Exhibit 10.4
AMENDMENT NUMBER TWO
to the
MASTER REPURCHASE AGREEMENT (2007 SERVICING RIGHTS)
Dated as of April 25, 2007
among
WACHOVIA BANK, N.A.
WACHOVIA CAPITAL MARKETS, LLC
and
NOVASTAR MORTGAGE, INC.
AMENDMENT NUMBER TWO ("Amendment Number Two"), dated as of September 7,
2007, by and among Wachovia Bank, N.A., as buyer ("Buyer"), Wachovia Capital
Markets, LLC, as agent ("Agent"), NovaStar Mortgage, Inc., as seller (the
"Seller"), NovaStar Financial, Inc. ("NFI"), NovaStar Holding Corporation
("NHC") and Homeview Lending Inc. ("Homeview", together with Seller, NFI and
NHC, each a Guarantor and collectively the "Guarantors") to the Master
Repurchase Agreement (2007 Servicing Rights), dated as of April 25, 2007, as
amended by Amendment Number One, dated May 10, 2007 (as amended, the "Master
Repurchase Agreement"), by and among the Buyer, the Agent, the Seller and the
Guarantors.
RECITALS
WHEREAS, Buyer, the Seller, the Guarantors and the Agent have agreed to
amend the Master Repurchase Agreement pursuant to the terms and conditions set
forth herein.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
SECTION 1. Defined Terms. Any terms capitalized but not otherwise defined
herein shall have the respective meanings set forth in the Master Repurchase
Agreement.
SECTION 2. Amendments. Effective as of the date hereof, the Master
Repurchase Agreement is hereby amended as follows:
(a) Section 2 of the Master Repurchase Agreement is hereby amended by
deleting clause (a) of the definition of "Eligible Servicing Agreement" and
replacing it with the following:
"(a) such Servicing Agreement is in form and substance satisfactory
to, and has been reviewed and approved by, the Buyer in its sole
discretion, and such Servicing Agreement contains
servicing and assignment of servicing rights provisions acceptable to
the Buyer and with respect to the Servicing Agreements identified in
Sections (a) and (b) of Schedule 1, Buyer shall have received the
Resignation Letter and the Trustee Side Letter. The Buyer shall hold
the Resignation Letter and Trustee Side Letter in escrow until the
earliest of: (i) the resignation of the Seller as Servicer, (ii) the
occurrence of an Event of Default or (iii) upon notification by the
Agent to the Servicer that the Agent reasonably believes that an event
will occur which would cause a trustee to be permitted or required to
appoint a backup or successor servicer under a Servicing Agreement,
then Servicer agrees to release its resignation letter with respect to
such Servicing Agreement."
(b) The first sentence in Section 9(a)(vi) of the Master Repurchase
Agreement is hereby amended by deleting the reference to "$517,000,000" and
replacing it with: "$150,000,000".
(c) Section 13(q)(ii) is hereby amended by adding the word "not" after the
word "shall" and before the word "exercise" in the second sentence thereof.
(d) Section 13(t) of the Master Repurchase Agreement is hereby amended and
restated in its entirety as follows:
t. Maintenance of Adjusted Tangible Net Worth. The Adjusted Tangible
Net Worth of NFI at any time shall be greater than $150,000,000.
(e) Section 13(v) of the Master Repurchase Agreement is hereby amended and
restated in its entirety as follows:
v. At any time and for any reason, the Agent may, at Seller's expense,
cause the appointment with immediate effect of one or more backup
servicers to service some or all of the Purchased Assets, including,
without limitation, the Purchased Assets relating to all repurchase
agreements and other warehouse facilities, if any, and all
securitizations, subject to the rights, if any, of parties other than
Seller and its Affiliates to participate in the selection, instruction
and/or monitoring of such backup servicer(s). Seller agrees, and
agrees to cause its Subsidiaries and any other Affiliates within its
control, to cooperate in any manner the Agent indicates is reasonably
necessary to assist with the creation and maintenance of such backup
servicing arrangements on terms acceptable to the Agent in its sole
and absolute discretion.
(f) Section 18(q) of the Master Repurchase Agreement is hereby
amended and restated in its entirety as follows:
q. [reserved];
(g) Section 18(r) of the Master Repurchase Agreement is hereby amended and
restated in its entirety as follows:.
r. the Adjusted Tangible Net Worth of NFI, on a consolidated basis, is
less than or equal to $150,000,000 at any time;"
(h) Section 18(ii) of the Master Repurchase Agreement is hereby amended and
restated in its entirety as follows:
(ii) Servicer's current servicing rating is downgraded: (i) with
respect to Xxxxx'x below SQ4 (ii) with respect to S&P below "Average"
and (iii) with respect to Fitch below RPS4; or
(i) Clause (i) of Exhibit A-2 to the Master Repurchase Agreement is hereby
deleted in its entirety and replaced with the following:
(j) [reserved];
(k) Clause (ii) of Exhibit A-2 to the Master Repurchase Agreement is hereby
amended by deleting the reference to "$517,000,000" therein and replacing it
with: "$150,000,000".
SECTION 3. Conditions Precedent. This Amendment Number Two shall become
effective only when:
(a) this Amendment Number Two is executed and delivered by duly authorized
officers of each of Buyer, Seller, Guarantors and Agent;
(b) Buyer shall have received all fees and other amounts due and payable on
or prior to the date hereof, including reimbursement of all out-of pocket
expenses required to be reimbursed or paid by Seller hereunder or any other
Program Document;
(c) Any other deliverable due as the date hereof to Buyer; and
(d) Buyer has received any other documents as the Buyer or counsel to the
Buyer may reasonably request.
SECTION 4. Governing Law. THIS AMENDMENT NUMBER TWO SHALL BE CONSTRUED IN
ACCORDANCE WITH, AND GOVERNED BY, THE LAW OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.
SECTION 5. Counterparts. This Amendment Number Two may be executed by each
of the parties hereto on any number of separate counterparts, each of which
shall be an original and all of which taken together shall constitute one and
the same instrument.
SECTION 6. Costs. Seller shall promptly reimburse Buyer for all
out-of-pocket costs and expenses of Buyer in connection with the preparation,
execution and delivery of this Amendment Number Two (including, without
limitation, the fees and expenses of counsel for Buyer).
SECTION 7. Limited Effect. Except as amended hereby, the Master Repurchase
Agreement shall continue in full force and effect in accordance with its
respective terms. Reference to this Amendment Number Two need not be made in the
Master Repurchase Agreement or any other instrument or document executed in
connection therewith, or in any certificate, letter or communication issued or
made pursuant to, or with respect to, the Master Repurchase Agreement, any
reference therein to the Master Repurchase Agreement, being sufficient to refer
to the Master Repurchase Agreement, as amended thereby. Seller shall be
responsible for all costs associated with this Amendment Number Two.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, Seller, Buyer, Agent and Guarantors have caused their
names to be signed to this Amendment Number Two by their respective officers
thereunto duly authorized as of the date first above written.
NOVASTAR MORTGAGE, INC., as Seller
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President, Treasurer &
Controller
WACHOVIA BANK, N.A., as Buyer
By: /s/ Xxxxx Xxxxxx
--------------------------------------
Name: Xxxxx Xxxxxx
------------------------------------
Title: Vice President
-----------------------------------
WACHOVIA CAPITAL MARKETS, LLC, as Agent
By: /s/ Xxxxx Xxxxxxx
--------------------------------------
Name: Xxxxx Xxxxxxx
------------------------------------
Title: Vice President
-----------------------------------
Amendment No. 2 to the Master Repurchase Agreement (Servicing Rights)
Acknowledged and Agreed:
NFI HOLDING CORPORATION, as Guarantor
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President, Treasurer &
Controller
NOVASTAR FINANCIAL, INC., as Guarantor
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President, Treasurer &
Controller
NOVASTAR MORTGAGE, INC., as Guarantor
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President, Treasurer &
Controller
HOMEVIEW LENDING INC., as Guarantor
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President
Amendment No. 2 to the Master Repurchase Agreement (Servicing Rights)
