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International Swaps and Derivatives Association, Inc.
dated as of November 30, 2006 among:
THE ROYAL BANK OF SCOTLAND PLC. (the “ Remaining Party ”),
NOVASTAR MORTGAGE, INC. (the “ Transferor ”)
NOVASTAR MORTGAGE SUPPLEMENTAL INTEREST TRUST, SERIES 2006-6 (the “ Transferee ”).
The Remaining Party and NovaStar Financial, Inc. (“ NFI ”) are parties to a 1992 ISDA Master dated as of June 30, 2005 (the “ NFI/RBS Master Agreement ”). The Remaining Party and NFI originally entered into certain transactions (each an “ Old Transaction ”) under the NFI/RBS Master Agreement, each evidenced by a Confirmation (an “ Old Confirmation ”) with reference number IRG16076279, IRG16078815, IRG16078817, IRG16082235, IRG16089258, IRG16089272, respectively, attached hereto as Exhibit I. The Old Transactions were transferred by novation to the Transferor from NFI pursuant to the Novation Agreement dated July 19, 2006, among NFI, the Remaining Party and the Transferor, made subject to a 1992 ISDA Master Agreement dated as of July 19, 2006, between the Remaining Party and the Transferor (the “ Old Agreement ”) and assigned the following internal reference number IRG16076279, IRG16078815, IRG16078817,IRG16082235, IRG16089258, IRG16089272.
The Remaining Party and the Transferee are simultaneously entering into a 1992 ISDA Master Agreement dated as of the date hereof in the form attached hereto as Exhibit II (the “ New Agreement ”).
With effect from and including November 30, 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 each Old Transaction, with the exception of the Excluded Rights and Obligations referred to below, with the effect that the Remaining Party and the Transferee enter into a new transaction (each a “ New Transaction ”) between them having terms identical to those of each Old Transaction, subject to the same exceptions and as more particularly described below.
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 Transactions.
Accordingly, the parties agree as follows: —
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. For purposes of this Novation Agreement, “ Excluded Rights and
Obligations ” means all obligations of each of the Transferor and the Remaining Party to Transfer (as defined in the Credit Support Annex to the Old Agreement) Eligible Collateral (as so defined) in respect of the Old Transactions and all related rights of the Remaining Party and the Transferor under the Old Agreement.
Subject to the execution and delivery of the New Agreement by each of the parties thereto to the other, 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):
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.
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.
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 and subject to the Rating Agency Condition (as defined in the New Agreement).
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.
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.
Deutsche Bank National Trust Company is signing this Novation Agreement solely in its capacity as Trustee of the Transferee under the Pooling and Servicing Agreement among NovaStar Mortgage Funding Corporation, NovaStar Mortgage, Inc., U.S. Bank National Association, and Deutsche Bank National Trust Company dated as of November 1, 2006 (the “ Pooling and Servicing Agreement ”) and in the exercise of the powers and authority conferred and vested in it thereunder and not in its individual capacity. It is expressly understood and agreed by the parties hereto that (i) each of the representations, undertakings and agreements herein stated to be those of Transferee is made and intended for the purpose of binding only the Transferee, (ii) nothing herein contained shall be construed as creating any liability for Deutsche Bank National Trust Company, individually or personally, to perform any covenant (either express or implied) contained herein stated to be those of Transferee, and all such liability, if any, is hereby expressly waived by the parties hereto, and such waiver shall bind any third party making a claim by or through one of the parties hereto, and (iii) under no circumstances shall Deutsche Bank National Trust Company be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Transferee under this Novation Agreement. All persons having any claim against the Trustee reason of the Transactions contemplated by this Novation Agreement shall look only to the assets of NovaStar Mortgage Supplemental Interest Trust, Series 2006-6 (subject to the availability of funds therefor in accordance with the Flow of Funds as set forth in Article IV of the Pooling and Servicing Agreement) for payment or satisfaction thereof.
The foregoing may not be construed to give to Majority Certificateholders any rights under this Novation Agreement.
Capitalized terms used in this Novation Agreement that are not defined herein and are defined in the Pooling and Servicing Agreement shall have the respective meanings assigned to them in the Pooling and Servicing Agreement.
Promptly after each Reset Date, but in no event later than three New York Business Days prior to each related Distribution Date, the Calculation Agent shall deliver the reset notice in writing via mail or facsimile to the Trustee at the address provided in the notices portion of the New Agreement.
IN WITNESS WHEREOF the parties have executed this Novation Agreement on the respective dates specified below with effect from and including the Novation Date.
[Old Hedge Confirmations attached behind this page]
11 September 2006
Novastar Mortgage Inc.
Attn: Dave Farris
THIS CONFIRMATION AMENDS AND RESTATES IN ITS ENTIRETY THE ORIGINAL
CONFIRMATION FOR THIS TRANSACTION
Our Reference: IRG16076279
Re: USD 20,000,000.00 Interest Rate Cap
The purpose of this document is to set forth the terms and conditions of the transaction entered into between The Royal Bank of Scotland plc and yourselves on the Trade Date specified below (the “Transaction”). This document constitutes a “Confirmation”