EXHIBIT 10.07a
SIXTH AMENDMENT TO MORTGAGE LOAN
WAREHOUSING AGREEMENT
THIS SIXTH AMENDMENT TO MORTGAGE LOAN WAREHOUSING AGREEMENT (the
"Amendment") is made as of the 12th day of February, 1999, by and between
NOVASTAR MORTGAGE, INC., a Virginia corporation ("NovaStar Mortgage"), NOVASTAR
FINANCIAL, INC., a Maryland corporation ("NovaStar Financial"), NOVASTAR
CAPITAL, INC., a Delaware corporation ("NovaStar Capital") and FIRST UNION
NATIONAL BANK (formerly known as First Union National Bank of North Carolina), a
national banking association (the "Lender").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, NovaStar Mortgage and NovaStar Financial and the Lender are
parties to a Mortgage Loan Warehousing Agreement dated as of November 24, 1997,
as amended by a First Amendment to Mortgage Loan Warehousing Agreement dated as
of February 19, 1998, by a Second Amendment to Mortgage Loan Warehousing
Agreement dated as of April 30, 1998, by a Third Amendment to Mortgage Loan
Warehousing Agreement dated as of September 3, 1998, by a Fourth Amendment to
and Waiver of Mortgage Loan Warehousing Agreement dated as of October 15, 1998
and by a Fifth Amendment to Mortgage Loan Warehousing Agreement dated as of
November 30, 1998 (as so amended, the "Credit Agreement"; all capitalized terms
used herein and not otherwise defined having the respective meanings provided to
such terms in the Credit Agreement, as amended hereby); and
WHEREAS, the parties hereto desire that NovaStar Capital be admitted as a
borrower under the Credit Agreement and the other Credit Documents and wish to
amend the Credit Agreement and the other Credit Documents to provide for the
inclusion of NovaStar Capital as a party thereto and a borrower thereunder and
to provide for certain other modifications thereto, as more particularly set
forth herein; and
WHEREAS, subject to and upon the terms and conditions herein set
forth, the Lender is willing to continue to make available to NovaStar Mortgage,
NovaStar Financial and NovaStar Capital the credit facilities provided for in
the Credit Agreement; and
WHEREAS, a specific condition to the willingness of the Lender to
continue to make available to NovaStar Mortgage, NovaStar Financial and NovaStar
Capital the credit facilities provided for in the Credit Agreement is the re-
affirmation by the Guarantor of the Guaranty; and
WHEREAS, the Guarantor will derive a material benefit from the
continued availability to NovaStar Mortgage, NovaStar Financial and NovaStar
Capital of the credit facilities provided for in the Credit Agreement, and
therefore the Guarantor is willing to reaffirm the Guaranty;
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NOW, THEREFORE, in consideration of the premises and agreements
contained herein and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
hereto hereby agree as follows:
1. Effect and Effective Date. By its execution hereof, NovaStar
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Capital hereby assumes on a joint and several basis with NovaStar Mortgage and
NovaStar Financial all of the obligations of the Companies under the Credit
Agreement and the other Credit Documents and agrees to be bound by the Credit
Agreement and the other Credit Documents. The effective date of all of the
amendments to the Credit Agreement and the other Credit Documents described
herein shall be as of the date hereof unless otherwise expressly provided
herein.
2. Conditions Precedent.
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(a) As a condition precedent to the effectiveness of this
Amendment, NovaStar Capital shall deliver to the Lender the following:
(i) certified copies of resolutions of the Board of Directors of
NovaStar Capital approving the execution and delivery of this Amendment and the
Credit Documents to which NovaStar Capital is a party and the performance of the
obligations hereunder and under the Credit Documents by NovaStar Capital and the
consummation of the transactions contemplated hereby and thereby;
(ii) a certificate of the Secretary or an Assistant Secretary of
NovaStar Capital certifying the names and true signatures of the officers of
NovaStar Capital authorized to execute and deliver this Amendment and the Credit
Documents to which NovaStar Capital is a party;
(iii) a copy of the Certificate of Incorporation of NovaStar
Capital, certified by the Secretary or a Assistant Secretary of NovaStar Capital
as of the date of this Amendment as being accurate and complete;
(iv) a copy of the Bylaws of NovaStar Capital, certified by the
Secretary or an Assistant Secretary of NovaStar Capital as of the date of this
Amendment as being accurate and complete;
(v) (A) a certificate of the Secretary of State of Delaware,
certifying as of a recent date that NovaStar Capital is in good standing, and
(B) a certificate of the Secretary of State of Kansas, certifying as of a recent
date that NovaStar Capital is authorized to transact business as a foreign
corporation;
(vi) UCC-1 Financing Statement(s) in form and substance acceptable
to the Lender, listing NovaStar Capital as debtor and the Lender as secured
party thereunder; and
(vii) an opinion of counsel for NovaStar Capital acceptable to the
Lender and substantially in accordance with the one delivered on behalf of
NovaStar
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Mortgage and NovaStar Financial as of the effective date of the Credit Agreement
and containing the additional opinion that NFI Holding owns one hundred percent
(100%) of the issued and outstanding shares of NovaStar Capital.
(b) As a condition precedent to the effectiveness of this
Amendment, the Companies (as that term is amended by this Amendment) shall
deliver to the Lender the following:
(i) a copy of this Amendment executed by each of the Companies (as
that term is amended by this Amendment) and the Guarantor (whether such parties
shall have signed the same or different counterparts);
(ii) a replacement Note, such Note being made by the Companies (as
that term is amended by this Amendment) payable to the order of the Lender;
(iii) a copy of the Second Amendment to Security Agreement in form
and substance acceptable to the Lender, as executed by each of the Companies (as
that term is amended by this Amendment) (whether such parties shall have signed
the same or different counterparts);
(iv) a reaffirmation of the Guaranty (the "Reaffirmation") executed
by the Guarantor in favor of the Lender;
(v) resolutions of each of NovaStar Mortgage, NovaStar Financial
and the Guarantor authorizing the execution of this Amendment, the replacement
Note and the Second Amendment to Security Agreement, and the Reaffirmation,
respectively;
(vi) a certificate of even date herewith signed by the President,
any Vice President or the Treasurer of each of NovaStar Mortgage, NovaStar
Financial and the Guarantor certifying that (A) the articles, bylaws and
resolutions of each of NovaStar Mortgage, NovaStar Financial and the Guarantor
previously delivered to the Lender remain in full force and effect except as
provided therein, (B) each of NovaStar Mortgage, NovaStar Financial and the
Guarantor remains in good standing, (C) all representations and warranties of
each of NovaStar Mortgage, NovaStar Financial and the Guarantor previously made
to Lender remain true, complete and accurate, and (D) no Event of Default or
Potential Default has occurred and is continuing; and
(vii) payment to the Lender by the Companies (as that term is amended
by this Amendment) of a one-time non-refundable facility fee in the amount of
$93,750.
3. Companies. All references in the Credit Agreement and the Credit
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Documents to the "Companies" shall be deemed to include, in addition to NovaStar
Mortgage and NovaStar Financial, NovaStar Capital, and reference in the Credit
Agreement or in any of the other Credit
3
Documents to a "Company" shall be to any of NovaStar Mortgage, NovaStar
Financial and NovaStar Capital. All references in the Credit Agreement and the
Credit Documents to "either Company" shall be deemed to mean "any Company."
4. Representations, Warranties and Covenants. All references to any
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representations, warranties or covenants contained in the Credit Agreement or
the other Credit Documents relating to, made by or binding upon the Companies,
shall be deemed as of and after the date hereof to be made in relation to, to be
made by, or to be binding upon, each of the Companies (as that term is amended
by this Amendment).
5. Amendments to the Credit Agreement.
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(a) Paragraph 2(l)(3) of the Credit Agreement is deleted in its
entirety and the following paragraph is substituted in lieu thereof:
"(3) An aged loan fee, such fee to be payable monthly in arrears on
the applicable dates specified in Paragraph 2(d) hereof, each such
installment to be in an amount equal to the product of (i) the average
daily aggregate principal balance of all Mortgage Loans included in the
Borrowing Base during said month of the type described in subsection (iii)
of the proviso to subsection (p) of the definition of "Eligible Mortgage
Loan," multiplied by (ii) 0.25%, divided by (iii) 12."
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(b) Paragraph 2(l)(5) of the Credit Agreement is deleted in its
entirety and the following paragraph is substituted in lieu thereof:
"(5) A delinquent loan fee, such fee to be computed on a per annum
basis payable in monthly installments, in arrears, on those dates set forth
for payment of interest in Paragraph 2(d) hereof, each such installment to
be in an amount equal to the product of: (i) the average daily aggregate
principal amount of Loans outstanding during the preceding month;
multiplied by (ii) the quotient of (A) the average daily aggregate Unit
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Collateral Values for all Eligible Delinquent Mortgage Loans included in
the Borrowing Base during the preceding month; divided by (B) the average
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daily aggregate Unit Collateral Values of all Eligible Mortgage Loans
included in the Borrowing Base during the preceding month; multiplied by
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(iii) 0.25%; divided by (iv) 12."
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(c) A new clause (C) is hereby added to subsection (1) of Paragraph
5(c) of the Credit Agreement as follows:
", and (C) with respect to NovaStar Capital, the State of Delaware"
(d) Paragraph 5(n)of the Credit Agreement is hereby deleted in its
entirety and the following paragraph is hereby substituted in lieu thereof:
"5(n) Ownership and Subsidiaries. As of the date hereof, (i) ninety-
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nine percent (99%) of the economic interests in the Guarantor are owned by
NovaStar Financial, and (ii) one hundred percent (100%) of the outstanding
stock of each of
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NovaStar Mortgage and NovaStar Capital is owned by the Guarantor. NovaStar
Mortgage has no Subsidiaries other than NovaStar Mortgage Funding
Corporation II and NovaStar REMIC Financing Corporation. NovaStar Capital
has no Subsidiaries. The Guarantor has no Subsidiaries other than NovaStar
Mortgage, NovaStar Capital and The Hiresource, Inc. NovaStar Financial has
no Subsidiaries other than Guarantor, NovaStar Assets Corporation, NovaStar
Certificates Financing Corporation, NovaStar Mortgage Funding Corporation
and NovaStar Capital Access Corporation."
(e) Paragraph 6(b)(5) of the Credit Agreement is hereby deleted in its
entirety and the following paragraph is substituted in lieu thereof:
"(5) With respect to each Eligible Delinquent Mortgage Loan included
in the Borrowing Base, (i) on or before the date said Eligible Delinquent
Mortgage Loan is included in the Borrowing Base under the delinquent loan
sublimit, a report including, but not limited to, the original appraised
value and location of the Property which is the subject of such Eligible
Delinquent Mortgage Loan, and the original principal balance, current
outstanding balance and status of such Eligible Delinquent Mortgage Loan;
(ii) monthly delinquency and progress reports for such Eligible Delinquent
Mortgage Loan in form and content acceptable to the Lender; (iii) in the
event such Eligible Delinquent Mortgage Loan becomes more than seventy-five
(75) days past due, a certificate of mortgage insurance (or a demonstration
of coverage in form satisfactory to Lender) covering such Eligible
Delinquent Mortgage Loan and satisfactory to Lender in its sole discretion;
and (iv) in the event such Eligible Delinquent Mortgage Loan becomes more
than ninety (90) days past due, a "drive-by" appraisal of, or broker's
price opinion with respect to, the Property which is the subject of such
Eligible Delinquent Mortgage Loan (provided, that the Companies shall have
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ten (10) Business Days after the date on which such Eligible Delinquent
Mortgage Loan becomes more than ninety (90) days past due in which to
deliver any such broker's price opinion)".
(f) Paragraph 7(e)of the Credit Agreement is hereby deleted in its
entirety and the following paragraph is hereby substituted in lieu thereof:
"7(e) Transfer of Stock. Permit the acquisition, purchase,
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redemption, retirement, transfer or issuance of any shares of the capital
stock of either of NovaStar Mortgage or NovaStar Capital now or hereafter
outstanding which would result in the Guarantor owning less than one
hundred percent (100%) of its outstanding capital stock, or (ii) permit the
acquisition, purchase, redemption, retirement, transfer or issuance of any
shares of the capital stock of the Guarantor now or hereafter outstanding
which would result in NovaStar Financial owning less than ninety-nine
percent (99%) of the economic interest in the Guarantor."
(g) Paragraph 7(i) of the Credit Agreement is hereby deleted in its
entirety and the following paragraph is hereby substituted in lieu thereof:
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"7(i) Minimum Adjusted Tangible Net Worth. Permit Adjusted Tangible
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Net Worth as of the last day of any fiscal quarter to be less than the sum
of (i) $75,000,000, plus (ii) eighty percent (80%) of all contributions to
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equity capital of NovaStar Financial, its consolidated Subsidiaries or its
unconsolidated Affiliates (which contributions are made by Persons other
than NovaStar Financial, its consolidated Subsidiaries or its
unconsolidated Affiliates) after February 12, 1999."
=
(h) The definition of the term "Adjusted Tangible Net Worth" contained
in Section 10 of the Credit Agreement is hereby amended by deleting the last
sentence thereof in its entirety and substituting the following sentence in lieu
thereof:
"Provided that in all cases such amount shall be determined by combining
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the relevant figures for NovaStar Financial and for Guarantor and its
consolidated Subsidiaries and its Affiliates, as accounted for under the
equity method, in the form shown on the example Covenant Compliance
Certificate attached as Exhibit H hereto."
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(i) The definition of the term "Buy-Down Rate" contained in Section 10
of the Credit Agreement is hereby amended by deleting the percentage "one and
one-quarter percent (1.25%)" contained therein and by substituting the
percentage "one and three-quarters percent (1.75%)" in lieu thereof.
(j) Subparagraph (d) of the definition of the term "Eligible Mortgage
Loan" contained in Section 10 of the Credit Agreement is hereby deleted in its
entirety and the following subparagraph is substituted in lieu thereof:
"(d) No payment under said Mortgage Loan is more than thirty
(30) days past due the payment due date set forth in the underlying
promissory note and deed of trust (or mortgage); provided, however, that a
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Mortgage Loan which is more than thirty (30) days delinquent may be an
Eligible Mortgage Loan so long as (i) said Mortgage Loan is a delinquent
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Mortgage Loan which is either the subject of an ongoing attempt by the
applicable Company to work out said Mortgage Loan or the subject of an
ongoing foreclosure proceeding which has not yet resulted in the sale of
the underlying Property; (ii) said Mortgage Loan has not been specifically
rejected on a Mortgage Loan-by-Mortgage Loan basis, by the Lender in its
sole discretion, for inclusion in the Borrowing Base; (iii) the Companies
have delivered to the Lender such reports with respect to said Mortgage
Loan as are required under Paragraph 6(b)(5) above; (iv) if said Mortgage
Loan is more than thirty (30) days delinquent, the Unit Collateral Value of
said Mortgage Loan, when added to the aggregate Unit Collateral Values of
all Eligible Mortgage Loans included in the Borrowing Base by virtue of
this proviso to subparagraph (d) of the definition of "Eligible Mortgage
Loan" which are more than thirty (30) days delinquent does not exceed
$10,000,000; and (v) said Mortgage Loan is not more than one hundred eighty
(180) days delinquent (Eligible Mortgage Loans of the type referred to in
the proviso to this subsection (d) shall be referred to herein as "Eligible
Delinquent Mortgage Loans")."
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(k) Subparagraph (p) of the definition of the term "Eligible Mortgage
Loan" contained in Section 10 of the Credit Agreement is hereby deleted in its
entirety and the following subparagraph is substituted in lieu thereof:
"(p) Said Mortgage Loan has not been included in the Borrowing
Base for more than one hundred eighty (180) days; provided, however that a
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Mortgage Loan which is included in the Borrowing Base for more than one
hundred eighty (180) days may be an Eligible Mortgage Loan so long as (i)
[INTENTIONALLY OMITTED], or (ii) (A) said Eligible Mortgage Loan is an
Eligible Home Equity Line of Credit Mortgage Loan, and (B) said Mortgage
Loan is not included in the Borrowing Base for more than three hundred
sixty-four (364) days, or (iii) (A) said Mortgage Loan is not an Eligible
Home Equity Line of Credit Mortgage Loan, (B) said Mortgage Loan is not
included in the Borrowing Base for more than three hundred sixty (360)
days, and (C) the Unit Collateral Value of said Mortgage Loan, when added
---
to the Unit Collateral Values of all other Mortgage Loans which are not
Eligible Home Equity Line of Credit Mortgage Loans and which are included
in the Borrowing Base for more than one hundred eighty (180) days, does not
exceed five percent (5%) of the Credit Limit (Eligible Mortgage Loans
referred to in subsection (iii) of the proviso to this subparagraph (p)
shall be referred to herein as "Eligible Aged Mortgage Loans")."
(l) The definition of the term "Maturity Date" contained in Section 10
of the Credit Agreement is deleted in its entirety and the following paragraph
is substituted in lieu thereof:
"`Maturity Date' shall mean the earlier of: (a) February 11, 2000, as
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such date may be extended from time to time in writing by the Lender, in
its sole discretion, and (b) the date the Lender terminates its obligation
to make further Loans pursuant to the provisions hereof."
(m) The following definition of the term "NovaStar Capital" is hereby
added to Paragraph 10 of the Credit Agreement:
"`NovaStar Capital' shall mean NovaStar Capital, Inc., a Delaware
----------------
corporation."
(n) The definition of the term "Unit Collateral Value" contained in
Section 10 of the Credit Agreement is deleted in its entirety and the following
paragraph is substituted in lieu thereof:
"`Unit Collateral Value' shall mean, with respect to each Eligible
----------------------
Mortgage Loan contained in the Borrowing Base:
(a) If said Mortgage Loan is an Eligible Aged Mortgage Loan, the
lesser of: (i) ninety percent (90%) of the lesser of (A) the unpaid
principal balance thereof at the time the Mortgage Loan is included in the
Borrowing Base, and (B) the original note amount thereof; and (ii) eighty-
eight percent (88%) of the Fair Market Value thereof.
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(b) If said Mortgage Loan is an Eligible Delinquent Mortgage Loan
which is less than or equal to 75 days past due, eighty-five percent (85%)
of the current amount outstanding under the Mortgage Loan.
(c) If said Mortgage Loan is an Eligible Delinquent Mortgage Loan
which is more than 75, but less than or equal to 180, days past due, sixty
percent (60%) of the current amount outstanding under the Mortgage Loan.
(d) If said Mortgage Loan is an Eligible Home Equity Line of
Credit Mortgage Loan, the lesser of: (i) ninety percent (90%) of the
current amount outstanding under the Mortgage Loan; and (ii) eighty-eight
percent (88%) of the Fair Market Value thereof.
(e) If said Mortgage Loan is an Eligible Super Jumbo Mortgage
Loan, the lesser of: (i) ninety-five percent (95%) of the lesser of (A) the
unpaid principal balance thereof at the time the Mortgage Loan is included
in the Borrowing Base, and (B) the original note amount thereof; and (ii)
ninety-three percent (93%) of the Fair Market Value thereof.
(f) If said Mortgage Loan is an Eligible Alt-A Mortgage Loan, the
lesser of: (i) ninety-eight percent (98%) of the lesser of (A) the unpaid
principal balance thereof at the time the Mortgage Loan is included in the
Borrowing Base, and (B) the original note amount thereof; and (ii) the Fair
Market Value thereof.
(g) For all other Mortgage Loans, the lesser of: (i) ninety-eight
percent (98%) of the lesser of (A) the unpaid principal balance thereof at
the time the Mortgage Loan is included in the Borrowing Base, and (B) the
original note amount thereof; and (ii) ninety-seven percent (97%) of the
Fair Market Value thereof."
(o) Schedule I to the Credit Agreement is deleted in its entirety and
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the form of Schedule I attached as Annex A hereto is substituted in lieu
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thereof.
(p) Schedule II to the Credit Agreement is deleted in its entirety and
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the form of Schedule II attached as Annex B hereto is substituted in lieu
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thereof.
(q) Exhibit E to the Credit Agreement is deleted in its entirety and
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the form of Exhibit E attached as Annex C hereto is substituted in lieu thereof.
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(r) Exhibit G to the Credit Agreement is deleted in its entirety and
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the form of Exhibit G attached as Annex D hereto is substituted in lieu thereof.
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6. The Credit Agreement and the other Credit Documents are hereby amended
to the extent necessary to conform to the parties' intention as evidenced by the
express amendments set forth above.
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7. Except as expressly amended hereby or as may be necessary to conform
to the intentions of the parties hereto, all other terms and provisions of the
Credit Agreement and the other Credit Documents are hereby ratified and affirmed
and remain in full force and effect.
8. This Amendment is limited, and except as set forth herein, shall not
constitute the modification, acceptance or waiver of any provision of the Credit
Agreement, or any other document or instrument entered into in connection
therewith.
9. This Amendment may be executed in any number of counterparts by the
different parties hereto on separate counterparts, each of which counterparts
when executed and delivered shall be an original, but all of which together
shall constitute one in the same instrument. A complete set of counterparts
shall be lodged with each of the Companies and the Lender.
10. This Amendment and the rights and obligations of the parties hereunder
shall be construed in accordance with and governed by the laws of the State of
North Carolina.
11. From and after the date hereof, all references in the Credit Agreement
and any other document or instrument entered into in connection therewith, to
the Credit Agreement shall be named to be references to the Credit Agreement as
amended hereby.
12. The Guarantor joins in the execution and delivery of this Amendment to
acknowledge and consent to the terms hereof and hereby reaffirms its obligations
under the Guaranty.
13. THE LENDER, THE GUARANTOR AND THE COMPANIES EACH HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AMENDMENT OR
ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN)
OR ACTIONS OF ANY PARTY RELATING HERETO. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE LENDER TO ENTER INTO THIS AGREEMENT.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the day and year first above written.
NOVASTAR MORTGAGE, INC.,
a Virginia corporation
By:
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Name:
-----------------------------
Title: Treasurer
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NOVASTAR FINANCIAL, INC.,
a Maryland corporation
By:
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Name:
-----------------------------
Title: Treasurer
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NOVASTAR CAPITAL, INC.,
a Delaware corporation
By:
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Name:
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Title:
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FIRST UNION NATIONAL BANK
(formerly known as First Union National Bank
of North Carolina), a national banking
association
By:
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Name:
-----------------------------
Title:
----------------------------
GUARANTOR:
NFI HOLDING CORPORATION,
a Delaware corporation
By:
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Name:
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Title:
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10
ANNEX A
SCHEDULE I
TO
MORTGAGE LOAN WAREHOUSING AGREEMENT
DATED AS OF NOVEMBER 24, 1997
BY AND AMONG NOVASTAR MORTGAGE, INC.,
NOVASTAR FINANCIAL, INC.,
NOVASTAR CAPITAL, INC. AND
FIRST UNION NATIONAL BANK
Schedule of Addresses
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COMPANIES:
NovaStar Mortgage, Inc.
0000 Xxxx 00xx Xxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxx 00000
Attention: Xxxx Xxxxxxx
NovaStar Financial, Inc.
0000 Xxxx 00xx Xxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxx 00000
Attention: Xxxx Xxxxxxx
NovaStar Capital, Inc.
0000 Xxxx 00xx Xxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxx 00000
Attention: Xxxx Xxxxxxx
BANK:
First Union National Bank
Xxx Xxxxx Xxxxx Xxxxxx, XX-00
000 Xxxxx Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxxxxxxx
GUARANTOR:
NFI Holding Corporation
0000 Xxxx 00xx Xxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxx 00000
Attention: Xxxx Xxxxxxx
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ANNEX B
SCHEDULE II
TO
MORTGAGE LOAN WAREHOUSING AGREEMENT
DATED AS OF NOVEMBER 24, 1997
BY AND AMONG NOVASTAR MORTGAGE, INC.,
NOVASTAR FINANCIAL, INC.,
NOVASTAR CAPITAL, INC. AND
FIRST UNION NATIONAL BANK
Approved Investors
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Agencies
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FHLMC
FNMA
Investment Banks
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Bear Xxxxxxx
CIBC-Oppenheimer
Xxxx Xxxxxxxx
DeutscheBank
DLJ
First Tennessee
Xxxxxxx Sachs
Greenwich Capital
Xxxxxx Brothers
Xxxxxxx Xxxxx
Xxxxxx Xxxxxx
Xxxxxx Xxxxxxx
Xxxxxx
PaineWebber
Prudential
Salomon Brothers
Conduit/Finance Companies
-------------------------
Advanta
American General
Amresco
CIT
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Commercial Credit
Xxxxx
Countrywide
XX
Xxxxxxxxx
Household
Impac
IndyMac
RFC
TransAmerica
Federal/State Regulated Financial Institutions
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Federal- or state-regulated banks, thrifts, credit unions and insurance
companies which meet all three (3) of the following criteria: (i) at least
$500,000,000 in assets; (ii) a capital ratio of not less than five percent (5%);
and (iii) a CAMEL rating of 1 or 2; provided, that in the event any of the above
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three (3) criteria are not met, the Companies may submit such bank, thrift,
credit union or insurance company to the Lender for approval as an Approved
Investor, which approval may be granted or denied by the Lender in its sole
discretion, acting in good faith.
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ANNEX C
EXHIBIT E
TO
MORTGAGE LOAN WAREHOUSING AGREEMENT
DATED AS OF NOVEMBER 24, 1997
BY AND AMONG NOVASTAR MORTGAGE, INC.,
NOVASTAR FINANCIAL, INC.,
NOVASTAR CAPITAL, INC. AND
FIRST UNION NATIONAL BANK
Litigation Schedule
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With respect to NovaStar Financial, Inc.:
NovaStar Financial, Inc. and the Senior Credit Officer of NovaStar
Mortgage, Inc. were served a complaint on January 2, 1997 alleging several
points. Plaintiff is a competitor of NovaStar Financial, Inc. and the former
employer of NovaStar Mortgage, Inc.'s Senior Credit Officer. Plaintiff seeks
preliminary and permanent injunctions to restrain NovaStar Financial, Inc. from
certain matters. NovaStar Financial, Inc. strongly disagrees with all
allegations and believes they are without merit. NovaStar Financial, Inc. has
engaged legal counsel to assist in the response to and timely dismissal of these
charges
With respect to NovaStar Mortgage, Inc.:
None.
With respect to NovaStar Capital, Inc.:
None.
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ANNEX D
EXHIBIT G
TO
MORTGAGE LOAN WAREHOUSING AGREEMENT
DATED AS OF NOVEMBER 24, 1997
BY AND AMONG NOVASTAR MORTGAGE, INC.,
NOVASTAR FINANCIAL, INC.,
NOVASTAR CAPITAL, INC. AND
FIRST UNION NATIONAL BANK
Form of Borrowing Base Schedule
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This Borrowing Base Schedule is furnished pursuant to the Mortgage Loan
Warehousing Agreement dated as of November 24, 1997, as amended from time to
time, among the Companies and the Lender (the "Agreement"). Unless otherwise
defined herein, the terms used in this Borrowing Base Schedule have the meanings
ascribed thereto in the Agreement.
A. Aggregate Unit Collateral Values of
Eligible Mortgage Loans in Borrowing
Base as of previous Borrowing Base
Schedule delivered by the Companies $____________
B. Aggregate Unit Collateral Values of
Eligible Mortgage Loans submitted for
inclusion in Borrowing Base since
previous Borrowing Base Schedule
delivered by the Companies $____________
C. Sum of (A plus B) $____________
D. Aggregate Unit Collateral Values of
Eligible Mortgage Loans previously
released by the Lender for which
the full purchase price has been
received by the Lender since previous
Borrowing Base Schedule delivered by the
Companies $____________
E. Aggregate Unit Collateral Values of
Eligible Mortgage Loans more than
thirty (30) days delinquent for which
Lender has not received any of those reports
required under Paragraph 6(b)(5) of the Agree-
ment in a timely manner $____________
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F. Amount by which Aggregate Unit Collateral
Values of Eligible Mortgage Loans more
than thirty (30) days delinquent exceeds
$10,000,000 $____________
G. Aggregate Unit Collateral Values of
Eligible Mortgage Loans delinquent for more than
one hundred eighty (180) days $____________
H. Amount by which Aggregate Unit Collateral
Values of Eligible Mortgage Loans
withdrawn from the possession of the
Lender under a trust receipt and not
returned to the Lender exceeds
one percent (1%) of Credit Limit $____________
I. Aggregate Unit Collateral Values of Eligible
Mortgage Loans withdrawn from the possession
of the Lender under a trust receipt more than
10 Business Days prior to the date of this
schedule and not returned to the Lender $____________
J. Aggregate Unit Collateral Values of
Eligible Mortgage Loans withdrawn from
the possession of the Lender and shipped
to an investor for purchase or to a
custodian for pool formation more than
45 days prior to the date of this schedule
and not returned to the Lender or for which
the full purchase price has not been
received by the Lender $____________
K. Aggregate Unit Collateral Values of
Eligible Home Equity Line of Credit Mortgage
Loans submitted for inclusion in the Borrowing
Base more than 364 days prior to the date of
this schedule $____________
L. Amount by which Aggregate Unit Collateral
Values of Eligible Mortgage Loans (other than
Eligible Home Equity Line of Credit Mortgage
Loans) submitted for inclusion in the Borrowing
Base more than 180 days prior to the date of
this Schedule exceeds five percent (5%) of the
Credit Limit $____________
00
X. Xxxxxxxxx Xxxx Xxxxxxxxxx Values of
Eligible Mortgage Loans (other than
Eligible Home Equity Line of Credit Mortgage
Loans) submitted for inclusion in the Borrowing
Base more than 360 days prior to the date of
this Schedule $____________
N. Aggregate Unit Collateral Values of
Eligible Mortgage Loans the Required
Documents for which have not been
delivered to the Lender within ten (10)
Business Days after the submission of
such Eligible Mortgage Loans for inclusion
in the Borrowing Base $____________
O. Amount by which Aggregate Unit Collateral
Values of Eligible Mortgage Loans for
which the Required Documents are not
delivered upon, but within ten (10)
Business Days following, the submission
of such Eligible Mortgage Loans for
inclusion in the Borrowing Base exceeds
(i) fifty percent (50%) of the Credit
Limit during the last 5 or first 5
Business Days of each month or (ii) thirty
percent (30%) of the Credit Limit during
any other time $____________
P. Aggregate Unit Collateral Values of Eligible
Mortgage Loans (other than those acquired as part of
a Bulk Acquisition) with respect to which
the underlying promissory note is dated more than
365 days prior to the date as of which this
Certificate is prepared $____________
Q. Amount by which Aggregate Unit Collateral
Values of Eligible Mortgage Loans which are
home equity line of credit loans exceeds fifteen
percent (15%) of the Credit Limit $____________
R. Amount by which Aggregate Unit Collateral
Values of Eligible Mortgage Loans with an original
principal amount in excess of $650,000 exceeds
twenty percent (20%) of the Credit Limit $____________
17
S. Amount by which Aggregate Unit Collateral
Values of Eligible Alt-A Mortgage Loans exceeds
twenty percent (20%) of the Credit Limit $____________
T. Sum of (D plus E plus F plus G plus H
plus I plus J plus K plus L plus M plus N plus O
plus P plus Q plus R plus S) $____________
U. Adjusted Collateral Value of the
Borrowing Base (C minus T) $____________
V. Aggregate principal amount of Loans
Outstanding $____________
W. Borrowing Base availability (U minus V;
must equal or exceed zero) $____________
The undersigned hereby certifies that, as of the date hereof:
(1) I am the duly elected ____________________ of _____________________________
(2) The above schedule accurately states the Collateral Value of the Borrowing
Base and the aggregate principal amount of Loans outstanding;
(3) All Mortgage Loans included in the Borrowing Base as Eligible Mortgage
Loans comply in all respects with the requirements of the definition of
"Eligible Mortgage Loan"; and
(4) I have no knowledge of the existence of any condition or event which
constitutes an Event of Default under the Agreement.
18
Certified on behalf of the undersigned this _____ day of _________, 19___.
NOVASTAR MORTGAGE, INC.
By:
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Name:
------------------------------------------
Title:
-----------------------------------------
NOVASTAR FINANCIAL, INC.
By:
--------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
NOVASTAR CAPITAL, INC.
By:
--------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
19
