Exhibit 4.1
EXECUTION VERSION
AMENDMENT NO. 3
TO THE
POOLING AND SERVICING
AGREEMENT
Amendment No. 3, dated as of
September 18, 2006 (the “ Amendment ”), to
the Pooling and Servicing Agreement (the “ Agreement
”) dated as of December 1, 2005 as amended by Amendment
No. 1 dated as of January 26, 2006, and Amendment
No. 2 dated as of March 27, 2006, among NovaStar Mortgage
Funding Corporation (the “ Company ”), NovaStar
Mortgage, Inc., as seller and servicer (the “ Seller
” or “ Servicer ”), U.S. Bank National
Association as successor to Wachovia Bank, National Association, as
custodian (the “ Custodian ”), JPMorgan Chase
Bank, National Association, as trustee (the “ Trustee
”) and J.P. Morgan Trust Company, National Association, as
co-trustee (the “ Co-Trustee ”). Capitalized
terms used and not defined herein shall have the meaning set forth
in the Agreement and Appendix A thereto.
WHEREAS, the parties hereto have
entered into the Agreement;
WHEREAS, the Company has been
informed by the Servicer and certain Certificateholders that they
have entered into an “Acknowledgement and Assignment
Agreement,” and the Servicer and such Certificateholders
propose including a copy of such “Acknowledgement and
Assignment Agreement” as an exhibit to the Agreement, and
amending the Forms of Class CR, Class CT and Class R Certificates
to include a reference to such “Acknowledgement and
Assignment Agreement” therein, all for the purpose of giving
future Certificateholders knowledge of the existence
thereof.
NOW, THEREFORE, in consideration of
the promises and mutual agreements contained herein, the parties
hereto agree to amend the Agreement pursuant to Section 12.01
thereof as follows:
1. New Exhibit .
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(a)
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There is hereby
added a new Exhibit M to the Agreement, such Exhibit being a copy
of the “Acknowledgement and Assignment Agreement” in
the form attached as Exhibit A hereto.
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2. Additional Paragraph Added to
Forms of Certain Certificates .
There is hereby added as a final
paragraph the following, to be inserted in the Forms of Class CR,
Class CT and Class R Certificates:
“The Servicer, the Holders of
100% of the Class CR Certificates, the Holders of 100% of the Class
CT Certificates and the Holders of 100% of the Class R Certificates
entered into an Acknowledgement and Assignment Agreement dated as
of September 18, 2006. Such Acknowledgement and Assignment
Agreement concerns the allocation among the Servicer, the Class CR,
the Class CT and the Class R Certificateholders of
certain
amounts in connection with the
termination of the Trust, and the terms thereof are intended to
bind successor Servicers and all future Holders of the Class CR,
Class CT and Class R Certificates. A copy of such Acknowledgement
and Assignment Agreement has been included as Exhibit M to the
Pooling and Servicing Agreement.”
3. Condition to Effectiveness
.
As a condition to the effectiveness
of this Amendment, an Opinion of Counsel satisfying the
requirements of Section 12.01 of the Agreement has been
received by the parties hereto.
4. Effect of Amendment
.
This Amendment to the Agreement
shall be effective and the Agreement shall be deemed to be modified
and amended in accordance herewith on the Distribution Date on the
date on which the Trustee receives an executed copy of this
Amendment. This Amendment, once effective, shall be effective as of
the date first set forth above. The respective rights, limitations,
obligations, duties, liabilities and immunities of the Company, the
Seller, the Servicer, the Custodian and the Trustee shall hereafter
be determined, exercised and enforced subject in all respects to
such modifications and amendments, and all the terms and conditions
of this Amendment shall be and be deemed to be part of the terms
and conditions of the Agreement for any and all purposes. The
Agreement, as amended hereby, is hereby ratified and confirmed in
all respects.
5. The Agreement in Full Force
and Effect as Amended .
Except as specifically amended
hereby, all the terms and conditions of the Agreement shall remain
in full force and effect and, except as expressly provided herein,
the effectiveness of this Amendment shall not operate as, or
constitute a waiver or modification of, any right, power or remedy
of any party to the Agreement. All references to the Agreement in
any other document or instrument shall be deemed to mean the
Agreement as amended by this Amendment.
6. Counterparts .
This Amendment may be executed by
the Parties in several counterparts, each of which shall be deemed
to be an original and all of which shall constitute together but
one and the same agreement. This Amendment shall become effective
when counterparts hereof executed on behalf of such Party shall
have been received.
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