising out of or
relating in any way to the Mortgage Loan transaction;

     (rrr) S&P Glossary. No Mortgage Loan is a High Cost Loan or Covered Loan, as
applicable (as such terms are defined in the then current Standard & Poor’s LEVELS® Glossary

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which is now Version 5.7, Appendix E) and no Mortgage Loan originated on or after October 1,
2002 through March 6, 2003 is governed by the Georgia Fair Lending Act; and

     (sss) Manufactured Housing. No manufactured home securing any manufactured housing
contract is other than a “single family residence” as defined in section 25(e)(10) of the Code,
i.e., it is used as a single family residence, has a minimum living space of 400 square feet and a
minimum width of over 102 inches and is of the kind customarily used at a fixed location. The
manufactured home securing each manufactured housing contract is a “manufactured home” as defined
in 42 U.S.C. section 5402(6).

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          II. With respect to each Mortgage Loan that has been designated as a Group 1 Mortgage Loan,
the Originator hereby represents and warrants to the Purchaser, as of the Closing Date or as of
such other date specifically provided herein (except that with respect to any Qualified Substitute
Mortgage Loan such representations and warranties shall be as of the date of substitution and made
by the Originator), that:

     (a) Points and Fees. No borrower under a Mortgage Loan was charged “points and fees”
in an amount greater than (a) $1,000 or (b) 5% of the principal amount of such Mortgage Loan,
whichever is greater. For purposes of this representation, “points and fees” (x) include
origination, underwriting, broker and finder’s fees and charges that the lender imposed as a
condition of making the mortgage loan, whether they are paid to the lender or a third party; and
(y) exclude bona fide discount points, fees paid for actual services rendered in connection
with the origination of the mortgage (such as attorneys’ fees, notaries fees and fees paid for
property appraisals, credit reports, surveys, title examinations and extracts, flood and tax
certifications, and home inspections); the cost of mortgage insurance or credit-risk price
adjustments; the costs of title, hazard, and flood insurance policies; state and local transfer
taxes or fees; escrow deposits for the future payment of taxes and insurance premiums; and other
miscellaneous fees and charges, which miscellaneous fee and charges, in total, do not exceed 0.25
percent of the loan amount;

     (b) Loan Limits.

     (i) No first lien Mortgage Loan has an original principal balance that exceeds the
applicable Fannie Mae loan limit (as in effect on the Closing Date);

     (ii) With respect to any subordinate lien Mortgage Loan,

     (A) has an original principal balance that exceeds one-half of the
one-unit limitation for first lien mortgage loans, i.e., $208,500
(in Alaska, Guam, Hawaii or Virgin Islands: $312,750), without regard to the number
of units; and

     (B) the original principal balance of the related first lien mortgage loan plus
the original principal balance of subordinate lien Mortgage Loan does not exceed the
applicable Fannie Mae Mac loan limit for first lien mortgage loans for that property
type (as in effect on the Closing Date).

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EXHIBIT B

APPENDIX E OF THE STANDARD & POOR’S GLOSSARY FOR

FILE FORMAT FOR LEVELS® VERSION 5.7

(Appendix begins on the following page)

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APPENDIX E – Standard & Poor’s Predatory Lending Categories

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

Standard & Poor’s High Cost Loan Categorization

	 	 	 	 	 
	 	 	 	 	Category under
	 	 	Name of Anti-Predatory Lending	 	Applicable Anti-
	State/Jurisdiction	 	Law/Effective Date	 	Predatory Lending Law
	Arkansas

	 	Arkansas Home Loan Protection
Act, Ark. Code Ann. §§
23-53-101 et seq.
	 	High Cost Home Loan
	 

	 	Effective July 16, 2003	 	 
	 
	 	 	 	 
	Cleveland Heights, OH

	 	Ordinance No. 72-2003 (PSH),
Mun. Code §§ 757.01 et seq.
	 	Covered Loan
	 

	 	Effective June 2, 2003	 	 
	 
	 	 	 	 
	Colorado

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

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

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

	 	Effective October 1, 2001	 	 
	 
	 	 	 	 
	District of Columbia

	 	Home Loan Protection Act,
D.C. Code §§ 26-1151.01 et
seq.
	 	Covered Loan
	 

	 	Effective for loans closed on
or after January 28, 2003	 	 
	 
	 	 	 	 
	Florida

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

	 	Effective October 2, 2002	 	 
	 
	 	 	 	 
	Georgia (Oct. 1, 2002
- Mar. 6, 2003)

	 	Georgia Fair Lending Act, Ga.
Code Ann. §§ 7-6A-1 et seq.
	 	High Cost Home Loan
	 

	 	Effective October 1, 2002 -
March 6, 2003	 	 

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Standard & Poor’s High Cost Loan Categorization (continued)

	 	 	 	 	 
	 	 	Name of Anti-Predatory Lending	 	Category under Applicable
	State/Jurisdiction	 	Law/Effective Date	 	Anti-Predatory
Lending Law
	Georgia as amended
(Mar. 7, 2003 –

	 	Georgia Fair Lending Act, Ga.
Code Ann. §§ 7-6A-1 et seq.	 	High Cost Home Loan
	current)

	 	Effective for loans closed on
or after March 7, 2003
	 	 
	 
	 	 	 	 
	HOEPA Section 32

	 	Home Ownership and Equity
Protection Act of 1994, 15
U.S.C. § 1639, 12 C.F.R. §§
226.32 and 226.34
	 	High Cost Loan
	 

	 	Effective October 1, 1995,
amendments October 1, 2002	 	 
	 
	 	 	 	 
	Illinois

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

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

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

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

	 	2003 KY H.B. 287 – High Cost
Home Loan Act, Ky. Rev. Stat.
§§ 360.100 et seq.
	 	High Cost Home Loan
	 

	 	Effective June 24, 2003	 	 
	 
	 	 	 	 
	Maine

	 	Truth in Lending, Me. Rev.
Stat. tit. 9-A, §§ 8-101 et
seq.
	 	High Rate High Fee

Mortgage
	 

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

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

	 	Effective March 22, 2001 and amended from time to time	 	 

Fremont 2006-C

Mortgage Loan Purchase Agreement

B-3

 

Standard & Poor’s High Cost Loan Categorization (continued)

	 	 	 	 	 
	 	 	 	 	Category under
	 	 	Name of Anti-Predatory Lending	 	Applicable Anti-
	State/Jurisdiction 	 	Law/Effective Date	 	Predatory Lending Law
	Nevada

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

	 	Effective October 1, 2003
	 	 
	 
	 	 	 	 
	New Jersey

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

	 	Effective for loans closed on
or after November 27, 2003	 	 
	 
	 	 	 	 
	New Mexico

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

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

	 	N.Y. Banking Law Article 6-l

Effective for applications
made on or after April 1,
2003
	 	High Cost Home Loan
	 
	 	 	 	 
	North Carolina

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

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

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

	 	Effective May 24, 2002	 	 
	 
	 	 	 	 
	Oklahoma

	 	Consumer Credit Code
(codified in various sections
of Title 14A)
	 	Subsection 10 Mortgage
	 

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

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

	 	Effective for loans taken on
or after January 1, 2004	 	 

Fremont 2006-C

Mortgage Loan Purchase Agreement

B-4

 

Standard & Poor’s High Cost Loan Categorization (continued)

	 	 	 	 	 
	 	 	Name of Anti-Predatory Lending	 	Category under Applicable
	State/Jurisdiction	 	Law/Effective Date	 	Anti-Predatory Lending Law
	West Virginia

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

Loan Act Loan
	 

	 	Effective June 5, 2002	 	 
	 
	Standard & Poor’s Covered Loan Categorization  

	 
	 	 	Name of Anti-Predatory Lending	 	Category under Applicable
	State/Jurisdiction	 	Law/Effective Date	 	Anti-Predatory Lending Law
	Georgia (Oct. 1, 2002
- Mar. 6, 2003)

	 	Georgia Fair Lending Act, Ga.
Code Ann. §§ 7-6A-1 et seq.
	 	Covered Loan
	 

	 	Effective October 1, 2002 –
March 6, 2003	 	 
	 
	 	 	 	 
	New Jersey

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

	 	Effective November 27, 2003 –
July 5, 2004	 	 

Fremont 2006-C

Mortgage Loan Purchase Agreement

B-5

 

Standard & Poor’s Home Loan Categorization

	 	 	 	 	 
	 	 	 	 	Category under
	 	 	Name of Anti-Predatory Lending	 	Applicable Anti-
	State/Jurisdiction	 	Law/Effective Date	 	Predatory Lending Law
	Georgia (Oct. 1, 2002
- Mar. 6, 2003)

	 	Georgia Fair Lending Act, Ga. Code Ann.
§§ 7-6A-1 et seq.
	 	Home Loan
	 

	 	Effective October 1, 2002 – March 6, 2003	 	 
	 
	 	 	 	 
	New Jersey

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

	 	Effective for loans closed on or after
November 27, 2003	 	 
	 
	 	 	 	 
	New Mexico

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

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

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

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

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

	 	Effective for loans taken on or after
January 1, 2004	 	 

Fremont 2006-C

Mortgage Loan Purchase Agreement

B-6

 

SCHEDULE A

MORTGAGE LOAN SCHEDULE

[On file with Trust Administrator]

Fremont 2006-C

Mortgage Loan Purchase Agreement

Schedule Aexv4w3

 

(Multicurrency—Cross Border)

 ISDA®

International Swap and Derivatives Association, Inc.

MASTER AGREEMENT

dated as of September 7, 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-C, Mortgage
Backed Certificates, Series
2006-C
	 

	 	 	 	 
	(“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.

1

 

(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.

2

 

(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)).

3

 

(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,

4

 

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

5

 

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

6

 

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.

7

 

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

8

 

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.

10

 

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.

11

 

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.

16

 

“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-C, Mortgage Backed
Certificates, Series 2006-C	 	 
	 
	 	 	 	 	 	 
	/s/ Linda H. Singer

	 	 	 	/s/ Graham Oglesby	 	 
	 	 	 	 	 	 	 
	By: Linda H. Singer

	 	 	 	By: Graham Oglesby	 	 
	Title: Vice President

	 	 	 	Title: Assistant Vice President	 	 
	Date: September 7, 2006

	 	 	 	Date: September 7, 2006	 	 

(Signature Page to the ISDA Master Agreement — Fremont 2006-C)

18

 

(Multicurrency — Cross Border)

 ISDA®

International Swaps and Derivatives Association, Inc.

SCHEDULE

to the

Master Agreement

dated as of September 7, 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-C, Mortgage
Backed Certificates, Series
2006-C
	(“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.

 

 

	(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 September 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-C,
Mortgage-Backed Certificates, Series 2006-C 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	 	 	 	 	 	Covered by
	to deliver	 	 	 	Date by which to be	 	Section 3(d)
	document	 	Form/Document/Certificate	 	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	 	 	 	 	 	Covered by
	to deliver	 	 	 	Date by which to be	 	Section 3(d)
	document	 	Form/Document/Certificate	 	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-C
	 

	 	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 Required Ratings 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, but
in no event more than ten (10) days after, 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-C,
Mortgage-Backed Certificates, Series 2006-C, 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-C, Mortgage-Backed Certificates, Series 2006-C 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-C, Mortgage-Backed
Certificates, Series 2006-C, (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
September 7, 2006, among the Swap Administrator, Party B and FREMONT HOME LOAN TRUST 2006-C
(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 Swap
Administration 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-C,

MORTGAGE-BACKED CERTIFICATES, SERIES

2006-C.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	(“Party A”)	 	 	 	(“Party B”)	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/S/ Linda H. Singer
 

	 	 
	 	By:
	 	/s/ Graham Oglesby
 

	 	 
	Name: Linda H. Singer	 	 	 	Name: Graham Oglesby	 	 
	Title: Vice President	 	 	 	Title: Assistant Vice President	 	 
	Date: September 7, 2006	 	 	 	Date: September 7, 2006	 	 

(Signature Page for ISDA Schedule — Fremont 2006-C)

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:
	 	September 7, 2006
	Reference:
	 	1058464

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 September 7, 2006, between each of Party A
and Party B and shall form a part of and be subject to that ISDA Master Agreement. For avoidance
of doubt, the Transaction described herein shall be the sole Transaction governed by such 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

1

 

	 	 	explanations related to the terms and conditions of the Transaction
shall not be considered 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:
	 
	 	 
	 

	 	A) the aggregate Certificate Principal Balance of the
Senior Certificates and Subordinate Certificates
immediately prior to the related Distribution Date
multiplied by a ratio, the numerator of which is 1 and
the denominator of which is 250, and
	 
	 	 
	 

	 	B) the Scheduled Notional Amount on the Scheduled
Distribution Date as described in Schedule A below.
	 
	 	 
	Trade Date:

	 	August 22, 2006
	 
	 	 
	Effective Date:

	 	September 7, 2006
	 
	 	 
	Termination Date:

	 	The earlier of (i) the date on which the
Notional Amount is zero and (ii) August 25,
2011, 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

	 	$5,550,000
	 
	 	 
	          Initial Payment Date

	 	September 7, 2006

2

 

	 	 	 	 	 
	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 October 25, 2006, and ending on
August 25, 2011, inclusive, subject to No
Adjustment.
	 
	 	 	 	 
	 

	 	Fixed Rate Payer

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 Amount:
	 	250 x Fixed Rate x Notional Amount x Fixed

Rate Day Count Fraction
	 
	 	 	 	 
	 

	 	Fixed Rate:
	 	5.46%.
	 

	 	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 October 25, 2006, and ending on
August 25, 2011, 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
	 
	 	 	 	 
	 

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

	 	Designated Maturity:
	 	One month
	 
	 	 	 	 
	 

	 	Spread:
	 	None
	 
	 	 	 	 
	 

	 	Floating Rate Day

Count Fraction:
	 	Actual/360
	 
	 	 	 	 
	 

	 	Reset Dates:
	 	The first day of each Calculation Period.

3

 

	 	 	 	 	 	 	 
	 	 	     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.	 	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:
	 	50945202
	 

	 	 	 	Reference:
	 	Fremont Home Loan Trust 2006-C, 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-C
	 

	 	 	 	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/ Linda H. Singer
	 	 	 	/s/ Jeff Crusinberry	 	 
	 

NAME: Linda H. Singer

	 	 	 	 

NAME: Jeff Crusinberry
	 	 
	Title: Vice President

	 	 	 	Title: Senior Vice President	 	 
	Date: September 7, 2006

	 	 	 	Date: September 7, 2006	 	 

(Signature Page to Swap Confirmation  — Fremont 2006-C)

5

 

Schedule A to the Confirmation dated as of September 7, 2006

Re: Reference Number: 1058464

* 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 Maximum	 	 	 	Scheduled Maximum
	 	 	Swap Notional Amount	 	 	 	Swap Notional Amount
	Period End Dates	 	($)1	 	Period	 	($)1
	October 2006

	 	 	7,032,420.33	 	 	April 2009
	 	 	963,866.19	 
	November 2006

	 	 	6,964,562.91	 	 	May 2009
	 	 	940,257.61	 
	December 2006

	 	 	6,884,873.57	 	 	June 2009
	 	 	917,878.98	 
	January 2007

	 	 	6,793,505.31	 	 	July 2009
	 	 	895,446.01	 
	February 2007

	 	 	6,690,672.21	 	 	August 2009
	 	 	865,375.36	 
	March 2007

	 	 	6,576,652.81	 	 	September 2009
	 	 	813,567.14	 
	April 2007

	 	 	6,451,805.29	 	 	October 2009
	 	 	795,280.17	 
	May 2007

	 	 	6,316,603.23	 	 	November 2009
	 	 	777,401.71	 
	June 2007

	 	 	6,171,826.94	 	 	December 2009
	 	 	759,922.63	 
	July 2007

	 	 	6,018,418.68	 	 	January 2010
	 	 	742,833.99	 
	August 2007

	 	 	5,857,985.04	 	 	February 2010
	 	 	726,127.07	 
	September 2007

	 	 	5,694,358.45	 	 	March 2010
	 	 	709,793.34	 
	October 2007

	 	 	5,535,630.14	 	 	April 2010
	 	 	693,824.46	 
	November 2007

	 	 	5,381,365.99	 	 	May 2010
	 	 	678,212.29	 
	December 2007

	 	 	5,231,439.41	 	 	June 2010
	 	 	662,948.84	 
	January 2008

	 	 	5,085,693.62	 	 	July 2010
	 	 	648,026.35	 
	February 2008

	 	 	4,942,964.98	 	 	August 2010
	 	 	633,437.18	 
	March 2008

	 	 	4,798,303.55	 	 	September 2010
	 	 	619,173.91	 
	April 2008

	 	 	4,638,752.05	 	 	October 2010
	 	 	605,229.25	 
	May 2008

	 	 	4,412,045.23	 	 	November 2010
	 	 	591,596.10	 
	June 2008

	 	 	4,147,922.37	 	 	December 2010
	 	 	578,267.49	 
	July 2008

	 	 	3,687,865.15	 	 	January 2011
	 	 	565,236.65	 
	August 2008

	 	 	2,767,099.73	 	 	February 2011
	 	 	552,496.92	 
	September 2008

	 	 	1,143,617.81	 	 	March 2011
	 	 	540,041.81	 
	October 2008

	 	 	1,113,963.91	 	 	April 2011
	 	 	527,864.98	 
	November 2008

	 	 	1,085,697.21	 	 	May 2011
	 	 	515,960.20	 
	December 2008

	 	 	1,058,749.80	 	 	June 2011
	 	 	504,126.69	 
	January 2009

	 	 	1,034,176.03	 	 	July 2011
	 	 	492,443.32	 
	February 2009

	 	 	1,010,180.08	 	 	August 2011
	 	 	480,376.39	 
	March 2009

	 	 	986,748.00	 	 	 	 	 	—	 

6

 

ISDA®

International Swaps and Derivatives Association, Inc.

NOVATION AGREEMENT

dated as of September 7, 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-C, Mortgage Backed Certificates, Series 2006-C (the “Transferee”)

The Transferor and the Remaining Party have entered into a Transaction (the “Old Transaction”),
evidenced by a Confirmation dated as of September 7, 2006 (the “Old Confirmation”) attached hereto
subject to an ISDA Master Agreement dated as of September 7, 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 September 7, 2006.

With effect from and including September 7, 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.	 	Transfer, Release, Discharge and Undertakings.

 

2

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 September 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-C 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-C, 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.
	 
	7.	 	(a) Governing Law.

 

4

	 	 	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:	 	50945202, Fremont Home Loan Trust 2006-C, 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/ Linda H. Singer

	 	 	 	/s/ Jeff Crusinberry	 	 
	 	 	 	 	 	 	 
	NAME: Linda H. Singer

	 	 	 	NAME: Jeff Crusinberry	 	 
	Title: Vice President

	 	 	 	Title: Vice President	 	 
	Date: September 7, 2006

	 	 	 	Date: September 7, 2006	 	 
	 
	 	 	 	 	 	 
	WELLS FARGO BANK, N.A., NOT INDIVIDUALLY, BUT
SOLELY AS TRUST ADMINISTRATOR ON BEHALF OF THE
FREMONT HOME LOAN TRUST 2006-C, MORTGAGE-BACKED
CERTIFICATES, SERIES 2006-C.
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	/s/ Graham Oglesby
	 	 	 	 	 	 
	 	 	 	 	 	 	 
	NAME: Graham Oglesby
	 	 	 	 	 	 
	Title: Assistant Vice President
	 	 	 	 	 	 
	Date: September 7, 2006
	 	 	 	 	 	 

(Signature Page to the Swap Novation — Fremont 2006-C)

 

6

[ANNEX]

[Identification of Old Transaction to be discharged]

[Old Confirmation]

 

SWAP ADMINISTRATION AGREEMENT

          This Swap Administration Agreement, dated as of September 7, 2006 (this “Agreement”), among
Wells Fargo Bank N.A., a national banking association (“Wells Fargo”), as swap administrator (in
such capacity, the “Swap Administrator”), Wells Fargo, not in its individual capacity but solely as
trust administrator for Fremont Home Loan Trust 2006-C, Mortgage Backed Certificates, Series 2006-C
(in such capacity, the “Trust Administrator”) and HSBC Bank USA, National Association, as trustee
for Fremont Home Loan Trust 2006-C, Mortgage Backed Certificates, Series 2006-C (“Trustee”).

          WHEREAS, the Trust Administrator is party to an Interest Rate Swap Agreement (the “Swap
Agreement”), a copy of which is attached hereto as Exhibit A, between Wells Fargo, not
individually, but solely as Trust Administrator on behalf of the Fremont Home Loan Trust 2006-C,
Mortgage Backed Certificates, Series 2006-C and Swiss Re Financial Products Corporation, as
counterparty (together with its successors in interest, the “Swap Provider”);

          WHEREAS, the Trustee, pursuant to the Pooling and Servicing Agreement, dated as of September
1, 2006, among Fremont Mortgage Securities Corporation, Fremont Investment & Loan (“Fremont”), as
originator and servicer, Wells Fargo, as master servicer, swap administrator and trust
administrator, and the Trustee (the “Pooling and Servicing Agreement”), assigns all of its right,
title and interest to receive Net Swap Payments (as defined in the Pooling and Servicing
Agreement) pursuant to the Swap Agreement to the Swap Administrator;

          WHEREAS, the Trustee has specified the Swap Account as the account to receive the Net Swap
Payments; and

          WHEREAS; the Trustee desires to appoint the Swap Administrator, and the Swap Administrator
desires to accept such appointment, to distribute funds received from the Swap Providers as
provided herein.

          NOW, THEREFORE, in consideration of the mutual covenants contained herein, and for other good
and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties
agree as follows:

     1. Definitions.

     Capitalized terms used but not otherwise defined herein shall have the respective meanings
assigned thereto in the Pooling and Servicing Agreement or in the related Indenture, as the case
may be, as in effect on the date hereof.

     2. Swap Administrator.

     (a) The Trustee hereby appoints the Swap Administrator to receive all funds paid by the
Swap Providers under the Swap Agreement (including any Swap Termination Payments) and the
Swap Administrator hereby agrees to receive such amounts and to distribute on each
Distribution Date such amounts in the following order of priority:

1

 

          (i) first, to the Trust Administrator for deposit into the Swap Account, an amount
equal to the sum of the following amounts, if any, remaining outstanding after distribution
of the Excess Cashflow for such Distribution Date: (A) Current Interest or Unpaid Interest
Shortfall Amounts, (B) Net WAC Rate Carryover Amounts; (C) Overcollateralization Deficiency
amounts; and (D) Allocated Realized Loss Amounts;

          (ii) second, to Wells Fargo, as the indenture trustee of the NIM Trust, if any, as and
to the extent designated in writing by Fremont to the Swap Administrator, and

          (iii) third, to holder(s) of the Class C Certificates, or to such other Person as
designated in writing by such holder(s) to the Swap Administrator from time to time.

2

 

     (b) On or before the second Business Day prior to each LIBOR Determination Date, the
Swap Administrator shall make available to each Swap Provider and the Servicer the aggregate
Certificate Principal Balance of the Senior Certificates and the Subordinate Certificates,
as of such date.

     3. Swap Administration Account.

     (a) The Swap Administrator shall segregate and hold all funds received pursuant to the
Swap Agreement (including any Swap Termination Payments) separate and apart from any of its
own funds and general assets and shall establish and maintain in the name of the Swap
Administrator one or more segregated accounts (such account or accounts, the “Swap
Administration Account”), which may be a subaccount of the Swap Account, held in trust for
the benefit of the Trustee and the parties to this Agreement. All amounts on deposit in the
Swap Administration Account shall remain uninvested unless the Swap Administrator receives
instructions to the contrary from Fremont. The Swap Administrator hereby agrees that it
holds and shall hold the Swap Administration Account and all amounts deposited therein in
trust for the exclusive use and benefit of the Trustee as their interests may appear.

     (b) With respect to the Swap Agreement and notwithstanding anything contained herein,
in the event that a replacement swap agreement cannot be obtained within 30 days after
receipt by the Swap Administrator of a Swap Termination Payment paid by a terminated Swap
Provider, the Swap Administrator shall deposit such Swap Termination Payment into a
separate, non-interest bearing account established by the Swap Administrator and the Swap
Administrator shall, on each Distribution Date following receipt of such Swap Termination
Payment (unless a replacement swap agreement has been entered into) withdraw from such
account, an amount equal to the Net Swap Payment, if any, that would have been paid to the
Trust by the original Swap Provider (computed in accordance with Section 2 of the original
Swap Agreement) and distribute such amount in accordance with Section 2(a) of this
Agreement. On the Distribution Date immediately after the termination date of an original
Swap Agreement, the Swap Administrator shall withdraw any funds remaining in the related
account and distribute such amount in accordance with Section 2(a)(iii) of this Agreement.

     4. Representations and Warranties of the Swap Administrator. Wells Fargo represents
and warrants as follows:

     (a) Wells Fargo is duly organized and validly existing national banking association
under the laws of the United States and has all requisite power and authority to execute and
deliver this Agreement, to perform its obligations as Swap Administrator hereunder.

     (b) The execution, delivery and performance of this Agreement by Wells Fargo as Swap
Administrator has been duly authorized by Wells Fargo.

     (c) This Agreement has been duly executed and delivered by Wells Fargo as Swap
Administrator and is enforceable against Wells Fargo in accordance with its terms,

3

 

except as enforceability may be affected by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or affecting
creditors’ rights generally, general equitable principles (whether considered in a
proceeding in equity or at law).

     (d) No consent of any Person and no consent, license, permit, approval or authorization
of, exemption by, notice or report to, or registration, filing or declaration with, any
governmental instrumentality is required in connection with the execution, delivery,
performance, validity or enforceability of this Agreement by Wells Fargo as Swap
Administrator.

     (e) The execution, delivery and performance of this Agreement by Wells Fargo as Swap
Administrator does not conflict with or result in a violation of (i) any law or regulation
applicable to Wells Fargo, (ii) Wells Fargo’s charter or (iii) any other agreement or
instrument to which Wells Fargo is a party or by which its assets are bound.

     (f) There is no litigation pending or threatened against Wells Fargo that would
materially and adversely affect the execution, delivery or enforceability of this Agreement
or the ability of the Swap Administrator to perform any of its other obligations hereunder
in accordance with the terms hereof.

     5. Certain Matters Relating to the Swap Administrator.

     (a) The rights, duties and liabilities of the Swap Administrator in respect of this
Agreement shall be as follows:

          (i) The Swap Administrator shall have the full power and authority that it may deem
advisable in order to enforce the provisions of this Agreement that it may deem advisable in
order to enforce the provisions hereof. The Swap Administrator shall not be answerable or
accountable except for its own bad faith, willful misconduct or negligence. The Swap
Administrator shall not be required to take any action to exercise or enforce any of its
rights or powers hereunder which, in the opinion of the Swap Administrator, shall be likely
to involve expense or liability to the Swap Administrator, unless the Swap Administrator
shall have received an agreement satisfactory to it in its sole discretion to indemnify it
against such liability and expense.

          (ii) The Swap Administrator shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of any party hereto
or otherwise as provided herein, relating to the time, method and place of conducting any
proceeding for any remedy available to the Swap Administrator under this Agreement.

          (iii) The Swap Administrator may perform any duties hereunder either directly or by or
through agents or attorneys of the Swap Administrator. The Swap Administrator shall not be
liable for the acts or omissions of its agents or attorneys so long as the Swap
Administrator chose such Persons with due care.

4

 

     (b) The Swap Administrator shall be entitled to the same rights, protections and
indemnities afforded to the Trustee and Trust Administrator under the Pooling and Servicing
Agreement, as if specifically set forth herein with respect to the Swap Administrator.

     6. Replacement of Swap Administrator.

          Any corporation, bank, trust company or association into which the Swap Administrator may be
merged or converted or with which it may be consolidated, or any corporation, bank, trust company
or association resulting from any merger, conversion or consolidation to which the Swap
Administrator shall be a party, or any corporation, bank trust company or association succeeding to
all or substantially all the corporate trust business of the Swap Administrator, shall be the
successor of the Swap Administrator hereunder, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, except to the extent that assumption of its
duties and obligations, as such, is not effected by operation of law.

          No resignation or removal of the Swap Administrator and no appointment of a successor Swap
Administrator shall become effective until the appointment by Fremont of a successor swap
administrator. Any successor swap administrator shall execute such documents or instruments
necessary or appropriate to vest in and confirm to such successor swap administrator all such
rights and powers conferred by this Agreement.

          The Swap Administrator may resign at any time by giving written notice thereof to the other
parties thereto. If a successor swap administrator shall not have accepted the appointment
hereunder within 30 days after the giving by the resigning Swap Administrator of such notice of
resignation, the resigning Swap Administrator may petition any court of competent jurisdiction for
the appointment of a successor swap administrator.

          In the event of a resignation or removal of the Swap Administrator, Fremont shall promptly
appoint a success Swap Administrator.

     7. Miscellaneous.

     (a) This Agreement shall be governed by and construed in accordance with the laws of
the State of New York.

     (b) Any action or proceeding against any of the parties hereto relating in any way to
this Agreement may be brought and enforced in the courts of the State of New York sitting in
the borough of Manhattan or of the United States District Court for the Southern District of
New York and the Swap Administrator irrevocably submits to the jurisdiction of each such
court in respect of any such action or proceeding. The Swap Administrator waives, to the
fullest extent permitted by law, any right to remove any such action or proceeding by reason
of improper venue or inconvenient forum.

     (c) This Agreement may be amended, supplemented or modified in writing by the parties
hereto.

5

 

     (d) This Agreement may be executed by one or more of the parties to this Agreement on
any number of separate counterparts (including by facsimile transmission), and all such
counterparts taken together shall be deemed to constitute one and the same instrument.

     (e) Any provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

     (f) The representations and warranties made by the parties to this Agreement shall
survive the execution and delivery of this Agreement. No act or omission on the part of any
party hereto shall constitute a waiver of any such representation or warranty

     (g) The article and section headings herein are for convenience of reference only, and
shall not limit or otherwise affect the meaning hereof.

     8. Nonpetition.

          Notwithstanding any prior termination of this Agreement, each of the Swap Administrator, the
Trust Administrator and the Trustee agree that it shall not acquiesce, petition or otherwise invoke
or cause Fremont Home Loan Trust 2006-C (the “Trust”) to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case against the Trust under any
federal or state bankruptcy, insolvency or similar law, or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the Trust or any
substantial part of the property of the Trust, or ordering the winding up or liquidation of the
affairs of the Trust.

     9. Third Party Beneficiaries.

          Fremont, the indenture trustee under the NIM Trust, if any, and the NIM Insurer, if any, shall
each be deemed a third-party beneficiary of this Agreement to the same extent as if it were a party
hereto, and shall have the right to enforce the provisions of this Agreement.

6

 

          IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered
as of the day and year first above written.

	 	 	 	 	 	 	 
	 	 	WELLS FARGO BANK, N.A.,

as Swap Administrator and, not in its individual

capacity but solely as Trust Administrator	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Graham Oglesby
 

	 	 
	 	 	Name: Graham Oglesby	 	 
	 	 	Title: Assistant Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	HSBC BANK USA, NATIONAL ASSOCIATION,

not in its individual capacity but solely as trustee for the

Fremont Home Loan Trust 2006-C	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Elena Zheng
 

	 	 
	 	 	Name: Elena Zheng	 	 
	 	 	Title: Assistant Vice President	 	 

(Signature Page to Swap Administration Agreement — Fremont 2006-C)

7

 

EXHIBIT A

SWAP AGREEMENT

8

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