EXECUTION COPY
December 7, 2007
NovaStar Mortgage, Inc.
NovaStar Certificates Financing LLC
NovaStar Certificates Financing Corporation
NFI Repurchase Corporation
NMI Repurchase Corporation
NMI Property Financing, Inc.
HomeView Lending, Inc.
NovaStar Financial, Inc.
NFI Holding Corporation
8140 Ward Parkway,
Suite 300
Kansas City, Missouri 64114
Re:
Master Repurchase Agreements Waiver
Reference is made to those certain Master Repurchase
Agreements listed on
Schedule I attached hereto (the "
Agreements
"). Capitalized terms used in this
letter agreement without definition have the meanings ascribed
to them in the
Agreements.
Effective as of the date hereof and until January 4, 2008
(the "Waiver
Period") and subject to the limitations set forth herein, each
Buyer hereby:
A. 1. Agrees not to enforce the requirements
for NovaStar
Financial, Inc. ("NFI") to maintain a
required Adjusted
Tangible Net Worth under the Agreements;
2. Waives any breach and/or any event of
default that would
otherwise arise under the Agreements solely
as a result of
the failure of NFI to have the required
Adjusted Tangible
Net Worth specified in the Agreements; or
3. Agrees that in the Monthly Certificates
delivered by NFI,
NFI may carve-out the certification solely
relating to the
Adjusted Tangible Net Worth for the previous
month and each
Buyer hereby waives any breach and/or event of
default that
would otherwise arise under the Agreements
as a result of
such carve-out from the Monthly Certifications.
B. 1. Agrees, during the Waiver Period, not to
enforce the
requirements for NovaStar Financial, Inc.
("NFI") to
maintain Liquidity in an amount not less than
$30,000,000 as
specified under the
Wachovia NovaStar TNW
Waiver 12-07-07
Agreements; provided that NFI agrees to
maintain Liquidity
that could be drawn against (taking into
account required
haircuts) in an amount not less than
$24,000,000;
2. Waives any breach and/or any event of
default that would
otherwise arise under the Agreements solely
as a result of
the failure of NFI to maintain Liquidity in
an amount not
less than $30,000,000 during the Waiver
Period; provided
that NFI maintains Liquidity in an amount not
less than the
$24,000,000 during the Waiver Period;
3. Agrees that in the Monthly Certificates
delivered by NFI
during the Waiver Period, NFI may
carve-out the
certification solely relating to the
maintenance of
Liquidity in an amount not less than
$30,000,000 for the
previous month and each Buyer hereby waives
any breach
and/or event of default that would otherwise
arise under the
Agreements as a result of such carve-out
from the Monthly
Certifications; provided that NFI maintains
Liquidity in an
amount not less than $24,000,000 for
such month and
certifies that it has maintained such amount
in the Monthly
Certification.
Notwithstanding anything to the contrary herein, all parties
bound herein
acknowledge and agree that the Buyers, shall retain all rights
and remedies in
order to enforce any Event of Default or other breach
contemplated by the
Agreements.
Notwithstanding the occurrence and continuance of the
NFI's failure to
maintain the required Adjusted Tangible Net Worth or maintenance
of Liquidity
under the Agreements described above, each Buyer is willing to
waive certain of
its rights;
provided
that each Buyer reserves the right to unilaterally
terminate this letter agreement on or prior to January 4, 2008,
without notice
to any party, based upon the occurrence of any Event of Default
or breach that
occurs under the Agreement
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