Deutsche Bank Securities Inc. 60 Wall Street New York, New York 10005 Greenwich Capital Markets, Inc. 600 Steamboat Road Greenwich, Connecticut 06830 Wachovia Capital Markets, LLC 301 South College Street, NC0610 Charlotte, North Carolina 28288-0610
February
23, 2007
Deutsche
Bank Securities Inc.
00
Xxxx
Xxxxxx
Greenwich
Capital Markets, Inc.
000
Xxxxxxxxx Xxxx
Greenwich,
Connecticut 06830
Wachovia
Capital Markets, LLC
000
Xxxxx
Xxxxxxx Xxxxxx, XX0000
Charlotte,
North Carolina 28288-0610
Ladies
and Gentlemen:
NovaStar
Mortgage, Inc. (the “Sponsor”), NovaStar Mortgage Funding Corporation (the
“Depositor”) and NovaStar Financial, Inc. (“NFI”) hereby confirm their agreement
to sell certain asset backed certificates to Deutsche Bank Securities Inc.
(“Deutsche Bank”), Greenwich Capital Markets, Inc. (“GCM”) and Wachovia Capital
Markets, LLC (“Wachovia” and, together with Deutsche Bank and GCM, the
“Underwriters”) as described herein. The certificates will represent interests
in the assets of a trust consisting primarily of a pool of residential, subprime
mortgage loans (the “Mortgage Loans”), which were originated by the Sponsor, as
originator (in such capacity, the “Originator”) or its affiliate. Pursuant to a
Pooling and Servicing Agreement dated as of February 1, 2007 (the “Pooling and
Servicing Agreement”) among the Depositor, the Sponsor, U.S. Bank National
Association, a national banking corporation (“U.S. Bank”), not in its individual
capacity, but solely as Custodian (the “Custodian”), Deutsche Bank National
Trust Company, a national banking association, not in its individual capacity,
but solely as trustee (the “Trustee”), NovaStar Mortgage Funding Trust 2007-1, a
common law trust acting through the Trustee (the “Issuer” or the “Trust”), will
issue the securities, as described herein.
All
capitalized terms used but not otherwise defined herein have the respective
meanings set forth in the Pooling and Servicing Agreement.
1. Securities.
The
securities will be issued in classes as follows: (i) six classes of senior
certificates designated as Class A-1A, Class A-2A1, Class A-2A2, Class A-2B,
Class A-2C and Class A-2D Certificates (collectively, the “Class A Certificates”
or “Senior Certificates”); and (ii) nine classes of mezzanine certificates
designated as the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5,
Class
M-6, Class M-7, Class M-8 and Class M-9 Certificates (collectively, the
“Mezzanine Certificates” and together with Senior Certificates, the
“Certificates”).
The
Senior Certificates and the Mezzanine Certificates (other than the Class
M-6,
Class M-7, Class M-8 and Class M-9 Certificates) are collectively referred
to
herein as the “Underwritten Certificates.”
2. Representations
and Warranties of the Sponsor and the Depositor.
The
Sponsor and the Depositor represent and warrant to, and covenant with, the
Underwriters that:
A. The
Depositor has filed with the Securities and Exchange Commission (the
“Commission”) a registration statement (No. 333-134461) on Form S-3 for the
registration under the Securities Act of 1933, as amended (the “Act”), of asset
backed securities (issuable in series), which registration statement, as
amended
at the date hereof, has become effective. Such registration statement, as
amended to the date of this Agreement, meets the requirements set forth in
Rule
415(a)(1)(x) under the Act and complies in all other material respects with
such
Rule. The Depositor proposes to file with the Commission pursuant to Rule
424(b)
under the Act a supplement dated the date hereof to the prospectus dated
June
16, 2006 relating to the Underwritten Certificates and the method of
distribution thereof and has previously advised the Underwriters of all further
information (financial and other) with respect to the Underwritten Certificates
to be set forth therein. Such registration statement, including the exhibits
thereto, as amended at the date hereof, is hereinafter called the “Registration
Statement”; such prospectus dated June 16, 2006, in the form in which it will be
filed with the Commission pursuant to Rule 424(b) under the Act is hereinafter
called the “Basic Prospectus”; such supplement dated the date hereof to the
Basic Prospectus, in the form in which it will be filed with the Commission
pursuant to Rule 424(b) of the Act, is hereinafter called the “Supplement”; and
the Basic Prospectus and the Supplement together are hereinafter called the
“Prospectus.” The free writing prospectus, dated February 22, 2007, in the form
in which it has heretofore been filed pursuant to Rule 433 is hereinafter
called
the “Pricing Free Writing Prospectus”. The Depositor will file with the
Commission a report on Form 8-K setting forth specific information concerning
the related Mortgage Loans (the “8-K”), as and to the extent required under the
Act.
B. As
of the date hereof, when the Registration Statement became effective, when
the
Pricing Free Writing Prospectus is first filed pursuant to Rule 433 under
the
Act, when the Prospectus Supplement is first filed pursuant to Rule 424(b)
under
the Act, when, prior to the Closing Date (as defined below), any other amendment
to the Registration Statement becomes effective, and when any supplement
to the
Prospectus is filed with the Commission, and at the Closing Date, (i) the
Registration Statement, as amended as of any such time, the Prospectus, as
amended or supplemented as of any such time, and the Pricing Free Writing
Prospectus, as amended as of any such time, will comply in all material respects
with the applicable requirements of the Act and the rules thereunder and
(ii)
the Registration Statement, as amended as of any such time, did not and will
not
contain any untrue statement of a material fact and did not and will not
omit to
state any material fact required to be stated therein or necessary to make
the
statements therein not misleading and the Prospectus, as amended or supplemented
as of any such time, and the Pricing Free Writing Prospectus, as of the date
hereof, did not and will not contain an untrue statement of a material fact
and
did not and will not omit to state a material fact necessary in order to
make
the statements therein, in light of the circumstances under which they were
made, not misleading; provided, however, that neither the Sponsor nor the
Depositor makes any representation or warranty as to the information contained
in or omitted from the Registration Statement, the Prospectus or the Pricing
Free Writing Prospectus or any amendment thereof or supplement thereto in
reliance upon and in conformity with the Underwriter Information. The Static
Pool Data of the Sponsor, whether or not incorporated by reference in the
Pricing Free Writing Prospectus and the Prospectus, as of the date hereof,
as of
the date of the Prospectus and as of the Closing Date does not and will not
contain any untrue statement of a material fact or omit to state a material
fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
C. Each
of the Sponsor, the Depositor and NFI (collectively, the “NovaStar Entities”) is
duly organized, validly existing and in good standing under the laws of the
state of its respective incorporation, has full power and authority (corporate
and other) to own its properties and conduct its business as now conducted
by
it, and as described in the Pricing Free Writing Prospectus and the Prospectus,
and is duly qualified to do business in each jurisdiction in which it conducts
business (to the extent such qualification is required by applicable law)
or in
which the conduct of its business requires such qualification except where
the
failure to be so qualified does not involve (i) a material risk to, or a
material adverse effect on, the business, properties, financial position,
operations or results of operations of such entity or (ii) any risk whatsoever
as to the enforceability of any Mortgage Loan.
D. There
are no actions, proceedings or investigations pending, or, to the knowledge
of
the Sponsor or the Depositor, threatened, before any court, governmental
agency
or body or other tribunal: (i) asserting the invalidity of this Agreement,
any
of the Hedge Agreements, any of the Basic Documents, or the Underwritten
Certificates; (ii) seeking to prevent the issuance of the Certificates or
the
consummation of any of the transactions contemplated by the Basic Documents;
(iii) which may, individually or in the aggregate, materially and adversely
affect the performance by the NovaStar Entities of their respective obligations
under, or the validity or enforceability of, the Basic Documents or the
Underwritten Certificates; or (iv) which may affect adversely the federal
income
tax attributes of the Underwritten Certificates as described in the Prospectus.
E. The
execution and delivery by the NovaStar Entities of this Agreement and the
Basic
Documents to which they are a party are within their respective corporate
power
and have been, or will be, prior to the Closing Date duly authorized by all
necessary corporate action on the part of the NovaStar Entities and the
execution and delivery of such instruments, the consummation of the transactions
therein contemplated and compliance with the provisions thereof will not
result
in a breach or violation of any of the terms and provisions of, or constitute
a
default under, any statute or any agreement or instrument to which the NovaStar
Entities or any of their affiliates is a party or by which it or any of them
is
bound or to which any of the property of the NovaStar Entities or any of
their
affiliates is subject, the NovaStar Entities’ charter or bylaws, or any order,
rule or regulation of any court, governmental agency or body or other tribunal
having jurisdiction over the NovaStar Entities, any of their affiliates or
any
of their properties; and no consent, approval, authorization or order of,
or
filing with, any court or governmental agency or body or other tribunal is
required for the consummation of the transactions contemplated by this Agreement
or the Prospectus in connection with the issuance and sale of the Underwritten
Certificates. Neither the NovaStar Entities nor any of their affiliates is
a
party to, bound by or in breach or violation of any indenture or other agreement
or instrument, or subject to or in violation of any statute, order, rule
or
regulation of any court, governmental agency or body or other tribunal having
jurisdiction over the NovaStar Entities or any of their affiliates, which
materially and adversely affects, or may in the future materially and adversely
affect, (i) the ability of the NovaStar Entities to perform their obligations
under the Basic Documents or (ii) the business, operations, results of
operations, financial position, income, properties or assets of the NovaStar
Entities.
F. This
Agreement has been duly executed and delivered by the Sponsor and the Depositor,
and the other Basic Documents, as applicable, will be duly executed and
delivered by the NovaStar Entities, and each constitutes and will constitute
the
legal, valid and binding obligation of each of the NovaStar Entities enforceable
in accordance with their respective terms, except as enforceability may be
limited by (i) bankruptcy, insolvency, liquidation, receivership, moratorium,
reorganization or other similar laws affecting the enforcement of the rights
of
creditors and (ii) general principles of equity, whether enforcement is sought
in a proceeding at law or in equity.
G. The
Underwritten Certificates will conform in all material respects to the
description thereof in the Pricing Free Writing Prospectus and the Prospectus
and will be duly and validly authorized and, when duly and validly executed,
authenticated, issued and delivered in accordance with the Pooling and Servicing
Agreement and sold to the Underwriters as provided herein, will be validly
issued and outstanding and entitled to the benefits of the Pooling and Servicing
Agreement.
H. On
the Closing Date, the Mortgage Loans will conform in all material respects
to
the description thereof contained in the Pricing Free Writing Prospectus
and the
Prospectus and the representations and warranties contained in this Agreement
will be true and correct in all material respects. The representations and
warranties of the Sponsor and the Depositor set out in the Pooling and Servicing
Agreement are hereby made to the Underwriters as though set out herein, and
at
the dates specified therein, such representations and warranties were or
will be
true and correct in all material respects.
I. The
NovaStar Entities possess all material licenses, certificates, permits or
other
authorizations issued by the appropriate state, federal or foreign regulatory
agencies or bodies necessary to conduct the business now operated by it and
as
described in the Prospectus and there are no proceedings pending or, to the
best
knowledge of the Sponsor and the Depositor, threatened, relating to the
revocation or modification of any such license, certificate, permit or other
authorization which singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would materially and adversely affect the business,
operations, results of operations, financial position, income, property or
assets of the NovaStar Entities.
J. Any
taxes, fees and other governmental charges in connection with the execution
and
delivery of this Agreement or the Basic Documents or the execution and issuance
of the Certificates have been or will be paid at or prior to the Closing
Date.
K. There
has not been any material adverse change, or any development involving a
prospective material adverse change, in the condition, financial or otherwise,
or in the earnings, business or operations of the NovaStar Entities or their
affiliates, taken as a whole, from December 31, 2006.
L. The
Basic Documents will conform in all material respects to the descriptions
thereof, if any, contained in the Pricing Free Writing Prospectus and the
Prospectus.
M. Neither
the Depositor nor the Issuing Entity created by the Pooling and Servicing
Agreement is, or as a result of the transactions contemplated hereby, will
be an
“investment company” within the meaning of such term under the Investment
Company Act of 1940 (the “1940 Act”) and the rules and regulations of the
Commission thereunder. The Pooling and Servicing Agreement is not required
to be
qualified under the Trust Indenture Act of 1939, as amended.
N. Neither
the Sponsor nor the Depositor is aware of (i) any request by the Commission
for
any further amendment of the Registration Statement or the Prospectus or
for any
additional information; (ii) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the institution
or
threatening of any proceeding for that purpose; or (iii) any notification
with
respect to the suspension of the qualification of the Underwritten Certificates
for sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose.
O. The
Depositor is not an “ineligible issuer” as defined in Rule 405 of the Act.
3. Agreements
of the Underwriters.
Each
Underwriter, severally and not jointly, agrees with the Sponsor and the
Depositor and NFI that upon the execution of this Agreement and authorization
by
each Underwriter of the release of the Underwritten Certificates, each
Underwriter shall offer the Underwritten Certificates for sale upon the terms
and conditions set forth herein in the amounts set forth in Annex A
hereto.
4. Purchase,
Sale and Delivery of the Underwritten Certificates.
Each of
the Sponsor and the Depositor hereby agree, subject to the terms and conditions
hereof, to sell the Underwritten Certificates to the Underwriters. Upon the
basis of the representations and warranties herein contained, but subject
to the
conditions hereinafter stated, the Underwriters hereby agree, severally and
not
jointly, to purchase the principal amount of the Underwritten Certificates
set
forth opposite their respective names in Annex A hereto. At the time of issuance
of the Underwritten Certificates, the Mortgage Loans will be transferred
by the
Sponsor to the Depositor, and by the Depositor to the Issuing Entity pursuant
to
the Pooling and Servicing Agreement.
The
Underwritten Certificates to be purchased by each Underwriter will be delivered
by the Sponsor and the Depositor to each Underwriter (which delivery shall
be
made through the facilities of The Depository Trust Company (“DTC”)) against
payment of the purchase price therefor, set forth in Annex A hereto, by a
same
day federal funds wire payable to the order of the Sponsor.
Settlement
shall take place at the offices of Xxxxx Xxxxxxxxxx LLP, 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 10:00 a.m., on February 28, 2007 or
at
such other time thereafter as each of the Underwriters, the Sponsor and the
Depositor determine (such time being herein referred to as the “Closing Date”).
The Underwritten Certificates will be prepared in definitive form and in
such
authorized denominations as each Underwriter may request, registered in the
name
of Cede & Co., as nominee of The Depository Trust Company.
The
Sponsor and the Depositor agree to have the Underwritten Certificates available
for inspection and review by the Underwriters in New York not later than
10:00
a.m. New York time on the business day prior to the Closing Date.
5. Covenants
of the Sponsor and the Depositor.
Each of
the Sponsor and the Depositor covenant and agree with the Underwriters
that:
A. The
Sponsor and the Depositor will promptly advise the Underwriters and their
counsel (i) when any amendment to the Registration Statement shall have become
effective; (ii) of any request by the Commission for any amendment to the
Registration Statement or the Prospectus or for any additional information;
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or threatening
of
any proceeding for that purpose; and (iv) of the receipt by the Sponsor or
the
Depositor of any notification with respect to the suspension of the
qualification of the Underwritten Certificates for sale in any jurisdiction
or
the initiation or threatening of any proceeding for such purpose. Neither
the
Sponsor nor the Depositor will file any amendment to the Registration Statement
or supplement to the Prospectus after the date hereof and prior to the Closing
Date for the Underwritten Certificates unless the Sponsor and the Depositor
have
furnished each Underwriter and its counsel copies of such amendment or
supplement for their review prior to filing and will not file any such proposed
amendment or supplement to which such Underwriter reasonably objects, unless
such filing is required by law. The Sponsor and the Depositor will use its
best
efforts to prevent the issuance of any stop order suspending the effectiveness
of the Registration Statement and, if issued, to obtain as soon as possible
the
withdrawal thereof.
B. If,
at any time during the period in which the Prospectus is required by law
to be
delivered, any event occurs as a result of which the Prospectus as then amended
or supplemented would include any untrue statement of a material fact or
omit to
state any material fact necessary to make the statements therein, in the
light
of the circumstances under which they were made, not misleading, or if it
shall
be necessary to amend or supplement the Prospectus to comply with the Act
or the
rules under the Act, the Sponsor and the Depositor will promptly prepare
and
file with the Commission, subject to Paragraph A of this Section 5, an amendment
or supplement that will correct such statement or omission or an amendment
that
will effect such compliance and, if such amendment or supplement is required
to
be contained in a post-effective amendment to the Registration Statement,
will
use its best efforts to cause such amendment of the Registration Statement
to be
made effective as soon as possible.
C. The
Sponsor and the Depositor will furnish to each Underwriter, without charge,
executed copies of the Registration Statement (including exhibits thereto)
and,
so long as delivery of a Prospectus by the Underwriters or a dealer may be
required by the Act, as many copies of the Prospectus, as amended or
supplemented, and any amendments and supplements thereto as the Underwriters
may
reasonably request. The Sponsor and the Depositor will pay the expenses of
printing all offering documents relating to the offering of the Underwritten
Certificates.
D. As
soon as practicable, but not later than sixteen months after the effective
date
of the Registration Statement, the Sponsor and the Depositor will make generally
available to Holders of Underwritten Certificates an earnings statement covering
a period of at least twelve months beginning after the effective date of
the
Registration Statement which will satisfy the provisions of Section 11(a)
of the
Act and, at the option of the Sponsor and the Depositor, will satisfy the
requirements of Rule 158 under the Act.
E. So
long as any of the Underwritten Certificates are outstanding, the Sponsor
and
the Depositor will cause to be delivered to each Underwriter (i) all documents
required to be distributed to the Certificateholders and (ii) from time to
time,
any other information filed with any government or regulatory authority that
is
otherwise publicly available, as any of the Underwriters may reasonably
request.
F. The
Sponsor and the Depositor, whether or not the transactions contemplated
hereunder are consummated or this Agreement is terminated, will pay all expenses
in connection with the transactions contemplated herein, including, but not
limited to, the expenses of printing (or otherwise reproducing) all documents
relating to the offering, the fees and disbursements of its counsel and expenses
of each Underwriter incurred in connection with (i) the proposed purchase
and
sale of the Underwritten Certificates; (ii) preparation of all documents
specified in this Agreement; (iii) any fees and expenses of the Trustee;
(iv)
any fees charged by investment rating agencies for rating the Underwritten
Certificates; and (v) their investigation with regard to the NovaStar
Entities.
G. Each
of the Sponsor and the Depositor agrees that, so long as any of the Underwritten
Certificates shall be outstanding, it will deliver or cause to be delivered
to
each Underwriter (i) the annual statement as to compliance delivered to the
Trustee pursuant to the Pooling and Servicing Agreement; (ii) the annual
statement of a firm of independent public accountants furnished by the Servicer
to the Trustee pursuant to Section 3.17 of the Pooling and Servicing Agreement
as soon as such statement is furnished to the Sponsor and the Depositor;
and
(iii) any information and reports required to be delivered by the Servicer
pursuant to Article III and Section 4.03 of the Pooling and Servicing
Agreement.
H. The
Sponsor, and the Depositor will enter into each of the Basic Documents to
which
it is a party and all related agreements on or prior to the Closing
Date.
I. The
Sponsor and the Depositor will endeavor to qualify the Underwritten Certificates
for sale to the extent necessary under any state securities or Blue Sky laws
in
any jurisdictions as may be reasonably requested by the Underwriters, if
any,
and will pay all expenses (including fees and disbursements of counsel) in
connection with such qualification and in connection with the determination
of
the eligibility of the Underwritten Certificates for investment under the
laws
of such jurisdictions as the Underwriters may reasonably designate, if
any.
6. Conditions
of the Underwriters’ Obligations.
The
several obligations of the Underwriters to purchase and pay for the Underwritten
Certificates as provided herein shall be subject to the accuracy as of the
date
hereof and the Closing Date (as if made at the Closing Date) of the
representations and warranties of the Sponsor and the Depositor contained
herein
(including those representations and warranties set forth in the Basic Documents
incorporated herein), to the accuracy of the statements of the Sponsor and
the
Depositor made in any certificate or other document delivered pursuant to
the
provisions hereof, to the performance by the Sponsor and the Depositor of
their
obligations hereunder, and to the following additional conditions:
A. The
Registration Statement shall have become effective no later than the date
hereof, and no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall
have
been instituted or threatened, and the Prospectus shall have been filed pursuant
to Rule 424(b).
B. The
Underwriters shall have received the Basic Documents and the Underwritten
Certificates in form and substance satisfactory to the Underwriters, duly
executed by all signatories required pursuant to the respective terms
thereof.
C. The
Underwriters shall have received the favorable opinion of Xxxxx Xxxxxxxxxx
LLP,
counsel to NovaStar Entities with respect to the following items, dated the
Closing Date, to the effect that:
(1) Each
of the NovaStar Entities has been duly organized and is validly existing
as a
corporation in good standing under the laws of its respective state of
incorporation, and is qualified to do business in each state necessary to
enable
it to perform its obligations under each of the Basic Documents to which
it is a
party. Each of the NovaStar Entities has the requisite power and authority
to
execute and deliver, engage in the transactions contemplated by, and perform
and
observe the conditions of the Basic Documents to which it is a
party.
(2) Each
of the applicable Basic Documents has been duly and validly authorized, executed
and delivered by the applicable NovaStar Entities, all requisite corporate
action having been taken with respect thereto, and each constitutes the valid,
legal and binding agreement of the NovaStar Entities, and would be enforceable
against the applicable NovaStar Entities in accordance with their respective
terms.
(3) Neither
the transfer of the Mortgage Loans to the Depositor and from the Depositor
to
the Issuing Entity, the issuance or sale of the Underwritten Certificates
nor
the execution, delivery or performance by the NovaStar Entities of, the Basic
Documents (A) conflicts or will conflict with or results or will result in
a
breach of, or constitutes or will constitute a default under, (i) any term
or
provision of any certificate of incorporation or bylaws of the NovaStar
Entities; (ii) any term or provision of any material agreement, contract,
instrument or indenture, to which any NovaStar Entity is a party or is bound
and
which has been identified to such counsel by the appropriate officers of
such
entity; or (iii) to the best of such counsel’s knowledge following due inquiry
made of the appropriate officers of such entity, any order, judgment, writ,
injunction or decree of any court or governmental agency or body or other
tribunal having jurisdiction over any NovaStar Entity; or (B) results in,
or
will result in the creation or imposition of any lien, charge or encumbrance
upon the Trust or upon the Underwritten Certificates, except as otherwise
contemplated by the Pooling and Servicing Agreement.
(4) No
consent, approval, authorization or order of, registration or filing with,
or
notice to, courts, governmental agency or body or other tribunal is required
under the laws of the State of Missouri, for the execution, delivery and
performance of the Basic Documents, or the offer, issuance, sale or delivery
of
the Underwritten Certificates or the consummation of any other transaction
contemplated thereby by the NovaStar Entities, except such which have been
obtained.
(5) There
are no actions, proceedings or investigations pending or, to such counsel’s
knowledge, threatened against the NovaStar Entities before any court,
governmental agency or body or other tribunal (i) asserting the invalidity
of
the Agreements or the Underwritten Certificates; (ii) seeking to prevent
the
issuance of the Underwritten Certificates or the consummation of any of the
transactions contemplated by the Basic Documents; or (iii) which would
materially and adversely affect the performance by the NovaStar Entities
of
obligations under, or the validity or enforceability of, the Underwritten
Certificates or the Basic Documents.
(6) The
Commission has not issued any stop order suspending the effectiveness of
the
Registration Statement or any order directed to any prospectus relating to
the
Underwritten Certificates (including the Prospectus), and has not initiated
or
to the knowledge of such counsel, threatened any proceeding for that
purpose.
(7) When
the Underwritten Certificates have been duly executed, delivered and
authenticated in accordance with the Pooling and Servicing Agreement, and
delivered and paid for pursuant to this Agreement, the Underwritten Certificates
will be validly issued and entitled to the benefits of the Pooling and Servicing
Agreement.
(8) The
Depositor and the Issuing Entity are not, and will not as a result of the
offer
and sale of the Underwritten Certificates as contemplated in the Prospectus
and
this Agreement become, an “investment company” as defined in the 1940 Act or a
company “controlled by” an “investment company” within the meaning of the 1940
Act.
(9) The
Pooling and Servicing Agreement is not required to be qualified under the
Trust
Indenture Act.
(10) Such
counsel shall state that they have participated in the preparation of the
Registration Statement and the Prospectus and no facts have come to their
attention which may cause them to believe that the Registration Statement
(excluding any Exhibit thereto), as of the effective date thereof, contained
any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading or that the Prospectus, as of its date or the Closing
Date, contains any untrue statement of a material fact or omitted to state
any
material fact necessary in order to make the statements therein, in the light
of
the circumstances under which they were made, not misleading; provided
that
such counsel need not express any view with respect to the financial,
statistical or computational material included in the Registration Statement
or
the Prospectus.
(11) To
the best of such counsel’s knowledge, there are no material contracts,
indentures or other documents of a character required to be described or
referred to in the Registration Statement or the Prospectus to be filed as
exhibits to the Registration Statement other than those described or referred
to
therein or filed or incorporated by reference as exhibits thereto.
(12) The
Certificates will, when issued, conform in all material respects to the
description thereof contained in the Prospectus and the Pricing Free Writing
Prospectus.
In
rendering their opinions, the counsel described in this Paragraph C may rely,
as
to matters of fact, on certificates of responsible officers of the NovaStar
Entities, the Trustee and public officials. Such opinions may also assume
the
due authorization, execution and delivery of the instruments and documents
referred to therein by the parties thereto other than the NovaStar
Entities.
D. [Reserved.]
E. [Reserved.]
F. The
Underwriters shall have received a letter from Deloitte & Touche, LLP dated
on or before the Closing Date, in form and substance satisfactory to the
Underwriters and counsel for the Underwriters, to the effect that they have
performed certain specified procedures requested by the Underwriters with
respect to the information set forth in the Pricing Free Writing Prospectus,
the
Prospectus and any Static Pool Data relating to periods on or after
January 1, 2006 and certain matters relating to the Sponsor.
G. The
Underwritten Certificates shall have been given the ratings listed for such
class by the applicable rating agencies in the Pricing Free Writing Prospectus
and none of such ratings shall have been rescinded. The Underwriters and
their
counsel shall have received copies of any opinions of counsel supplied to
the
rating organizations relating to any matters with respect to the Underwritten
Certificates. Any such opinions shall be dated the Closing Date and addressed
to
the Underwriters or accompanied by reliance letters to the Underwriters or
shall
state that the Underwriters may rely upon them.
H. The
Underwriters shall have received from the NovaStar Entities certificates,
signed
by the president, a senior vice president or a vice president of the NovaStar
Entities, dated the Closing Date, to the effect that the signer of such
certificate has carefully examined the Registration Statement and the Basic
Documents and that, to the best of his or her knowledge based upon reasonable
investigation:
(1) the
representations and warranties of the NovaStar Entities in this Agreement,
as of
the Closing Date, and in the Basic Documents to which they are a party and
in
all related Agreements, as of the date specified in such Agreements, are
true
and correct, and the NovaStar Entities have complied with all the Agreements
and
satisfied all the conditions on its part to be performed or satisfied at
or
prior to the Closing Date;
(2) there
are no actions, suits or proceedings pending, or to the best of such officer’s
knowledge, threatened against or affecting the NovaStar Entities which if
adversely determined, individually or in the aggregate, would be reasonably
likely to adversely affect such entity’s obligations under the Basic Documents
to which they are a party in any material way; and no merger, liquidation,
dissolution or bankruptcy of the NovaStar Entities is pending or
contemplated;
(3) the
information contained in the Registration Statement relating to the NovaStar
Entities and the Mortgage Loans is true and accurate in all material respects
and nothing has come to his or her attention that would lead such officer
to
believe that the Registration Statement includes any untrue statement of
a
material fact or omits to state a material fact necessary to make the statements
therein not misleading;
(4) the
information set forth in the Schedule required to be furnished pursuant to
the
Mortgage Loan Purchase Agreement is true and correct in all material
respects;
(5) there
has been no amendment or other document filed affecting the articles of
incorporation or bylaws of the NovaStar Entities since December 31, 2006,
and no
such amendment has been authorized. No event has occurred since December
31,
2006, which has affected the good standing of the NovaStar Entities under
the
laws of its respective state of incorporation;
(6) there
has not occurred any material adverse change, or any development involving
a
prospective material adverse change, in the condition, financial or otherwise,
or in the earnings, business or operations of the NovaStar Entities and their
respective subsidiaries, taken as a whole, from December 31, 2006;
and
(7) each
person who, as an officer or representative of the NovaStar Entities signed
or
signs the Registration Statement, the Basic Documents or any other document
delivered pursuant hereto, on the date of such execution, or on the Closing
Date, as the case may be, in connection with the transactions described in
this
Agreement was, at the respective times of such signing and delivery, and
is now,
duly elected or appointed, qualified and acting as such officer or
representative, and the signatures of such persons appearing on such documents
are their genuine signatures.
Each
of
the NovaStar Entities shall attach to such certificate a true and correct
copy
of its articles of incorporation and bylaws which are in full force and effect
on the date of such certificate, and a certified true copy of the resolutions
of
its Board of Directors with respect to the transactions contemplated
herein.
I. There
shall not have occurred any change, or any development involving a prospective
change, in the condition, financial or otherwise, or in the earnings, business
or operations, since December 31, 2006, of (A) the NovaStar Entities and
their
affiliates that is in the Underwriters’ judgment material and adverse and that
makes it in the Underwriters’ judgment impracticable to market the Underwritten
Certificates on the terms and in the manner contemplated in the
Prospectus.
J. The
Underwriters shall have received a favorable opinion of counsel to the
Custodian, dated the Closing Date and in form and substance satisfactory
to the
Underwriters, to the effect that:
(1) The
Custodian is a national banking association duly organized, validly existing
and
in good standing under the laws of the United States and has the power and
authority to enter into and to take all actions required of it under the
Basic
Documents;
(2) each
of the Basic Documents to which it is a party has been duly authorized, executed
and delivered by the Custodian and each constitutes the legal, valid and
binding
obligation of the Custodian, enforceable against the Custodian in accordance
with its respective terms, except as enforceability thereof may be limited
by
(A) bankruptcy, insolvency, reorganization or other similar laws affecting
the
enforcement of creditors’ rights generally, as such laws would apply in the
event of a bankruptcy, insolvency or reorganization or similar occurrence
affecting the Custodian, and (B) general principles of equity regardless
of
whether such enforcement is sought in a proceeding at law or in
equity;
(3) no
consent, approval, authorization or other action by any governmental agency
or
body or other tribunal is required on the part of the Custodian in connection
with its execution and delivery of the Pooling and Servicing Agreement or
the
performance of its obligations thereunder; and
(4) the
execution and delivery of, and performance by the Custodian of its obligations
under, the Basic Documents do not conflict with or result in a violation
of any
statute or regulation applicable to the Custodian, or the charter or bylaws
of
the Custodian, or to the best knowledge of such counsel, any governmental
authority having jurisdiction over the Custodian or the terms of any indenture
or other agreement or instrument to which the Custodian is a party or by
which
it is bound.
In
rendering such opinion, such counsel may rely, as to matters of fact, on
certificates of responsible officers of the Sponsor, the Depositor, the
Custodian and public officials. Such opinion may also assume the due
authorization, execution and delivery of the instruments and documents referred
to therein by the parties thereto other than the Custodian.
K. The
Underwriters shall have received from the Trustee a certificate, signed by
the
president, a senior vice president or a vice president of the Trustee, dated
the
Closing Date, to the effect that each person who, as an officer or
representative of the Trustee, signed or signs the Certificates, the Agreements
or any other document delivered pursuant hereto, on the date hereof or on
the
Closing Date, in connection with the transactions described in the Pooling
and
Servicing Agreement was, at the respective times of such signing and delivery,
and is now, duly elected or appointed, qualified and acting as such officer
or
representative, and the signatures of such persons appearing on such documents
are their genuine signatures.
L. The
Underwriters shall have received a favorable opinion of counsel to the Trustee,
dated the Closing Date and in form and substance satisfactory to the
Underwriters, to the effect that:
(1) The
Trustee is a national banking association organized, validly existing and
in
good standing under the laws of the United States and has the power and
authority to enter into and to take all actions required of it under the
Basic
Documents;
(2) each
of the Basic Documents to which it is a party has been duly authorized, executed
and delivered by the Trustee and each constitutes the legal, valid and binding
obligation of the Trustee, enforceable against the Trustee in accordance with
its respective terms, except as enforceability thereof may be limited by
(A)
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors’ rights generally, as such laws would apply in the
event of a bankruptcy, insolvency or reorganization or similar occurrence
affecting the Trustee, and (B) general principles of equity regardless of
whether such enforcement is sought in a proceeding at law or in
equity;
(3) no
consent, approval, authorization or other action by any governmental agency
or
body or other tribunal is required on the part of the Trustee in connection
with
its execution and delivery of the Pooling and Servicing Agreement or the
performance of its obligations thereunder;
(4) the
Underwritten Certificates have been duly executed, authenticated and delivered
by the Trustee and assuming delivery and payment are validly issued therefor
and
outstanding and are entitled to the benefits of the Pooling and Servicing
Agreement; and
(5) the
execution and delivery of, and performance by the Trustee of its obligations
under, the Basic Documents to which it is a party do not conflict with or
result
in a violation of any statute or regulation applicable to the Trustee, or
the
charter or bylaws of the Trustee, or to the best knowledge of such counsel,
any
governmental authority having jurisdiction over the Trustee or the terms
of any
indenture or other agreement or instrument to which the Trustee is a party
or by
which it is bound.
In
rendering such opinion, such counsel may rely, as to matters of fact, on
certificates of responsible officers of the Sponsor, the Depositor, the Trustee
and public officials. Such opinion may also assume the due authorization,
execution and delivery of the instruments and documents referred to therein
by
the parties thereto other than the Trustee.
M. The
Underwriters shall have received such opinion or opinions, dated the Closing
Date, with respect to (i) the “true sale” of the Mortgage Loans from the Sponsor
to the Depositor and from the Depositor to the Issuing Entity and (ii) the
“non-consolidation” in a bankruptcy proceeding of the Sponsor and the Depositor,
in form and substance reasonably satisfactory to the Underwriters.
N. The
Underwriters shall have received from XxXxx Xxxxxx LLP, special counsel to
the
Underwriters, such opinion or opinions, dated the Closing Date, with respect
to
the issuance and sale of the Underwritten Certificates, the Prospectus and
such
other related matters as the Underwriters shall reasonably require.
O. The
Underwriters shall have received an opinion from Xxxxx Xxxxxxxxxx LLP, special
tax counsel to the Depositor to the effect that the statements in the Pricing
Free Writing Prospectus, the Prospectus and the Prospectus Supplement under
the
heading “Material Federal Income Tax Consequences” accurately describe the
material federal income tax consequences to the holders of the Underwritten
Certificates and that the statements under the heading “ERISA Considerations” in
the Prospectus and the Prospectus Supplement, are materially correct, to
the
extent such statements purport to state or summarize matters of federal
law.
P. Each
Hedge Agreement will be delivered by the applicable NovaStar Entity to the
Trustee. Each Hedge Agreement shall have been duly authenticated by an
authorized agent of the related Hedge Provider, if so required under applicable
state law or regulations.
Q. The
Underwriters and their counsel shall have received copies of any opinions
of
counsel to the NovaStar Entities or the Trustee supplied to the Trustee relating
to matters with respect to the Certificates or the acquisition of the Mortgage
Loans. Any such opinions shall be satisfactory to the Underwriters in form
and
substance.
R. The
Underwriters shall have received a negative assurance letter with respect
to the
Pricing Free Writing Prospectus from each of Xxxxx Xxxxxxxxxx LLP and XxXxx
Xxxxxx LLP.
S. The
Underwriters and their counsel shall have received such further information,
certificates and documents as the Underwriter may reasonably have requested
not
fewer than three (3) full business days prior to the Closing Date.
If
any of
the conditions specified in this Section 6 shall not have been fulfilled
in all
respects when and as provided in this Agreement, if the NovaStar entities
are in
breach of any covenants or agreements contained herein or if any of the opinions
and certificates mentioned above or elsewhere in this Agreement shall not
be in
all material respects reasonably satisfactory in form and substance to the
Underwriters and their counsel, this Agreement and all obligations of the
Underwriters hereunder, may be canceled on, or at any time prior to, the
Closing
Date by the Underwriters. Notice of such cancellation shall be given to the
Sponsor and the Depositor in writing, or by telephone or telegraph confirmed
in
writing.
7. No
Advisory or Fiduciary Responsibility.
Each of
the Sponsor and the Depositor acknowledges and agrees that: (i) the purchase
and
sale of the Underwritten Certificates pursuant to this Agreement, including
the
determination of the public offering price of the Underwritten Certificates
and
any related discounts and commissions, is an arm’s-length commercial transaction
between the Sponsor and the Depositor, on the one hand, and the several
Underwriters, on the other hand, and the Sponsor and the Depositor are capable
of evaluating and understanding and understand and accept the terms, risks
and
conditions of the transactions contemplated by this Agreement; (ii) in
connection with each transaction contemplated hereby and the process leading
to
such transaction each Underwriter is and has been acting solely as a principal
and is not the financial advisor, agent or fiduciary of the Sponsor, the
Depositor or their respective affiliates, stockholders, creditors or employees
or any other party; (iii) no Underwriter has assumed or will assume an advisory,
agency or fiduciary responsibility in favor of the Sponsor or the Depositor
with
respect to any of the transactions contemplated hereby or the process leading
thereto (irrespective of whether such Underwriter has advised or is currently
advising the Sponsor or the Depositor on other matters) or any other obligation
to the Sponsor or the Depositor except the obligations expressly set forth
in
this Agreement; (iv) the several Underwriters and their respective affiliates
may be engaged in a broad range of transactions that involve interests that
differ from those of the Sponsor and the Depositor and that the several
Underwriters have no obligation to disclose any of such interests by virtue
of
any advisory, agency or fiduciary relationship; and (v) the Underwriters
have
not provided any legal, accounting, regulatory or tax advice with respect
to the
offering contemplated hereby and the Sponsor and the Depositor have consulted
their own legal, accounting, regulatory and tax advisors to the extent they
deemed appropriate.
8. Indemnification
and Contribution.
A. Regardless
of whether any Underwritten Certificates are sold, the Sponsor, the Depositor
and NFI will jointly and severally indemnify and hold harmless each Underwriter,
each of their respective officers and directors and each person who controls
each Underwriter within the meaning of the Act or the Securities Exchange
Act of
1934 (the “1934 Act”), against any and all losses, claims, damages, or
liabilities (including the cost of any investigation, legal and other expenses
incurred in connection with and amounts paid in settlement of any action,
suit,
proceeding or claim asserted), joint or several, to which they may become
subject, under the Act, the 1934 Act or other federal or state law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based
upon an
untrue statement or alleged untrue statement of a material fact contained
in, or
arise out of or are based upon the omission or alleged omission to state
therein
a material fact required to be stated therein (in the case of the Registration
Statement) or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading in, (i) the
Registration Statement, or any amendment thereof or supplement thereto, (ii)
the
Basic Prospectus, the Prospectus Supplement, the Pricing Free Writing Prospectus
or the Static Pool Data, whether or not incorporated therein by reference
or any
amendment thereto or supplement thereto, or (iii) the Sponsor-Provided
Information, and will reimburse each such indemnified party for any legal
or
other expenses reasonably incurred by it in connection with investigating
or
defending against such loss, claim, damage, liability or action; provided,
however, that the Sponsor, the Depositor and NFI shall not be liable in any
such
case to the extent that any such loss, claim, damage or liability arises
out of
or is based upon an untrue statement or alleged untrue statement or omission
or
alleged omission made therein in reliance upon and in conformity with the
Underwriter Information.
B. Regardless
of whether any Underwritten Certificates are sold, each Underwriter, severally
and not jointly, will indemnify and hold harmless the Sponsor, the Depositor,
NFI and each of its officers and directors and each person, if any, who controls
the Sponsor, the Depositor and NFI within the meaning of the Act or the 1934
Act
against any losses, claims, damages or liabilities to which they become subject
under the Act, the 1934 Act or other federal or state law or regulation,
at
common law or otherwise, to the same extent as the foregoing indemnity, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in the Prospectus Supplement or in the Pricing
Free
Writing Prospectus or any amendment thereto or supplement thereto, or arise
out
of or are based upon the omission or alleged omission to state therein a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, in each case to
the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made therein in reliance upon
and
in conformity with the Underwriter Information provided by such Underwriter,
and
will reimburse the Sponsor, the Depositor and NFI for any legal or other
expenses reasonably incurred by the Sponsor, the Depositor and NFI in connection
with investigating or defending against such loss, claim, damage, liability
or
action.
C. In
case any proceeding (including any governmental investigation) shall be
instituted involving any person in respect of which indemnity may be sought
pursuant to paragraphs A, B and E of this Section 8, such person (hereinafter
called the indemnified party) shall promptly notify the person against whom
such
indemnity may be sought (hereinafter called the indemnifying party) in writing
thereof; provided, however, that the failure to notify an indemnifying party
shall not relieve it from any liability which it may have under this Section
8
except to the extent it has been materially prejudiced by such failure; and
provided further, however, that the failure to notify any indemnifying party
shall not relieve it from any liability which it may have to any indemnified
party otherwise than under this Section 8. The indemnifying party, upon request
of the indemnified party, shall retain counsel reasonably satisfactory to
the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees
and
disbursements of such counsel related to such proceeding. In any such proceeding
any indemnified party shall have the right to retain its own counsel, but
the
fees and expenses of such counsel shall be at the expense of such indemnified
party unless (i) the indemnifying party and the indemnified party shall have
mutually agreed to the retention of such counsel, or (ii) the named parties
to
any such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both parties
by the same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the indemnifying party shall
not,
in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate
firm
(in addition to any local counsel) for all such indemnified parties, and
that
all such fees and expenses shall be reimbursed as they are incurred. Such
firm
shall be designated in writing by the applicable Underwriter in the case
of
parties indemnified pursuant to paragraph A of this Section 8 and by the
Sponsor, the Depositor and NFI in the case of parties indemnified pursuant
to
paragraphs B and E of this Section 8. The indemnifying party shall not be
liable
for any settlement of any proceeding effected without its written consent,
but
if settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated above, the indemnifying
party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than
30
days after receipt by such indemnifying party of the aforesaid request and
(ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity
could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.
D. Marketing
Materials (as defined below) shall be treated as follows:
(1) All
Marketing Materials, to the extent required to be filed with the Commission,
shall be filed as free writing prospectuses.
(2) Each
of the Underwriters may convey Derived Information (as defined below) (x)
to a
potential investor prior to entering into a Contract of Sale with such investor;
provided, however, that such Underwriter shall not enter into a Contract
of Sale
with such investor unless such Underwriter has conveyed the Pricing Free
Writing
Prospectus to such potential investor prior to such Contract of Sale and
such
Derived Information shall be conveyed separate and apart from any Pricing
Free
Writing Prospectus and (y) to an investor after a Contract of Sale provided
that
such Underwriter has conveyed the Pricing Free Writing Prospectus to such
investor in connection with such Contract of Sale. Each of the Underwriters
agrees that it shall not broadly disseminate any Derived Information.
(3) Each
of the Underwriters agrees to provide to the Depositor prior to the date
of
filing of the Pricing Free Writing Prospectus a copy of any Derived Information
conveyed by such Underwriter if such Derived Information is in fact required
to
be filed under the Act, and the Depositor shall file such Derived Information
with the Commission if the filing is in fact required under the Act.
(4) Each
of the Underwriters may convey Issuer Marketing Materials (as defined below),
or
Traditional Marketing Materials (as defined below) to a potential investor
prior
to entering into a Contract of Sale with such investor; provided,
however,
that
such Underwriter shall not enter into a Contract of Sale with such investor
unless such Underwriter has conveyed the Pricing Free Writing Prospectus
to such
potential investor prior to such Contract of Sale. In addition, in the case
of
Traditional Marketing Materials, such Underwriter shall (x) deliver a copy
of
the Traditional Marketing Materials to the Depositor and its counsel one
business day prior to the first use thereof, (y) shall not convey any such
Traditional Marketing Materials to which the Depositor or its counsel reasonably
objects and (z) shall convey such Traditional Marketing Materials to each
potential investor in the class or classes of Offered Notes to which such
Traditional Marketing Materials relates.
(5) Each
Underwriter that has furnished Issuer Marketing Materials or Traditional
Marketing Materials, in each instance, other than those that contain only
ABS
ICM (as defined below), to potential investors shall furnish copies thereof
to
the Depositor at the time of first use thereof, and the Depositor shall file
such Issuer Marketing Materials or Traditional Marketing Materials, as
applicable, with the Commission if the filing thereof is in fact required
under
the Act. Each Underwriter that has furnished Issuer Marketing Materials or
Traditional Marketing Materials, in each instance, that contain only ABS
ICM, to
potential investors shall furnish copies thereof to the Depositor prior to
the
date of filing of the Prospectus Supplement, and the Depositor shall file
such
Issuer Marketing Materials or Traditional Marketing Materials, as applicable,
with the Commission if the filing thereof is in fact required under the
Act.
(6) Notwithstanding
any provision of this Section 8 to the contrary, unless required under the
Act,
no Underwriter shall be required to file with the Commission or deliver to
the
Depositor for filing with the Commission any free writing prospectus that
(i) is
used or referred to by it and distributed by or on behalf of it in a manner
that
is not reasonably designed to lead to its broad, unrestricted dissemination
and
(ii) does not consist of or include Issuer Marketing Materials or Traditional
Marketing Materials.
E. Each
Underwriter agrees, severally and not jointly, assuming all Sponsor -Provided
Information (defined below) is accurate and complete in all material respects,
to indemnify and hold harmless the Sponsor and the Depositor, their respective
officers and directors and each person who controls the Sponsor within the
meaning of the Securities Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they may become
subject under the Securities Act or the Exchange Act or otherwise, insofar
as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement of a material fact contained
in the Derived Information provided by such Underwriter, or arise out of
or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein,
in
the light of the circumstances under which they were made, not misleading,
and
agrees to reimburse each such indemnified party for any legal or other expenses
reasonably incurred by him, her or it in connection with investigating or
defending or preparing to defend any such loss, claim, damage, liability
or
action as such expenses are incurred; provided,
however,
that
this indemnity shall not apply to any untrue statement or omission or alleged
untrue statement or alleged omission made in any Derived Information that
results from an error or omission in any Sponsor-Provided Information. The
several obligations of each Underwriter under this Section 8(E) shall be
in
addition to any liability which each Underwriter may otherwise
have.
The
procedures set forth in Section 8(C) shall be equally applicable to this
Section
8(E).
F. If
the indemnification provided for in this Section 8 is unavailable to an
indemnified party in respect of any losses, claims, damages or liabilities
referred to herein, then each indemnifying party, in lieu of indemnifying
such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(i)
in such proportion as is appropriate to reflect the relative benefits received
by the Sponsor, the Depositor, NFI and the Underwriters from the sale of
the
Underwritten Certificates or (ii) if the allocation provided by clause (i)
above
is not permitted by applicable law, in such proportion as is appropriate
to
reflect not only relative benefits referred to in clause (i) above but also
the
relative fault of the Sponsor, the Depositor, NFI and of the Underwriters
in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations.
The
relative benefits received by an Underwriter shall be equal to its aggregate
discount and underwriting commissions with respect to the Underwritten
Certificates purchased by such Underwriter, and the relative benefits of
the
Sponsor, the Depositor and NFI shall be equal to the balance of the proceeds
of
the sale of the Offered Notes; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The relative fault of the Sponsor, the Depositor,
NFI and each Underwriter shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact
or the
omission or alleged omission to state a material fact relates to information
supplied by the Sponsor, the Depositor, NFI or by any of the Underwriters
and
the parties’ relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
G. The
Sponsor, the Depositor, NFI and each Underwriter agree that it would not
be just
and equitable if contribution pursuant to this Section 8 were determined
by pro
rata allocation or by any other method of allocation that does not take account
of the equitable considerations referred to in paragraph F of this Section
8.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in paragraph F of this Section
8
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8, no Underwriter shall be
required to contribute any amount in excess of the aggregate discount and
underwriting commissions with respect to the Underwritten Certificates purchased
by it less amounts such Underwriter has already been required to pay by reason
of the untrue or alleged untrue statement or omission or alleged
omission.
H. The
Sponsor, the Depositor and each Underwriter each expressly waive, and agree
not
to assert, any defense to their respective indemnification and contribution
obligations under this Section 8 which they might otherwise assert based
upon
any claim that such obligations are unenforceable under federal or state
securities laws or by reasons of public policy.
I. The
obligations of the Sponsor and the Depositor under this Section 8 shall be
in
addition to any liability which the Sponsor and the Depositor may otherwise
have
and shall extend, upon the same terms and conditions, to each person, if
any,
who controls the Underwriter within the meaning of the Act or the 1934 Act;
and
the several obligations of the Underwriters under this Section 8 shall be
in
addition to any liability that the Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each director of the Sponsor
and
to each person, if any, who controls the Sponsor within the meaning of the
Act
or the 1934 Act; provided, however, that in no event shall the Sponsor, the
Depositor or the Underwriters be liable for double indemnification.
J. For
purposes of this agreement,
(1) “ABS
ICM” means “ABS informational and computational materials” as defined in Item
1101(a) of Regulation AB of the Act (“Regulation AB”) promulgated by the
Commission.
(2) “Bloomberg
Submission” means the material provided by or through Bloomberg or Intex or
similar entities for use by prospective investors, or embedded in any CDI
files
provided to prospective investors.
(3) “Collateral
Strats” means information regarding the Mortgage Loans that is based on the
Sponsor-Provided Information that is conveyed separate and apart from any
Preliminary Term Sheet.
(4) “Contract
of Sale” has the meaning in Rule 159 under the Act.
(5) “Derived
Information” means information specified in paragraph (5) of the definition of
ABS Informational and Computational Materials in Item 1101(a) of Regulation
AB.
(6) “Issuer
Marketing Materials” means Marketing Materials that include “issuer information”
as defined in Rule 433(h)(2) of the Act that are required to be filed by
the
Depositor under the Act.
(7) “Marketing
Materials” means ABS ICM or Preliminary Term Sheets.
(8) “Preliminary
Term Sheet” means a “written communication” within the meaning of Rule 405 under
the Act that describes the Notes and/or the Mortgage Loans and contains
information described in paragraphs (1) - (3) of the definition of ABS
Informational and Computational Materials in Item 1101(a) of Regulation AB
but
which does not include Derived Information.
(9) “Sponsor-Provided
Information” means any computer tape furnished to any Underwriter by the Sponsor
concerning the assets comprising the Trust.
(10) “Static
Pool Data” means any information provided by the Depositor as contemplated by
Item 1105 of Regulation AB relating to securitized pools established by the
Sponsor.
(11) “Traditional
Marketing Materials” means Marketing Materials that are required to be filed
under the Act that contain both “issuer information” as defined in Rule
433(h)(2) of the Act and other information that would be required to be filed
under the Act, other than Collateral Strats and Bloomberg Submissions.
9. Information
Supplied by Underwriters.
The
first sentence of the last paragraph on the front cover page of the Supplement,
the third paragraph under the heading “Method of Distribution” in the Supplement
and the fifth paragraph on the cover page of the Supplement (the “Underwriter
Information”) constitute the only information furnished by the Underwriters to
the Sponsor and the Depositor for the purposes of Sections 2(B), 8(A) and
8(B)
hereof. Each Underwriter confirms that the Underwriter Information relating
to
it is correct as of the date of the Prospectus Supplement.
10. Notices.
All
communications hereunder shall be in writing and, if sent to the Underwriters,
shall be mailed or delivered or telecopied and confirmed in writing to Deutsche
Bank Securities Inc., 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxx
Xxxxxxx, Legal Department, Greenwich Capital Markets, Inc., 000 Xxxxxxxxx
Xxxx,
Xxxxxxxxx, Xxxxxxxxxxx 00000, Attention: General Counsel, and Wachovia Capital
Markets, LLC, 000 Xxxxx Xxxxxxx Xxxxxx, XX0000, Xxxxxxxxx, Xxxxx Xxxxxxxx
00000,
Attention: Xxxxxx Xxxxxx; if sent to the Sponsor, shall be mailed, delivered
or
facsimiled and confirmed in writing to NovaStar Mortgage Inc., 0000 Xxxx
Xxxxxxx, Xxxxx 000, Xxxxxx Xxxx, Xxxxxxxx 00000, Attention: Xxxxx Xxxxxx,
Senior
Vice President; and if sent to the Depositor, shall be mailed, delivered
or
telegraphed and confirmed in writing to 0000 Xxxx Xxxxxxx, Xxxxx 000, Xxxxxx
Xxxx, Xxxxxxxx 00000, Attention: Xxxx Xxxxxxxxxxxx, Vice President.
11. Survival.
All
representations, warranties, covenants and agreements of the Sponsor and
the
Depositor contained herein or in agreements or certificates delivered pursuant
hereto, and the agreements of the Underwriters, the Sponsor and the Depositor
contained in Section 8 hereof shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of the Underwriters
or any controlling persons, or any subsequent purchaser or the Sponsor or
the
Depositor or any of its officers, directors or any controlling persons, and
shall survive delivery of and payment for the Underwritten Certificates.
The
provisions of Sections 5 and 8 hereof shall survive the termination or
cancellation of this Agreement.
12. Termination.
The
Underwriters shall have the right to terminate this Agreement by giving notice
as hereinafter specified at any time at or prior to the Closing Date if (a)
trading generally shall have been suspended or materially limited on or by,
as
the case may be, the New York Stock Exchange or the American Stock Exchange,
(b)
trading of any securities of NFI or the Depositor shall have been suspended
on
any exchange or in any over-the-counter market, (c) a general moratorium
on
commercial banking activities shall have been declared by either federal
or New
York State authorities, (d) there shall have occurred a material disruption
in
securities settlement, payment or clearance services in the United States,
or
(e) there shall have occurred any outbreak or escalation of hostilities or
any
change in financial markets or any calamity or crisis which, in the
Underwriters’ judgment, is material and adverse, and, in the case of any of the
events specified in this clause (e), such event singly or together with any
other such event makes it in the Underwriters’ judgment impractical or
inadvisable to proceed with the offer, sale or delivery of the Certificates.
Any
such termination shall be without liability of any other party except that
the
provisions of Paragraph F. of Section 5 and Sections 7 and 8 hereof shall
at all
times be effective.
13. Successors.
This
Agreement will inure to the benefit of and be binding upon the signatories
hereto and their respective successors and assigns (which successors and
assigns
do not include any person purchasing an Underwritten Certificate from the
Underwriters), and the officers and directors and controlling persons referred
to in Section 8 hereof and their respective successors and assigns, and no
other
persons will have any right or obligations hereunder.
14. APPLICABLE
LAW; VENUE.
THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS OF THE STATE OF NEW YORK. ANY ACTION OR PROCEEDING BROUGHT TO ENFORCE
OR
ARISING OUT OF ANY PROVISION OF THIS AGREEMENT SHALL BE BROUGHT ONLY IN A
STATE
OR FEDERAL COURT LOCATED IN THE BOROUGH OF MANHATTAN, NEW YORK CITY, NEW
YORK,
AND THE PARTIES HERETO EXPRESSLY CONSENT TO THE JURISDICTION OF SUCH COURTS
AND
AGREE TO WAIVE ANY DEFENSE OR CLAIM OF FORUM NON CONVENIENS THEY MAY HAVE
WITH
RESPECT TO ANY SUCH ACTION OR PROCEEDING BROUGHT.
15. Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall
together constitute but one and the same instrument.
16. Amendments
and Waivers.
This
Agreement may be amended, modified, altered or terminated, and any of its
provisions waived, only in a writing signed on behalf of the signatories
hereto.
17. Default
of Underwriters.
If any
of the Underwriters defaults in its obligations to purchase the Underwritten
Certificates offered to it hereunder (such Underwriter, the “Defaulting
Underwriter”), then the remaining Underwriters (the “Performing Underwriters”)
shall have the option, but not the obligation, to purchase all, but not less
than all, of the Underwritten Certificates offered to the Defaulting
Underwriter. If a Performing Underwriter elects not to exercise such option,
then this Agreement will terminate without liability on the part of such
Performing Underwriter. Nothing contained herein shall relieve the Defaulting
Underwriter from any and all liabilities to the Sponsor, the Depositor, NFI
and
the Performing Underwriters resulting from the default of such Defaulting
Underwriter.
If
the
foregoing is in accordance with your understanding of our agreement, please
sign
and return to us a counterpart hereof, whereupon this instrument along with
all
counterparts will become a binding agreement among you, the Sponsor, the
Depositor and NFI in accordance with its terms.
Very
truly yours,
NOVASTAR
MORTGAGE INC.
By:
/s/
Xxxx Xxxxxxxxxxxx
Name: Xxxx Xxxxxxxxxxxx
Title: Vice President
Name: Xxxx Xxxxxxxxxxxx
Title: Vice President
NOVASTAR
MORTGAGE FUNDING CORPORATION
By:
/s/
Xxxx Xxxxxxxxxxxx
Name: Xxxx Xxxxxxxxxxxx
Title: Vice President
Name: Xxxx Xxxxxxxxxxxx
Title: Vice President
NOVASTAR
FINANCIAL, INC.
By:
/s/
Xxxx Xxxxxxxxxxxx
Name: Xxxx Xxxxxxxxxxxx
Title: Vice President
Name: Xxxx Xxxxxxxxxxxx
Title: Vice President
Agreed
to
and Accepted by:
(as
of
the date hereof)
DEUTSCHE
BANK SECURITIES INC.
By:
/s/
Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: Director
Name: Xxxx X. Xxxxx
Title: Director
By:
/s/
Xxxxxxx Xxxxxx
Name: Xxxxxxx Xxxxxx
Title: Director
Name: Xxxxxxx Xxxxxx
Title: Director
GREENWICH
CAPITAL MARKETS, INC.
By:
/s/
Xxx Xxxxxxxxxx
Name: Xxx Xxxxxxxxxx
Title: Vice President
Name: Xxx Xxxxxxxxxx
Title: Vice President
WACHOVIA
CAPITAL MARKETS, LLC
By:
/s/
Xxxx Xxxxx
Name: Xxxx Xxxxx
Title: Vice President
Name: Xxxx Xxxxx
Title: Vice President
Annex
A
Underwriting
Class
A-1A Certificates
|
Underwriter
|
Principal
Amount
|
Purchase
Price
|
|||||
|
Deutsche
Bank Securities Inc.
|
$
|
321,424,000
|
100.000000
|
%
|
|||
|
Greenwich
Capital Markets, Inc.
|
241,068,000
|
100.000000
|
%
|
||||
|
Wachovia
Capital Markets, LLC
|
241,068,000
|
100.000000
|
%
|
||||
|
Total
|
$
|
803,560,000
|
100.000000
|
%
|
|||
|
Class
A-2A1 Certificates
|
|||||||
|
Underwriter
|
Principal
Amount
|
Purchase
Price
|
|||||
|
Deutsche
Bank Securities Inc.
|
$
|
105,066,000
|
100.000000
|
%
|
|||
|
Greenwich
Capital Markets, Inc.
|
78,799,500
|
100.000000
|
%
|
||||
|
Wachovia
Capital Markets, LLC
|
78,799,500
|
100.000000
|
%
|
||||
|
Total
|
$
|
262,665,000
|
|||||
|
Class
A-2A2 Certificates
|
|||||||
|
Underwriter
|
Principal
Amount
|
Purchase
Price
|
|||||
|
Deutsche
Bank Securities Inc.
|
$
|
40,000,000
|
99.994181
|
%
|
|||
|
Greenwich
Capital Markets, Inc.
|
30,000,000
|
99.994181
|
%
|
||||
|
Wachovia
Capital Markets, LLC
|
30,000,000
|
99.994181
|
%
|
||||
|
Total
|
$
|
100,000,000
|
|||||
|
Class
A-2B Certificates
|
|||||||
|
Underwriter
|
Principal
Amount
|
Purchase
Price
|
|||||
|
Deutsche
Bank Securities Inc.
|
$
|
52,581,600
|
100.000000
|
%
|
|||
|
Greenwich
Capital Markets, Inc.
|
39,436,200
|
100.000000
|
%
|
||||
|
Wachovia
Capital Markets, LLC
|
39,436,200
|
100.000000
|
%
|
||||
|
Total
|
$
|
131,454,000
|
|||||
|
Class
A-2C Certificates
|
|||||||
|
Underwriter
|
Principal
Amount
|
Purchase
Price
|
|||||
|
Deutsche
Bank Securities Inc.
|
$
|
50,230,000
|
100.000000
|
%
|
|||
|
Greenwich
Capital Markets, Inc.
|
37,672,500
|
100.000000
|
%
|
||||
|
Wachovia
Capital Markets, LLC
|
37,672,500
|
100.000000
|
%
|
||||
|
Total
|
$
|
125,575,000
|
|||||
i
|
Class
A-2D Certificates
|
|||||||
|
Underwriter
|
Principal
Amount
|
Purchase
Price
|
|||||
|
Deutsche
Bank Securities Inc.
|
$
|
13,968,000
|
100.000000
|
%
|
|||
|
Greenwich
Capital Markets, Inc.
|
10,476,000
|
100.000000
|
%
|
||||
|
Wachovia
Capital Markets, LLC
|
10,476,000
|
100.000000
|
%
|
||||
|
Total
|
$
|
34,920,000
|
|||||
|
Class
M-1 Certificates
|
|||||||
|
Underwriter
|
Principal
Amount
|
Purchase
Price
|
|||||
|
Deutsche
Bank Securities Inc.
|
$
|
40,043,200
|
100.000000
|
%
|
|||
|
Greenwich
Capital Markets, Inc.
|
30,032,400
|
100.000000
|
%
|
||||
|
Wachovia
Capital Markets, LLC
|
30,032,400
|
100.000000
|
%
|
||||
|
Total
|
$
|
100,108,000
|
|||||
|
Class
M-2 Certificates
|
|||||||
|
Underwriter
|
Principal
Amount
|
Purchase
Price
|
|||||
|
Deutsche
Bank Securities Inc.
|
$
|
33,621,200
|
100.000000
|
%
|
|||
|
Greenwich
Capital Markets, Inc.
|
25,215,900
|
100.000000
|
%
|
||||
|
Wachovia
Capital Markets, LLC
|
25,215,900
|
100.000000
|
%
|
||||
|
Total
|
$
|
84,053,000
|
|||||
|
Class
M-3 Notes
|
|||||||
|
Underwriter
|
Principal
Amount
|
Purchase
Price
|
|||||
|
Deutsche
Bank Securities Inc.
|
$
|
10,577,600
|
100.000000
|
%
|
|||
|
Greenwich
Capital Markets, Inc.
|
7,933,200
|
100.000000
|
%
|
||||
|
Wachovia
Capital Markets, LLC
|
7,933,200
|
100.000000
|
%
|
||||
|
Total
|
$
|
26,444,000
|
100.000000
|
%
|
|||
|
Class
M-4 Certificates
|
|||||||
|
Underwriter
|
Principal
Amount
|
Purchase
Price
|
|||||
|
Deutsche
Bank Securities Inc.
|
$
|
15,110,800
|
98.662850
|
%
|
|||
|
Greenwich
Capital Markets, Inc.
|
11,333,100
|
98.662850
|
%
|
||||
|
Wachovia
Capital Markets, LLC
|
11,333,100
|
98.662850
|
%
|
||||
|
Total
|
$
|
37,777,000
|
|||||
|
Class
M-5 Certificates
|
|||||||
|
Underwriter
|
Principal
Amount
|
Purchase
Price
|
|||||
|
Deutsche
Bank Securities Inc.
|
$
|
12,844,000
|
98.489400
|
%
|
|||
|
Greenwich
Capital Markets, Inc.
|
9,633,000
|
98.489400
|
%
|
||||
|
Wachovia
Capital Markets, LLC
|
9,633,000
|
98.489400
|
%
|
||||
|
Total
|
$
|
32,110,000
|
|||||
ii
