Exhibit 1.1
August 24, 2001
First Union Securities, Inc.
Xxx Xxxxx Xxxxx Xxxxxx, XX-00
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
NovaStar Mortgage Inc. (the "Seller"), NovaStar Mortgage Funding
Corporation (the "Company") and NovaStar Financial, Inc. ("NFI") hereby confirm
their agreement to sell certain asset backed certificates to First Union
Securities, Inc. (the "Representative"), Xxxxxx Xxxxxxx & Co. Incorporated
("Xxxxxx Xxxxxxx") and Greenwich Capital Markets, Inc. ("Greenwich", and
together with the Representative and Xxxxxx Xxxxxxx, the "Underwriters") as
described herein. The certificates will be secured by the assets of a trust
consisting primarily of a segregated pool of certain mortgage loans (the
"Mortgage Loans"), which were originated by the Seller, as originator (in such
capacity, the "Originator") or its affiliate. Pursuant to a Pooling and
Servicing Agreement dated as of September 1, 2001 (the "Pooling and Servicing
Agreement") among the Company, the Seller, First Union National Bank, a national
banking corporation ("First Union"), not in its individual capacity, but solely
as Certificate Administrator (the "Certificate Administrator"), Citibank, N.A.,
not in its individual capacity, but solely as trustee (the "Trustee"), NovaStar
Mortgage Funding Trust 2001-2, a common law trust acting through the Trustee
(the "Issuer" or the "Trust"), will issue the Class A-1 Certificates, the Class
A-2 Certificates, the Class A-3 Certificates, the Class M Certificates, the
Class AIO Certificates and the Class P Certificates as described herein.
All capitalized terms used but not otherwise defined herein have the
respective meanings set forth in the Pooling and Servicing Agreement. The phrase
"this Agreement" shall refer to this letter by the Seller, the Company and NFI
to the Underwriters as agreed to and accepted by the Underwriters as of the date
hereof.
1. Securities. The securities will be issued in classes as follows: (i)
four classes of senior certificates designated as Asset Backed Certificates,
Class A-1 (the "Class A-1 Certificates") Asset Backed Certificates, Class A-2
(the "Class A-2 Certificates"), Asset Backed Certificates, Class A-3 (the "Class
A-3 Certificates") and a senior interest only certificate designated as Asset
Backed Certificates, Class AIO (the "Class AIO Certificates"); (ii) three
classes of mezzanine certificates designated as Asset Backed Certificates, Class
M-1 (the "Class M-1 Certificates"), Asset Backed Certificates, Class M-2 (the
"Class M-2 Certificates") and Asset Backed Certificates Class M-3 (the "Class
M-3 Certificates" and collectively with the Class M-1 Certificates and Class M-2
Certificates, the "Class M Certificates" and together with the Class A-1
Certificates, the "Offered Certificates"); (iii) a certificate entitling the
holder to prepayment penalties and a payment of principal on the Class P
Principal Distribution Date designated as Asset Backed Certificates, Class P
(the "Class P Certificates"), (iv) a certificate entitling the holder to certain
principal payments designated as Asset Backed Certificates, Class O (the "Class
O Certificates") and (v) one or more certificates representing the residual
interest
in the Trust, designated as Asset Backed Certificates, Class R (the "Class R
Certificates" and collectively with the Offered Certificates, the Class AIO
Certificates and the Class P Certificates, the "Certificates").
2. Representations and Warranties of the Seller and the Company. The Seller
and the Company represent and warrant to, and covenant with, the Underwriters
that:
A. The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement (No. 333-50290) 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 Company proposes to file
with the Commission pursuant to Rule 424(b)(2) under the Act a supplement
dated the date hereof to the prospectus dated February 16, 2001 relating to
the Offered Certificates and the method of distribution thereof and has
previously advised the Underwriters of all further information (financial
and other) with respect to the Offered 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 February 16, 2001, in the form in which
it will be filed with the Commission pursuant to Rule 424(b)(2) 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)(2) of the Act, is hereinafter
called the "Prospectus Supplement"; and the Basic Prospectus and the
Prospectus Supplement together are hereinafter called the "Prospectus." Any
preliminary form of the Prospectus Supplement which has heretofore been
filed pursuant to Rule 424 is hereinafter called a "Preliminary Prospectus
Supplement." The Company will file with the Commission within fifteen days
of the issuance of the Certificates a report on Form 8-K setting forth
specific information concerning the related Mortgage Loans (the "8-K").
B. As of the date hereof, when the Registration Statement became
effective, when the Prospectus Supplement is first filed pursuant to Rule
424(b)(2) 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, and the Prospectus, as amended or supplemented
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, 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 Seller nor the Company
makes any representation or warranty as to the information contained in or
omitted from the Registration Statement or the Prospectus or any amendment
thereof or supplement thereto in reliance upon and in conformity with the
Underwriter Information.
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C. Each of the Seller, the Company, NFI, NovaStar Capital, Inc. (the
"Converted Loan Purchaser") and NRFC (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 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 Seller or the Company, threatened, before any court,
governmental agency or body or other tribunal: (i) asserting the invalidity
of this Agreement, the Pooling and Servicing Agreement, the Mortgage Loan
Purchase Agreement, dated as of September 1, 2001 (the "Mortgage Loan
Purchase Agreement"), between the Seller and the Company, the Converted
Loan Purchase Agreement, dated as of September 1, 2001 (the "Converted Loan
Purchase Agreement"), among the Seller, as Servicer and as Originator, the
Converted Loan Purchaser and the Trustee, and the REMIC Interests Sale
Agreement, dated as of September 1, 2001 (the "REMIC Sale Agreement," and
collectively, the "Agreements") between the Company and NRFC, or the
Offered Certificates; (ii) seeking to prevent the issuance of the
Certificates or the consummation of any of the transactions contemplated by
the Agreements; (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 Agreements or the Certificates; or (iv) which may affect adversely the
federal income tax attributes of the Offered Certificates as described in
the Prospectus.
E. The execution and delivery by the NovaStar Entities of the
Agreements 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 Offered
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 Agreements or (ii) the
business, operations, results of operations, financial position, income,
properties or assets of the NovaStar Entities.
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F. This Agreement has been duly executed and delivered by the Seller
and the Company, and the other Agreements 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 Offered Certificates will conform in all material respects to
the description thereof to be contained in 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 Initial Mortgage Loans will conform in all
material respects to the description thereof contained in the Prospectus
and the representations and warranties contained in this Agreement will be
true and correct in all material respects. On each Subsequent Transfer
Date, the Subsequent Mortgage Loans will conform to the criteria set forth
in the Prospectus Supplement. The representations and warranties of the
Seller and the Company 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 Seller and the
Company, 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 the Agreements or the execution and issuance
of the Offered 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 June 30,
2001.
L. The Agreements will conform in all material respects to the
descriptions thereof, if any, contained in the Prospectus.
M. Neither the Seller nor the Company 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
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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 Offered
Certificates for sale in any jurisdiction or the initiation or threatening
of any proceeding for such purpose.
3. Agreements of the Underwriters. Each Underwriter, severally and not
jointly, agrees with the Seller, the Company and NFI that upon the execution of
this Agreement and authorization by each Underwriter of the release of the
Offered Certificates, each Underwriter shall offer the Offered 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 Offered Certificates. Each of the
Seller and the Company hereby agree, subject to the terms and conditions hereof,
to sell the Offered Certificates the Underwriters, who, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, hereby severally and not jointly agree to purchase the
principal amount of the Offered Certificates set forth in Annex A hereto. At the
time of issuance of the Offered Certificates, the Mortgage Loans will be
transferred by the Seller to the Company, and by the Company to the Trust
pursuant to the Pooling and Servicing Agreement.
The Offered Certificates to be purchased by each Underwriter will be
delivered by the Seller and the Company 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 Seller.
Settlement shall take place at the offices of Xxxxx Xxxxxxxxxx LLP, 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 10 a.m., on September 1,
2001 or at such other time thereafter as each of the Underwriters, the Seller
and the Company determine (such time being herein referred to as the "Closing
Date"). The Offered 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 Seller and the Company agree to have the Offered Certificates available
for inspection and review by the Underwriters in New York not later than 10 a.m.
New York time on the business day prior to the Closing Date.
5. Covenants of the Seller and the Company. Each of the Seller and the
Company covenant and agree with the Underwriters that:
A. The Seller and the Company will promptly advise each Underwriter
and its 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 Seller or the Company of any notification with respect
to the suspension of the qualification of the Offered Certificates for sale
in any jurisdiction or the initiation or threatening of any proceeding for
such purpose. Neither the Seller
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nor the Company 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 Offered Certificates unless the Seller and the Company 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 Seller and the Company
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 Seller and the Company 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 Seller and the Company 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 Seller and the
Company will pay the expenses of printing all offering documents relating
to the offering of the Offered Certificates.
D. As soon as practicable, but not later than sixteen months after the
effective date of the Registration Statement, the Seller and the Company
will make generally available to Holders of Offered 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 Seller
and the Company, will satisfy the requirements of Rule 158 under the Act.
E. So long as any of the Offered Certificates are outstanding, the
Seller and the Company will cause to be delivered to each Underwriter (i)
all documents required to be distributed to the Offered 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 Seller and the Company, 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 Offered
Certificates; (ii) preparation of all documents specified in this
Agreement;
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(iii) any fees and expenses of the Trustee; (iv) any fees and expenses of
the Certificate Administrator; (v) any fees charged by investment rating
agencies for rating the Offered Certificates; and (vi) their investigation
with regard to the NovaStar Entities.
G. Each of the Seller and the Company agrees that, so long as any of
the Offered 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 Seller and the Company; 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 Seller, and the Company will enter into each of the Agreements
to which it is a party and all related agreements on or prior to the
Closing Date.
I. The Seller and the Company will endeavor to qualify the Offered
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 Offered
Certificates for investment under the laws of such jurisdictions as the
Underwriters may reasonably designate, if any.
6. Conditions of the Underwriters' Obligation. The obligation of each
Underwriter to purchase and pay for the Offered 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 Seller
and the Company contained herein (including those representations and warranties
set forth in the other Agreements incorporated herein), to the accuracy of the
statements of the Seller and the Company made in any certificate or other
document delivered pursuant to the provisions hereof, to the performance by the
Seller and the Company 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 Agreements and the Offered
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
Xxxxxxx, Mag and Fizzell, 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
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perform its obligations under each of the Agreements. 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 each of the Agreements.
(2) Each of the Agreements has been duly and validly authorized,
executed and delivered by the 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 NovaStar Entities in
accordance with their respective terms.
(3) Neither the transfer of the Mortgage Loans to the Trust, the
issuance or sale of the Offered Certificates nor the execution,
delivery or performance by the NovaStar Entities of, the Agreements
(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 Offered 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 Kansas, for
the execution, delivery and performance of the Agreements, or the
offer, issuance, sale or delivery of the Offered 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 Offered
Certificates; (ii) seeking to prevent the issuance of the Offered
Certificates or the consummation of any of the transactions
contemplated by the Agreements; or (iii) which would materially and
adversely affect the performance by the NovaStar Entities of
obligations under, or the validity or enforceability of, the Offered
Certificates or the Agreements.
(6) Except as to any financial or statistical data contained in
the Registration Statement, to the best of such counsel's knowledge,
the Registration Statement does not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein not
misleading.
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(7) To the best of the knowledge of such counsel, 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 Offered Certificates (including the Prospectus), and
has not initiated or threatened any proceeding for that purpose.
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. The Underwriters shall have received a letter from Ernst & Young,
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
Prospectus and certain matters relating to the Seller.
E. The Class A-1 Certificates, the Class A-2 Certificates and the
Class A-3 Certificates shall have been rated "AAA" by Standard & Poor's
Ratings Services, a division of The XxXxxx-Xxxx Companies, Inc. ("S&P") and
"Aaa" by Xxxxx'x Investors Service, Inc. ("Moody's"), the Class M-1
Certificates shall have been rated "AA" by S&P and "Aa" by Moody's, the
Class M-2 Certificates shall have been rated "A" by S&P and "A2" by Moody's
and the Class M-3 Certificates shall have been rated "BBB" by S&P and
"Baa2" by Moody's 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 Offered 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.
F. 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 Agreements 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 other Agreements
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 Agreements in any material way; and no
merger, liquidation, dissolution or bankruptcy of the NovaStar
Entities is pending or contemplated;
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(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
September 1, 2001, and no such amendment has been authorized. No event
has occurred since September 1, 2001, 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 September 1, 2001; and
(7) each person who, as an officer or representative of the
NovaStar Entities signed or signs the Registration Statement, the
Agreements 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.
G. 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 September 1, 2001, 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 Offered Certificates on the terms and
in the manner contemplated in the Prospectus.
H. The Underwriters shall have received a favorable opinion of counsel
to the Certificate Administrator, dated the Closing Date and in form and
substance satisfactory to the Underwriters, to the effect that:
(1) The Certificate Administrator is a national banking
association duly organized, validly existing and in good standing
under the laws of the United States
10
and has the power and authority to enter into and to take all actions
required of it under the Agreements;
(2) each of the Agreements to which it is a party has been duly
authorized, executed and delivered by the Certificate Administrator
and each constitutes the legal, valid and binding obligation of the
Certificate Administrator, enforceable against the Certificate
Administrator 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 Certificate Administrator, 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 Certificate Administrator in connection with its execution and
delivery of the Pooling and Servicing Agreement or the performance of
its obligations thereunder;
(4) the Offered Certificates have been duly executed,
authenticated and delivered by the Certificate Administrator 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
Certificate Administrator of its obligations under, the Agreements do
not conflict with or result in a violation of any statute or
regulation applicable to the Certificate Administrator, or the charter
or bylaws of the Certificate Administrator, or to the best knowledge
of such counsel, any governmental authority having jurisdiction over
the Certificate Administrator or the terms of any indenture or other
agreement or instrument to which the Certificate Administrator 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 Seller, the Company,
the Certificate Administrator 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
Certificate Administrator.
I. The Underwriters shall have received from the Certificate
Administrator a certificate, signed by the president, a senior vice
president or a vice president of the Certificate Administrator, dated the
Closing Date, to the effect that each person who, as an officer or
representative of the Certificate Administrator, signed or signs the
Offered 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.
11
J. The Underwriters shall have received from the Certificate
Administrator a certificate, signed by the president, a senior vice
president or a vice president of the Certificate Administrator, dated the
Closing Date, to the effect that each person who, as an officer or
representative of the Certificate Administrator, signed or signs 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.
K. 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 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 Agreements;
(2) each of the Agreements 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 Offered 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 Agreements 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.
12
In rendering such opinion, such counsel may rely, as to matters of
fact, on certificates of responsible officers of the Seller, the Company,
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.
L. 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 Seller to the Company and from the Company to the Trust and
(ii) the "non-consolidation" in a bankruptcy proceeding of the Seller and
the Company, in form and substance reasonably satisfactory to the
Underwriters.
M. The Underwriters shall have received from Xxxxx Xxxxxxxxxx LLP,
special counsel to the Underwriters, such opinion or opinions, dated the
Closing Date, with respect to the issuance and sale of the Offered
Certificates, the Prospectus and such other related matters as the
Underwriters shall reasonably require.
N. 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, the
formation of the Trust or the acquisition of the Mortgage Loans. Any such
opinions shall be satisfactory to the Underwriters in form and substance.
O. The Underwriters shall have received an opinion from Xxxxx
Xxxxxxxxxx LLP, special tax counsel to the Company to the effect that the
statements in 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 Offered
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. The Underwriters shall have received such further information,
certificates and documents as the Underwriters 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 Seller and
the Company in writing, or by telephone or telegraph confirmed in writing.
7. [Reserved]
8. Indemnification and Contribution.
A. Regardless of whether any Offered Certificates are sold, the
Seller, the Company and NFI will jointly and severally indemnify and hold
harmless each Underwriter, each of
13
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
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 or the Prospectus Supplement or any amendment thereto or
supplement thereto, or (iii) the Seller-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 Seller, the Company 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 Offered Certificates are sold, each
Underwriter, severally and not jointly, will indemnify and hold harmless
the Seller, the Company, NFI and each of its officers and directors and
each person, if any, who controls the Seller, the Company 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 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, and will reimburse the Seller, the Company and
NFI for any legal or other expenses reasonably incurred by the Seller, the
Company 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
14
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 Underwriters in
the case of parties indemnified pursuant to paragraph A of this Section 8
and by the Seller, the Company 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. Each Underwriter agrees, severally and not jointly, to provide the
Company no later than the date on which the Prospectus Supplement is
required to be filed pursuant to Rule 424 with a copy of any Derived
Information (defined below) for filing with the Commission on Form 8-K.
E. Each Underwriter agrees, severally and not jointly, assuming all
Seller-Provided Information (defined below) is accurate and complete in all
material respects, to indemnify and hold harmless the Seller and the
Company, their respective officers and directors and each person who
controls the Seller 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
15
action as such expenses are incurred. 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. For purposes of this Section 8, the term "Derived Information"
means such portion, if any, of the information delivered to the Companies
pursuant to Section 8(D) for filing with the Commission on Form 8-K as: (i)
is not contained in the Prospectus without taking into account information
incorporated therein by reference; and (ii) does not constitute
Seller-Provided Information. "Seller-Provided Information" means any
computer tape furnished to the Underwriters by the Seller concerning the
assets comprising the Trust.
G. 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 Seller, the Company, NFI and
each Underwriter from the sale of the Offered 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 Seller,
the Company, NFI and of each Underwriter 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 each Underwriter shall be equal to
its aggregate discount and underwriting commissions with respect to the
Offered Certificates purchased by it, and the relative benefits of the
Seller, the Company and NFI shall be equal to the balance of the proceeds
of the sale of the Offered Certificates; 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
Seller, the Company, 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 Seller, the Company,
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.
H. The Seller, the Company, 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 G 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 G 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
Xxxxxxx 0, xxxx of the Underwriters shall be required to contribute any
amount in excess of the aggregate discount and
16
underwriting commissions with respect to the Offered Certificates purchased
by it less amounts the underwriter has already been required to pay by
reason of the untrue or alleged untrue statement or omission or alleged
omission.
I. The Seller, the Company 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.
J. The obligations of the Seller and the Company under this Section 8
shall be in addition to any liability which the Seller and the Company 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 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 Seller and to each person, if any, who controls the
Seller within the meaning of the Act or the 1934 Act; provided, however,
that in no event shall the Seller, the Company or the Underwriters be
liable for double indemnification.
9. Information Supplied by Underwriters. The last paragraph on the front
cover page of the Prospectus Supplement regarding market-making and under the
heading "Method of Distribution" in the Prospectus Supplement (to the extent
such statements relate to the Underwriters) (the "Underwriter Information")
constitute the only information furnished by the Underwriters to the Seller and
the Company for the purposes of Sections 2(B) and 8(A) hereof. Each Underwriter
confirms that the Underwriter Information 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 the Certificate Administrator Capital Markets Corp., Xxx Xxxxx Xxxxx
Xxxxxx, XX-00, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Xxxx Xxxxxxxxx; if
sent to the Seller, shall be mailed, delivered or facsimiled and confirmed in
writing to NovaStar Mortgage Inc., 0000 X. 00xx Xxxxx, Xxxxx 000, Xxxxxxxx,
Xxxxxx 00000, Attention: Xxxxx Xxxxxx, Senior Vice President; and if sent to the
Company, shall be mailed, delivered or telegraphed and confirmed in writing to
0000 X. 00xx Xxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxx 00000, Attention: Xxxxx
Xxxxxxxx, Vice President.
11. Survival. All representations, warranties, covenants and agreements of
the Seller and the Company contained herein or in agreements or certificates
delivered pursuant hereto, the agreements of the Underwriters, the Seller and
the Company contained in Section 8 hereof, and 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
Seller or the Company or any of its officers, directors or any controlling
persons, and shall survive delivery of and payment for the Offered 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
17
York Stock Exchange or the American Stock Exchange, (b) trading of any
securities of NFI or the Company 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 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 clauses (a) through (d), such event singly or
together with any other such event makes it in the Underwriters' judgment
impractical to market the Offered 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 Offered Note 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 Offered 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 Offered 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 Seller, the Company, NFI and the
Performing Underwriters resulting from the default of the Defaulting
Underwriter.
18
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
Seller, the Company and NFI in accordance with its terms.
Very truly yours,
NOVASTAR MORTGAGE INC.
By:
-----------------------------
Name:
Title:
NOVASTAR MORTGAGE FUNDING
CORPORATION
By:
------------------------------
Name:
Title:
NOVASTAR FINANCIAL, INC.
By:
------------------------------
Name:
Title:
Agreed to and Accepted by:
(as of the date hereof)
FIRST UNION SECURITIES, INC.
as Representative of the Several Underwriters
By:
-----------------------------------------
Name:
Title:
[Underwriting Agreement Signature Page]
Annex A
Underwriting
Class A-1 Certificates
Underwriter Principal Amount Discount Purchase Price
-------------------------------------------------------------------------------------------------------------
First Union Securities, Inc. $100,000,000 0.25% $99,750,000
Greenwich Capital Markets, Inc. 50,000,000 0.25% 49,875,000
Xxxxxx Xxxxxxx & Co. Incorporated 50,000,000 0.25% 49,875,000
----------------------------------------------------------------------
Total: $200,000,000 $199,500,000
Class A-2 Certificates
Underwriter Principal Amount Discount Purchase Price
-------------------------------------------------------------------------------------------------------------
First Union Securities, Inc. $100,000,000 0.25% $99,750,000
Greenwich Capital Markets, Inc. 50,000,000 0.25% 49,875,000
Xxxxxx Xxxxxxx & Co. Incorporated 50,000,000 0.25% 49,875,000
----------------------------------------------------------------------
Total: $200,000,000 $199,500,000
Class A-3 Certificates
Underwriter Principal Amount Discount Purchase Price
-------------------------------------------------------------------------------------------------------------
First Union Securities, Inc. $172,000,000 0.25% $171,570,000
Greenwich Capital Markets, Inc. 86,000,000 0.25% 85,785,000
Xxxxxx Xxxxxxx & Co. Incorporated 86,000,000 0.25% 85,785,000
----------------------------------------------------------------------
Total: $344,000,000 $343,140,000
Class M-1 Certificates
Underwriter Principal Amount Discount Purchase Price
------------------------------------------------------------------------------------
First Union Securities, Inc. $8,000,000 0.25% $ 7,980,000
Greenwich Capital Markets, Inc. 4,000,000 0.25% 3,990,000
Xxxxxx Xxxxxxx & Co. Incorporated 4,000,000 0.25% 3,990,000
---------------------------------------------
Total: $16,000,000 $15,960,000
Class M-2 Certificates
Underwriter Principal Amount Discount Purchase Price
------------------------------------------------------------------------------------
First Union Securities, Inc. $8,000,000 0.25% $ 7,980,000
Greenwich Capital Markets, Inc. 4,000,000 0.25% 3,990,000
Xxxxxx Xxxxxxx & Co. Incorporated 4,000,000 0.25% 3,990,000
---------------------------------------------
Total: $16,000,000 $15,960,000
Class M-3 Certificates
Underwriter Principal Amount Discount Purchase Price
------------------------------------------------------------------------------------
First Union Securities, Inc. $12,000,000 0.25% $11,970,000
Greenwich Capital Markets, Inc. 0 0
Xxxxxx Xxxxxxx & Co. Incorporated 0 0
---------------------------------------------
Total: $12,000,000 $11,970,000
ii
