Common use of Sale of Initial Mortgage Loans Clause in Contracts

Sale of Initial Mortgage Loans. The Seller hereby sells, and the Company hereby purchases on the Closing Date, the Initial Mortgage Loans identified on the Mortgage Loan Schedule annexed hereto as Exhibit 1. In addition, the Seller shall deposit with the Indenture Trustee from proceeds of the issuance of the Notes on the Closing Date (i) the Original Pre-Funded Amount for deposit in the Pre- Funding Account and (ii) the Interest Coverage Amount for deposit in the Interest Coverage Account. The Initial Mortgage Loans will be fixed and adjustable rate, residential first lien mortgage loans. The Initial Mortgage Loans will have a Principal Balance as of the close of business on the Cut-off Date, after giving effect to any payments due on or before such date whether or not received, of approximately $76,168,676.59. The sale of the Initial Mortgage Loans will take place on the Closing Date, subject to and simultaneously with the deposit of the Initial Mortgage Loans and the amounts in the Pre-Funding Account and the Interest Coverage Account into the Trust Estate, the issuance of the Securities and the sale of the Notes by the Issuer pursuant to the Underwriting Agreement. The purchase price (the "Purchase Price") for the Initial Mortgage Loans to be paid by the Company to the Seller on the Closing Date shall consist of the following: (i) a payment in an amount equal to 99.396% of the aggregate Principal Balance of the Initial Mortgage Loans as of the close of business on the Cut-off Date, which payment shall be paid to the Seller by wire transfer in immediately available funds on the Closing Date by or on behalf of the Company, or as otherwise agreed by the Company; and (ii) delivery to the Seller of the Certificates issued by the Issuer pursuant to the Trust Agreement.

Sale of Initial Mortgage Loans. The Seller hereby sells, and the Company hereby purchases on the Closing Date, the Initial Mortgage Loans identified on the Mortgage Loan Schedule annexed hereto as Exhibit 1. In addition, the Seller shall deposit with the Indenture Trustee from proceeds of the issuance of the Notes on the Closing Date (i) the Original Pre-Funded Amount for deposit in the Pre- Funding Account and (ii) the Interest Coverage Amount for deposit in the Interest Coverage Account. The Initial Mortgage Loans will be fixed and adjustable rate, residential first and second lien mortgage loans. The Initial Mortgage Loans will have a Principal Balance as of the close of business on the Cut-off Date, after giving effect to any payments due on or before such date whether or not received, of approximately $76,168,676.5999,717,402. The sale of the Initial Mortgage Loans will take place on the Closing Date, subject to and simultaneously with the deposit of the Initial Mortgage Loans and the amounts in the Pre-Funding Account and the Interest Coverage Account into the Trust Estate, the issuance of the Securities and the sale of the Notes by the Issuer pursuant to the Underwriting Agreement. The purchase price (the "Purchase Price") for the Initial Mortgage Loans to be paid by the Company to the Seller on the Closing Date shall consist of the following: (i) a payment in an amount equal to 99.39699.65% of the aggregate Principal Balance of the Initial Mortgage Loans as of the close of business on the Cut-off Date, which payment shall be paid to the Seller by wire transfer in immediately available funds on the Closing Date by or on behalf of the Company, or as otherwise agreed by the Company; and (ii) delivery to the Seller of the Certificates issued by the Issuer pursuant to the Trust Agreement.

Sale of Initial Mortgage Loans. (a) The Seller hereby sells, and the Company hereby purchases on the Closing Date, the Initial Mortgage Loans identified (and the related MI Policies) on the Mortgage Loan Schedule annexed hereto as Exhibit 1. In addition, the Seller shall deposit with proceeds thereof and all rights under the Indenture Trustee from proceeds of Related Documents (including the issuance of the Notes on the Closing Date (i) the Original Pre-Funded Amount for deposit in the Pre- Funding Account and (ii) the Interest Coverage Amount for deposit in the Interest Coverage Accountrelated Mortgage Files). The Initial Mortgage Loans will be fixed and adjustable rateconsist of four groups of conventional, residential first lien mortgage loansloans segregated into groups of fixed and adjustable interest rates. The Initial Mortgage Loans will have a Principal Balance as of the close of business on the Cut-off Date, after giving effect to any payments due on or before such date whether or not received, of approximately $76,168,676.59__________________. The sale of the Initial Mortgage Loans will take place on the Closing Date, subject to and simultaneously with the deposit of the Initial Mortgage Loans and the amounts in the Original Pre-Funding Account Funded Amount and the Interest Coverage Account Amount into the Trust Estate, the issuance of the Securities by the Issuer and the sale of the Notes by the Issuer Class A Bonds pursuant to the Underwriting Agreement. The purchase price (the "Purchase Price") for the Initial Mortgage Loans to be paid by the Company to the Seller on the Closing Date shall consist of the following: (i) a payment in an amount equal to 99.396% $________________ representing the net proceeds of the aggregate Principal Balance sale of the Initial Mortgage Loans as of the close of business on the Cut-off DateClass A Bonds, which payment shall be paid to the Seller by wire transfer in immediately available funds on the Closing Date by or on behalf of the Company, or as otherwise agreed by the Company; and (ii) delivery a payment in an amount equal to $________________ representing the proceeds of the sale of the Subordinated Bonds by the Company to NRFC pursuant to the REMIC Interests Sale Agreement, which payment shall be paid to the Seller by wire transfer in immediately available funds on the Closing Date by or on behalf of the Certificates issued Company, or as otherwise agreed by the Issuer Company. (b) In connection with such conveyances by the Seller, the Seller shall on behalf of and at the direction of the Company deliver to, and deposit with the Bond Administrator on behalf of the Indenture Trustee, on or before the Closing Date in the case of an Initial Mortgage Loan, and two Business Days prior to the related Subsequent Transfer Date in the case of a Subsequent Mortgage Loan, the following documents or instruments with respect to each Mortgage Loan (the "Mortgage File"): (i) the original Mortgage Note endorsed to "____________________, as Indenture Trustee pursuant to the Trust Indenture dated as of _________________, relating to the NovaStar Home Equity Loan Asset-Backed Bonds, Series ________"; (ii) the original Mortgage with evidence of recording thereon, or, if the original Mortgage has not yet been returned from the public recording office, a copy of the original Mortgage certified by the Seller or the public recording office in which such original Mortgage has been recorded; (iii) an original assignment (which may be included in one or more blanket assignments if permitted by applicable law) of the Mortgage endorsed to "_________________________, as Indenture Trustee pursuant to the Indenture dated as of ______________, relating to the NovaStar Home Equity Loan Asset-Backed Bonds, Series ________", and otherwise in recordable form; (iv) originals of any intervening assignments of the Mortgage, with evidence of recording thereon, or, if the original of any such intervening assignment has not yet been returned from the public recording office, a copy of such original intervening assignment certified by the Seller or the public recording office in which such original intervening assignment has been recorded; (v) the original policy of title insurance (or a commitment for title insurance, if the policy is being held by the title insurance company pending recordation of the Mortgage); (vi) with respect to each Mortgage Loan insured by a MI Policy, a certificate of insurance or other evidence of such MI Policy; (vii) a true and correct copy of each assumption, modification, consolidation or substitution agreement, if any, relating to the Mortgage Loan; and (viii) an executed copy of the notice of assignment and acknowledgement of assignment with respect to the Mortgage Loans covered by the MI Policies. If a material defect in any Mortgage File is discovered which may materially and adversely affect the value of the related Mortgage Loan, or the interests of the Indenture Trustee (as pledgee of the Mortgage Loans), the Bondholders, the Certificateholders or the Bond Insurer in such Mortgage Loan, including if any document required to be delivered to the Bond Administrator has not been delivered (provided that a Mortgage File will not be deemed to contain a defect for an unrecorded assignment under clause (iii) above for 180 days following submission of the assignment if the Seller has submitted such assignment for recording pursuant to the terms of the following paragraph), the Seller shall cure such defect, repurchase the related Mortgage Loan at the Repurchase Price or substitute an Eligible Substitute Mortgage Loan for the related Mortgage Loan upon the same terms and conditions set forth in Section 3.01 hereof as to the Initial Mortgage Loans and the Subsequent Mortgage Loans and Section 2.02(c) hereof as to the Subsequent Mortgage Loans for breaches of representations and warranties. Promptly after the Closing Date in the case of an Initial Mortgage Loan or, in the case of a Subsequent Mortgage Loan, promptly after the Subsequent Transfer Date (or after the date of transfer of any Eligible Substitute Mortgage Loan), the Seller at its own expense shall complete and submit for recording in the appropriate public office for real property records each of the assignments referred to in clause (iii) above, with such assignment completed in favor of the Indenture Trustee. While such assignment to be recorded is being recorded, the Bond Administrator shall retain a photocopy of such assignment. If any assignment is lost or returned unrecorded to the Bond Administrator because of any defect therein, the Seller is required to prepare a substitute assignment or cure such defect, as the case may be, and the Seller shall cause such substitute assignment to be recorded in accordance with this paragraph. In instances where an original Mortgage or any original intervening assignment of Mortgage is not, in accordance with clause (ii) or (iv) above, delivered by the Seller to the Bond Administrator, on behalf of the Indenture Trustee, prior to or on the Closing Date in the case of an Initial Mortgage Loan or, in the case of a Subsequent Mortgage Loan, prior to or on the Subsequent Transfer Date, the Seller will deliver or cause to be delivered the originals of such documents to the Bond Administrator, on behalf of the Indenture Trustee, promptly upon receipt thereof. Effective on the Closing Date, the Company hereby acknowledges its acceptance of all right, title and interest to the Initial Mortgage Loans and other property, existing on the Closing Date and thereafter created and conveyed to it pursuant to this Section 2.01. The Indenture Trustee, as assignee or transferee of the Company, shall be entitled to all scheduled principal payments due after the Cut-off Date, all other payments of principal due and collected after the Cut-off Date, and all payments of interest on the Initial Mortgage Loans. No scheduled payments of principal due on or before the Cut-off Date and collected after the Cut-off Date shall belong to the Company pursuant to the terms of this Purchase Agreement. The Servicing Agreement shall provide that any late payment charges collected in connection with a Mortgage Loan shall be paid to the Servicer as provided therein. (c) The parties hereto intend that the transactions set forth herein constitute a sale by the Seller to the Company on the Closing Date of all the Seller's right, title and interest in and to the Initial Mortgage Loans and other property as and to the extent described above. In the event the transactions set forth herein shall be deemed not to be a sale, the Seller hereby grants to the Company as of the Closing Date a security interest in all of the Seller's right, title and interest in, to and under the Initial Mortgage Loans and such other property, to secure all of the Seller's obligations hereunder, and this Purchase Agreement shall constitute a security agreement under applicable law and in such event, the parties hereto acknowledge that the Bond Administrator, in addition to holding the Initial Mortgage Loans on behalf of the Indenture Trustee for the benefit of the Bondholders and the Bond Insurer, holds the Initial Mortgage Loans as designee of the Company. The Seller agrees to take or cause to be taken such actions and to execute such documents, including without limitation the filing of all necessary UCC-1 financing statements filed in the State of Virginia and the State of Kansas (which shall have been submitted for filing as of the Closing Date and each Subsequent Transfer Date, as applicable), any continuation statements with respect thereto and any amendments thereto required to reflect a change in the name or corporate structure of the Seller or the filing of any additional UCC-1 financing statements due to the change in the principal office of the Seller, as are necessary to perfect and protect the interests of the Company and its assignees in each Initial Mortgage Loan and the proceeds thereof and the interests of the Issuer and its assignees in each Subsequent Mortgage Loan and the proceeds thereof.

Sale of Initial Mortgage Loans. The Seller hereby sells, and the Company hereby purchases on the Closing Date, the Initial Mortgage Loans identified on the Mortgage Loan Schedule annexed hereto as Exhibit 1. In addition, the Seller shall deposit with the Indenture Trustee from proceeds of the issuance of the Notes on the Closing Date (i) the Original Pre-Funded Amount for deposit in the Pre- Funding Account and (ii) the Interest Coverage Amount for deposit in the Interest Coverage Account. The Initial Mortgage Loans will be fixed and adjustable rate, residential first and second lien mortgage loans. The Initial Mortgage Loans will have a Principal Balance as of the close of business on the Cut-off Date, after giving effect to any payments due on or before such date whether or not received, of approximately $76,168,676.5946,076,103. The sale of the Initial Mortgage Loans will take place on the Closing Date, subject to and simultaneously with the deposit of the Initial Mortgage Loans and the amounts in the Pre-Funding Account and the Interest Coverage Account into the Trust Estate, the issuance of the Securities and the sale of the Notes by the Issuer pursuant to the Underwriting Agreement. The purchase price (the "Purchase Price") for the Initial Mortgage Loans to be paid by the Company to the Seller on the Closing Date shall consist of the following: (i) a payment in an amount equal to 99.396____% of the aggregate Principal Balance of the Initial Mortgage Loans as of the close of business on the Cut-off Date, which payment shall be paid to the Seller by wire transfer in immediately available funds on the Closing Date by or on behalf of the Company, or as otherwise agreed by the Company; and (ii) delivery to the Seller of the Certificates issued by the Issuer pursuant to the Trust Agreement.

Sale of Initial Mortgage Loans. The Seller hereby sells, and the Company hereby purchases on the Closing Date, the Initial Mortgage Loans identified on the Mortgage Loan Schedule annexed hereto as Exhibit 1. In addition, the Seller shall deposit with the Indenture Trustee from proceeds of the issuance of the Notes on the Closing Date (i) the Original Pre-Funded Amount for deposit in the Pre- Pre-Funding Account and (ii) the Interest Coverage Amount for deposit in the Interest Coverage Account. The Initial Mortgage Loans will be fixed and adjustable rate, residential first and second lien mortgage loans. The Initial Mortgage Loans will have a Principal Balance as of the close of business on the Cut-off Date, after giving effect to any payments due on or before such date whether or not received, of approximately $76,168,676.5999,717,402. The sale of the Initial Mortgage Loans will take place on the Closing Date, subject to and simultaneously with the deposit of the Initial Mortgage Loans and the amounts in the Pre-Funding Account and the Interest Coverage Account into the Trust Estate, the issuance of the Securities and the sale of the Notes by the Issuer pursuant to the Underwriting Agreement. The purchase price (the "Purchase Price") for the Initial Mortgage Loans to be paid by the Company to the Seller on the Closing Date shall consist of the following: (i) a payment in an amount equal to 99.39699.65% of the aggregate Principal Balance of the Initial Mortgage Loans as of the close of business on the Cut-off Date, which payment shall be paid to the Seller by wire transfer in immediately available funds on the Closing Date by or on behalf of the Company, or as otherwise agreed by the Company; and (ii) delivery to the Seller of the Certificates issued by the Issuer pursuant to the Trust Agreement.