Item 1.01 Entry into a Material Definitive Agreement
On December 7, 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, for a period ending on January 4, 2008 (the "Waiver Period"),
Wachovia agreed not to enforce, and waived any breach or event of default that
would otherwise have resulted solely from the Company's failure to comply with,
the requirement under the Agreements described below that the Company maintain a
specified adjusted tangible net worth. Further, the requirement under the
Agreements that the Company maintain liquidity of at least $30 million was
amended to require the Company to maintain liquidity of at least $24 million
during the Waiver Period. Wachovia expressly reserved the right to terminate the
Waiver Agreement prior to January 4, 2008, if any other event of default or
breach occurs under the Agreements other than as described above.
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.
