Exhibit 10.60
GUARANTY
THIS GUARANTY, dated as of
August 2, 2006, (this “Guaranty”), is made by
NovaStar Financial, Inc. (the “Guarantor”) in favor of
Deutsche Bank Securities, Inc. (“DBSI”), Aspen Funding
Corp. (“Aspen”) and Newport Financing Corp.
(“Newport” and collectively with Aspen and DBSI, the
“Buyers”) which term shall include any buyer for whom
Buyers 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, dated as of August 2, 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 Buyers
(the “Master Repurchase Agreement”), the Buyers have
agreed to purchase certain securities (the “Purchased
Securities”) from the Sellers and the Sellers have agreed to
repurchase such Purchased Securities upon the terms and subject to
the conditions set forth therein.
B. It is a condition precedent to
the obligation of the Buyers to purchase the Purchased Securities
from the Sellers under the Master Repurchase Agreement that the
Guarantor shall have executed and delivered this Guaranty to the
Buyers.
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 Buyers under the Program Documents,
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 Buyers that are required
to be paid by the Sellers pursuant to the terms of the Master
Repurchase Agreement) or otherwise.
(c) 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.
(d) 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 Buyers and their 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 Buyers 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 any of the 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 Buyers
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 Buyers 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 Buyers on account of its liability hereunder, it
will notify the Buyers in writing that such payment is made under
this Guaranty for such purpose.
(f) Notwithstanding any provision of
this Guaranty to the contrary, the aggregate liability of Sellers
and Guarantor under the Program Documents (including, without
limitation, this Guaranty) on any date of determination with
respect to all Purchased Securities owned by Buyers on such date
shall be limited as set forth in Section 19 of the Master
Repurchase Agreement; provided that such limitation 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 Securities 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
except where any failure to be so qualified and in good standing
will not cause a Material Adverse Effect or impair the
enforceability of a Purchased Security.
(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 material 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 authorizes the Buyers or any of their 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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