April 30, 2007
NovaStar Mortgage, Inc.
NovaStar Certificates Financing LLC
NovaStar Certificates Financing Corporation
0000 Xxxx Xxxxxxx, Xxxxx 000
Xxxxxx Xxxx, Xxxxxxxx 00000
Re: Master Repurchase Agreement Waiver
Reference is made to that certain Master Repurchase Agreement (2007
Servicing Rights) dated as of April 25, 2007 (the "Servicing Rights Agreement"),
among Wachovia Bank, N.A., as Buyer, Wachovia Capital Markets, LLC, as Agent,
NovaStar Mortgage, Inc., as a Seller, and NovaStar Financial, Inc., NovaStar
Mortgage, Inc., HomeView Lending, Inc. and NFI Holding Corporation, as
Guarantors and that certain Master Repurchase Agreement (2007 Residual
Securities) dated as of April 18, 2007 (the "Residual Securities Agreement" and
together with the Servicing Rights Agreement, the "Agreements"), among Wachovia
Investment Holdings, LLC, as Buyer, Wachovia Capital Markets, LLC, as Agent,
NovaStar Mortgage, Inc., as a Seller, NovaStar Certificates Financing LLC, as a
Seller, NovaStar Certificates Financing Corporation, as a Seller and NovaStar
Financial, Inc., NovaStar Mortgage, Inc., HomeView Lending, Inc. and NFI Holding
Corporation, as Guarantors. Capitalized terms used in this letter without
definition have the meanings ascribed to them in the Agreements.
Each Buyer hereby gives consent for NovaStar Financial Inc. to declare and
pay dividends on its 8.90% Series C Cumulative Redeemable Preferred Stock and
the Trust Preferred Securities for the quarter ended June 30, 2007. The payment
of such dividends shall not constitute a breach of Section 13(u) under the
Servicing Rights Agreement or Section 13(t) under the Residual Securities
Agreement and each Buyer hereby waives any event of default that would otherwise
arise as a result of the payment of such dividends under the Agreements. Each
Seller acknowledges that after giving effect to the payment of such dividends,
it will continue to be in compliance with all financial covenants set forth in
the Agreements.
Except as expressly set forth herein, this letter shall not, by implication
or otherwise, limit, impair, constitute a waiver of, or otherwise affect the
rights and remedies of the Buyer under the Agreements, and shall not alter,
modify, amend or in any way affect any of the terms, conditions, obligations,
covenants or agreements contained in the Agreements, all of which shall continue
in full force and effect. For the avoidance of doubt, any future dividends must
be expressly approved by the Buyers in writing.
Very truly yours,
Wachovia Bank, N.A.,
as Buyer
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Director
Wachovia Investment Holdings, LLC,
as Buyer
By: /s/ Xxxxxx Xxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
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