Document:

Guaranty

 Exhibit 10.64 
 GUARANTY 
 THIS GUARANTY, dated as of June 30, 2006, (this “Guaranty”), is made by NovaStar
Financial, Inc. (the “Guarantor”) in favor of Greenwich Capital Financial Products, Inc. (the “Buyer”). 
 RECITALS

 A. Pursuant to that certain Master Repurchase Agreement (Securities), dated as of June 30, 2006, among NovaStar Mortgage, Inc.
(“NMI”), NovaStar Certificates Financing LLC (“NCFL”), NovaStar Certificate Financing Corporation (“NCFC” and collectively with NCFL and NMI, jointly and severally the “Sellers”) and Buyer (the “Master
Repurchase Agreement”), Buyer has agreed to purchase certain securities and other related assets (the “Purchased Assets”) from the Sellers and the Sellers have agreed to repurchase such Purchased Assets upon the terms and subject to
the conditions set forth therein. 
 B. It is a condition precedent to the obligation of Buyer to purchase the Purchased Assets from the
Sellers under the Master Repurchase Agreement that the Guarantor shall have executed and delivered this Guaranty to Buyer. 
 NOW, THEREFORE,
in order to induce Buyer to enter into the Master Repurchase Agreement and for other good and valuable consideration, receipt and sufficiency of which by the parties hereto are hereby acknowledged, the parties hereto hereby agree as follows:

 1. Defined Terms. (a) Unless otherwise defined herein, terms defined in the Master Repurchase Agreement and used herein shall
have the meanings given to them in the Master Repurchase Agreement. 
 (b) “Obligations” shall mean all obligations and liabilities
of each Seller and the Guarantor to Buyer (including, without limitation, the “Obligations” (as defined in the Master Repurchase Agreement)), whether direct or indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, or out of or in connection with the Master Repurchase Agreement, this Guaranty, any other Program Documents and any other document made, delivered or given in connection herewith or therewith, whether on
account of covenants, Repurchase Prices, Price Differentials, Margin Deficits, reimbursement obligations, fees, indemnities, costs, expenses (including, without limitation, all reasonable fees and disbursements of counsel to Buyer that are required
to be paid by Sellers pursuant to the terms of the Master Repurchase Agreement) or otherwise. 
 (c) The words “hereof,”
“herein” and “hereunder” and words of similar import when used in this Guaranty shall refer to this Guaranty as a whole and not to any particular provision of this Guaranty, and section and paragraph references are to this
Guaranty unless otherwise specified. 
 (d) The meanings given to terms defined herein shall be equally applicable to both the singular and
plural forms of such terms. 

 2. Guaranty. (a) The Guarantor hereby absolutely, unconditionally and irrevocably, guarantees
to Buyer and its successors, endorsees, transferees and assigns from the date hereof the prompt and complete payment and performance by the Sellers when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations.

 (b) The Guarantor’s obligations hereunder shall not be affected by the existence, validity, enforceability, perfection or extent of
any collateral therefor (including the Collateral) or by any other circumstance relating to the Obligations that might otherwise constitute a legal or equitable discharge of or defense to the Guarantor not available to Seller. The Guarantor agrees
that Buyer may resort to the Guarantor for payment of any of the Obligations whether or not Buyer shall have resorted to any collateral therefor (including the Collateral) or shall have proceeded against any Seller. Buyer shall not be obligated to
file any claim relating to the Obligations in the event that any Seller becomes subject to a bankruptcy, reorganization or similar proceeding, and the failure of Buyer to so file shall not affect the Guarantor’s obligations hereunder. In the
event that any payment to Buyer in respect of any Obligations is rescinded or must otherwise be returned for any reason whatsoever (other than by reason of any circumstance, other than bankruptcy or insolvency, that constitutes a legal or equitable
defense to any Seller), the Guarantor shall remain liable hereunder with respect to such Obligations as if such payment had not been made and the Guaranty shall be reinstated, if applicable. 
 (c) The Guarantor hereby waives any and all notice of the creation, renewal, extension or accrual of any of the Obligations, and notice of or proof of
reliance by Buyer upon this Guaranty or acceptance of this Guaranty; the Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon this
Guaranty; and all dealings between the Sellers and the Guarantor, on the one hand, and Buyer, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon this Guaranty. The Guarantor waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment to or upon the Sellers or the Guarantor with respect to the Obligations. 
 (d) The Guarantor further agrees to pay on demand any and all fees and expenses (including, without limitation, all reasonable fees and disbursements of counsel) which may be paid or incurred by Buyer in enforcing or
protecting any rights with respect to, or collecting, any or all of the Obligations and/or enforcing any rights with respect to, or collecting against, the Guarantor under this Guaranty. 
 (e) The Guarantor (the “Indemnifying Party”) agrees to hold Buyer and each of its officers, directors and employees (each an “Indemnified
Party”) harmless from and indemnify each Indemnified Party against all liabilities, losses, damages, judgments, costs and expenses of any kind (including reasonable fees and expenses of counsel) that may be imposed on, incurred by or asserted
against such Indemnified Party relating to or resulting from the Indemnifying Party’s negligence, bad faith, willful misconduct, fraud or breach of its representations, warranties, covenants or obligations under this Guaranty. 
  

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 (f) The Guarantor agrees that the Obligations may at any time and from time to time exceed the amount of
the liability of the Guarantor hereunder without impairing this Guaranty or affecting the rights and remedies of Buyer hereunder. 
 (g) No
payment or payments made by Sellers, the Guarantor, any other guarantor or any other Person or received or collected by Buyer from Sellers, the Guarantor, any other guarantor or any other Person by virtue of any action or proceeding or any set off
or appropriation or application at any time or from time to time in reduction of or in payment of the Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of the Guarantor hereunder which shall, notwithstanding
any such payment or payments other than payments made by the Guarantor in respect of the Obligations or payments received or collected from the Guarantor in respect of the Obligations, remain liable for the Obligations until the Obligations are paid
in full and the Master Repurchase Agreement is terminated. 
 (h) The Guarantor agrees that whenever, at any time, or from time to time, it
shall make any payment to Buyer on account of its liability hereunder, it will notify Buyer in writing that such payment is made under this Guaranty for such purpose. 
 (i) Notwithstanding any provision of this Guaranty to the contrary, the aggregate liability of Guarantor under the Program Documents (including, without limitation, this Guaranty) on any date of determination shall be
limited as set forth in Section 19(k) of the Master Repurchase Agreement; provided that such limitation shall not (i) constitute a waiver, release or impairment of any obligation evidenced or secured by the Program Documents;
(ii) impair the right of Buyers to name the Guarantor or a Seller as a party or defendant in any action or suit for judicial foreclosure and sale under the Program Documents; (iii) impair the right of Buyers to obtain the appointment of a
receiver; (iv) impair the right of Buyers to bring suit (and seek a money judgment therein) with respect to breach of contract, tort, fraud or intentional misrepresentation by the Guarantor or a Seller or any other person or entity in
connection with the Program Documents; (v) impair the right of Buyers to obtain payments on the Purchased Assets received by the Guarantor or a Seller after the occurrence of an Event of Default; (vi) impair the right of Buyers to bring
suit (and seek a money judgment therein) with respect to any misappropriation by the Guarantor or a Seller of payments collected in advance with respect to ‘the Purchased Securities; or (vii) impair the right of Buyers to apply to losses
arising out of any misrepresentation, willful misconduct or fraud by the Guarantor or a Seller or any of their agents or employees, any suit or money judgment related thereto. 
 3. Changes in Obligations, Collateral therefor and Agreements Relating Thereto; Waiver of Certain Notices. The Guarantor agrees that Buyer may at
any time and from time to time, either before or after the maturity thereof, without notice to or further consent of the Guarantor, extend the time of payment of, exchange or surrender any collateral (including the Collateral) for, or renew any of
the Obligations, and may also make any agreement with Sellers for the extension, renewal, payment, compromise, discharge or release thereof, in whole or in part, or for any modification of the terms thereof or of any agreement between Buyer and any
Seller without in any way impairing or affecting this Guaranty, it being understood that no such notice or consent is required with respect to individual Transaction Notices. The Guarantor waives notice of the acceptance of this Guaranty and of the
creation, renewal, extension or accrual of Obligations, presentment demand for payment, non-payment notice of dishonor and protest. 
  

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 4. Representations and Warranties of the Guarantor. The Guarantor hereby represents and warrants
that: 
 (a) It (i) is duly organized and validly existing in good standing under the laws of the jurisdiction under which it is
organized and (ii) is duly qualified to do business and is in good standing in every other jurisdiction as to which the nature of the business conducted by it makes such qualification necessary, except where the failure to be so qualified and
in good standing would not be reasonably likely (individually or in the aggregate) to have a Material Adverse Effect. 
 (b) It has the full
power, authority and legal right to execute, deliver and perform its obligations under this Guaranty. This Guaranty has been duly executed and delivered by it, has not been amended or otherwise modified, is in full force and effect. 
 (c) Neither the execution and delivery of this Guaranty nor the consummation of the transactions contemplated herein (i) contravene the
Guarantor’s charter or by-laws, or (ii) conflict with or result in a breach of, or require any consent under, any applicable law or regulation, or any order, writ, judgment, injunction or decree of any court or governmental authority or
agency, or any material agreement or instrument to which the Guarantor is a party or by which the Guarantor or its property is bound or to which the Guarantor is subject, or constitute a default under any such agreement or instrument, or result in
the creation or imposition of any lien or encumbrance upon the Guarantor’s revenues or assets pursuant to the terms of any such agreement or instrument. 
 (d) The Guarantor has received and reviewed copies of the Master Repurchase Agreement. 
 (e) There is no
action, suit or proceeding at law or in equity by or before any governmental authority, arbitral tribunal or other body now pending, or to the best of the Guarantor’s knowledge, threatened against or affecting the Guarantor or any of its
property that is reasonably likely to (i) have a material adverse effect on the Guarantor’s condition, financial or otherwise, or (ii) which questions the validity or enforceability of any of the Program Documents or any action to be
taken in connection with the transactions contemplated thereby and there is a reasonable likelihood of a Material Adverse Effect or adverse decision. 
 (f) This Guaranty is the legal, valid and binding obligation of the Guarantor, enforceable against the Guarantor in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights of creditors generally and to the application of general principles of equity (regardless of whether considered in a proceeding in equity or at law). 
 (g) All consents, licenses, clearances, authorizations and approvals of, and registrations and declarations with, any governmental authority or
regulatory body necessary for the due execution, delivery and performance of this Guaranty have been obtained and remain in full force and effect and all conditions thereof have been duly complied with, and no other action by, and no notice to or
filing with, any governmental authority or regulatory body is required in connection with the execution, delivery or performance of this Guaranty. 
  

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 (h) The Guarantor is not required to be registered as, or controlled by a company required to be
registered as, an “investment company” within the meaning of the Investment Company Act of 1940, as amended from time to time, or any successor statute. 
 (i) No report prepared by the Guarantor pursuant to this Guaranty, or furnished or to be furnished by the Guarantor to Buyer in connection with this Guarantee, is or will be inaccurate in any material respect as of
the date it is or shall be dated (except as otherwise disclosed to Buyer, as the case may be, at such time) and no such document contains or will contain any material misstatement of fact as of the date so furnished. 
 (j) The Guarantor has not dealt with or paid any compensation to any broker, investment banker, agent or other person in connection with the transactions
contemplated hereby. 
 (k) Since the date of the financial statement heretofore most recently delivered by the Guarantor to Buyer (which the
Guarantor represents and warrants to be its most recent financial statement), there has been no material adverse change in the Guarantor’s financial condition or results of operations. 
 (l) The Guarantor has no rights in or to the Purchased Assets (including any rights associated with or related to the Purchased Assets). 
 (m) The Guarantor has not filed or authorized the filing of any financing statement under the Uniform Commercial Code in any jurisdiction naming the
Guarantor as seller, transferor or debtor and listening as collateral or otherwise covering any of the Collateral. 
 (n) There are no
delinquent federal, state, city, county or other taxes relating to the Guarantor, the Purchased Assets or any arrangement pursuant to which the Purchased Assets are issued that might, in the reasonable judgment of Buyer, have a Material Adverse
Effect, and all such delinquent tax liabilities have been satisfied except those that are being contested by the Guarantor in good faith and with respect to which payment has been stayed by a court of competent jurisdiction. 
 (o) Each other representation and warranty of the Guarantor contained in the Master Repurchase Agreement is true and correct and is hereby restated and
affirmed as if fully set forth herein. 
 5. Covenants and Agreements of Guarantor. The Guarantor covenants and agrees with Buyer
that, from and after the date hereof: 
 (a) The Guarantor will (i) preserve and maintain its legal existence and all of its material
rights, privileges, licenses and franchises to the extent that a failure to do so would result in a Material Adverse Effect; (ii) comply with the requirements of all applicable laws, rules, regulations and orders of Governmental Authorities and
other Requirements of Law if failure to comply with such requirements would be reasonably likely (either individually or in 

  

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the aggregate) to have a Material Adverse Effect; (iii) keep adequate records and books of account, in which complete entries will be made in accordance
with GAAP consistently applied; (iv) not move its chief executive office or chief operating office from the addresses where such offices are located as of the date hereof, or change its jurisdiction of organization unless it shall have provided
Buyer 30 days prior written notice of such change; (v) pay and discharge all taxes, assessments and governmental charges or levies imposed on it or on its income or profits or on any of its property prior to the date on which penalties attach
thereto, except for any such tax, assessment, charge or levy the payment of which is being contested in good faith and by proper proceedings and against which adequate reserves are being maintained; and (vi) permit representatives of Buyer,
during normal business hours upon prior written notice at a mutually desirable time (or at any time and from time to time upon the occurrence of an Event of Default or Event of Termination and during the continuance thereof), to examine, copy and
make extracts from its books and records, to inspect any of its properties, and to discuss its business and affairs with its officers, all to the extent reasonably requested by Buyer. 
 (b) Guarantor shall not liquidate, wind up or dissolve itself (or suffer any liquidation, winding up or dissolution) or sell all or substantially all of
its assets other than in connection with a whole loan sale or securitization, the proceeds of which shall be used to pay any amounts then owing lo Buyer. 
 (c) Guarantor shall give notice to Buyer promptly: (i)(a) within one (1) Business Day after the Guarantor becomes aware of the occurrence of any Default, Event of Default or Event of Termination under the Master
Repurchase Agreement or any default or event of default under any other material agreement of the Guarantor or any of its Subsidiaries or Affiliates; (ii) within five (5) Business Days after service of process on the Guarantor or any of
its Subsidiaries, or any agent thereof for service of process, in respect of any legal or arbitrable proceedings affecting the Guarantor or any of its Subsidiaries or Affiliates (x) that questions or challenges the validity or enforceability of
the Master Repurchase Agreement, this Guaranty, any Security, any Purchased Asset, any Governing Agreement or any Transaction or (y) in which the amount in controversy exceeds $5,000,000; (iii) upon the Guarantor becoming aware of any
event of default related to any Purchased Assets or Governing Agreement; (iv) upon discovery by the Guarantor of any breach of any representation, warranty or covenant contained in the Master Repurchase Agreement or this Guaranty; and
(v) upon the entry of a judgment or decree against the Guarantor in an amount in excess of $2,000,000. Each notice delivered pursuant to this Paragraph 5 shall be accompanied by a statement of a Responsible Officer of the Guarantor setting
forth details of the occurrence referred to therein and stating what action the Guarantor has taken or proposes to take with respect thereto. 
 (d) At all times, the Guarantor shall have, on a consolidated basis, cash, Cash Equivalents and unused borrowing capacity on unencumbered assets that could be drawn against (taking into account required haircuts) under committed warehouse
and repurchase facilities in an amount of not less than $10,000,000. 
 (e) The Guarantor shall not permit its Adjusted Tangible net Worth at
any time to be less than $350,000,000. 
  

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 (f) The Guarantor shall not permit the ratio of its Total Indebtedness to Tangible Net Worth at any time
to be greater than 8:1 as measured as of any quarter end. 
 (g) A Change of Control shall not occur. 
 (h) The Guarantor shall not (i) incur debts beyond its ability to pay such debts as they mature; or (ii) contemplate the commencement of
insolvency, bankruptcy, liquidation or consolidation proceedings or the appointment of a receiver, liquidator, conservator, trustee or similar official in respect of the Guarantor or any of its assets. 
 (i) The Guarantor shall deliver to Buyer all financial statements, accountants’ reports, monthly certifications and other information required by
Section 13 of the Master Repurchase Agreement. 
 (j) Without prior written consent of Buyer, the Guarantor will not: (i) assign,
sell, transfer, pledge or grant any security interest in or lien on any of the Purchased Assets to anyone except Buyer, permit any financing statement (except for any assignments in favor of Buyer) or assignment (except for any assignments in favor
of Buyer) to be on file in any public office with respect thereto, (ii) permit or suffer to exist any security interest, lien, charge, encumbrance or right of others to attach to any of the Purchased Assets, except as contemplated by the Master
Repurchase Agreement, or (iii) consent to any amendment or supplement to the Governing Agreements that would reasonably be expected to result in a Material Adverse Effect. 
 (k) Each other covenant of the Guarantor contained in the Master Repurchase Agreement is hereby restated and affirmed as if fully set forth herein.

 6. Right of Set-off. In addition to any rights and remedies of Buyer provided by law, but subject to the limitations set forth in
Section 19(k) of the Master Purchase Agreement, upon any amount becoming due and payable by any NovaStar Entity to any GCFP Entity pursuant to any of the Relevant Transactions (whether at the stated maturity, by acceleration or otherwise) any
GCFP Entity may, without prior notice to any Novastar Entity, any such notice being expressly waived by each Novastar Entity to the extent permitted by applicable law, set-off; net, appropriate and apply against such amount any and all Collateral,
Property and deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, matured or unmatured, at any time held or
owing by any GCFP Party to or for the credit or the account of any Novastar Party. Without limiting the generality of the foregoing, any GCFP Party may set-off and net cash, the proceeds of the liquidation of any Collateral, any other collateral
pledged to or held by any GCFP Party in connection with any Relevant Transaction and all other sums or obligations owed by any GCFP Party to any Novastar Party against all of the Novastar Parties’ respective obligations to any GCFP Party,
whether under this Guaranty, under any other Program Document or under any other agreement among the parties or between any GCFP Party and any Novastar Party, or otherwise, whether or not such obligations are then due, without prejudice to any GCFP
Party’s right to recover any deficiency. Buyer agrees promptly to notify each Seller and the Guarantor after any such set-off and application is made; provided, that the failure to give such notice shall not affect the validity of such set-off
and application. Notwithstanding the foregoing, in no event shall any GCFP Entity have the right to 

  

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set-off, net, or apply any Property, deposits, credits, indebtedness, claims, or other amounts in the aggregate in excess of the Maximum Recourse Amount
against any Obligations, other than the Purchased Assets and other Collateral, the proceeds of liquidation thereof, cash held hereunder and any and all proceeds of the foregoing pursuant to Section 19(k) of the Master Repurchase Agreement.

 7. No Subrogation. Notwithstanding any payment or payments made by the Guarantor hereunder or any set off or application of funds
of the Guarantor by Buyer or any of its Affiliates, the Guarantor shall not be entitled to be subrogated to any of the rights of Buyer against any Seller or any other guarantor or any collateral security (including the Collateral) or guarantee or
right of offset held by Buyer for the payment of the Obligations, nor shall the Guarantor seek or be entitled to seek any contribution or reimbursement from any Seller or any other guarantor in respect of payments made by the Guarantor hereunder,
until all amounts owing to Buyer by the Sellers and the Guarantor on account of the Obligations are paid in full and the Master Repurchase Agreement is terminated. If any amount shall be paid to the Guarantor on account of such subrogation rights at
any time when all of the Obligations shall not have been paid in full, such amount shall be held by the Guarantor in trust for Buyer, segregated from other funds of the Guarantor, and shall, forthwith upon receipt by the Guarantor, be turned over to
Buyer in the exact form received by the Guarantor (duly indorsed by the Guarantor to Buyer, if required), to be applied against the Obligations, whether matured or unmatured, in such order as Buyer may determine. 
 8. Amendments, Etc. with Respect to the Obligations. The Guarantor shall remain obligated hereunder notwithstanding that, without any reservation
of rights against the Guarantor and without notice to or further assent by the Guarantor, any demand for payment of any of the Obligations made by Buyer may be rescinded by Buyer and any of the Obligations continued, and the Obligations, or the
liability of any other party upon or for any part thereof, or any collateral security (including the Collateral) or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by Buyer, and the Master Repurchase Agreement and any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated,
in whole or in part, as Buyer may deem advisable from time to time, and any collateral security (including the Collateral), guarantee or right of offset at any time held by Buyer for the payment of the Obligations may be sold, exchanged, waived,
surrendered or released. Buyer shall not have any obligation to protect, secure, perfect or insure any lien at any time held by it as security for the Obligations or for this Guaranty or any property subject thereto. When making any demand hereunder
against the Guarantor, Buyer may, but shall be under no obligation to, make a similar demand on the Sellers, and any failure by Buyer to make any such demand or to collect any payments from the Sellers or any release of the Sellers shall not relieve
the Guarantor of its obligations or liabilities hereunder, and shall not impair or affect the rights and remedies, express or implied, or as a matter of law, of Buyer against the Guarantor. For the purposes hereof “demand” shall include
the commencement and continuance of any legal proceedings. 
 9. No Waiver; Cumulative Rights. No failure on the part of Buyer to
exercise, and no delay in exercising, any right, remedy or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by Buyer of any right, remedy or power 

  

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hereunder preclude any other or future exercise of any right, remedy or power. A waiver by Buyer of any right or remedy hereunder on any one occasion shall
not be construed as a bar to any right or remedy which Buyer would otherwise have on any future occasion. Each and every right, remedy and power hereby granted to Buyer or allowed it by law or other agreement shall be cumulative and not exclusive of
any other, and may be exercised by Buyer at any time or from time to time. This Guaranty shall remain in full force and effect until the Obligations are paid in full, notwithstanding that from time to time prior thereto, one or more Sellers may then
be free from any Obligation. 
 10. Guaranty Absolute and Unconditional. The Guarantor understands and agrees that this Guaranty shall
be construed as a continuing, absolute and unconditional guarantee of the full and punctual payment and performance by the Sellers of the Obligations and not of their collectibility only, and is in no way conditioned upon any requirement that Buyer
first attempt to collect any of the obligations from the Sellers, without regard to (a) the validity, regularity or enforceability of the Master Repurchase Agreement, any of the Obligations or any other collateral security therefor (including
the Collateral) or guarantee or right of offset with respect thereto at any time or from time to time held by Buyer, (b) any defense, set off or counterclaim (other than a defense of payment or performance) which may at any time be available to
or be asserted by a Seller against Buyer, or (c) any other circumstance whatsoever (with or without notice to or knowledge of the Sellers or the Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge
of a Seller from the Obligations, or of the Guarantor from this Guaranty, in bankruptcy or in any other instance. When pursuing its rights and remedies hereunder against the Guarantor, Buyer may, but shall be under no obligation to, pursue such
rights and remedies as it may have against a Seller or any other Person or any collateral security (including the Collateral) or guarantee for the Obligations or any right of offset with respect thereto, and any failure by Buyer to pursue such other
rights or remedies or to collect any payments from a Seller or any such other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of a Seller or any such other Person or any
such collateral security, guarantee or right of offset, shall not relieve the Guarantor of any liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of Buyer against
the Guarantor. This Guaranty shall remain in full force and effect and be binding in accordance with and to the extent of its terms upon the Guarantor and the successors and permitted assigns thereof, and shall inure to the benefit of Buyer, and its
successors, endorsees, transferees and assigns, until all the Obligations and the obligations of the Guarantor under this Guaranty shall have been satisfied by payment in full and the Master Repurchase Agreement shall be terminated, notwithstanding
that from time to time during the term of the Master Repurchase Agreement one or more Sellers may be free from any Obligations. 
 11.
Reinstatement. This Guaranty shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Obligations is rescinded or must otherwise be restored or returned by Buyer upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of any Seller or the Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, the Guarantor or any
substantial part of its property, or otherwise, all as though such payments had not been made. 
  

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 12. Payments. The Guarantor hereby guarantees that payments hereunder will be paid to Buyer
without set off or counterclaim in U.S. Dollars in accordance with the wiring instructions of Buyer. 
 13. Notices. All notices,
requests and other communications provided for herein (including without limitation any modifications of, or waivers, requests or consents under, this Guaranty) shall be given or made in writing (including without limitation by telex or telecopy)
and delivered to the intended recipient at the “Address for Notices” specified on the signature page hereto; or, as to any party, at such other address as shall be designated by such party in a written notice to each other party. All such
communications shall be deemed to have been duly given when transmitted by telex or telecopy or personally delivered or, in the case of a mailed notice, upon receipt, in each case given or addressed as aforesaid. 
 14. Severability. Any provision of this Guaranty which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction. 
 15. Integration. This Guaranty and the Master Repurchase Agreement represent the agreement of the Guarantor
with respect to the subject matter hereof and thereof and there are no promises or representations by Buyer or the Guarantor relative to the subject matter hereof or thereof not reflected herein or therein. 
 16. Amendments in Writing. None of the terms or provisions of this Guaranty may be waived, amended, supplemented or otherwise modified except by a
written instrument executed by the Guarantor and Buyer, provided that any provision of this Guaranty may be waived by Buyer. 
 17.
Continuing Guarantee. This Guarantee shall remain in full force and effect and shall be binding on the Guarantor, its successors and permitted assigns until all of the Obligations have been satisfied in full. 
 18. Section Headings. The section headings used in this Guaranty are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof. 
 19. Successors and Assigns. This Guaranty shall be binding upon
the successors and assigns of the Guarantor and shall inure to the benefit of Buyer and its successors and assigns. This Guaranty may not be assigned by the Guarantor without the express written consent of Buyer. 
 20. Governing Law. THIS GUARANTY SHALL BE GOVERNED BY NEW YORK LAW WITHOUT REFERENCE TO CHOICE OF LAW DOCTRINE. 
 21. SUBMISSION TO JURISDICTION; WAIVERS. GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY: 
 (A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTY, THE MASTER REPURCHASE AGREEMENT,
THE OTHER PROGRAM DOCUMENTS OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON EXCLUSIVE GENERAL JURISDICTION OF THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE
COURTS FROM ANY THEREOF; 
  

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 (B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND, TO
THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR
CLAIM THE SAME; 
 (C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A
COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET FORTH UNDER ITS SIGNATURE BELOW OR AT SUCH OTHER ADDRESS OF WHICH BUYER SHALL HAVE BEEN NOTIFIED; AND 
 (D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT
THE RIGHT TO SUE IN ANY OTHER JURISDICTION. 
 22. WAIVER OF JURY TRIAL. GUARANTOR HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY, THE MASTER REPURCHASE AGREEMENT, THE OTHER PROGRAM DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY
OR THEREBY. 
 23. Other Liens. Notwithstanding anything to the contrary contained herein, liens previously granted by the
Guarantor in favor of Buyer or future liens that are granted by the Guarantor in favor of Buyer will not constitute a breach of this Guaranty. 
 24. Agents. Buyer may employ agents and attorneys in fact in connection herewith and shall not be responsible for the negligence or misconduct of any such agents or attorneys in fact selected by it in good faith. 
 [SIGNATURE PAGE FOLLOWS] 
  

 11 

 IN WITNESS WHEREOF, the Guarantor have caused this Guaranty to be duly executed and delivered as of the
day and year first above written. 
 NOVASTAR FINANCIAL, INC., 
 as Guarantor 
  

			
	 By:
	 	 /s/ Todd Phillips

	 Name:
	 	Todd Phillips
	 Title:
	 	Vice President, Treasurer and Controller

 Address for Notices with respect to each of the foregoing: 
 8140 Ward Parkway, Suite 300 
 Kansas City, Missouri 64114 

			
	 Attention:
	 	Rodney Schwatken
		 	Vice President/Treasury
	 Telephone:
	 	(XXX) XXX-XXXX
	 Facsimile:
	 	(XXX) XXX-XXXX

 Address for Notices to Buyer: 
 600 Steamboat Road 
 Greenwich, CT 06830 
  

 12Employment Agreement

 Exhibit 10.66 
 EMPLOYMENT AGREEMENT 
 This Employment Agreement (“Agreement”) is made and entered
into as of May 03, 2007, by and between NovaStar Financial, Inc. (the “Company”) and Todd Phillips (the “Employee”). 
  

	1.	EMPLOYMENT BY THE COMPANY 

 1.1 Employment. The
Company hereby employs Employee, and Employee hereby accepts employment with the Company, upon the terms and conditions set forth in this Agreement. 
 1.2 Duties. Employee initially shall be employed by the Company in the position of VP—Controller-CAO. Employee shall perform for and on behalf of the Company such duties as the chief executive
officer or Board of Directors of the Company shall assign from time to time, and shall perform such duties in accordance with the Company’s policies and practices, including, but not limited to, its employment policies and practices.

 1.3 Efforts. Employee hereby agrees that he or she will devote all of his or her working time and attention and give his or her
diligent effort and skill exclusively to the business and interests of Company, and that he or she will perform such services as may from time to time be assigned to Employee, and shall do his or her utmost to further enhance and develop the best
interests and welfare of the Company in all respects. Employee agrees that he or she will give full attention and fully comply with the rules and procedures as may from time to time be promulgated by Company in its sole discretion. 
 1.4 Conflicts. Employee shall not, without prior written consent of the Company, at any time during his or her employment with the Company:
(a) accept employment with, or render services of a business, professional or commercial nature to any person other than the Company; (b) engage in, own or provide financial or other assistance to any person, venture or activity which the
Company may in good faith consider to be competitive with or adverse to the Company, whether directly or indirectly, alone or with any other person as a principle, agent, shareholder, participant, partner, promoter, director, officer, manager,
employee, consultant, sales representative or otherwise; or (c) engage in any venture or activity that the Company may in good faith consider to interfere with Employee’s performance of his or her duties. 
 1.5 Authority. Employee represents that he or she has not entered into any agreement that is effective at the time of the execution of this
Agreement which would prevent Employee from performing his or her duties to the Company. Employee is not authorized by the Company to take, use, disclose or otherwise misappropriate any confidential, business proprietary, trade secret and/or other
any other business information from any of Employee’s former employers to perform his or her job duties with the Company, and Employee hereby covenants and agrees that Employee shall not use or disclose any such information to the Company in
performing his or her job duties for the Company or otherwise. 
  

	2.	COMPENSATION 

 2.1 Base Salary. The Company agrees
to pay Employee an annual base salary (“Base Salary”) of $136,792, payable in accordance with the Company’s regular payroll schedule and subject to applicable deductions and withholdings. The Company may increase or decrease
Employee’s Base Salary at any time in its sole discretion, subject to the rights of Employee under Section 5 of this Agreement. 
 2.2 Performance Bonus. Employee shall be eligible to receive incentive compensation (“Incentive Pay”) based upon goals established by the Company from time to time. The Company may 

  

 1 

 
increase or decrease Employee’s Incentive Pay and any Incentive Pay target amount thereof, and may modify any Incentive Pay program or structure, at any
time in its sole discretion. Incentive Pay for any calendar year or portion thereof shall be deemed earned only at the end of such calendar year. Should the Employee no longer be employed by the Company on the date on which any Incentive Pay is
deemed pursuant to the foregoing to be earned, Employee shall not be eligible or entitled to such Incentive Pay or to any pro-rata portion thereof. 
 2.3 Benefits. Employee shall be entitled to participate in any employee benefits plans, perquisites and fringe benefits that the Company extends generally from time to time to employees of the Company at the level of Employee.
Separate written descriptions of available benefits will be provided or made available from time to time, and the Company reserves, in its sole and absolute discretion, the right to modify these benefits in whole or in part at any time. 

2.4 Vacation. Employee shall be entitled to 120 hours weeks of paid vacation per calendar year, with such vacation to be accrued and taken in
accordance with the Company’s standard vacation policies. 
 2.5 Business Expenses. The Company shall reimburse Employee for any
and all necessary, customary and usual expenses, properly receipted in accordance with the Company’s policies and procedures, incurred by Employee on behalf of the Company. 
 2.6 Equity Awards. Equity or equity-based compensation awards including, without limitation, stock options and/or restricted stock
(“Equity Awards”) may be offered to certain employees of the Company from time to time, at the sole discretion of the Company. Such Equity Awards, if any, shall be governed solely by one or more separate agreements and the
provisions of any plan governing such awards. 
  

	3.	AT WILL EMPLOYMENT 

 Employee and the Company acknowledge
that there is no agreement, express or implied, between them for any specified term or period of employment, nor for continuing or long-term employment. The employment relationship between Employee and the Company is completely and, in all respects,
at-will. Each of Employee and the Company has the separate and absolute right to terminate the employment relationship, at any time, with or without cause, for any reason or no reason and no reason need be given. The fact that other sections of this
Agreement provide differential post-termination benefits to Employee on the basis of whether Employee is terminated with Cause or without Cause, as defined below, and the fact that the other rights and obligations set forth in this Agreement remain
in effect for a specified period of time, do not undermine the at-will nature of the employment relationship. This is the entire agreement between Employee and the Company regarding the matters set forth in this paragraph. 
  

	4.	TERMINATION OF EMPLOYMENT BY THE COMPANY 

 4.1
Termination For Cause. Employee’s employment may be terminated by the Company for Cause at any time. For purposes of this Agreement, “Cause” shall mean the existence of or a good faith belief by the Company in the
existence of facts which constitute a basis for termination of Employee’s employment in view of relevant factors and circumstances, which may include, but are not limited to, Employee’s duties, responsibilities, conduct on the job or
otherwise, job performance, and employment record. Acts or omissions that constitute Cause include, but are not limited to: 
 (a) Breach of any of the terms of this Agreement; 
  

 2 

 (b) Failure to perform material duties in accordance with the standards from time to time
established by the Company; 
 (c) Neglect in performance of or failure to attend to the performance of material duties;

 (d) Insubordination or willful breach of policies and procedures of the Company; 
 (e) Breach of fiduciary duties; or 
 (f) Conduct that the Company determines in good faith may impair or tend to impair the integrity of the Company, including but not limited to commission of a felony, theft, misappropriation, embezzlement, dishonesty,
or criminal misconduct. 
 4.2 Termination For Death or Disability. Employee’s employment shall be terminated by the Company upon
the death of Employee, and may be terminated by the Company upon the disability of Employee, consistent with any rights or obligations of the Company and the Employee under the Americans with Disabilities Act, or any other applicable constitutional
provision or statute. Termination for death or disability is separate and distinct from termination with Cause or Good Reason and from termination without Cause or Good Reason, and will give rise only to the rights and obligations expressly provided
in Section 6.3 hereof. 
 4.3 Termination Without Cause. Employee’s employment may be terminated by the Company without
Cause at any time and at its sole discretion. 
  

	5.	TERMINATION OF EMPLOYMENT BY EMPLOYEE 

 5.1 Termination
for Good Reason. Employee’s employment may be terminated by Employee at any time for Good Reason. For purposes of this Agreement, “Good Reason” shall mean the occurrence, without the Employee’s consent, of any one or
more of the following events: 
 (a) Except in connection with the Company’s termination of Employee’s employment
for Cause pursuant to Section 4.1 or as a result of Employee’s death or disability: (i) a reduction in Employee’s Base Salary; or (ii) a decrease in the responsibilities of Employee to a level that, on the whole, is
materially inconsistent with the position for which Employee is then employed by the Company; or 
 (b) The Company requires
that Employee relocate more than fifty (50) miles from the location at which Employee is employed by the Company on the date hereof, and the Employee objects to such relocation in writing prior to Employee’s actual relocation. 

(c) The Company’s material breach of any of the provisions of this Agreement. 
 5.2 Notice and Cure. Notwithstanding the foregoing, a termination of employment by Employee shall not be considered as having occurred for Good
Reason unless Employee provides written notice of his or her objection to the event constituting Good Reason within thirty (30) days following the occurrence thereof, specifying that Employee believes such event to constitute Good Reason, and
the Company has been afforded a period of at least thirty (30) days following delivery of such notice to remedy the event constituting Good Reason and has not done so. 
  

 3 

 5.3 Termination Without Good Reason. Employee’s employment may be terminated by Employee
without Good Reason at any time. 
  

	6.	TREATMENT OF COMPENSATION AND BENEFITS UPON TERMINATION 

 6.1 For Cause or Without Good Reason. If Employee is terminated by the Company for Cause or if Employee terminates his or her employment without Good Reason: 
 (a) Employee shall not be entitled to any continuation of Base Salary, other than Base Salary accrued but unpaid at the date of
termination of Employee’s employment; 
 (b) Employee shall not be entitled to Incentive Pay not earned prior to the date
of termination of Employee’s employment; 
 (c) Employee shall be entitled to receive reimbursement for business expenses
incurred prior to the date of termination of Employee’s employment to the extent provided in Section 2.5 hereof; 
 (d) Employee shall not be entitled to continue to receive any benefits from the Company after the date of termination of Employee’s employment, except as otherwise required by the applicable benefit plan or applicable law. 

6.2 Other than for Cause; for Good Reason. If Employee’s employment is terminated by the Company other than for Cause, or by the Employee
for Good Reason: 
 (a) Employee shall receive compensation during the Consulting Period at the same rate as Employee’s
Base Salary in effect on the date of termination of Employee’s employment, for the period commencing on the date of termination and continuing until the date that is 6 months following the date of termination of Employee’s employment,
pursuant to a “Consultancy Agreement” between Employee and the Company, the terms and conditions of which are outlined in Section 8.4 of this Agreement; 
 (b) Employee shall not be entitled to Incentive Pay not earned prior to the date of termination of Employee’s employment; 

(c) Employee shall be entitled to receive reimbursement for business expenses incurred prior to the date of termination of
Employee’s employment to the extent provided in Section 2.5 hereof; 
 (d) Employee shall not be entitled to
continue to receive any benefits from the Company after the date of termination of Employee’s employment, except as otherwise required by the applicable benefit plan or applicable law. 
 6.3 For Death or Disability. If Employee’s employment is terminated by reason of the death or disability of Employee: 
 (a) Employee shall not be entitled to any continuation of Base Salary, other than Base Salary accrued but unpaid at the date of
termination of Employee’s employment; 
 (b) Employee shall not be entitled to Incentive Pay not earned prior to the date
of termination of Employee’s employment; 
  

 4 

 (c) Employee shall be entitled to receive reimbursement for business expenses incurred
prior to the date of termination of Employee’s employment to the extent provided in Section 2.5 hereof; 
 (d)
Employee shall not be entitled to continue to receive any benefits from the Company after the date of termination of Employee’s employment, except as otherwise required by the applicable benefit plan or applicable law. 
 6.4 After Change in Control by Company Other than for Cause or by Employee for Good Reason  
 If Employee’s employment shall be terminated after a Change in Control, as defined in Section 6.5, (a) by Company other than for Cause, or (b) by
Employee for Good Reason, Employee shall be entitled to the following additional benefits: 
 (a) Employee shall be paid an amount (the
“Severance Amount”) equal to 1.0 times the Employee’s combined current year Base Salary and actual Incentive Pay for the preceding fiscal year; provided, however, the Severance Amount shall not be less than Two Hundred Thousand
Dollars ($200,000.00) nor more (once the minimum is reached) than one percent (1.0%) of the book value of Company (i.e., the amount reported on Company’s balance sheet prepared in accordance with generally accepted accounting principles as
stockholder’s equity). The Severance Amount shall be paid in a single lump sum (i) as soon as possible in event Employee’s employment shall be terminated by the Company other than for Cause or (ii) six months following
Employee’s termination of employment due to Good Reason. 
 (b) Vesting for Equity Awards will accelerate to the date of termination. In
other words, Employee shall immediately be vested with all Equity Awards awarded by Company which have not been exercised prior to the termination date. The provisions of the agreements and/or plans governing the stock options and restricted stock
will otherwise be controlling. 
 6.5 Change in Control. A “Change in Control” shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs shall have been satisfied. 
 (a) Any “person” as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) (other than Company; any trustee or other fiduciary holding securities under an executive benefit plan of Company; or any company owned, directly or
indirectly, by the stockholders of Company in substantially the same proportions as their ownership of the stock of Company), is or becomes the “beneficial owner” (as defined by Rule 13d-3 under the Exchange Act), directly or indirectly,
of the securities of Company (not including any securities acquired directly from Company or from a transferor in a transaction expressly approved or consented to by the Board of Directors) representing more than 25% of the combined voting power of
Company’s then outstanding securities; or 
 (b) During any period of two consecutive years (not including any period prior to the
execution of the Agreement), individuals who at the beginning of such period constitute the Board of Directors and any new director (other than a director designated by a person who has entered into an agreement with Company to effect a transaction
described in clause (a), (c) or (d) of this section), (i) whose election by the Board of Directors or nomination for election by Company’s stockholders was approved by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved or (ii) whose election is to replace a person who ceases to be a director due to death,
disability or age, cease for any reason to constitute a majority thereof; or 
  

 5 

 (c) The stockholders of Company approve a merger or consolidation of Company with another corporation,
other than (i) a merger or consolidation which would result in the voting securities of Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the
surviving entity), in combination with the ownership of any trustee or other fiduciary holding securities under an executive benefit plan of Company, at least 75% of the combined voting power of the voting securities of Company or such surviving
entity outstanding immediately after such merger or consolidation, or (ii) a merger or consolidation effected to implement a recapitalization of Company (or similar transaction) in which no person acquires more than 50% of the combined voting
power of Company’s then outstanding securities; or 
 (d) The stockholders of Company approve a plan of complete liquidation of Company
or an agreement for the sale or disposition by Company of all or substantially all Company’s assets. 
 6.6 Section 409A
Requirements. Notwithstanding any provision in this Agreement to the contrary, in the event Employee is a key employee as defined in Section 416(i) of the Internal Revenue Code of 1986, as amended (the
“Code”) (or any successor provision thereof), payments of any and all amounts under this Agreement following termination of employment shall be delayed for a period of six months following Employee’s separation from service to
the extent required by Section 409A of the Code. Any payments required to be delayed pursuant to the foregoing shall be accumulated and paid, without interest, in a lump sum following the end of such six month period. 
  

	7.	NON-COMPETITION 

 7.1 During Employment. Employee
agrees that, during his or her employment by the Company, he or she will not engage directly or indirectly, at any location within the United States, in any business of the same or similar nature to the business of the Company or of any Affiliate
thereof or to any business in which the Company or any Affiliate thereof is engaged in developing, nor will Employee participate directly or indirectly in the ownership or management of any enterprise engaged in such a business within the United
States, including ownership or management as defined by the Sarbanes-Oxley Act of 2002. As used in this Agreement, an “Affiliate” of any person or entity means any other person or entity that controls, is controlled by, or is under
common control with such first person or entity, with “control” of an entity meaning direct or indirect ownership of fifty percent (50%) or more of the voting power or economic interests of such entity. 
  

	8.	ADDITIONAL OBLIGATIONS 

 8.1 Non-Interference.
Employee agrees that during the term of his or her employment with the Company and for a period of one (1) year after termination of employment with the Company for any reason, Employee shall not interfere with the business of the Company or
any of its Affiliates. 
 8.2 Non-Solicitation. Employee agrees that during the term of his or her employment with the Company and for
a period of one (1) year after termination of employment with the Company for any reason, Employee shall not directly or indirectly solicit or encourage any of the employees of the Company or of any Affiliate thereof to leave such employment
and/or to work for another company or business, whether or not the solicited employee would commit any breach of his or her own employment terms by leaving the service of the Company or of such Affiliate. 
  

 6 

 8.3 Non-Disparagement. Employee agrees that he or she will not, at any time during the term of his
or her employment with the Company or thereafter, in any way disparage the Company or any of its Affiliates (or any of their respective directors, officers, managers, employees or other representatives), and will not make or solicit any comments,
statements, or the like to others that are derogatory or detrimental to the good name or business reputation of the Company or of any Affiliate thereof. 
 8.4 Consultancy Agreement. 
 (a) Employee shall enter into, and shall be conclusively
deemed to have entered into, a consultancy agreement with Company upon the terms of this Section 8.4 (i) immediately upon termination of Employee’s employment without Cause by the Company or for Good Reason by Employee, or
(ii) at the Company’s sole discretion, immediately upon the Company’s request following termination of Employee’s employment with Cause by the Company or without Good Reason by Employee. The term of the consultancy will commence
on the date of termination of Employee’s employment and shall continue until the date that is six months following the date of termination of Employee’s employment (the “Consulting Period”). In exchange for Employee’s
consulting services, Employee shall receive compensation during the Consulting Period at the same rate as Employee’s Base Salary in effect on the date of termination of Employee’s employment (“Consultancy Pay”), payable in
equal monthly installments (subject to Section 6.6). 
 (b) During the Consulting Period, Employee agrees to make himself
or herself available to the Company for up to ten (10) hours per week, whether by telephone, e-mail, or in person, on an as-needed basis to consult with respect to matters that were within Employee’s job description during the course of
Employee’s employment. Employee agrees to respond promptly, reasonably and cooperatively to the Company’s requests for assistance. Barring special circumstances, the consulting hours shall not be cumulative; accordingly, hours not used
within a given week will be waived by the Company, but Employee will receive his or her full pay under Section 8.4(a). However, the Company reserves the right to require Employee to provide more than ten (10) hours of service per week in
the event that special circumstances arise in which Employee’s unique assistance is required by the Company. (Examples of special circumstances include, but are not limited to assistance in litigation or responding to regulatory inquiries).

 (c) In order to protect the Company’s confidential and trade secret information from use or disclosure to a party
other than the Company, and to enable the Company to be able to obtain the benefits of Employee’s consulting obligations hereunder, Employee agrees that during the Consulting Period, Employee owes the Company a duty of loyalty and
(i) shall not accept employment or consulting work in any capacity with, or invest in, any business opportunity or activity that is engaged at any location in the United States in any activity in which the Company or any of its Affiliates in
then engaged, and (ii) will continue to abide by the provisions of paragraphs 8.1, 8.2 and 8.3 above, and (iii) shall not directly or indirectly contact, solicit, divert or take away, or attempt to contact, solicit, divert, or take away,
the business or patronage of any of the clients, customers, or accounts, or prospective clients, customers, or accounts of the Company or of any of its Affiliates. 
  

	9.	CONFIDENTIALITY/TRADE SECRETS 

 9.1 Confidential
Information. For the purpose of this Agreement, “Confidential Information” means any technology, ideas, concepts, design, devices or other information belonging to or relating to the affairs of the Company or any Affiliate
thereof, including, but not limited to, (a) all trade secrets, unpublished proprietary or other information with respect to any business conducted or proposed to be 

  

 7 

 
conducted by the Company or any Affiliate thereof, (b) any present or proposed services or products, (c) all lending policies and procedures,
contracts and agreements with lenders, investors, and other clients, and information regarding lenders, investors, loan applicants, and borrowers, (d) the manner in which business is conducted, sales techniques, and methods of data processing,
and (e) budgets, forecasts, and financial information; provided, however, that Confidential Information shall not include any information that has entered or enters the public domain through no fault of Employee. 
 9.2 Value and Secrecy. Employee acknowledges and agrees that the Confidential Information has independent actual or potential economic value from
not being generally known to the public or to other persons who can obtain economic value from its disclosure or use, is not readily available or independently ascertainable through any source other than Company and its Affiliates, and is subject to
reasonable efforts to maintain its secrecy. 
 9.3 Ownership. Employee understands and agrees that any and all Confidential
Information produced or used by Employee during the period of employment belongs to the Company and its Affiliates and not to Employee. 
 9.4 Restrictions on Use and Disclosure. In recognition that the business of the Company and that the nature of Employee’s work will require Employee to have access to Confidential Information which, if disclosed in an
unauthorized manner, could be highly prejudicial to the Company, its Affiliates, and/or their respective clients: 
 (a)
Employee agrees not to make any use whatsoever, directly or indirectly, at any time, of any Confidential Information, except as required in the course of his or her employment with the Company. 
 (b) Employee agrees not to disclose in any manner any Confidential Information, directly or indirectly, during employment with the Company
or following termination of employment, except as required in the course of his or her employment with the Company. 
 (c)
Employee agrees to take all precautions reasonably necessary to prevent the unauthorized use, disclosure, or dissemination of Confidential Information during his or her employment with the Company and following termination of employment. 

(d) Upon termination of employment, Employee will immediately turn over to the Company all Confidential Information, including all
copies thereof, created or obtained by, or otherwise in the possession of, Employee. 
 9.5 Other Rights. Employee recognizes and
acknowledges that none of the above provisions, nor the Company’s exercise of any rights under this Agreement, shall limit the rights of the Company under applicable statutes and common law rules regarding trade secrets, including, without
limitation, the Uniform Trade Secrets Act. 
  

	10.	MISCELLANEOUS 

 10.1 Specific Performance. Employee
understands and expressly acknowledges that the provisions of Sections 7, 8 and 9 of this Agreement are material terms of this Agreement. Employee acknowledges that any breach of the provisions of Section 7, 8 or 9 of this Agreement shall
result in serious and irreparable injury to the Company for which the Company cannot be adequately compensated by monetary damages alone. Employee agrees, therefore, that, in addition to any other remedies it may have, the Company shall be entitled
to enforce the specific performance of this Agreement and to seek both temporary and permanent injunctive relief (to the extent permitted by law). 
  

 8 

 10.2 Successors and Assigns. The rights and obligations of the Company under this Agreement shall
inure to the benefit of and be binding upon the successors and assigns of the Company. Employee cannot assign any right or obligation under this Agreement without the prior written consent of the Company. 
 10.3 Entire Agreement; Amendment. Except for Equity Award agreements and any other agreements referenced herein, this Agreement constitutes the
entire agreement between the parties with respect to the subject matter of this Agreement and supercedes any prior or contemporaneous agreement by and between the parties with respect to the subject matter hereof. This Agreement can be modified only
by a written instrument executed by Employee and an officer of the Company duly authorized to do so by the Board of Directors of the Company. 
 10.4 Waiver. Failure to insist upon compliance with any of the terms, covenants or conditions hereof shall not be deemed a waiver of such term, covenant or condition, nor shall any waiver or relinquishment of, or failure to insist
upon strict compliance with, any right or power hereunder at any one or more times be deemed a waiver of or relinquishment of such right or power at any other time or times. 
 10.5 Headings. Section headings in this Agreement are included for convenience of reference only and shall not constitute a part of this Agreement
for any purpose. 
 10.6 Severability. In the event that one or more of the provisions contained herein are held to be invalid by a
court of competent jurisdiction, the remainder of the contract will continue in full force and effect. 
 10.7 Attorney’s Fees.
The prevailing party in any action or dispute between the Company and Employee shall be entitled to recover reasonable attorneys’ fees and other costs incurred in that action or proceeding in addition to any other relief to which the prevailing
party may be entitled. 
 10.8 Negotiation. The parties warrant and agree that the terms of this Agreement were the subject of
negotiations between them. Employee acknowledges that he has read this Agreement and has had full opportunity to seek independent legal advice before signing it. 
 10.9 Governing Law; Consent to Jurisdiction. This Agreement and the legal relations thus created between the parties hereto shall be governed by and construed under and in accordance with the laws of the State
of Missouri, without regard to conflicts of laws principles. FOR PURPOSES OF DETERMINING ANY CONTROVERSY ARISING UNDER THIS AGREEMENT, EACH OF THE PARTIES HEREBY CONSENTS TO THE NON-EXCLUSIVE JURISDICTION, PERSONAL AND OTHERWISE, OF THE FEDERAL
AND STATE COURTS OF THE STATE OF MISSOURI, AND HEREBY WAIVES ANY OBJECTIONS OF ANY NATURE TO VENUE IN SUCH COURTS.  
 [Signatures on
following page.] 
  

 9 

 IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the date first written
above. 
  

			
	EMPLOYEE:
		
		 	 /s/ Todd Phillips

	Name:	 	Todd Phillips
	
	COMPANY:
	
	NOVASTAR FINANCIAL, INC.
		
	By:	 	 /s/ Scott F. Hartman

	Name:	 	Scott F. Hartman
	Title:	 	Chairman and Chief Executive Officer

  

 10

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