Exhibit 10.64
GUARANTY
THIS GUARANTY, dated as of
June 30, 2006, (this “Guaranty”), is made by
NovaStar Financial, Inc. (the “Guarantor”) in favor of
Greenwich Capital Financial Products, Inc. (the
“Buyer”).
RECITALS
A. Pursuant to that certain Master
Repurchase Agreement (Securities), dated as of June 30, 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 Buyer (the “Master Repurchase
Agreement”), Buyer has agreed to purchase certain securities
and other related assets (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 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
Buyer.
NOW, THEREFORE, in order to induce
Buyer to enter into the Master Repurchase Agreement and for other
good and valuable consideration, receipt and sufficiency of which
by the parties hereto are 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 all obligations and liabilities of each Seller and the
Guarantor to Buyer (including, without limitation, the
“Obligations” (as defined in the Master Repurchase
Agreement)), 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
herewith or therewith, whether on account of covenants, Repurchase
Prices, Price Differentials, Margin Deficits, reimbursement
obligations, fees, indemnities, costs, expenses (including, without
limitation, all reasonable fees and disbursements of counsel to
Buyer that are required to be paid by 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.
2. Guaranty . (a) The
Guarantor hereby absolutely, unconditionally and irrevocably,
guarantees to Buyer and its successors, endorsees, transferees and
assigns from the date hereof 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’s
obligations hereunder shall not be affected by the existence,
validity, enforceability, perfection or extent of any collateral
therefor (including the Collateral) or by any other circumstance
relating to the Obligations that might otherwise constitute a legal
or equitable discharge of or defense to the Guarantor not available
to Seller. The Guarantor agrees that Buyer may resort to the
Guarantor for payment of any of the Obligations whether or not
Buyer shall have resorted to any collateral therefor (including the
Collateral) or shall have proceeded against any Seller. Buyer shall
not be obligated to file any claim relating to the Obligations in
the event that any Seller becomes subject to a bankruptcy,
reorganization or similar proceeding, and the failure of Buyer to
so file shall not affect the Guarantor’s obligations
hereunder. In the event that any payment to Buyer in respect of any
Obligations is rescinded or must otherwise be returned for any
reason whatsoever (other than by reason of any circumstance, other
than bankruptcy or insolvency, that constitutes a legal or
equitable defense to any Seller), the Guarantor shall remain liable
hereunder with respect to such Obligations as if such payment had
not been made and the Guaranty shall be reinstated, if
applicable.
(c) The Guarantor hereby waives any
and all notice of the creation, renewal, extension or accrual of
any of the Obligations, and notice of or proof of reliance by Buyer
upon this Guaranty or acceptance of this Guaranty; the Obligations,
and any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in
reliance upon this Guaranty; and all dealings between the Sellers
and the Guarantor, on the one hand, and Buyer, on the other hand,
likewise shall be conclusively presumed to have been had or
consummated in reliance upon this Guaranty. The Guarantor waives
diligence, presentment, protest, demand for payment and notice of
default or nonpayment to or upon the Sellers or the Guarantor with
respect to the Obligations.
(d) The Guarantor further agrees to
pay on demand any and all fees and expenses (including, without
limitation, all reasonable fees and disbursements of counsel) which
may be paid or incurred by Buyer in enforcing or protecting 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.
(e) The Guarantor (the
“Indemnifying Party”) agrees to hold Buyer and each of
its officers, directors and employees (each an “Indemnified
Party”) harmless from and indemnify each Indemnified Party
against all liabilities, losses, damages, judgments, costs and
expenses of any kind (including reasonable fees and expenses of
counsel) that may be imposed on, incurred by or asserted against
such Indemnified Party relating to or resulting from the
Indemnifying Party’s negligence, bad faith, willful
misconduct, fraud or breach of its representations, warranties,
covenants or obligations under this Guaranty.
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(f) The Guarantor agrees that the
Obligations may at any time and from time to time exceed the amount
of the liability of the Guarantor hereunder without impairing this
Guaranty or affecting the rights and remedies of Buyer
hereunder.
(g) No payment or payments made by
Sellers, the Guarantor, any other guarantor or any other Person or
received or collected by Buyer from 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.
(h) The Guarantor agrees that
whenever, at any time, or from time to time, it shall make any
payment to Buyer on account of its liability hereunder, it will
notify Buyer in writing that such payment is made under this
Guaranty for such purpose.
(i) Notwithstanding any provision of
this Guaranty to the contrary, the aggregate liability of Guarantor
under the Program Documents (including, without limitation, this
Guaranty) on any date of determination shall be limited as set
forth in Section 19(k) 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 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.
3. Changes in Obligations,
Collateral therefor and Agreements Relating Thereto; Waiver of
Certain Notices . The Guarantor agrees that Buyer may at any
time and from time to time, either before or after the maturity
thereof, without notice to or further consent of the Guarantor,
extend the time of payment of, exchange or surrender any collateral
(including the Collateral) for, or renew any of the Obligations,
and may also make any agreement with Sellers for the extension,
renewal, payment, compromise, discharge or release thereof, in
whole or in part, or for any modification of the terms thereof or
of any agreement between Buyer and any Seller without in any way
impairing or affecting this Guaranty, it being understood that no
such notice or consent is required with respect to individual
Transaction Notices. The Guarantor waives notice of the acceptance
of this Guaranty and of the creation, renewal, extension or accrual
of Obligations, presentment demand for payment, non-payment notice
of dishonor and protest.
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4. Representations and Warranties
of the Guarantor . The Guarantor hereby represents and warrants
that:
(a) It (i) is duly organized
and validly existing in good standing under the laws of the
jurisdiction under which it is organized and (ii) 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 the failure to be
so qualified and in good standing would not be reasonably likely
(individually or in the aggregate) to have a Material Adverse
Effect.
(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.
(c) Neither the execution and
delivery of this Guaranty nor the consummation of the transactions
contemplated herein (i) contravene the Guarantor’s
charter or by-laws, or (ii) conflict with or result in a
breach of, or require any consent under, any applicable law or
regulation, or any order, writ, judgment, 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 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) 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 (i) have a material adverse effect on the
Guarantor’s condition, financial or otherwise, or
(ii) which questions the validity or enforceability of any of
the Program Documents or any action to be taken in connection with
the transactions contemplated thereby and there is a reasonable
likelihood of a Material Adverse Effect or adverse
decision.
(f) This Guaranty is the legal,
valid and binding obligation of the Guarantor, enforceable against
the Guarantor 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).
(g) All consents, licenses,
clearances, authorizations and approvals of, and registrations and
declarations with, any governmental authority or regulatory body
necessary for the due execution, delivery and performance of this
Guaranty have been obtained and remain in full force and effect and
all conditions thereof have been duly complied with, and no other
action by, and no notice to or filing with, any governmental
authority or regulatory body is required in connection with the
execution, delivery or performance of this Guaranty.
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(h) The Guarantor is not required to
be registered as, or controlled by a company required to be
registered as, an “investment company” within the
meaning of the Investment Company Act of 1940, as amended from time
to time, or any successor statute.
(i) No report prepared by the
Guarantor pursuant to this Guaranty, or furnished or to be
furnished by the Guarantor to Buyer in connection with this
Guarantee, is or will be inaccurate in any material respect as of
the date it is or shall be dated (except as otherwise disclosed to
Buyer, as the case may be, at such time) and no such document
contains or will contain any material misstatement of fact as of
the date so furnished.
(j) The Guarantor has not dealt with
or paid any compensation to any broker, investment banker, agent or
other person in connection with the transactions contemplated
hereby.
(k) Since the date of the financial
statement heretofore most recently delivered by the Guarantor to
Buyer (which the Guarantor represents and warrants to be its most
recent financial statement), there has been no material adverse
change in the Guarantor’s financial condition or results of
operations.
(l)
