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International Swaps and Derivatives Association, Inc.
dated as of February 28, 2007 among:
THE ROYAL BANK OF SCOTLAND PLC. (the " Remaining Party "),
NOVASTAR MORTGAGE, INC. (the " Transferor ")
NOVASTAR MORTGAGE SUPPLEMENTAL INTEREST TRUST, SERIES 2007-1 (the " Transferee ").
The Remaining Party and the Transferor are parties to a 1992 ISDA Master dated as of July 19, 2006 (the “ Old Agreement ”). The Remaining Party and the Transferor originally entered into certain transactions (each an " Old Transaction ") under the Old Agreement, each evidenced by a Confirmation (an " Old Confirmation ") with reference number D16120156, D16120161, D16126990, D16126995, D16139827, D16139828, D16141301, D16155893, D16165622, D16165623 respectively, attached hereto as Exhibit I.
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 February , 2007 (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. For the avoidance of doubt, the first transaction period being novated in each Old Transaction is the full period ending on the Fixed Rate Payer Payment Date in March 2007.
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):