Item 1.01 Entry into a Material Definitive Agreement
On November 30, 2007, NovaStar Financial, Inc. and certain of its affiliates
(the "Company") entered into a Master Repurchase Agreements Waiver ("Waiver
Agreement") with Wachovia Bank, N.A. and certain of its affiliates ("Wachovia")
pursuant to which Wachovia agreed not to enforce, for a period ending on
December 7, 2007, the adjusted tangible net worth requirement under the
Agreements described below, and waived, for the same period, any breach and/or
event of default that would have resulted under the Agreements solely as a
result of the Company's failure to maintain the required adjusted tangible net
worth. Wachovia expressly reserved the right to terminate the Waiver Agreement
prior to December 7, 2007, if any event of default or breach occurs under the
Agreements other than solely as a result of the Company's failure to maintain
the required adjusted tangible net worth.
The agreements affected by this Waiver Agreement are the following (the
"Agreements"):
1. Master Repurchase Agreement (2007 Residual Securities) dated as of April
18, 2007, among Wachovia Investment Holdings, LLC, Wachovia Capital Markets,
LLC, NovaStar Mortgage, Inc., NovaStar Certificates Financing LLC, and NovaStar
Certificates Financing Corp.
2. Master Repurchase Agreement (2007 Whole Loan) dated as of May 9, 2007,
among Wachovia Bank, National Association, NFI Repurchase Corporation, NMI
Repurchase Corporation, NMI Property Financing, Inc., HomeView Lending, Inc.,
NovaStar Financial Inc., NFI Holding Corporation and NovaStar Mortgage, Inc.
3. Master Repurchase Agreement (2007 Non-investment Grade) dated as of May
31, 2007, among Wachovia Investment Holdings, LLC, Wachovia Capital Markets,
LLC, NovaStar Mortgage, Inc., NovaStar Certificates Financing LLC, and NovaStar
Certificates Financing Corp.
4. Master Repurchase Agreement (2007 Investment Grade) dated as of May 31,
2007, among Wachovia Bank, N. A., Wachovia Capital Markets, LLC, NovaStar
Mortgage, Inc., NovaStar Certificates Financing LLC, and NovaStar Certificates
Financing Corp.
5. Master Repurchase Agreement (New York) dated as of July 6, 2007, between
Wachovia Bank, National Association and NovaStar Mortgage, Inc.
In addition to the financing agreements listed above, Wachovia also routinely
engages in other ordinary course financial transactions with the Company,
including but not limited to financial derivative transactions, and has acted as
an underwriter for certain securitizations sponsored by the Company.
The foregoing is a summary of the terms of the Waiver Agreement. This summary is
qualified in its entirety by reference to the full text of the Waiver Agreement,
which is attached hereto as Exhibit 10.1 and is incorporated herein by
reference.