June 17, 2002
Wachovia Securities, Inc.
One First Union Center, TW-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 Wachovia
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 June 1, 2002 (the "Pooling and Servicing
Agreement") among the Company, the Seller, Wachovia Bank, National Association,
a national banking corporation ("Wachovia Bank"), not in its individual
capacity, but solely as Certificate Administrator (the "Certificate
Administrator"), JPMorgan Chase Bank, a New York banking corporation, not in its
individual capacity, but solely as trustee (the "Trustee"), NovaStar Mortgage
Funding Trust 2002-1, 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 M Certificates, the Class B Certificates, the Class AIO
Certificates, the Class P Certificates and the Class I 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)
three 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") and a senior interest-only class of certificates
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 and the
Class A-2 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"), (v) a certificate entitling the holder to certain
interest payments designated as Asset-Backed Certificates, Class I (the "Class I
Certificates") and (vi) 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, the Class I 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. 333-84328) 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 March 13, 2002 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 March 13, 2002, 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 NovaStar REMIC Financing Corporation ("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, each ISDA master agreement
and related confirmation between Credit Suisse First Boston International and/or
Xxxxxx Xxxxxxx Capital Services Inc. and the Novastar Entity party thereto, (the
"Swap Agreements"), the assignment by the related Novstar Entity of each Swap
Agreement (the "Assignment"), the interest rate cap agreement between the
Trustee, on behalf of the Trust, and Citibank, N.A. New York (the "Cap
Agreement"), the Mortgage Loan Purchase Agreement, dated as of June 1, 2002 (the
"Mortgage Loan Purchase Agreement"), between the Seller and the Company, the
Converted Loan Purchase Agreement, dated as of June 1, 2002 (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 June 1, 2002 (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
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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.
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 and the Additional
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. 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
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the earnings, business or operations of the NovaStar Entities or their
affiliates, taken as a whole, from March 31, 2002.
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 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 to 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 June 27,
2002 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:
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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 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
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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; (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).
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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
Xxxxx Xxxxxxxxxx LLP, counsel to NovaStar Entities with respect to the following
items, dated the Closing Date, to the effect that:
(1) Each of the NovaStar Entities has been duly organized and is
validly existing as a corporation in good standing under the laws of its
respective state of incorporation, and is qualified to do business in each
state necessary to enable it to perform its obligations under each of the
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
8
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.
(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.
(8) The Class A-1 Certificates will be "mortgage related
securities" under the Secondary Mortgage Market Enhancement Act.
(9) The Swap Agreements and the related Assignments and the Cap
Agreement have been duly and validly authorized, executed and delivered by
the applicable Novastar Entity, all requisite corporate action having been
taken with respect thereto, and each constitutes the valid, legal and
binding agreement of such NovaStar Entity, and would be enforceable against
the applicable NovaStar Entity in accordance with the terms thereof.
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 Deloitte &
Touche, LLP dated on or before the Closing Date, in form and substance
satisfactory to the Underwriters and counsel for the Underwriters, to the effect
that they have performed certain specified procedures requested by the
Underwriters with respect to the information set forth in the Prospectus and
certain matters relating to the Seller.
E. The Class A-1 Certificates and the Class A-2 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
"Aa2" 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
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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;
(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 June
1, 2002, and no such amendment has been authorized. No event has occurred
since June 1, 2002, 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 June 1, 2002; 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
10
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 June 1, 2002, 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 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
11
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.
J. 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 New York banking corporation 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
12
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.
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.
K. 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.
L. The Underwriters shall have received from XxXxx Xxxxxx LLP,
special counsel to the Underwriters, such opinion or opinions, dated the Closing
Date, with respect to the issuance and sale of the Offered Certificates, the
Prospectus and such other related matters as the Underwriters shall reasonably
require.
M. 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.
N. 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.
O. Each of the ISDA master agreement and related confirmation
provided by Credit Suisse First Boston International and Xxxxxx Xxxxxxx Capital
Services Inc. (each, a "Swap Provider"), and the Cap Agreement will be delivered
by the applicable Novstar Entity.
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.
13
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 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
14
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 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.
15
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 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 Company 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
16
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 Section 8, none of the Underwriters shall
be required to contribute any amount in excess of the aggregate discount and
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.
17
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., One First Union
Center, TW-06, Charlotte, North Carolina 28288, 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 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 a
material disruption in securities settlement, payment or clearance services in
the United States, or (e) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
which, in the Underwriters' judgment, is material and adverse, and, in the case
of any of the events specified in this clause (e), such event singly or together
with any other such event makes it in the Underwriters' judgment impractical or
inadvisable to proceed with the offer, sale or delivery of the 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
18
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.
19
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: /s/ Xxxxx Xxxxxxxx
----------------------------------
Name: Xxxxx Xxxxxxxx
Title: Vice President
NOVASTAR MORTGAGE FUNDING CORPORATION
By: /s/ Xxxxx Xxxxxxxx
----------------------------------
Name: Xxxxx Xxxxxxxx
Title: Vice President
NOVASTAR FINANCIAL, INC.
By: /s/ Xxxxx Xxxxxxxx
----------------------------------
Name: Xxxxx Xxxxxxxx
Title: Vice President
Agreed to and Accepted by:
(as of the date hereof)
WACHOVIA SECURITIES, INC.
as Representative of the Several Underwriters
By: /s/ Xxxxxxx Xxxxxx
-------------------------------
Name: Xxxxxxx Xxxxxx
Title: Director
[Underwriting Agreement Signature Page]
Annex A
Underwriting
Class A-1 Certificates
Underwriter Principal Amount Discount Purchase Price
--------------------------------------------------------------------------------------------
Wachovia Securities, Inc. $120,000,000 0.25% $199,500,000
Greenwich Capital Markets, Inc. $40,000,000
Xxxxxx Xxxxxxx & Co. Incorporated $40,000,000
------------------------------------------------------
TOTAL: $200,000,000 $199,500,000
Class A-2 Certificates
Underwriter Principal Amount Discount Purchase Price
--------------------------------------------------------------------------------------------
Wachovia Securities, Inc. $48,330,000 0.25% $80,348,625
Greenwich Capital Markets, Inc. $16,110,000
Xxxxxx Xxxxxxx & Co. Incorporated $16,110,000
------------------------------------------------------
TOTAL: $80,550,000 $80,348,625
Class M-1 Certificates
Underwriter Principal Amount Discount Purchase Price
--------------------------------------------------------------------------------------------
Wachovia Securities, Inc. $5,115,000 0.25% $8,503,688
Greenwich Capital Markets, Inc. $1,705,000
Xxxxxx Xxxxxxx & Co. Incorporated $1,705,000
------------------------------------------------------
TOTAL: $8,525,000 $8,503,688
Class M-2 Certificates
Underwriter Principal Amount Discount Purchase Price
--------------------------------------------------------------------------------------------
Wachovia Securities, Inc. $4,185,000 0.25% $6,957,563
Greenwich Capital Markets, Inc. $1,395,000
Xxxxxx Xxxxxxx & Co. Incorporated $1,395,000
------------------------------------------------------
TOTAL: $6,975,000 $6,957,563
Class M-3 Certificates
Underwriter Principal Amount Discount Purchase Price
--------------------------------------------------------------------------------------------
Wachovia Securities, Inc. $3,255,000 0.25% $5,386,666
Greenwich Capital Markets, Inc. $1,085,000
Xxxxxx Xxxxxxx & Co. Incorporated $1,085,000
------------------------------------------------------
TOTAL: $5,425,000 $5,386,666
ii
