Exhibit 10.57
GUARANTY
THIS GUARANTY, dated as of
April 14, 2006, (this “Guaranty”), is made by
NovaStar Financial, Inc. (the “Guarantor”) in favor of
Wachovia Investment Holdings, LLC, (the “Buyer”, which
term shall include any buyer for whom Buyer acts as Agent as
defined and provided for in the Master Repurchase Agreement
referred to below).
RECITALS
A. Pursuant to that certain Master
Repurchase Agreement (Securities), dated as of April 14, 2006,
among NovaStar Mortgage, Inc. (“NMI”), NovaStar
Certificates Financing LLC (“NCFL”), NovaStar
Certificate Financing Corporation (“NCFC” and
collectively with NCFL and NMI, jointly and severally the
“Sellers”) and the Buyer (the “Master Repurchase
Agreement”), the Buyer has agreed to purchase certain
securities (the “Purchased Assets”) from the Sellers
and the Sellers have agreed to repurchase such Purchased Assets
upon the terms and subject to the conditions set forth
therein.
B. It is a condition precedent to
the obligation of the Buyer to purchase the Purchased Assets from
the Sellers under the Master Repurchase Agreement that the
Guarantor shall have executed and delivered this Guaranty to the
Buyer.
NOW, THEREFORE, for good and
valuable consideration, receipt of which by the parties hereto is
hereby acknowledged, the parties hereto hereby agree as
follows:
1. Defined Terms .
(a) Unless otherwise defined herein, terms defined in the
Master Repurchase Agreement and used herein shall have the meanings
given to them in the Master Repurchase Agreement.
(b) “ Obligations
” shall mean the obligations and liabilities of the Sellers
and the Guarantor to the Buyer, including, without limitation, the
obligations whether direct or indirect, absolute or contingent, due
or to become due, or now existing or hereafter incurred, which may
arise under, or out of or in connection with the Master Repurchase
Agreement, this Guaranty, any other Program Documents and any other
document made, delivered or given in connection therewith or
herewith, whether on account of covenants, Repurchase Prices,
reimbursement obligations, fees, indemnities, costs, expenses
(including, without limitation, all fees and disbursements of
counsel to the Buyer that are required to be paid by the Sellers
pursuant to the terms of the Master Repurchase Agreement) or
otherwise.
(d) The words “hereof,
“herein” and “hereunder” and words of
similar import when used in this Guaranty shall refer to this
Guaranty as a whole and not to any particular provision of this
Guaranty, and section and paragraph references are to this Guaranty
unless otherwise specified.
(e) The meanings given to terms
defined herein shall be equally applicable to both the singular and
plural forms of such terms.
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2. Guaranty . (a) The
Guarantor hereby, unconditionally and irrevocably, guarantees to
the Buyer and its successors, endorsees, transferees and assigns
the prompt and complete payment and performance by the Sellers when
due (whether at the stated maturity, by acceleration or otherwise)
of the Obligations.
(b) The Guarantor further agrees to
pay any and all expenses (including, without limitation, all
reasonable fees and disbursements of counsel) which may be paid or
incurred by the Buyer in enforcing any rights with respect to, or
collecting, any or all of the Obligations and/or enforcing any
rights with respect to, or collecting against, the Guarantor under
this Guaranty. This Guaranty shall remain in full force and effect
until the Obligations are paid in full, notwithstanding that from
time to time prior thereto either or both Sellers may be free from
any Obligations.
(c) The Guarantor agrees that the
Obligations may at any time and from time to time exceed the amount
of the liability of Guarantor hereunder without impairing this
Guaranty or affecting the rights and remedies of the Buyer
hereunder.
(d) No payment or payments made by
the Sellers, the Guarantor, any other guarantor or any other Person
or received or collected by the Buyer from the Sellers, the
Guarantor, any other guarantor or any other Person by virtue of any
action or proceeding or any set-off or appropriation or application
at any time or from time to time in reduction of or in payment of
the Obligations shall be deemed to modify, reduce, release or
otherwise affect the liability of the Guarantor hereunder which
shall, notwithstanding any such payment or payments other than
payments made by the Guarantor in respect of the Obligations or
payments received or collected from the Guarantor in respect of the
Obligations, remain liable for the Obligations until the
Obligations are paid in full and the Master Repurchase Agreement is
terminated.
(e) The Guarantor agrees that
whenever, at any time, or from time to time, it shall make any
payment to the Buyer on account of its liability hereunder, it will
notify the Buyer in writing that such payment is made under this
Guaranty for such purpose.
(f) The Guarantor’s liability
hereunder on any date of determination with respect to all
Purchased Assets owned by Buyers on such date shall not exceed the
Maximum Recourse Amount set forth in Section 19 of the Master
Repurchase Agreement; provided that such Maximum Recourse Amount
shall not (i) constitute a waiver, release or impairment of
any obligation evidenced or secured by the Program Documents;
(ii) impair the right of Buyers to name the Guarantor or a
Seller as a party or defendant in any action or suit for judicial
foreclosure and sale under the Program Documents; (iii) impair
the right of Buyers to obtain the appointment of a receiver;
(iv) impair the right of Buyers to bring suit (and seek a
money judgment therein) with respect to breach of contract, tort,
fraud or intentional misrepresentation by the Guarantor or a Seller
or any other person or entity in connection with the Program
Documents; (v) impair the right of Buyers to obtain payments
on the Purchased Assets received by the Guarantor or a Seller after
the occurrence of an Event of Default; (vi) impair the right
of Buyers to bring suit (and seek a money judgment therein) with
respect to any misappropriation by the Guarantor or a Seller of
payments collected in advance with respect to the Purchased
Securities; or (vii) impair the right of Buyers to apply to
losses arising out of any misrepresentation, willful misconduct or
fraud by the Guarantor or a Seller or any of their agents or
employees, any suit or money judgment related thereto.
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3. Representations and Warranties
of the Guarantor . Guarantor hereby represents and warrants
that:
(a) It is duly organized and validly
existing in good standing under the laws of the jurisdiction under
which it is organized and is duly qualified to do business and is
in good standing in every other jurisdiction as to which the nature
of the business conducted by it makes such qualification
necessary.
(b) It has the full power, authority
and legal right to execute, deliver and perform its obligations
under this Guaranty. This Guaranty has been duly executed and
delivered by it, has not been amended or otherwise modified, is in
full force and effect and is the legal, valid and binding
obligation of Guarantor, enforceable against it in accordance with
its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting the rights of creditors generally and to the application
of general principles of equity (regardless of whether considered
in a proceeding in equity or at law).
(c) Neither the execution and
delivery of this Guaranty nor the consummation of the transactions
contemplated herein will conflict with or result in a breach of, or
require any consent under, any applicable law or regulation, or any
order, writ, injunction or decree of any court or governmental
authority or agency, or any agreement or instrument to which the
Guarantor is a party or by which the Guarantor or its property is
bound or to which the Guarantor is subject, or constitute a default
under any such agreement or instrument, or (except for the liens
created pursuant hereto) result in the creation or imposition of
any lien or encumbrance upon the Guarantor’s revenues or
assets pursuant to the terms of any such agreement or
instrument.
(d) The Guarantor has received and
reviewed copies of the Master Repurchase Agreement.
(e) This Guaranty is the legal,
valid and binding obligation of the Guarantor, enforceable against
the Guarantor, in accordance with its terms, subject to bankruptcy,
insolvency and similar laws and to the availability of equitable
remedies.
(f) There is no action, suit or
proceeding at law or in equity by or before any governmental
authority, arbitral tribunal or other body now pending, or to the
best of the Guarantor’s knowledge, threatened against or
affecting the Guarantor or any of its property that is reasonably
likely to have a material adverse effect on the Guarantor’s
condition, financial or otherwise.
(g) No authorizations, approvals or
consents of, and no filings or registrations with, any governmental
authority are necessary for the execution, delivery or performance
by the Guarantor of this Guaranty.
4. Reserved .
5. Right of Set-off . Upon
the occurrence of any Event of Default, the Guarantor hereby
irrevocably authorize the Buyer or any of its Affiliates at any
time and from time to time without notice to the Guarantor, any
such notice being expressly waived by the Guarantor, to set-off and
appropriate and apply any and all deposits (general or special,
time or demand, provisional or
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final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured,
at any time held or owing by the Buyer or any of its Affiliates to
or for the cred
