Document:

Exchange Agreement

 Exhibit 10.55 
 EXECUTION COPY 
 EXCHANGE AGREEMENT 
 BY AND AMONG 
 NOVASTAR MORTGAGE, INC., 
 NOVASTAR FINANCIAL, INC., 
 NOVASTAR CAPITAL
TRUST I/B, 
 NOVASTAR CAPITAL TRUST II/B, 
 AND 
 THE HOLDERS LISTED ON SCHEDULES I AND II HERETO 
  
  
 Dated as of February 18, 2009 
  
  

 EXCHANGE AGREEMENT 
 THIS EXCHANGE AGREEMENT (this “Exchange Agreement” or “Agreement”), dated as of February 18, 2009 (the “Effective Date”), is entered into by and among, NOVASTAR
MORTGAGE, INC., a Virginia corporation (the “Company”), NOVASTAR FINANCIAL, INC., a Maryland corporation (the “Guarantor”), NOVASTAR CAPITAL TRUST I/B, a Delaware statutory trust (the “NovaStar Trust
I/B”), NOVASTAR CAPITAL TRUST II/B, a Delaware statutory trust (the “NovaStar Trust II/B”, together with NovaStar Trust I/B, the “Trusts” and, together with the Company, the Guarantor and the NovaStar Trust
I/B, the “Exchangors”) and the beneficial owners of the preferred securities of the Existing Trusts (as defined below) whose names appear on the signature pages hereto (the “Holders”). 
 WITNESSETH: 
 WHEREAS, the Holders listed on
Schedule I hereto are the beneficial owners of all of the trust preferred securities currently outstanding which were issued by the NovaStar Capital Trust I, a Delaware statutory trust (the “NovaStar Trust I”), in the stated
liquidation amounts set forth next to their names on such Schedule I (the “2005 Preferred Securities”); 
 WHEREAS, the
Holders listed on Schedule II hereto are the beneficial owners of all of the trust preferred securities currently outstanding (other than such trust preferred securities owned by the Company) which were issued by the NovaStar Capital Trust II, a
Delaware statutory trust (the “NovaStar Trust II” and, together with the NovaStar Trust I, the “Existing Trusts”), in the stated liquidation amounts set forth next to their names on such Schedule II (the “2006
Preferred Securities” and, together with the 2005 Preferred Securities, the “Existing Preferred Securities”); 
 WHEREAS, the NovaStar Trust I is the holder and beneficial owner of all of the outstanding unsecured junior subordinated notes issued by the Company in the aggregate principal amount of $51,550,000 (the “2005 Junior Subordinated
Notes”); 
 WHEREAS, the NovaStar Trust II is the holder and beneficial owner of all of the outstanding unsecured junior
subordinated notes issued by the Company in the aggregate principal amount of $28,995,000 (the “2006 Junior Subordinated Notes” and, together with the 2005 Junior Subordinated Notes, the “Existing Subordinated
Notes”); 
 WHEREAS, the Company proposes to issue to the NovaStar Trust I/B $51,550,000 in aggregate principal amount of the
unsecured junior subordinated notes of the Company (the “2009 I/B Junior Subordinated Notes”) and to cause the NovaStar Trust I/B to issue (a) 50,000 Preferred Securities of the NovaStar Trust I/B, having an aggregate
liquidation amount of $50,000,000 (the “2009 I/B Preferred Securities”), to the applicable Holders in exchange for the transfer by the applicable Holders to the Company of all of the outstanding 2005 Preferred Securities and
(b) 1,550 Common Securities of the NovaStar Trust I/B, having an aggregate liquidation amount of $1,550,000 (the “2009 I/B Common Securities”), to the Company; 

 WHEREAS, the Company proposes to issue to the NovaStar Trust II/B $28,995,000 in aggregate principal
amount of the unsecured junior subordinated notes of the Company (the “2009 II/B Junior Subordinated Notes” and, together with the 2009 I/B Junior Subordinated Notes, the “Junior Subordinated Notes”) and to cause
the NovaStar Trust II/B to issue (a) 28,125 Preferred Securities of the NovaStar Trust II/B, having an aggregate liquidation amount of $28,125,000 (the “2009 II/B Preferred Securities” and, together with the 2009 I/B Preferred
Securities, the “Preferred Securities”), to the applicable Holders in exchange for the transfer by the applicable Holders to the Company of all of the outstanding 2006 Preferred Securities and (b) 870 Common Securities of the
NovaStar Trust II/B, having an aggregate liquidation amount of $870,000 (the “2009 II/B Common Securities” and, together with the 2009 I/B Common Securities, the “Common Securities”), to the Company; 
 WHEREAS, upon receipt of the Existing Preferred Securities from the applicable Holders, the Company proposes to (a) surrender the Existing Preferred
Securities and all of the outstanding common securities which were issued by the Existing Trusts (collectively, the “Existing Common Securities”) to the applicable property trustee of the Existing Trusts for cancellation thereof,
(b) direct the property trustees and administrative trustees of the Existing Trusts to dissolve the Existing Trusts and to surrender the Existing Subordinated Notes to the applicable indenture trustees for cancellation thereof and
(c) cause the indentures pursuant to which the Existing Subordinated Notes were issued to be discharged (the “Existing Indentures”); 
 WHEREAS, the 2009 I/B Preferred Securities and the 2009 I/B Common Securities of the NovaStar Trust I/B will be issued pursuant to the Amended and Restated Trust Agreement (the “2009 I/B Trust
Agreement”), dated as of the Effective Date, among the Company, as depositor, The Bank of New York Mellon Trust Company, National Association, a national banking association (“BNYM”), as property trustee (in such capacity,
the “2009 I/B Property Trustee”), BNY Mellon Trust of Delaware (“BNYM Delaware”), as Delaware trustee (in such capacity, the “2009 I/B Delaware Trustee”) and the administrative trustees named
therein; 
 WHEREAS, the 2009 II/B Preferred Securities and the 2009 II/B Common Securities of the NovaStar Trust II/B will be issued
pursuant to the Amended and Restated Trust Agreement (the “2009 II/B Trust Agreement” and, together with the 2009 I/B Trust Agreement, the “Trust Agreements”), dated as of the Effective Date, among the Company, as
depositor, BNYM, as property trustee (in such capacity, the “2009 II/B Property Trustee”), BNYM Delaware, as Delaware trustee (in such capacity, the “2009 II/B Delaware Trustee”) and the administrative trustees
named therein (together with the administrative trustees named in the 2009 I/B Trust Agreement, the “Administrative Trustees”); 
 WHEREAS, the 2009 I/B Preferred Securities will be guaranteed on a subordinated basis by the Guarantor as to the payment of distributions, and as to payments on liquidation and redemption, to the extent set forth in the Parent Guarantee
Agreement (the “2009 I/B Guarantee”), dated as of the Effective Date, between the Guarantor and BNYM, as guarantee trustee (in such capacity, the “2009 I/B Guarantee Trustee”); 
 WHEREAS, the 2009 II/B Preferred Securities will be guaranteed on a subordinated basis by the Guarantor as to the payment of distributions, and as to
payments on liquidation and redemption, to the extent set forth in the Parent Guarantee Agreement 

  

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(the “2009 II/B Guarantee” and, together with the 2009 I/B Guarantee, the “Guarantees”), dated as of the Effective Date,
between the Guarantor and BNYM, as guarantee trustee (in such capacity, the “2009 II/B Guarantee Trustee”); 
 WHEREAS, the
2009 I/B Junior Subordinated Notes will be issued pursuant to a Junior Subordinated Indenture, dated as of the Effective Date (the “2009 I/B Indenture”), between the Company and BNYM, as indenture trustee (in such capacity, the
“2009 I/B Indenture Trustee”); 
 WHEREAS, the 2009 II/B Junior Subordinated Notes will be issued pursuant to a Junior
Subordinated Indenture, dated as of the Effective Date (the “2009 II/B Indenture” and, together with the 2009 I/B Indenture, the “Indentures”), between the Company and BNYM, as indenture trustee (in such capacity,
the “2009 II/B Indenture Trustee”); and 
 WHEREAS, WolfBlock LLP, not in its individual capacity, but solely as escrow
agent (the “Escrow Agent”), will, pursuant to an Escrow Agreement, dated as of the Effective Date, between the Escrow Agent, the Exchangors and the Holders (the “Escrow Agreement”), facilitate the exchange upon
satisfaction of the conditions precedent set forth herein. 
 NOW, THEREFORE, in consideration of the mutual agreements and subject to the
terms and conditions set forth herein, the parties hereto agree as follows: 
 Section 1. Definitions. The Preferred Securities,
the Common Securities and the Junior Subordinated Notes are collectively referred to herein as the “Securities.” The Existing Preferred Securities, the Existing Common Securities and the Existing Subordinated Notes are collectively
referred to herein as the “Existing Securities.” This Exchange Agreement, the Indentures, the Trust Agreements, the Guarantees and the Securities are collectively referred to herein as the “Operative Documents.”

 Section 2. Exchange of the Existing Preferred Securities. 
 2.1 On the Exchange Date, the Company hereby agrees to issue the 2009 I/B Junior Subordinated Notes to the NovaStar Trust I/B and to cause the NovaStar
Trust I/B to issue (a) the 2009 I/B Preferred Securities to the applicable Holders in exchange for the transfer by the applicable Holders to the Company of all of the outstanding 2005 Preferred Securities and (b) the 2009 I/B Common
Securities to the Company. On the Exchange Date, the NovaStar Trust I/B hereby agrees to accept the 2009 I/B Junior Subordinated Notes and to issue the 2009 I/B Preferred Securities and the 2009 I/B Common Securities. On the Exchange Date, the
applicable Holders hereby agree to accept the 2009 I/B Preferred Securities in exchange for the 2005 Preferred Securities. 
 2.2 On the
Exchange Date, the Company hereby agrees to issue the 2009 II/B Junior Subordinated Notes to the NovaStar Trust II/B and to cause the NovaStar Trust II/B to issue (a) the 2009 II/B Preferred Securities to the applicable Holders in exchange for
the transfer by the applicable Holders to the Company of all of the outstanding 2006 Preferred Securities and (b) the 2009 II/B Common Securities to the Company. On the Exchange Date, the NovaStar Trust II/B hereby agrees to accept the 2009
II/B Junior Subordinated Notes and to issue the 2009 II/B Preferred Securities and the 2009 II/B Common Securities. On the Exchange Date, the applicable Holders hereby agree to accept the 2009 II/B Preferred Securities in exchange for the 2006
Preferred Securities. 
  

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 2.3 Prior to or on the Exchange Date, the Company hereby agrees to deliver to the 2009 I/B Indenture
Trustee all of its 2009 I/B Junior Subordinated Notes and to the 2009 II/B Indenture Trustee all of its 2009 II/B Junior Subordinated Notes, in each case together with a request for authentication and delivery on the Exchange Date, and may not
withdraw such delivery and request unless and until this Agreement is terminated in accordance with Section 9. Prior to or on the Exchange Date, the Company hereby agrees to cause the Administrative Trustees to deliver to the 2009 I/B
Property Trustee all of the 2009 I/B Preferred Securities and to the 2009 II/B Property Trustee all of the 2009 II/B Preferred Securities, in each case together with a request for authentication and delivery on the Exchange Date, and may not
withdraw such delivery and request unless and until this Agreement is terminated in accordance with Section 9. Prior to or on the Exchange Date, each Holder hereby agrees to deliver an issuer order (an “Issuer Order”)
instructing each trustee (in each such capacity, a “CDO Trustee”) under the applicable indenture pursuant to which such CDO Trustee serves as trustee for such Holder to exchange the Existing Preferred Securities for the Preferred
Securities on the Exchange Date and to deliver to the 2009 I/B Property Trustee or the 2009 II/B Property Trustee, as applicable, all of its Existing Preferred Securities on or before the Exchange Date and may not withdraw such Issuer Order or
delivery unless and until this Agreement is terminated in accordance with Section 9. 
 2.4 If the applicable Holders elect to
have the Preferred Securities rated, each Holder shall be responsible for its pro rata portion of any rating agency costs for the Preferred Securities of the applicable Trust that such Holder will acquire upon the Exchange Date (defined
below). In no event shall any Holder be responsible for any rating agency costs of any other Holder or the fees and expenses set forth in Section 7, and, each Holder is solely responsible for its own expenses to the extent not reimbursed
by the Company or the Guarantor pursuant to the Settlement Agreement (defined below). Outstanding as of the Effective Date are: 
  

	 	(i)	$50,000,000 aggregate liquidation amount of Existing Preferred Securities of the NovaStar Capital Trust I; and 

  

	 	(ii)	$28,125,000 aggregate liquidation amount of Existing Preferred Securities of the NovaStar Capital Trust II. 

 None of the Company, the Company’s Board of Directors, the Guarantor, the Guarantor’s Board of Directors, nor any trustee of any of the Trusts
or the Existing Trusts makes or has made any recommendation to any Holder as to whether to exchange or refrain from exchanging all or any portion of the Existing Preferred Securities for Preferred Securities pursuant to this Exchange Agreement. In
addition, no one has been authorized to make any such recommendation. Each Holder has made its own decision whether to exchange all of such Holder’s Existing Preferred Securities pursuant to this Agreement based upon such Holder’s own
financial positions and requirements and upon such due diligence and advice as it has deemed necessary. 
  

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 2.5 On the Exchange Date, upon the direction of the applicable Administrative Trustees, the 2009 I/B
Property Trustee and the 2009 II/B Property Trustee shall authenticate and deliver the respective Preferred Securities in accordance with the terms of the respective Trust Agreements. On the Exchange Date, upon the direction of the Company, the 2009
I/B Indenture Trustee and the 2009 II/B Indenture Trustee shall authenticate and deliver the respective Junior Subordinated Notes in accordance with the terms of the respective Indentures. 
 2.6 On the Exchange Date, immediately following the satisfaction of the conditions set forth in Section 3: (a) the 2009 I/B Property
Trustee shall deliver the 2009 I/B Preferred Securities, in the amounts set forth on Schedule I, to the applicable Holders according to the delivery instructions provided by each such Holder to the 2009 I/B Property Trustee, (b) the 2009
II/B Property Trustee shall deliver the 2009 II/B Preferred Securities, in the amounts set forth on Schedule II, to the applicable Holders according to the delivery instructions provided by each such Holder to the 2009 II/B Property Trustee,
(c) the Administrative Trustees shall deliver the Common Securities to the Company according to the delivery instructions provided by the Company to the Administrative Trustees, (d) the 2009 I/B Indenture Trustee shall deliver the 2009 I/B
Junior Subordinated Notes to the NovaStar Trust I/B according to the delivery instructions provided by such Trust to the 2009 I/B Indenture Trustee, (e) the 2009 II/B Indenture Trustee shall deliver the 2009 II/B Junior Subordinated Notes to
the NovaStar Trust II/B according to the delivery instructions provided by such Trust to the 2009 II/B Indenture Trustee, and (f) the 2009 I/B Property Trustee and the 2009 II/B Property Trustee shall deliver all of the Existing Preferred
Securities to the Company according to the delivery instructions provided by the Company to the 2009 I/B Property Trustee and the 2009 II/B Property Trustee, respectively. Upon receipt of the Existing Preferred Securities from the 2009 I/B Property
Trustee and the 2009 II/B Property Trustee, the Company shall (i) surrender the Existing Preferred Securities and the Existing Common Securities to the applicable Existing Trusts for cancellation thereof, (ii) direct the appropriate
trustees of the Existing Trusts to dissolve the Existing Trusts and to surrender the Existing Subordinated Notes to the applicable indenture trustees for cancellation thereof and (iii) cause the Existing Indentures to be discharged. 

2.7 Each Holder and each Exchangor agrees that, on and as of the Exchange Date, (a) all obligations under the Existing Securities shall be deemed
to be fully discharged and satisfied, and (b) all right, title and interest in and to any payments of principal, interest or any other amounts under or with respect to the Existing Securities, whether or not any of such payments are due or
accrued and unpaid, shall be deemed surrendered and forfeited. 
 2.8 The exchange date shall be the date upon which all of the conditions
precedent set forth in Section 3 shall have been satisfied (the “Exchange Date”). If the Exchange Date has not occurred on or before April 30, 2009 (the “Expiry Date”), (a) the 2009 I/B Property
Trustee and the 2009 II/B Property Trustee shall return the Existing Preferred Securities to the applicable Holders and the Preferred Securities to the Administrative Trustees of the applicable Trusts, (b) the 2009 I/B Indenture Trustee and the
2009 II/B Indenture Trustee shall return the Junior Subordinated Notes to the Company, (c) the Company shall return the Common Securities to the applicable Trusts, (d) no exchange shall take place pursuant to this Agreement, (e) the
Escrow Agent shall return the full amount of the Settlement Amount (as defined in the Escrow Agreement) to the Company, and (f) this Agreement and the Operative Documents shall be terminated in accordance with Section 9. 

 

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 2.9 The Preferred Securities shall be delivered by each of the Trusts, directly or indirectly, to each
Holder without registration of any of the Securities under the Securities Act of 1933, as amended (the “Securities Act”), or any other applicable securities laws in reliance upon exemptions from the registration requirements of the
Securities Act and other applicable securities laws. 
 Section 3. Closing Conditions. The exchange of the Securities pursuant to
this Agreement is subject to the timely satisfaction of the following conditions precedent: 
 3.1 Conditions to be Satisfied prior to or
on Effective Date. 
 (a) Escrow Agreement. Prior to or on the Effective Date, the Exchangors, the Holders and the Escrow Agent
shall have executed and delivered the Escrow Agreement, in form and substance acceptable to each Holder and each Exchangor (acceptance of such form and substance to be evidenced by such Holder’s or such Exchangor’s execution and delivery
thereof). 
 (b) Settlement Agreement. Prior to or on the Effective Date, the parties to that certain Settlement Agreement (the
“Settlement Agreement”) shall have executed and delivered such Settlement Agreement, in form and substance acceptable to each Holder and each Exchangor (acceptance of such form and substance to be evidenced by such Holder’s or
such Exchangor’s execution and delivery thereof), and the Company shall have deposited the Settlement Amount (as defined therein) with the Escrow Agent pursuant to the Escrow Agreement and the Settlement Agreement. 
 (c) Operative Documents. On the Effective Date, the parties to this Exchange Agreement, the Indentures, the Trust Agreements and the Guarantees
shall have executed and delivered such Operative Documents to the other parties thereto and in form and substance acceptable to each Holder and each Exchangor (acceptance of such form and substance to be evidenced by such Holder’s or such
Exchangor’s execution and delivery thereof). 
 3.2 Conditions to be Satisfied prior to or on the Exchange Date. 
 (a) Accuracy of Representations and Warranties. The representations and warranties contained in this Agreement, and the statements of the
Exchangors and the Holders made in any certificates pursuant to this Agreement, shall be accurate as of the Exchange Date. 
 (b) Opinions
of Counsel. 
 (i) The Holders shall have received an opinion of Husch Blackwell Sanders LLP, special counsel for the Company and the
Guarantor, dated as of the Exchange Date and in form and substance acceptable to each Holder. 
  

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 (ii) The Holders shall have received an opinion of Husch Blackwell Sanders LLP, special tax counsel for
the Guarantor, dated as of the Exchange Date and in form and substance acceptable to each Holder. 
 (iii) The Holders, the Company and the
Guarantor shall have received an opinion of Richards, Layton & Finger, P.A., special counsel for the Trusts and the 2009 I/B Delaware Trustee and the 2009 II/B Delaware Trustee, dated as of the Exchange Date and in form and substance
acceptable to each Holder, the Company and the Guarantor. 
 (iv) The Holders and the Exchangors shall have received an opinion of Gardere
Wynne Sewell LLP, special counsel for the 2009 I/B Property Trustee, 2009 II/B Property Trustee, 2009 I/B Indenture Trustee and 2009 II/B Indenture Trustee, dated as of the Exchange Date and in form and substance acceptable to each Holder and each
Exchangor. 
 (v) The Exchangors shall have received an opinion of Winston & Strawn LLP, special counsel for the Holders, dated as
of the Exchange Date and in form and substance acceptable to each Exchangor. 
 (vi) The Holders shall have received an opinion of
Winston & Strawn, LLP, special tax counsel for the Holders, dated as of the Exchange Date and in form and substance acceptable to each Holder. 
 (c) Dismissal Order. On or before the Expiry Date, the Holders shall have obtained entry of the Dismissal Order (as defined in the Settlement Agreement) (the “Dismissal Order”). 
 (d) Officer’s Certificate of the Company and the Guarantor. Each of the Company and the Guarantor shall have furnished to each Holder a
certificate of the Company and the Guarantor, as applicable, in form and substance acceptable to each Holder, signed by the Chief Executive Officer, President or a Vice President and by the Chief Financial Officer, Treasurer or Assistant Treasurer
of the Company and the Guarantor, as applicable, and each Trust shall have furnished to the Holders of the Preferred Securities issued by such Trust a certificate of the Trust signed by an Administrative Trustee of such Trust, in each case dated the
Exchange Date, and, in the case of the Company, the Guarantor and each Trust, that the representations and warranties in this Agreement are true and correct on and as of the Exchange Date with the same effect as if made on and at such time, and the
Company, the Guarantor and the Trusts have complied in all material respects with all the agreements and satisfied all the conditions on each of their part to be performed or satisfied at or prior to the Exchange Date. 
 (e) Officer’s Certificate of each Holder. Each Holder shall have furnished to the Company and the Guarantor a certificate of the applicable
Holder, in form and substance acceptable to the Company and the Guarantor, signed by an authorized signatory of such Holder, in each case dated the Exchange Date, and, stating that the representations and warranties in this Agreement are true and
correct on and as of the Exchange Date with the same effect as if made on and at such time, and that such Holder has complied in all material respects with all the agreements and satisfied all the conditions on its part to be performed or satisfied
at or prior to the Exchange Date. 
  

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 (f) No Subsequent Change. Subsequent to the execution of this Agreement but prior to the Exchange
Date, there shall not have been any change, or any development involving a prospective change, in, or affecting the condition (financial or other), earnings, business or assets of the Guarantor and its subsidiaries taken as a whole, whether or not
occurring in the ordinary course of business, the effect of which is, in each Holder’s or the Company’s reasonable judgment, so material and adverse as to make it impractical or inadvisable to proceed with the transactions contemplated
hereby. 
 (g) Purchase Permitted by Applicable Laws; Legal Investment. The exchange of the Existing Preferred Securities for the
Preferred Securities as described in this Agreement shall (a) not be prohibited by any applicable law or governmental regulation, (b) not subject the Holders or the Exchangors to any material penalty under or pursuant to any applicable law
or governmental regulation and (c) be permitted by the laws and regulations of the jurisdictions to which the Holders and the Exchangors are subject. 
 (h) Cancellation of Certain Existing Preferred Securities, Existing Common Securities and Corresponding Like Amount of Notes. On or before the Expiry Date, (i) the Company shall have surrendered to the
BNYM as property trustee for the NovaStar Trust II (the “2006 Property Trustee”) the trust preferred securities currently outstanding and owned by the Company which were issued by the NovaStar Trust II and a proportionate amount of
the common securities issued by NovaStar Trust II (the “Surrendered Securities”) for cancellation thereof, (ii) the 2006 Property Trustee shall have cancelled the Surrendered Securities, (iii) the 2006 Property Trustee
shall have caused the NovaStar Trust II to have surrendered to BNYM, as trustee pursuant to that certain Junior Subordinated Indenture, dated as of April 18, 2006 (the “2006 Indenture Trustee”), an amount of 2006 Junior
Subordinated Notes with an outstanding principal amount equal to the stated liquidation amount of the Surrendered Securities (the “Surrendered Notes”) for cancellation thereof and (iv) the 2006 Indenture Trustee shall have
cancelled the Surrendered Notes. 
 (i) Acknowledgment of Trustees. On or before the Expiry Date, the Holders, the Company and the
Guarantor shall have received the Acknowledgment of Trustees (as defined in the Settlement Agreement). 
 Section 4. Representations
and Warranties of the Exchangors. The Exchangors jointly and severally represent and warrant to the Holders as of the Effective Date and as of the Exchange Date (except as otherwise noted herein) as follows (it being understood that each Trust
is hereby making the following representations and warranties only as to itself and not the other Trusts); provided, however, that none of the following representations or warranties apply or relate to any acts or omissions by the
Holders or their Affiliates, and provided, further, that the representations and warranties made in Section 4.15 are made as of the respective closing dates of the agreements therein referenced or as of such earlier dates
as noted otherwise therein: 
 4.1 Securities Laws Matters: 
 (a) None of the Exchangors, nor any of their “Affiliates” (as defined in Rule 501(b) of Regulation D under the Securities Act
(“Regulation D”)), nor any person acting on any of their behalf (except for the Holders, as to which no representation or warranty is made) has, directly or indirectly, made offers or sales of any security, or solicited offers to
buy any security, under circumstances that would require the registration under the Securities Act of any of the Securities. 
  

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 (b) None of the Exchangors, nor any of their Affiliates, nor any person acting on any of their behalf
(except for the Holders, as to which no representation or warranty is made) has (i) offered for sale or solicited offers to purchase the Securities, (ii) engaged in any form of general solicitation or general advertising (within the
meaning of Regulation D) in connection with any offer or sale of any of the Securities, or (iii) engaged in any “directed selling efforts” within the meaning of Regulation S under the Securities Act (“Regulation S”)
with respect to the Securities. 
 (c) The Securities (i) are not and have not been listed on a national securities exchange registered
under Section 6 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or quoted on a U.S. automated interdealer quotation system and (ii) are not of an open-end investment company, unit investment trust
or face-amount certificate company that are, or are required to be, registered under Section 8 of the Investment Company Act of 1940, as amended (the “Investment Company Act”), and the Securities otherwise satisfy the
eligibility requirements of Rule 144A(d)(3) promulgated pursuant to the Securities Act (“Rule 144A(d)(3)”). 
 (d) None of
the Exchangors is, and, immediately following consummation of the transactions contemplated hereby, none of the Exchangors will be, an “investment company” or an entity “controlled” by an “investment company,” in each
case within the meaning of Section 3(a) of the Investment Company Act. 
 (e) None of the Exchangors have paid or agreed to pay to any
person or entity, directly or indirectly, any fees or other compensation for soliciting another to purchase any of the Securities. 
 4.2
Standing and Qualification of the Trusts. Each Trust has been duly formed and is validly existing in good standing as a statutory trust under the Delaware Statutory Trust Act, 12 Del. C. §3801, et seq. (the “Statutory
Trust Act”), with all requisite power and authority to own property and to conduct the business it transacts and proposes to transact and to enter into and perform its obligations under the Operative Documents to which it is a party. Each
Trust is duly qualified to transact business as a foreign entity and is in good standing in each jurisdiction in which such qualification is necessary, except where the failure to so qualify or be in good standing would not have a material adverse
effect on the condition (financial or otherwise), earnings, business or assets of the Trusts, whether or not occurring in the ordinary course of business. None of the Trusts is a party to, or otherwise bound by, any agreement other than the
Operative Documents to which they are a party and the other agreements contemplated by the Operative Documents. Each of the Trusts is, and under current law will continue to be, classified for federal income tax purposes as grantor trusts and not as
a business entity or an association or publicly traded partnership taxable as a corporation. 
  

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 4.3 Trust Agreements. Upon approval of the Trust Agreements and the other Operative Documents by
the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”), the Trust Agreements shall have each been duly authorized, executed and delivered by the Company and the Administrative Trustees of each of
the respective Trusts and, assuming due authorization, execution and delivery by the 2009 I/B Property Trustee, the 2009 II/B Property Trustee, the 2009 I/B Delaware Trustee and the 2009 II/B Delaware Trustee, respectively, will be a legal, valid
and binding obligation of the Company and the respective Administrative Trustees, enforceable against them in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and to
general principles of equity. Each of the Administrative Trustees of the Trusts is an employee of the Company and has been duly authorized by the Company to execute and deliver each of the Trust Agreements. To the knowledge of the respective
Administrative Trustees, no Trust is in violation of any provision of the Statutory Trust Act. 
 4.4 Indenture. Upon approval of the
Indentures and the other Operative Documents by the Bankruptcy Court, each Indenture shall have been duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery by the 2009 I/B Indenture Trustee and
the 2009 II/B Indenture Trustee, respectively, will be a legal, valid and binding obligation of the Company enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’
rights generally and to general principles of equity. 
 4.5 Preferred Securities and Common Securities. Upon approval of the
Operative Documents by the Bankruptcy Court, the Preferred Securities and the Common Securities shall have been duly authorized by the respective Trusts and, in the case of the Preferred Securities, when issued, authenticated and delivered on the
Exchange Date by the 2009 I/B Property Trustee or the 2009 II/B Property Trustee, as applicable, to the Holders in exchange for the Existing Preferred Securities in accordance with this Agreement and, in the case of the Common Securities, when
issued and delivered to the Company in accordance with this Agreement, will be validly issued, fully paid and nonassessable and will represent undivided beneficial interests in the assets of the respective Trusts entitled to the benefits of the
respective Trust Agreements, enforceable against the respective Trusts in accordance with their terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and to general principles of equity. The
issuance of the Securities is not subject to preemptive or other similar rights. On the Exchange Date, all of the issued and outstanding Common Securities will be directly owned by the Company free and clear of any pledge, security interest, claim,
lien or other encumbrance (each, a “Lien”). 
 4.6 Junior Subordinated Notes. Upon approval of the Indentures and the
other Operative Documents by the Bankruptcy Court, the Junior Subordinated Notes shall have been duly authorized by the Company and, when executed by the Company and authenticated and delivered on the Exchange Date by the 2009 I/B Indenture Trustee
or the 2009 II/B Indenture Trustee, as applicable, in exchange for the issuance of the Preferred Securities and the Common Securities in accordance with this Agreement, will constitute legal, valid and binding obligations of the Company entitled to
the benefits of the respective Indentures enforceable 

  

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against the Company in accordance with their terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally
and to general principles of equity, and each respective Trust will acquire good, marketable and unencumbered title to the Junior Subordinated Notes. 
 4.7 Exchange Agreement. Upon approval of this Agreement and the other Operative Documents by the Bankruptcy Court, this Agreement shall have been duly authorized, executed and delivered by the Exchangors and
will constitute the legal, valid and binding obligation of the Exchangors, enforceable against the Exchangors in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and
to general principles of equity. 
 4.8 Guarantees. Each Guarantee has been duly authorized, executed and delivered by the Guarantor
and, assuming due authorization, execution and delivery by the other parties thereto, will be a legal, valid and binding obligation of the Guarantor enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency
and similar laws affecting creditors’ rights generally and to general principles of equity. 
 4.9 Defaults. Upon approval of
this Agreement and the other Operative Documents by the Bankruptcy Court, none of the issue and exchange of the Securities by the Exchangors, the execution and delivery of and compliance with the Operative Documents by any of the Exchangors, and the
consummation of the transactions contemplated herein or in the Operative Documents, (i) will conflict with or constitute a breach of, or a default under, any Trust Agreement or the charter or bylaws or similar organizational documents of the
Company, the Guarantor or any subsidiary of the Company or the Guarantor or, to the Company’s or Guarantor’s knowledge, any applicable law, statute, rule, regulation, judgment, order, writ or decree of any government, governmental
authority, agency or instrumentality or court, domestic or foreign, having jurisdiction over any Trust, the Company, the Guarantor or any of their subsidiaries, or their respective properties or assets (collectively, “Governmental
Entities”) or any arbitrator, (ii) will conflict with or constitute a violation or breach of, or a default or Repayment Event (as defined below) under, or result in the creation or imposition of any Lien upon any property or assets of
the respective Trusts, the Company, the Guarantor or any of the Company’s or Guarantor’s subsidiaries pursuant to any contract, indenture, mortgage, loan agreement, note, lease or other agreement or instrument to which (A) the
respective Trusts, the Company, the Guarantor or any of their subsidiaries is a party or by which it or any of them may be bound, or (B) any of the property or assets of any of them is subject, or any judgment, order or decree of any court,
Governmental Entity or arbitrator, except, in the case of this clause (ii), for such conflicts, breaches, violations, defaults, Repayment Events (as defined below) or Liens which (X) could not reasonably be expected to, singly or in the
aggregate, adversely affect the consummation of the transactions contemplated by the Operative Documents and (Y) could not reasonably be expected to, singly or in the aggregate, have a material adverse effect on the condition (financial or
otherwise), earnings, business, liabilities and assets of the Guarantor and its subsidiaries taken as a whole, whether or not occurring in the ordinary course of business (a “Material Adverse Effect”); or (iii) require the
consent, approval, authorization or order of any court or Governmental Entity other than the Dismissal Order of the United States Bankruptcy Court for the District of Delaware. As used herein, a “Repayment Event” means any event or

  

 12 

 
condition which gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to
require the repurchase, redemption or repayment of all or a portion of such indebtedness by the respective Trusts or the Company, the Guarantor or any of their subsidiaries prior to its scheduled maturity. 
 4.10 Organization, Standing and Qualification of the Company and the Guarantor. Each of the Company and the Guarantor has been duly incorporated
and is validly existing as a corporation in good standing under the laws of the jurisdiction in which it is chartered or organized, with all requisite corporate power and authority to own, lease and operate its properties and conduct the business it
transacts and proposes to transact, and is duly qualified to transact business and is in good standing as a foreign corporation in each jurisdiction where the nature of its activities requires such qualification, except where the failure of the
Company or the Guarantor, as the case may be, to be so qualified could not reasonably be expected to, singly or in the aggregate, have a Material Adverse Effect. 
 4.11 Government Licenses; Laws. Each Trust holds all necessary approvals, authorizations, orders, licenses, consents, registrations, qualifications, certificates and permits (collectively, “Government
Licenses”) of and from Governmental Entities necessary to conduct their respective businesses as now being conducted, and neither Trust has received any notice of proceedings relating to the revocation or modification of any such Government
License, except where the failure to be so licensed or approved or the receipt of an unfavorable decision, ruling or finding, would not, singly or in the aggregate, have a Material Adverse Effect; all of the Government Licenses are valid and in full
force and effect, except where the invalidity or the failure of such Government Licenses to be in full force and effect, would not, singly or in the aggregate, have a Material Adverse Effect; and the Company, the Guarantor and their subsidiaries are
in compliance with all applicable laws, rules, regulations, judgments, orders, decrees and consents, except where the failure to be in compliance, would not, singly or in the aggregate, have a Material Adverse Effect. 
 4.12 Taxes. Neither Trust is subject to United States federal income tax with respect to income received or accrued on the Junior Subordinated
Notes, interest payable by the Company on the Junior Subordinated Notes is deductible by the Company for United States federal income tax purposes, and neither Trust is, or will not be within ninety (90) days of the Effective Date, subject to
more than a de minimis amount of other taxes, duties or other governmental charges. 
 4.13 Conflicts, Authorizations and
Approvals. No filing with, authorization, approval, consent, license, order, registration, qualification or decree of, any Governmental Entity, other than the Dismissal Order and those that have been made or obtained, is necessary or required
for the performance by any of the Exchangors of their respective obligations under the Operative Documents, as applicable, or the consummation by the Exchangors of the transactions contemplated by the Operative Documents. 
 4.14 Litigation. There is no action, suit or proceeding before or by any Governmental Entity, arbitrator or court, domestic or foreign, now
pending or, to the knowledge of the Exchangors after due inquiry, threatened against or affecting any of the Exchangors or any of their subsidiaries, except for such actions, suits or proceedings that, if adversely determined, would not, singly

  

 13 

 
or in the aggregate, adversely affect the consummation of the transactions contemplated by the Operative Documents, other than the proceedings pending before
the Bankruptcy Court on the date hereof. 
 4.15 Representations and Warranties Made in Certain Purchase Agreements. All of the
representations and warranties made by each of the Company and the Guarantor, in its own capacity and in its capacity as sponsor of the Existing Trusts, as applicable, in the Sections 4 of that certain Purchase Agreement dated March 15, 2005
among the Company, the Guarantor, Nova Star Trust I, Merrill Lynch International and Taberna Preferred Funding I, Ltd. and that certain Purchase Agreement dated April 18, 2006 among the Company, the Guarantor, the NovaStar Trust II and Kodiak
Warehouse LLC, are hereby made to each Holder, as applicable, as of the dates the Company made such representations and warranties in such purchase agreements, or as of such earlier dates as noted otherwise therein. 
 Section 5. Representations and Warranties of the Holders. Each Holder severally represents and warrants, solely as to itself, to, and agrees
with, the Exchangors, as of the Effective Date and as of the Exchange Date (except as otherwise noted herein) as follows, provided, however, that none of the following representations or warranties apply or relate to any acts or
omissions by the Exchangors or their Affiliates: 
 5.1 The Holder understands and acknowledges that the Securities (i) have not and will
not be registered under the Securities Act, or any other applicable securities law, and (ii) may not be offered, sold, pledged or otherwise transferred by the Holder except in compliance with the registration requirements of the Securities Act
or any other applicable securities laws, pursuant to an exemption therefrom or in a transaction not subject thereto. 
 5.2 The Holder is
acquiring the Preferred Securities for its own account, for investment and not with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act or other applicable securities laws, subject to any
requirement of law that the disposition of its property be at all times within its control and subject to its ability to resell such Preferred Securities pursuant to an effective registration statement under the Securities Act or under Rule 144A
promulgated pursuant to the Securities Act (“Rule 144A”) or any other exemption from registration available under the Securities Act or any other applicable securities law. The Holder agrees to the legends and transfer restrictions
applicable to the Securities contained in the Trust Agreements. The Holder understands that no public market exists for any of the Securities, and that it is unlikely that a public market will ever exist for the Securities. 
 5.3 The Holder (a) has consulted with its own legal, regulatory, tax, business, investment, financial and accounting advisers in connection herewith
to the extent they have deemed necessary; (b) has had a reasonable opportunity to ask questions of and receive answers and request additional information from officers and representatives of the Exchangors, any such questions have been answered
to its satisfaction, and any such additional information has been provided to its satisfaction; (c) has had the opportunity to review all publicly available records and filings concerning the Exchangors and it has carefully reviewed such
records and filings that it considers relevant to making an investment decision; and (d) has made its own investment decisions based upon its own judgment, due diligence and advice from such advisers as it has deemed necessary and not upon any
view expressed by the Exchangors. 
  

 14 

 5.4 The Holder is (i) an institutional “accredited investor” within the meaning of
subparagraph (a)(1), (2), (3) or (7) of Rule 501 of Regulation D under the Securities Act, and (ii) a “qualified purchaser” (as determined in accordance with Section 2(a)(51) of the Investment Company Act of 1940, as
amended) not formed solely for the purpose of owning the Preferred Securities or the Junior Subordinated Notes. 
 5.5 The Holder has full
power and authority to deliver, exchange, sell, assign and transfer the Existing Preferred Securities; the Company will acquire good, marketable and unencumbered title to the Existing Preferred Securities provided for exchange, free and clear of all
Liens, restrictions, charges and encumbrances; and the Existing Preferred Securities provided for exchange are not subject to any adverse claims or proxies. Such Holder will, upon request, execute and deliver any additional documents reasonably
deemed by any Exchangor or the Escrow Agent to be necessary or desirable to complete the exchange of the Existing Preferred Securities pursuant to this Agreement. 
 5.6 Neither any of the Holders, nor any of the Holders’ affiliates, nor any person acting on the Holders’ or the Holders’ affiliates’ behalf have engaged, or will engage, in any form of
“general solicitation or general advertising” (within the meaning of Regulation D) or in any “direct selling efforts” (within the meaning of Regulation S) in connection with any offer or sale of the Preferred Securities.

 5.7 The Holder is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is
organized with all requisite (i) power and authority to execute, deliver and perform the Operative Documents to which it is a party, to make the representations and warranties specified herein and therein and to consummate the transactions
contemplated herein and (ii) right and power to exchange the Existing Preferred Securities for the Preferred Securities. 
 5.8 This
Agreement has been duly authorized, executed and delivered by the Holder and no filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any governmental body, agency or court having jurisdiction
over the Holder, other than those that have been made or obtained, is necessary or required for the performance by the Holder of its obligations under this Exchange Agreement or to consummate the transactions contemplated herein. 
 5.9 This Agreement constitutes the legal, valid and binding obligation of the Holder, enforceable against the Holder, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors’ rights generally and to general principles of equity. 
 5.10 Each Holder listed on
Schedules I and II hereto currently holds legal and beneficial interests in the aggregate liquidation amount of the Existing Preferred Securities set forth next to their names on such Schedules I and II. 
 Section 6. Covenants. Each of the Exchangors and the Holders covenants and agrees with the other parties hereto as follows: 
 6.1 Compliance with Representations and Warranties. During the period from the date of this Agreement to the Exchange Date, the Exchangors and the Holders
shall use commercially reasonable efforts to cause their representations and warranties contained in Sections 4 and 5, as applicable, to be true as of the Exchange Date (except as otherwise noted therein), after giving effect to the
transactions contemplated by this Agreement, as if made on and as of the Exchange Date. 
  

 15 

 6.2 Sale and Registration of Securities. None of the Company, the Guarantor nor the Trusts will,
nor will any of them permit any of its Affiliates to, nor will any of them permit any person acting on its or their behalf to, directly or indirectly, (i) resell any Preferred Securities that have been acquired by any of them, (ii) sell,
offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in the Securities Act) that would be integrated with the sale of the Preferred Securities in any manner that would require the registration of the
Securities under the Securities Act or (iii) make offers or sales of any such Security, or solicit offers to buy any such Security, under any circumstances that would require the registration of any of such Securities under the Securities Act.

 6.3 Clearing and Settlement. With respect to the 2009 II/B Preferred Securities only, the Exchangors will cooperate with the
Holders (or any holder of the 2009 II/B Preferred Securities) and use all commercially reasonable efforts to make the 2009 II/B Preferred Securities eligible for clearance and settlement as book-entry securities through the facilities of the DTC and
listed for trading through the PORTAL Market (“PORTAL”), and will execute, deliver and comply with all material representations made to, and agreements with, DTC and PORTAL. This Section 6.3 will survive delivery of the
2009 II/B Preferred Securities in exchange for the 2006 Preferred Securities. 
 6.4 Integration. None of the Company, the Guarantor
nor any Trust will, until one hundred eighty (180) days following the Exchange Date, without the prior written consent of each Holder, offer, sell, contract to sell, grant any option to purchase or otherwise dispose of, directly or indirectly,
(i) any Preferred Securities or other securities of such Trust other than as contemplated by this Agreement or (ii) any other securities convertible into, or exercisable or exchangeable for, any Preferred Securities or other securities of
such Trust. 
 6.5 Qualification of Securities. The Exchangors will arrange for the qualification of the Preferred Securities for sale
under the laws of such jurisdictions as each of the Holders may designate and will maintain such qualifications in effect so long as required for the sale of the Preferred Securities. The Exchangors, as the case may be, will promptly advise each of
the Holders of the receipt by the Exchangors, as the case may be, of any notification with respect to the suspension of the qualification of the Preferred Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for
such purpose. 
 6.6 Investment Company. So long as any of the Securities are outstanding, (i) the Securities shall not be listed
on a national securities exchange registered under Section 6 of the Exchange Act or quoted in a U.S. automated interdealer quotation system, (ii) neither the Company, the Guarantor nor any Trust shall be an open-end investment company,
unit investment trust or face-amount certificate company that is, or is required to be, registered under Section 8 of the Investment Company Act, and, the Securities shall otherwise satisfy the eligibility requirements of Rule 144A(d)(3) and
(iii) neither the Company, the Guarantor nor any Trust shall 
  

 16 

 
engage, or permit any subsidiary to engage, in any activity which would cause it or any subsidiary to be an “investment company” under the
provisions of the Investment Company Act. 
 6.7 Solicitation and Advertising. Neither the Company, the Guarantor nor any Trust will,
nor will any of them permit any of their Affiliates or any person acting on their behalf to (i) engage in any “directed selling efforts” within the meaning of Regulation S or (ii) engage in any form of “general solicitation
or general advertising” (within the meaning of Regulation D) in connection with any offer or sale of any of the Securities. 
 6.8
Compliance with Rule 144A(d)(4) under the Securities Act. So long as any of the Securities are outstanding and are “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, the Exchangors will, during
any period in which they are not subject to and in compliance with Section 13 or 15(d) of the Exchange Act, or the Exchangors are not exempt from such reporting requirements pursuant to and in compliance with Rule 12g3-2(b) under the Exchange
Act, provide to each holder of such restricted securities and to each prospective purchaser (as designated by such holder) of such restricted securities, upon the request of such holder or prospective purchaser in connection with any proposed
transfer, any information required to be provided by Rule 144A(d)(4) under the Securities Act, if applicable. The information provided by the Exchangors pursuant to this Section 6.8 will not, at the date thereof, contain any untrue
statement of a material fact. If the Company, the Guarantor or any of the Trusts are required to register under the Exchange Act, such reports filed in compliance with Rule 12g3-2(b) shall be sufficient information as required above. This covenant
is intended to be for the benefit of the Holders, the holders of the Securities, and the prospective purchasers designated by such holders, from time to time, of the Securities. 
 6.9 Press Releases and Announcements. None of the Company, the Guarantor nor any Trust will identify any of the Indemnified Parties (as defined
below) in a press release or any other public statement without the consent of such Indemnified Party, except as otherwise required by applicable laws. 
 6.10 Replacement Notes. Each Holder shall have the right under this Agreement, the Indentures and the Trust Agreements to request the substitution of new notes for all or a portion of the Junior Subordinated
Notes held by any of the Trusts, as applicable. Each Trust shall be required under the terms of this Agreement, the Indentures and the Trust Agreements to accept such newly issued notes (the “Replacement Notes”) from the Company and
surrender a like amount of Junior Subordinated Notes to the Company. The Replacement Notes shall bear terms identical to the Junior Subordinated Notes with the sole exception of interest payment dates (and corresponding redemption date and maturity
date), which will be specified by the applicable Holders but shall be quarterly. In no event will the interest payment dates (and corresponding redemption date and maturity date) on the Replacement Notes vary by more than sixty (60) calendar
days from the original interest payment dates (and corresponding redemption date and maturity date) under the Junior Subordinated Notes. Each Exchangor acknowledges and agrees that, to the extent of the principal amount of the Replacement Notes
issued to such Trust under the applicable Indenture, the applicable Holders (and each successor to such Holders’ interest in the Preferred Securities) will require the applicable Trust to issue a new series of Preferred Securities having a
principal 

  

 17 

 
amount related to the principal amount of the Replacement Notes (the “Replacement Securities”) to designated holders of Preferred
Securities, provided that any such Replacement Securities, and any distributions from such Trust to the holders of Replacement Securities, must relate solely to such Trust’s interest in the Replacement Notes and in no event will the Preferred
Securities other than the Replacement Securities share in the returns from any Replacement Notes. The Replacement Securities shall have payment dates (and corresponding redemption date and maturity date) that relate to the Replacement Notes. Each
Exchangor agrees to cooperate with all reasonable requests of the Holders in connection with any of the foregoing; provided, that, except as set forth herein, no action requested of any Exchangor in connection with such cooperation shall otherwise
modify the obligations or rights of the Company pursuant to such documents. The Holders shall pay all reasonable expenses in connection with the issuance of the Replacement Notes and the Replacement Securities. 
 6.11 Reports. So long as any of the Securities are outstanding, the Company shall furnish to (i) the Holders and any subsequent holder of the
Securities reasonably identified to the Company, and (ii) any beneficial owner of the Securities reasonably identified to the Company (which identification may be made by either such subsequent holder, beneficial owner or by the Holder, as
applicable), a duly completed and executed certificate in the form attached hereto as Exhibit A, including the financial statements referenced in such exhibit, which certificate and financial statements shall be so furnished by the Company
not later than forty-five (45) days after the end of each of the first three fiscal quarters of each fiscal year of the Company and not later than ninety (90) days after the end of each fiscal year of the Company. 
 6.12 Further Assurances. The Exchangors and the Holders covenant and agree to execute and deliver (whether prior to or after the Exchange Date)
such other agreements, opinions and certificates as may be reasonably required in order (i) to cancel the Existing Securities, (ii) terminate the Existing Trusts and (iii) discharge the Existing Indentures, all on or after the
Exchange Date and in accordance with the terms and conditions set forth in the Existing Trusts and the Existing Indentures. 
 Section 7. Payment of Expenses. The Company and the Guarantor, jointly and severally, hereby covenant and agree that they shall pay (without duplication) or cause to be paid (directly or by reimbursement) all costs and expenses
incident to the performance of the obligations of the Exchangors under this Agreement, including (a) the Kodiak Restructuring Costs (as defined in the Settlement Agreement); (b) the Taberna Restructuring Costs (as defined in the Settlement
Agreement); (c) the reasonable fees and reasonable expenses of the counsel, the accountants and any other experts or advisors retained by the Company, the Guarantor or the Trusts; (d) the reasonable fees and reasonable expenses (including
reasonable expenses of counsel) of the Trusts’ property trustees, Delaware trustees, and administrative trustees and the Indentures’ indenture trustees and the reasonable fees of such trustees to administer the Trusts; (e) CUSIP and
PORTAL fees; and (f) all costs and expenses of the Company and the Guarantor not otherwise included in this Section 7 incident to the authorization, issuance, exchange and delivery of the Preferred Securities and any taxes incurred
by the Exchangors payable in connection therewith. All amounts payable pursuant to clauses (a) and (b) above shall be paid solely from the Settlement Amount deposited with the Escrow Agent pursuant to the terms of the Escrow
Agreement and the Settlement Agreement. Except as described in the preceding sentence, neither the Company nor the Guarantor shall have any direct or 

  

 18 

 
indirect obligation or liability with respect to the amounts payable pursuant to clauses (a) and (b) above, even if such amounts, in
the aggregate, exceed the Settlement Amount. 
 Section 8. Indemnification. 
 8.1 Indemnification.   
 8.1.1 The Company, the Guarantor and each Trust (each, an “Indemnifying Party,” and collectively, the “Indemnifying Parties”) agree jointly and severally to indemnify and hold harmless each Holder of each
Preferred Security issued by such Trust (collectively, the “Indemnified Parties”), each person, if any, who controls any of the Indemnified Parties within the meaning of the Securities Act, or the Exchange Act, and the Indemnified
Parties’ respective directors, officers, employees and agents and each person who “controls” the Indemnified Parties within the meaning of either the Securities Act or the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject under the Securities Act, the Exchange Act or other federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (a) any untrue statement or alleged untrue statement of a material fact contained in any information or documents furnished or made available to the Holders by or on
behalf of the Company, the Guarantor or any Trust by an Administrative Trustee, (b) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading,
(c) the breach or alleged breach of any representation, warranty or agreement of any Exchangor contained herein or (d) the execution and delivery by the Company, the Guarantor and/or any Trust of this Agreement or any of the other
Operative Documents and/or the consummation of the transactions contemplated hereby and thereby; provided, however, that none of the Guarantor, the Company or any Trust shall be liable to the extent that any such loss, claim, damage or
liability arises out of or is based on any statement, act or omission of the Indemnified Parties, and agrees to reimburse the Indemnified Parties, as incurred, for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action. This indemnity agreement will be in addition to any liability that the Company, the Guarantor or the Trusts may otherwise have. 
 8.1.2 Promptly after receipt by an Indemnified Party under this Section 8 of notice of the commencement of any action, such Indemnified Party
will, if a claim in respect thereof is to be made against the Indemnifying Party under this Section 8, promptly notify the Indemnifying Party in writing of the commencement thereof; but the failure so to notify the Indemnifying Party
(i) will not relieve the Indemnifying Party from liability under paragraph (a) above unless and to the extent that such failure results in the forfeiture by the Indemnifying Party of material rights and defenses and (ii) will not, in
any event, relieve the Indemnifying Party from any obligations to any Indemnified Party other than the indemnification obligation provided in paragraph (a) above. The Holders shall be entitled to appoint counsel to represent the Indemnified
Party in any action for which indemnification is sought. An Indemnifying Party may participate at its own expense in the defense of any such action; provided, that counsel to the Indemnifying Party shall not (except with the consent of the
Indemnified Party) also be counsel to the Indemnified Party. In no event shall the Indemnifying Parties be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all 

  

 19 

 
Indemnified Parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general
allegations or circumstances. An Indemnifying Party will not, without the prior written consent of the Indemnified Parties, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether or not the Indemnified Parties are actual or potential parties to such claim, action, suit or proceeding) unless such settlement, compromise or consent includes an
unconditional release of each Indemnified Party from all liability arising out of such claim, action, suit or proceeding. 
 8.2
Additional Remedies. The indemnity agreements contained in this Section 8 are in addition to any liability that the Exchangors may otherwise have to any Indemnified Party. 
 8.3 Additional Indemnification. The Company and the Guarantor shall indemnify and hold harmless each Trust against all loss, liability, claim,
damage and expense whatsoever, as due from the respective Trusts under Sections 8.1 and 8.2. 
 Section 9.
Termination. This Agreement and the other Operative Documents shall terminate automatically, and without notice to any party thereof, if the Exchange Date has not occurred on or before the Expiry Date. In the event that this Agreement is
terminated, the Escrow Agent shall return the Settlement Amount to the Company as provided in the Escrow Agreement and the Settlement Agreement, and the Existing Preferred Securities and the Securities shall be returned to the applicable parties as
provided in Section 2 hereof. 
 Section 10. Miscellaneous. 
 10.1 Notices. All communications hereunder will be in writing and effective only on receipt, and will be mailed, delivered by hand or courier or
sent by facsimile and confirmed: 
 if to the Holders, to the addresses for notice set forth on Schedules I and II hereto, with a copy to:

  

			
	 Winston & Strawn LLP
 35 West Wacker Drive
 Chicago, Illinois 60601
 Telephone: (312) 558-5600
 Facsimile: (312) 558-5700
 Attention: Katherine A. McAvopy, Esq.

  

 20 

			
		
	if to the Exchangors, to:	 	
	
	 NovaStar Mortgage, Inc.
 2114 Central Street, Suite 600
 Kansas City, MO 64108
 Telephone: (816) 237-7000
 Facsimile:
(816) 237-7515
 Attention: Chief Executive Officer

		
	with a copy to:	 	
	
	 Husch Blackwell Sanders LLP
 1200 Main Street, Suite 2300
 Kansas
City, MO 64105
 Telephone: (816) 421-4800
 Facsimile: (816) 421-0596
 Attention: Christopher Redmond

 All such notices and communications shall be deemed to have been duly received (i) at the
time delivered by hand, if personally delivered, (ii) five business days after being deposited in the mail, postage prepaid, if mailed, (iii) when answered back, if telexed, (iv) the next business day after being telecopied, or
(v) the next business day after timely delivery to a courier, if sent by overnight air courier guaranteeing next-day delivery. From and after the Exchange Date, the foregoing notice provisions shall be superseded by any notice provisions of the
Operative Documents under which notice is given. The Holders, the Exchangors and their respective counsel, may change their respective notice addresses, from time to time, by written notice to all of the foregoing persons. 
 10.2 Parties in Interest, Successors and Assigns. This Agreement will inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person other than the parties hereto, their successors, assigns, heirs and legal representatives, any right
or obligation hereunder. None of the rights or obligations of the parties under this Agreement may be assigned, whether by operation of law or otherwise, without the prior written consent of each of the other parties hereto. The rights and
obligations of each Holder in connection with the transfer of the Preferred Securities permitted pursuant to the terms of the applicable Trust Agreement may be assigned without the Exchangors’ consent; provided that the assignee assumes
the obligations and makes the representations and warranties of the respective Holders under this Agreement. 
 10.3 Amendments. This
Agreement may not be modified, amended, altered or supplemented, except upon the execution and delivery of a written agreement by each of the parties hereto. 
 10.4 Counterparts and Facsimile. This Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts
shall together constitute one and the same instrument. This Agreement may be executed by any one or more of the parties hereto by facsimile which shall be effective as delivery of a manually executed counterpart hereof. 
  

 21 

 10.5 Headings. The headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof. 
 10.6 Governing Law. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAW (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW). 
 10.7 Submission to Jurisdiction. ANY LEGAL ACTION OR PROCEEDING BY OR AGAINST ANY PARTY HERETO OR WITH RESPECT TO OR ARISING OUT OF THIS AGREEMENT MAY BE BROUGHT IN OR REMOVED TO THE COURTS OF THE STATE OF NEW
YORK, IN AND FOR THE COUNTY OF NEW YORK, OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK (IN EACH CASE SITTING IN THE BOROUGH OF MANHATTAN). BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY ACCEPTS, FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS (AND COURTS OF APPEALS THEREFROM) FOR LEGAL PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT. 
 10.8 Entire Agreement. This Agreement, together with the Operative Documents, the Settlement Agreement and the other documents delivered in
connection with the transactions contemplated by this Agreement and the Settlement Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding
of the parties hereto in respect of the subject matter contained herein and therein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein. This Agreement, together with the
Operative Documents, the Settlement Agreement and the other documents delivered in connection with the transactions contemplated by this Agreement, supersedes all prior agreements and understandings between the parties with respect to such subject
matter. 
 10.9 Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any
circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired or
affected, it being intended that all of the parties’ rights and privileges shall be enforceable to the fullest extent permitted by law. 
 10.10 Survival. The respective agreements, representations, warranties, covenants, indemnities and other statements of the Exchangors and the Holders set forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any of the Holders, the Company, the Guarantor or the Trusts or any of their respective officers, directors, trustees or controlling persons, and will survive the exchange of the
Securities. The provisions of the first paragraph of Section 2.4 relating to the payment of rating agency costs and Sections 7 and 8 shall survive the termination or cancellation of this Agreement. 
 Signatures appear on the following page 
  

 22 

 IN WITNESS WHEREOF, this Exchange Agreement has been entered
into as of the date first written above. 
  

			
	NOVASTAR MORTGAGE, INC.
		
	By:	 	  

	Name:	 	
	Title:	 	
	
	NOVASTAR FINANCIAL, INC.
		
	By:	 	  

	Name:	 	
	Title:	 	
	
	NOVASTAR CAPITAL TRUST I/B
		
	By:	 	NovaStar Mortgage, Inc., as Depositor
		
	By:	 	  

	Name:	 	
	Title:	 	
	
	NOVASTAR CAPITAL TRUST II/B
		
	By:	 	NovaStar Mortgage, Inc., as Depositor
		
	By:	 	  

	Name:	 	
	Title:	 	

			
	KODIAK CDO I, LTD., as Holder
		
	By:	 	Kodiak CDO Management, LLC, as Collateral Manager
		
	By:	 	Kodiak Funding, LP
	Its:	 	Sole Member
		
	By:	 	Kodiak Funding Company, Inc.
	Its:	 	General Partner
		
	By:	 	  

	Name:	 	Robert M. Hurley
	Title:	 	Chief Financial Officer

			
	 TABERNA PREFERRED FUNDING I, LTD., 
 as
Holder

		
	By:	 	Taberna Capital Management, LLC, as Collateral Manager
		
	By:	 	  

	Name:	 	Raphael Licht
	Title:	 	Secretary
	
	 TABERNA PREFERRED FUNDING II, LTD.,
 as
Holder

		
	By:	 	Taberna Capital Management, LLC, as Collateral Manager
		
	By:	 	  

	Name:	 	Raphael Licht
	Title:	 	Secretary

 Schedule I 
 NovaStar Capital Trust I and NovaStar Capital Trust I/B 
  

							
	 Holder
	  	Stated Liquidation Amount of
2005 Preferred
Securities Held as of
the Effective Date	  	Liquidation Amount of
2009 I/B Preferred Securities
to be Received upon
Completion of
the Exchange
	 Taberna Preferred Funding I, Ltd.
	  	$	25,000,000	  	$	25,000,000
	 Taberna Preferred Funding II, Ltd
	  	$	25,000,000	  	$	25,000,000
		  	 	 	  	 	 
	 Total
	  	$	50,000,000	  	$	50,000,000

 Taberna Preferred Funding I, Ltd. 
 Taberna Capital Management, LLC 
 2929 Arch Street, 17th Floor 
 Philadelphia, PA 19104 
 Fax: (215) 243-9030 
 Taberna Preferred Funding II, Ltd. 
 Taberna Capital Management, LLC 
 2929 Arch Street, 17th Floor 
 Philadelphia, PA 19104 
 Fax: (215) 243-9030 
 Email: rlicht@raitft.com and mfralin@tabernasecurities.com 

 Schedule II 
 NovaStar Capital Trust II and NovaStar Capital Trust II/B 
  

							
	 Holder
	  	Stated Liquidation Amount of
2006 Preferred
Securities Held as of
the Effective Date	  	Liquidation Amount
of 2009 II/B Preferred Securities
to be Received
upon
Completion of the Exchange
	 Kodiak CDO I, Ltd.
	  	$	28,125,000	  	$	28,125,000
		  	 	 	  	 	 
	 Total
	  	$	28,125,000	  	$	28,125,000

 Kodiak CDO I, Ltd. 
 c/o Kodiak Capital Management Company, LLC 
 Attn: Chief Financial Officer 
 2107 Wilson Boulevard, Suite 400 
 Arlington, VA 22201 
 Email : rhurley@ejfcap.com and lkucera@ejfcap.comAmended and Restated Trust Agreement

 EXHIBIT 10.56 
 EXECUTION COPY 
 AMENDED AND RESTATED TRUST AGREEMENT 
 among 
 NOVASTAR MORTGAGE, INC., 

as Depositor 
 THE BANK OF NEW YORK MELLON
TRUST COMPANY, NATIONAL ASSOCIATION, 
 as Property Trustee 
 BNY MELLON TRUST OF DELAWARE, 
 as Delaware Trustee 
 and 
 THE ADMINISTRATIVE TRUSTEES NAMED HEREIN 
 as Administrative Trustees 
  
  
 Dated as of February 18,
2009 
  
  
 NOVASTAR CAPITAL TRUST I/B 

 TABLE OF CONTENTS 
  

					
			
	 	  	 	  	Page
	ARTICLE I	  	DEFINED TERMS	  	2
			
	 Section 1.1.
	  	Definitions	  	2
			
	ARTICLE II	  	THE TRUST	  	12
			
	 Section 2.1.
	  	Name	  	12
			
	 Section 2.2.
	  	Office of the Delaware Trustee; Office of the Trust	  	13
			
	 Section 2.3.
	  	Initial Contribution of Trust Property; Fees, Costs and Expenses	  	13
			
	 Section 2.4.
	  	Purposes of Trust	  	13
			
	 Section 2.5.
	  	Authorization to Enter into Certain Transactions	  	14
			
	 Section 2.6.
	  	Assets of Trust	  	16
			
	 Section 2.7.
	  	Title to Trust Property	  	16
			
	ARTICLE III	  	PAYMENT ACCOUNT; PAYING AGENTS	  	17
			
	 Section 3.1.
	  	Payment Account	  	17
			
	 Section 3.2.
	  	Appointment of Paying Agents	  	17
			
	ARTICLE IV	  	DISTRIBUTIONS; OTHER PAYMENTS; REDEMPTION	  	18
			
	 Section 4.1.
	  	Distributions; Payments of Liquidation Amount	  	18
			
	 Section 4.2.
	  	Redemption	  	20
			
	 Section 4.3.
	  	Subordination of Common Securities	  	22
			
	 Section 4.4.
	  	Payment Procedures	  	23
			
	 Section 4.5.
	  	Withholding Tax	  	23
			
	 Section 4.6.
	  	Tax Returns and Other Reports	  	23
			
	 Section 4.7.
	  	Payment of Taxes, Duties, Etc. of the Trust	  	24
			
	 Section 4.8.
	  	Payments under Indenture or Pursuant to Direct Actions	  	24
			
	 Section 4.9.
	  	Exchanges	  	24
			
	 Section 4.10.
	  	Calculation Agent	  	25
			
	 Section 4.11.
	  	Certain Accounting Matters	  	25
			
	ARTICLE V	  	SECURITIES	  	26
			
	 Section 5.1.
	  	Initial Ownership	  	26
			
	 Section 5.2.
	  	Authorized Trust Securities	  	27

					
	 	  	 	  	Page
			
	 Section 5.3.
	  	Issuance of the Common Securities; Subscription and Acquisition of Notes	  	27
			
	 Section 5.4.
	  	The Securities Certificates	  	27
			
	 Section 5.5.
	  	Rights of Holders	  	28
			
	 Section 5.6.
	  	Book-Entry Preferred Securities	  	28
			
	 Section 5.7.
	  	Registration of Transfer and Exchange of Preferred Securities Certificates	  	30
			
	 Section 5.8.
	  	Mutilated, Destroyed, Lost or Stolen Securities Certificates	  	31
			
	 Section 5.9.
	  	Persons Deemed Holders	  	32
			
	 Section 5.10.
	  	Cancellation	  	32
			
	 Section 5.11.
	  	Ownership of Common Securities by Depositor	  	33
			
	 Section 5.12.
	  	Restrictive Legends	  	33
			
	 Section 5.13.
	  	Form of Certificate of Authentication	  	36
			
	ARTICLE VI	  	MEETINGS; VOTING; ACTS OF HOLDERS	  	36
			
	 Section 6.1.
	  	Notice of Meetings	  	36
			
	 Section 6.2.
	  	Meetings of Holders of the Preferred Securities	  	36
			
	 Section 6.3.
	  	Voting Rights	  	37
			
	 Section 6.4.
	  	Proxies, Etc.	  	37
			
	 Section 6.5.
	  	Holder Action by Written Consent	  	37
			
	 Section 6.6.
	  	Record Date for Voting and Other Purposes	  	37
			
	 Section 6.7.
	  	Acts of Holders	  	38
			
	 Section 6.8.
	  	Inspection of Records	  	39
			
	 Section 6.9.
	  	Limitations on Voting Rights	  	39
			
	 Section 6.10.
	  	Acceleration of Maturity; Rescission of Annulment; Waivers of Past Defaults	  	40
			
	ARTICLE VII	  	REPRESENTATIONS AND WARRANTIES	  	42
			
	 Section 7.1.
	  	Representations and Warranties of the Property Trustee and the Delaware Trustee	  	42
			
	 Section 7.2.
	  	Representations and Warranties of Depositor	  	43
			
	ARTICLE VIII	  	THE TRUSTEES	  	44
			
	 Section 8.1.
	  	Number of Trustees	  	44
			
	 Section 8.2.
	  	Property Trustee Required	  	44
			
	 Section 8.3.
	  	Delaware Trustee Required	  	45

  

 ii 

					
	 	  	 	  	Page
			
	 Section 8.4.
	  	Appointment of Administrative Trustees	  	45
			
	 Section 8.5.
	  	Duties and Responsibilities of the Trustees	  	46
			
	 Section 8.6.
	  	Notices of Defaults and Extensions	  	47
			
	 Section 8.7.
	  	Certain Rights of Property Trustee	  	48
			
	 Section 8.8.
	  	Delegation of Power	  	50
			
	 Section 8.9.
	  	May Hold Securities	  	50
			
	 Section 8.10.
	  	Compensation; Reimbursement; Indemnity	  	50
			
	 Section 8.11.
	  	Resignation and Removal; Appointment of Successor	  	51
			
	 Section 8.12.
	  	Acceptance of Appointment by Successor	  	53
			
	 Section 8.13.
	  	Merger, Conversion, Consolidation or Succession to Business	  	53
			
	 Section 8.14.
	  	Not Responsible for Recitals or Issuance of Securities	  	53
			
	 Section 8.15.
	  	Property Trustee May File Proofs of Claim	  	54
			
	 Section 8.16.
	  	Reports to the Property Trustee	  	55
			
	ARTICLE IX	  	TERMINATION, LIQUIDATION AND MERGER	  	55
			
	 Section 9.1.
	  	Dissolution Upon Expiration Date	  	55
			
	 Section 9.2.
	  	Early Termination	  	56
			
	 Section 9.3.
	  	Termination	  	56
			
	 Section 9.4.
	  	Liquidation	  	56
			
	 Section 9.5.
	  	Mergers, Consolidations, Amalgamations or Replacements of Trust	  	58
			
	ARTICLE X	  	MISCELLANEOUS PROVISIONS	  	59
			
	 Section 10.1.
	  	Limitation of Rights of Holders	  	59
			
	 Section 10.2.
	  	Agreed Tax Treatment of Trust and Trust Securities	  	59
			
	 Section 10.3.
	  	Amendment	  	59
			
	 Section 10.4.
	  	Separability	  	61
			
	 Section 10.5.
	  	Governing Law	  	61
			
	 Section 10.6.
	  	Successors	  	61
			
	 Section 10.7.
	  	Headings	  	61
			
	 Section 10.8.
	  	Reports, Notices and Demands	  	61
			
	 Section 10.9.
	  	Agreement Not to Petition	  	63
			
	 Section 10.10.
	  	Counterparts	  	63

  

 iii 

 EXHIBITS AND SCHEDULE 
  

			
	Exhibit A	  	Certificate of Trust of NovaStar Capital Trust I/B
	Exhibit B	  	Form of Common Securities Certificate
	Exhibit C	  	Form of Preferred Securities Certificate
	Exhibit D	  	Junior Subordinated Indenture
	Exhibit E	  	Form of Transferee Certificate to be Executed by Transferees
	Exhibit F	  	Form of Officer’s Financial Certificate of the Depositor
		
	Schedule A	  	Determination of LIBOR
	Schedule 8.16	  	List of Existing TRUPS Holders

  

 iv 

 AMENDED AND RESTATED TRUST AGREEMENT 
 This AMENDED AND RESTATED TRUST AGREEMENT (this “Trust Agreement”), dated as of February 18, 2009 (the “Execution
Date”), among (i) NovaStar Mortgage, Inc., a Virginia corporation (including any successors or permitted assigns, the “Depositor”), (ii) The Bank of New York Mellon Trust Company, National Association, a national
banking association, as property trustee (in such capacity, the “Property Trustee”), (iii) BNY Mellon Trust of Delaware, a Delaware banking corporation, as Delaware trustee (in such capacity, the “Delaware
Trustee”), and (iv) W. Lance Anderson, Rodney E. Schwatken and Matthew R. Kaltenrieder, each an individual whose address is c/o NovaStar Financial, Inc., 2114 Central Street, Suite 600, Kansas City, MO 64108, as administrative trustees
(in such capacities, each an “Administrative Trustee” and, collectively, the “Administrative Trustees” and together with the Property Trustee and the Delaware Trustee, the “Trustees”). 

WITNESSETH: 
 WHEREAS, pursuant to the
Existing Exchange Agreement (as hereinafter defined), the Depositor and the Existing TRUPS Holders (as hereinafter defined) have agreed to effect an exchange offer with respect to the Existing Preferred Securities (as hereinafter defined);

 WHEREAS, the Existing Exchange Agreement contemplates that: (i) the Depositor and the Existing TRUPS Holders shall enter into such
documents as necessary to effectuate the issuance of trust preferred securities (the “New TRUPS”) by trusts newly formed by the Depositor (each of which is a Delaware statutory trust) and the acquisition of such New TRUPS by the
Existing TRUPS Holders, (ii) each Existing TRUPS Holder shall transfer the respective Existing Preferred Securities it holds to the Depositor, and in exchange for the Depositor’s receipt of all of the validly issued and outstanding
Existing Preferred Securities the Depositor shall cause the newly formed Delaware statutory trusts to issue the New TRUPS to the Existing TRUPS Holders in the same proportions that such Existing TRUPS Holders owned Existing Preferred Securities
immediately prior to such transfers (the “Exchange Offer”), and (iii) upon the consummation of the Exchange Offer, the trust that issued the Existing Preferred Securities shall be dissolved, wound up, and terminated, and the
indenture relating to the notes that previously were issued by the Depositor to such trust shall be satisfied and discharged; 
 WHEREAS,
each of this Trust Agreement and the other Operative Documents (as hereinafter defined) have been or are being entered into to effectuate the foregoing; 
 WHEREAS, the Depositor and the Delaware Trustee have heretofore created a Delaware statutory trust pursuant to the Delaware Statutory Trust Act by entering into a Trust Agreement, dated as of February 13, 2009
(the “Original Trust Agreement”), and by executing and filing with the Secretary of State of the State of Delaware the Certificate of Trust, substantially in the form attached hereto as Exhibit A (the “Certificate of
Trust”); and 
 WHEREAS, the Depositor and the Trustees desire to amend and restate the Original Trust Agreement in its entirety as
set forth herein to provide for, among other things, (i) the issuance of the Common Securities by the Trust to the Depositor, (ii) the issuance of the Preferred Securities by the Trust pursuant to the Existing Exchange Agreement and
(iii) the acquisition by the Trust from the Depositor of all of the right, title and interest in and to the Notes; 

 NOW, THEREFORE, in consideration of the agreements and obligations set forth herein and for other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each party, for the benefit of the other parties and for the benefit of the Holders, hereby amends and restates the Original Trust Agreement in its entirety
and agrees as follows: 
 ARTICLE I 
 DEFINED TERMS 
 Section 1.1. Definitions. 
 For all purposes of this Trust Agreement, except as otherwise expressly provided or unless the context otherwise requires: 
 (a) the terms defined in this Article I have the meanings assigned to them in this Article I; 
 (b) the words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation”; 
 (c) all accounting terms used but not defined herein have the meanings assigned to them in accordance with United States generally
accepted accounting principles; 
 (d) unless the context otherwise requires, any reference to an “Article”, a
“Section”, a “Schedule” or an “Exhibit” refers to an Article, a Section, a Schedule or an Exhibit, as the case may be, of or to this Trust Agreement; 
 (e) the words “hereby,” “herein,” “hereof” and “hereunder” and other words of similar import refer
to this Trust Agreement as a whole and not to any particular Article, Section or other subdivision; 
 (f) a reference to the
singular includes the plural and vice versa; and 
 (g) the masculine, feminine or neuter genders used herein shall
include the masculine, feminine and neuter genders. 
 “Act” when used with respect to any Holder, has the meaning specified
in Section 6.7. 
 “Additional Interest” has the meaning specified in Section 1.1 of the Indenture.

 “Additional Interest Amount” means, with respect to Trust Securities of a given Liquidation Amount and/or a given period,
the amount of Additional Interest paid by the Depositor on a Like Amount of Notes for such period. 
  

 2 

 “Additional Tax Sums” has the meaning specified in Section 10.5 of the Indenture.

 “Additional Taxes” has the meaning specified in Section 1.1 of the Indenture. 
 “Administrative Trustee” means each of the Persons identified as an “Administrative Trustee” in the preamble to this
Trust Agreement, solely in each such Person’s capacity as Administrative Trustee of the Trust and not in such Person’s individual capacity, or any successor Administrative Trustee appointed as herein provided. 
 “Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Person, means the power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing. 
 “Applicable Depositary Procedures” means, with respect to any transfer or transaction involving a Book-Entry Preferred Security, the
rules and procedures of the Depositary for such Book-Entry Preferred Security, in each case to the extent applicable to such transaction and as in effect from time to time. 
 “Bankruptcy Event” means, with respect to any Person: 
 (a) the entry of a decree or order by a court having jurisdiction in the premises (i) judging such Person a bankrupt or insolvent, (ii) approving as properly filed a petition seeking reorganization,
arrangement, adjudication or composition of or in respect of such Person under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law, (iii) appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of such Person or of any substantial part of its property or (iv) ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period
of sixty (60) consecutive days; or 
 (b) the institution by such Person of proceedings to be adjudicated a bankrupt or insolvent, or the
consent by it to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable federal or state bankruptcy, insolvency, reorganization
or other similar law, or the consent by it to the filing of any such petition or to the appointment of a custodian, receiver, liquidator, assignee, trustee, sequestrator or similar official of such Person or of any substantial part of its property,
or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due and its willingness to be adjudicated a bankrupt or insolvent, or the taking of
corporate action by such Person in furtherance of any such action. 
  

 3 

 “Bankruptcy Laws” means all federal and state bankruptcy, insolvency, reorganization and
other similar laws, including the United States Bankruptcy Code. 
 “Book-Entry Preferred Security” means a Preferred
Security, the ownership and transfers of which shall be made through book entries by a Depositary. 
 “Business Day” means a
day other than (a) a Saturday or Sunday, (b) a day on which banking institutions in the City of New York are authorized or required by law or executive order to remain closed or (c) a day on which the Corporate Trust Office is closed
for business. 
 “Calculation Agent” has the meaning specified in Section 4.10. 
 “Certificate of Trust” has the meaning specified in the recitals to this Trust Agreement. 
 “Code” means the United States Internal Revenue Code of 1986 or any successor statute thereto, in each case as amended from time to
time. 
 “Commission” means the Securities and Exchange Commission, as from time to time constituted, created under the
Exchange Act or, if at any time after the execution of this Trust Agreement such commission is not existing and performing the duties assigned to it, then the body performing such duties at such time. 
 “Common Securities Certificate” means a certificate evidencing ownership of Common Securities, substantially in the form attached hereto
as Exhibit B. 
 “Common Security” means a common security of the Trust, denominated as such and representing an
undivided beneficial interest in the assets of the Trust, having a Liquidation Amount of $1,000 and having the terms provided therefor in this Trust Agreement. 
 “Corporate Trust Office” means the principal office of the Property Trustee at
which any particular time its corporate trust business shall be administered, which office at the date of this Trust Agreement is located at 601 Travis, 16th floor, Houston, Texas 77002, Attention: Global Corporate Trust– NovaStar Capital Trust I/B. Initially, all notices and correspondence shall be addressed to Mudassir Mohamed, telephone 713-483-6029. 
 “Definitive Preferred Securities Certificates” means Preferred Securities issued in certificated, fully registered form that are not
Global Preferred Securities. 
 “Delaware Statutory Trust Act” means Chapter 38 of Title 12 of the Delaware Code, 12 Del.
Code § 3801 et seq., or any successor statute thereto, in each case as amended from time to time. 
 “Delaware
Trustee” means the Person identified as the “Delaware Trustee” in the preamble to this Trust Agreement, solely in its capacity as Delaware Trustee of the Trust and not in its individual capacity, or its successor in interest in
such capacity, or any successor Delaware Trustee appointed as herein provided. 
  

 4 

 “Depositary” means an organization registered as a clearing agency under the Exchange
Act that is designated as Depositary by the Depositor or any successor thereto. DTC will be the initial Depositary. 
 “Depositary
Participant” means a broker, dealer, bank, other financial institution or other Person for whom from time to time the Depositary effects book-entry transfers and pledges of securities deposited with the Depositary. 
 “Depositor” has the meaning specified in the preamble to this Trust Agreement and any successors and permitted assigns. 
 “Depositor Affiliate” has the meaning specified in Section 4.9(a). 
 “Distribution Date” has the meaning specified in Section 4.1(a)(i). 
 “Distributions” means amounts payable in respect of the Trust Securities as provided in Section 4.1. 
 “DTC” means The Depository Trust Company, a New York corporation, or any successor thereto. 
 “Early Termination Event” has the meaning specified in Section 9.2. 
 “ERISA” means the Employee Retirement Income Security Act of 1974 or any successor statute thereto, in each case as amended from time to
time. 
 “Escrow Agent” has the meaning specified in the Existing Exchange Agreement. 
 “Event of Default” means any one of the following events (whatever the reason for such event and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): 
 (a) the occurrence of a Note Event of Default; or 
 (b) default by the Trust in the payment of any Distribution when it becomes due and payable, and continuation of such default for a period of thirty (30) days; or 
 (c) default by the Trust in the payment of any Redemption Price of any Trust Security when it becomes due and payable; or 
 (d) default in the performance, or breach, in any material respect of any covenant or warranty of the Trustees in this Trust Agreement (other than those
specified in clause (b) or (c) above) and continuation of such default or breach for a period of thirty (30) days after there has been given, by registered or certified mail, to the Trustees and to the Depositor by the Holders of at
least twenty-five percent (25%) in aggregate Liquidation Amount of the Outstanding Preferred Securities a 

  

 5 

 
written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder;
or (e) occurrence of a Bankruptcy Event with respect to the Property Trustee if a successor Property Trustee has not been appointed within ninety (90) days thereof. 
 “Exchange Act” means the Securities Exchange Act of 1934 or any successor statute thereto, in each case as amended from time to time.

 “Exchange Agreement” means an agreement between the Exchange Note Issuer and the then Holder or Holders of the Trust
Security or Trust Securities regarding the exchange thereunder of Exchange Notes for the Notes, substantially in the form of the Existing Exchange Agreement, with changes thereto as required by the different circumstances and acceptable to the
Trustee. 
 “Exchange Date” has the meaning specified in the Existing Exchange Agreement. 
 “Exchange Indenture” means a Junior Subordinated Indenture between the Exchange Note Issuer and the Exchange Note Trustee, substantially
in the form of the Indenture, with changes thereto as required by the differing circumstances and acceptable to the Trustee. 
 “Exchange Note Issuer” means NovaStar Financial, Inc., a Maryland corporation. 
 “Exchange Notes”
means the Exchange Note Issuer’s Floating Junior Subordinated Notes issued pursuant to the Exchange Indenture. 
 “Exchange Note
Trustee” means The Bank of New York Mellon Trust Company, National Association as trustee under the Exchange Note Indenture. 
 “Exchange Offer” has the meaning specified in the Recitals. 
 “Execution Date” has the meaning
specified in the preamble to this Trust Agreement. 
 “Existing Exchange Agreement” has the meaning set forth in the
recitals to the Indenture. 
 “Existing Preferred Securities” means 50,000 preferred securities having an aggregate
liquidation amount of $50,000,000 issued by NovaStar Capital Trust I. 
 “Existing TRUPS Holders” means the Persons named as
“Holders” in the Existing Exchange Agreement. 
 “Expiration Date” has the meaning specified in Section
9.1. 
 “Fiscal Year” shall be the fiscal year of the Trust, which shall be the calendar year, or such other period as
is required by the Code. 
  

 6 

 “Global Preferred Security” means a Preferred Securities Certificate evidencing
ownership of Book-Entry Preferred Securities. 
 “Holder” means a Person in whose name a Trust Security or Trust Securities
are registered in the Securities Register; any such Person shall be deemed to be a “beneficial owner” within the meaning of the Delaware Statutory Trust Act. 
 “Indemnified Person” has the meaning specified in Section 8.10(c). 
 “Indenture” means the Junior Subordinated Indenture executed and delivered by the Depositor and the Note Trustee contemporaneously with the execution and delivery of this Trust Agreement, for the benefit of the holders of
the Notes, a copy of which is attached hereto as Exhibit D, or as it may from time to time be amended or supplemented by one or more amendments or indentures supplemental thereto entered into pursuant to the applicable provisions thereof.

 “Indenture Redemption Price” means the Optional Note Redemption Price or the Special Note Redemption Price, as
applicable. 
 “Interest Coverage Calculation” has the meaning specified in Section 1.1 of the Indenture. 

“Interest Coverage Trigger” has the meaning specified in Section 1.1 of the Indenture. 
 “Interest Payment Date” has the meaning specified in Section 1.1 of the Indenture. 
 “Investment Company Act” means the Investment Company Act of 1940 or any successor statute thereto, in each case as amended from time to
time. 
 “Investment Company Event” has the meaning specified in Section 1.1 of the Indenture. 
 “LIBOR” has the meaning specified in Schedule A. 
 “LIBOR Business Day” has the meaning specified in Schedule A. 
 “LIBOR
Determination Date” has the meaning specified in Schedule A. 
 “Lien” means any lien, pledge, charge,
encumbrance, mortgage, deed of trust, adverse ownership interest, hypothecation, assignment, security interest or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever. 
 “Like Amount” means (a) with respect to a redemption of any Trust Securities, Trust Securities having a Liquidation Amount equal to
the principal amount of Notes to be contemporaneously redeemed or paid at maturity in accordance with the Indenture, the proceeds of which will be used to pay the Redemption Price of such Trust Securities, (b) with respect to a distribution of
Notes to Holders of Trust Securities in connection with a dissolution of the Trust, Notes having a principal amount equal to the Liquidation Amount of the Trust Securities of the Holder to whom such Notes are distributed, (c) with respect to
any distribution of Additional 

  

 7 

 
Interest Amounts to Holders of Trust Securities, Notes having a principal amount equal to the Liquidation Amount of the Trust Securities in respect of which
such distribution is made and (d) with respect to any exchange of Preferred Securities owned or held by a Depositor Affiliate, Notes having a principal amount equal to the liquidation amount of the Preferred Securities in respect of which such
distribution is made. 
 “Liquidation Amount” means the stated liquidation amount of $1,000 per Trust Security. 

“Liquidation Date” means the date on which assets are to be distributed to Holders in accordance with Section 9.4(a)
hereunder following dissolution of the Trust. 
 “Liquidation Distribution” has the meaning specified in
Section 9.4(d). 
 “Majority in Liquidation Amount” means Common or Preferred Securities, as the case may be,
representing more than fifty percent (50%) of the aggregate Liquidation Amount of all (or a specified group of) then Outstanding Common or Preferred Securities, as the case may be. 
 “New TRUPS” has the meaning specified in the Recitals. 
 “Note Event of Default” means any “Event of Default” specified in Section 5.1 of the Indenture. 
 “Note Redemption Date” means, with respect to any Notes to be redeemed under the Indenture, the date fixed for redemption of such Notes under the Indenture. 
 “Note Trustee” means the Person identified as the “Trustee” in the Indenture, solely in its capacity as Trustee pursuant to
the Indenture and not in its individual capacity, or its successor in interest in such capacity, or any successor Trustee appointed as provided in the Indenture. 
 “Notes” means the Depositor’s Floating Rate Junior Subordinated Notes issued pursuant to the Indenture. 
 “Officers’ Certificate” means a certificate signed by the Chief Executive Officer, the President or a Vice President, and by the Chief Financial Officer, Treasurer or an Assistant Treasurer, the
Secretary or Assistant Secretary, of the Depositor, and delivered to the Trustees. Any Officers’ Certificate delivered with respect to compliance with a condition or covenant provided for in this Trust Agreement (other than the certificate
provided pursuant to Section 8.16(b) which is not an Officers’ Certificate) shall include: 
 (a) a statement by each officer
signing the Officers’ Certificate that such officer has read the condition or covenant and the definitions herein relating thereto; 
 (b) a brief statement of the nature and scope of the examination or investigation undertaken by such officer in rendering the Officers’ Certificate; 
  

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 (c) a statement that such officer has made such examination or investigation as, in such officer’s
opinion, is necessary to enable such officer to express an informed opinion as to whether or not such condition or covenant has been complied with; and 
 (d) a statement as to whether, in the opinion of such officer, such condition or covenant has been complied with. 
 “Operative Documents” means the Existing Exchange Agreement, the Indenture, the Trust Agreement, the Notes and the Trust Securities. 
 “Opinion of Counsel” means a written opinion of counsel, who may be counsel for, or an employee of, the Depositor or any Affiliate of the Depositor. 
 “Optional Note Redemption Price” means, with respect to any Note to be redeemed on any Redemption Date for an optional redemption under
the Indenture, an amount equal to one hundred percent (100%) of the outstanding principal amount of such Note (or the redeemed portion thereof, as applicable), together with accrued and unpaid interest, including any Additional Interest (to the
extent legally enforceable), through but not including the date fixed as such Redemption Date. 
 “Optional Redemption
Price” means, with respect to any Trust Security, an amount equal to one hundred percent (100%) of the Liquidation Amount of such Trust Security on the Redemption Date, plus accumulated and unpaid Distributions through but not
including the Redemption Date, plus the related amount of the premium, if any, and/or accrued and unpaid interest, including Additional Interest, if any, thereon paid by the Depositor upon the concurrent redemption or payment at maturity of a Like
Amount of Notes. 
 “Original Interest Accrual Date” has the meaning specified in Section 4.1(a)(ii).

 “Original Issue Date” means the date of original issuance of the Trust Securities. 
 “Original Trust Agreement” has the meaning specified in the recitals to this Trust Agreement. 
 “Outstanding” means, when used in reference to any Trust Securities, as of the date of determination, all Trust Securities theretofore
executed and delivered under this Trust Agreement, except: 
 (a) Trust Securities theretofore canceled by the Property Trustee or delivered
to the Property Trustee for cancellation; 
 (b) Trust Securities for which payment or redemption money in the necessary amount has been
theretofore deposited with the Property Trustee or any Paying Agent in trust for the Holders of such Trust Securities; provided, that, if such Trust Securities are to be redeemed, notice of such redemption has been duly given pursuant to this
Trust Agreement; and 
  

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 (c) Trust Securities that have been paid or in substitution for or in lieu of which other Trust
Securities have been executed and delivered pursuant to the provisions of this Trust Agreement, unless proof satisfactory to the Property Trustee is presented that any such Trust Securities are held by Holders in whose hands such Trust Securities
are valid, binding and legal obligations of the Trust; 
 provided, that in determining whether the Holders of the requisite Liquidation Amount of the
Outstanding Preferred Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Preferred Securities owned by the Depositor, any Trustee or any Affiliate of the Depositor or of any Trustee shall be
disregarded and deemed not to be Outstanding, except that (i) in determining whether any Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Preferred Securities that
such Trustee knows to be so owned shall be so disregarded and (ii) the foregoing shall not apply at any time when all of the Outstanding Preferred Securities are owned by the Depositor, one or more of the Trustees and/or any such Affiliate.
Preferred Securities so owned that have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Administrative Trustees the pledgee’s right so to act with respect to such Preferred
Securities and that the pledgee is not the Depositor, any Trustee or any Affiliate of the Depositor or of any Trustee. 
 “Owner” means each Person who is the beneficial owner of Book-Entry Preferred Securities as reflected in the records of the Depositary or, if a Depositary Participant is not the beneficial owner, then the beneficial owner
as reflected in the records of the Depositary Participant. 
 “Paying Agent” means any Person authorized by the
Administrative Trustees to pay Distributions or other amounts in respect of any Trust Securities on behalf of the Trust. 
 “Payment
Account” means a segregated non-interest-bearing corporate trust account maintained by the Property Trustee for the benefit of the Holders in which all amounts paid in respect of the Notes will be held and from which the Property Trustee,
through the Paying Agent, shall make payments to the Holders in accordance with Sections 3.1, 4.1 and 4.2. 
 “Person” means a legal person, including any individual, corporation, estate, partnership, joint venture, association, joint stock company, company, limited liability company, trust, unincorporated association or
government, or any agency or political subdivision thereof, or any other entity of whatever nature. 
 “Preferred Securities
Certificate” means a certificate evidencing ownership of Preferred Securities, substantially in the form attached as Exhibit C. 
 “Preferred Security” means a preferred security of the Trust, denominated as such and representing an undivided beneficial interest in the assets of the Trust, having a Liquidation Amount of $1,000 and having the terms
provided therefor in this Trust Agreement. 
 “Property Trustee” means the Person identified as the “Property
Trustee” in the preamble to this Trust Agreement, solely in its capacity as Property Trustee of the Trust and not in its individual capacity, or its successor in interest in such capacity, or any successor Property Trustee appointed as herein
provided. 
  

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 “QIB” means a “qualified institutional buyer” as defined in Rule 144A under
the Securities Act. 
 “QIB/QP” means a QIB that is also a QP. 
 “QP” means a “qualified purchaser” as defined in Section 2(a)(51) of the Investment Company Act. 
 “Redemption Date” means, with respect to any Trust Security to be redeemed, the date fixed for such redemption by or pursuant to this
Trust Agreement; provided, that each Note Redemption Date and the stated maturity (or any date of principal repayment upon early maturity) of the Notes shall be a Redemption Date for a Like Amount of Trust Securities. 
 “Redemption Price” means the Special Redemption Price or Optional Redemption Price, as applicable. If the Depositor has redeemed the
Notes at the Special Note Redemption Price, the Trust shall redeem the Trust Securities at the Special Redemption Price. If the Depositor has redeemed the Notes at the Optional Note Redemption Price, the Trust shall redeem the Trust Securities at
the Optional Redemption Price. 
 “Reference Banks” has the meaning specified in Schedule A. 
 “Responsible Officer” means, with respect to the Property Trustee, the officer in the Global Corporate Trust department of the Property
Trustee having direct responsibility for the administration of this Trust Agreement. 
 “Securities Act” means the
Securities Act of 1933 or any successor statute thereto, in each case as amended from time to time. 
 “Securities
Certificate” means any one of the Common Securities Certificates or the Preferred Securities Certificates. 
 “Securities
Register” and “Securities Registrar” have the respective meanings specified in Section 5.7(a). 
 “Special Redemption Price” means, with respect to any Trust Security, an amount equal to one hundred seven and one half percent (107.5%) of the Liquidation Amount of such Trust Security on the Redemption Date, plus
accumulated and unpaid Distributions to the Redemption Date, plus the related amount of the premium, if any, and/or accrued interest, including Additional Interest, if any, thereon paid by the Depositor upon the concurrent redemption or payment at
maturity of a Like Amount of Notes. 
 “Special Note Redemption Price” means, with respect to any Note to be redeemed on any
Redemption Date under the Indenture, an amount equal to one hundred seven and one half percent (107.5%) of the outstanding principal amount of such Note, together with accrued interest, including Additional Interest, thereon through but not
including the date fixed as such Redemption Date. 
  

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 “Successor Securities” has the meaning specified in Section 9.5(a).

 “Tax Event” has the meaning specified in Section 1.1 of the Indenture. 
 “Trust” means the Delaware statutory trust known as “NovaStar Capital Trust I/B,” which was created on February 13, 2009
under the Delaware Statutory Trust Act pursuant to the Original Trust Agreement and the filing of the Certificate of Trust, and continued pursuant to this Trust Agreement. 
 “Trust Agreement” means this Amended and Restated Trust Agreement, as the same may be modified, amended or supplemented from time to
time in accordance with the applicable provisions hereof, including the Schedule and Exhibits attached hereto (other than Exhibit D). 
 “Trust Indenture Act” means the Trust Indenture Act of 1939 or any successor statute thereto, in each case as amended from time to time. 
 “Trustees” means the Administrative Trustees, the Property Trustee and the Delaware Trustee, each as defined in this Article I. 
 “Trust Property” means (a) the Notes or, following an exchange of the Exchange Notes for the Notes pursuant to
Section 2.8, the Exchange Notes, (b) any cash on deposit in, or owing to, the Payment Account and (c) all proceeds and rights in respect of the foregoing and any other property and assets for the time being held or deemed to be
held by the Property Trustee pursuant to the trusts of this Trust Agreement. 
 “Trust Security” means any one of the Common
Securities or the Preferred Securities. 
 “Trust Securities” means the Common Securities and the Preferred Securities,
collectively. 
 ARTICLE II 
 THE
TRUST 
 Section 2.1. Name. 
 The trust continued hereby shall be known as “NovaStar Capital Trust I/B”, as such name may be modified from time to time by the Administrative Trustees following written notice to the Holders of Trust Securities and the other
Trustees, in which name the Trustees may conduct the business of the Trust, make and execute contracts and other instruments on behalf of the Trust and sue and be sued. 
  

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 Section 2.2. Office of the Delaware Trustee; Office of the Trust. 
 The address of the Delaware Trustee in the State of Delaware is White Clay Center, Route 273, Newark, DE 19711, Attention: Global Corporate Trust, or such
other address in the State of Delaware as the Delaware Trustee may designate by written notice to the Holders, the Depositor, the Property Trustee and the Administrative Trustees. The principal office of the Trust is c/o NovaStar Financial, Inc.,
2114 Central Street, Suite 600, Kansas City, MO 64108, Attention: Chief Executive Officer, as such address may be changed from time to time by the Administrative Trustees following written notice to the Holders and the other Trustees. 
 Section 2.3. Initial Contribution of Trust Property; Fees, Costs and Expenses. 
 The Property Trustee acknowledges receipt from the Depositor in connection with the Original Trust Agreement of the sum of ten dollars ($10), which
constituted the initial Trust Property. The Depositor shall pay all fees, costs and expenses of the Trust (except with respect to the Trust Securities) as they arise or shall, upon request of any Trustee, promptly reimburse such Trustee for any such
fees, costs and expenses paid by such Trustee. The Depositor shall make no claim upon the Trust Property for the payment of such fees, costs or expenses. 
 Section 2.4. Purposes of Trust. 
 (a) The exclusive purposes and functions of the Trust are to
(i) issue Trust Securities and acquire the Notes, (ii) make distributions as provided herein, (iii) enter into and perform its obligations under agreements, documents and instructions (including, without limitation, the Operative
Documents to which it is a party) relating to and/or necessary to accomplish (i) and (ii), and (iv) engage in only those activities necessary or incidental thereto. The Delaware Trustee, the Property Trustee and the Administrative Trustees
are trustees of the Trust, and have all the rights, powers and duties to the extent set forth herein. The Trustees hereby acknowledge that they are trustees of the Trust. 
 (b) So long as this Trust Agreement remains in effect, the Trust (or the Trustees acting on behalf of the Trust) shall not undertake any business, activities or transaction except as expressly provided herein or
contemplated hereby. In particular, the Trust (or the Trustees acting on behalf of the Trust) shall not (i) acquire any investments or engage in any activities not authorized by this Trust Agreement, (ii) sell, assign, transfer, exchange,
mortgage, pledge, set-off or otherwise dispose of any of the Trust Property or interests therein, including to Holders, except as expressly provided herein, (iii) incur any indebtedness for borrowed money or issue any other debt, (iv) take
or consent to any action that would result in the placement of a Lien on any of the Trust Property, (v) take or consent to any action that would reasonably be expected to cause the Trust to become taxable as a corporation or classified as other
than a grantor trust for United States federal income tax purposes, (vi) take or consent to any action that would cause the Notes to be treated as other than indebtedness of the Depositor for United States federal income tax purposes or
(vii) take or consent to any action that would cause the Trust to be deemed to be an “investment company” required to be registered under the Investment Company Act. 
  

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 Section 2.5. Authorization to Enter into Certain Transactions. 
 (a) The Trustees shall conduct the affairs of the Trust in accordance with and subject to the terms of this Trust Agreement. In accordance with the
following provisions (i) and (ii), the Trustees shall have the authority to enter into all transactions and agreements determined by the Trustees to be appropriate in exercising the authority, express or implied, otherwise granted to the
Trustees under this Trust Agreement, and to perform all acts in furtherance thereof, including the following: 
 (i) As among
the Trustees, each Administrative Trustee shall severally have the power and authority to act on behalf of the Trust with respect to the following matters: 
 (A) the issuance of the Trust Securities; 
 (B) to cause the Trust to enter into, and to
execute, deliver and perform on behalf of the Trust, such agreements, documents, instruments, certificates and other writings as may be necessary or desirable in connection with the purposes and function of the Trust, including, without limitation,
a common securities subscription agreement and a junior subordinated note subscription agreement and to cause the Trust to perform its obligations under the Existing Exchange Agreement executed by the Depositor on behalf of the Trust; 
 (C) assisting in the issuance of the Preferred Securities in one or more transactions exempt from registration under the Securities Act,
and in compliance with applicable state securities or blue sky laws; 
 (D) assisting in the sending of notices (other than
notices of default) and other information regarding the Trust Securities and the Notes to the Holders in accordance with this Trust Agreement; 
 (E) the appointment of a successor Paying Agent, Securities Registrar and Calculation Agent in accordance with this Trust Agreement; 
 (F) execution and delivery of the Trust Securities on behalf of the Trust in accordance with this Trust Agreement; 
 (G) execution and delivery of closing certificates, if any, pursuant to the Existing Exchange Agreement; 
 (H) preparation and filing of all applicable tax returns and tax information reports that are required to be filed on behalf of the Trust;

 (I) establishing a record date with respect to all actions to be taken hereunder that require a record date to be
established, except as provided in Section 6.10(a); 
  

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 (J) unless otherwise required by the Delaware Statutory Trust Act, to execute on behalf
of the Trust (either acting alone or together with the other Administrative Trustees) any documents and other writings that such Administrative Trustee has the power to execute pursuant to this Trust Agreement; 
 (K) the taking of any action incidental to the foregoing as such Administrative Trustee may from time to time reasonably determine is
necessary or advisable to give effect to the terms of this Trust Agreement; and 
 (L) application for a taxpayer
identification number for the Trust. 
 (ii) As among the Trustees, the Property Trustee shall have the power, duty and
authority to act on behalf of the Trust with respect to the following matters: 
 (A) the receipt and holding of legal title
of the Notes; 
 (B) the establishment of the Payment Account; 
 (C) the receipt of interest, principal and any other payments made in respect of the Notes and the holding of such amounts in the Payment
Account; 
 (D) the distribution through the Paying Agent of amounts distributable to the Holders in respect of the Trust
Securities; 
 (E) the exercise of all of the rights, powers and privileges of a holder of the Notes in accordance with the
terms of this Trust Agreement; 
 (F) the sending of notices of default and other information regarding the Trust Securities
and the Notes to the Holders in accordance with this Trust Agreement; 
 (G) the distribution of the Trust Property in
accordance with the terms of this Trust Agreement; 
 (H) to the extent provided in this Trust Agreement, the winding up of
the affairs of and liquidation of the Trust, provided that the Administrative Trustees shall have the power, duty and authority to act on behalf of the Trust with respect to the preparation, execution and filing of the certificate of cancellation of
the Trust with the Secretary of State of the State of Delaware; 
 (I) the approval of any agreement or other document
contemplated in connection with the exchange of the Exchange Notes for the Notes pursuant to Section 2.8 and the consummation of such exchange; and 
 (J) the taking of any action incidental to the foregoing as the Property Trustee may from time to time reasonably determine is necessary
or advisable to give effect to the terms of this Trust Agreement and protect and conserve the Trust Property for the benefit of the Holders (without consideration of the effect of any such action on any particular Holder). 
  

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 (b) In connection with the issuance of the Preferred Securities, the Depositor shall have the right and
responsibility to assist the Trust with respect to, or effect on behalf of the Trust, the following (and any actions taken by the Depositor in furtherance of the following prior to the date of this Trust Agreement are hereby ratified and confirmed
in all respects): 
 (i) the negotiation of the terms of, and the execution and delivery of, the Existing Exchange Agreement
providing for the issuance of the Preferred Securities in one or more transactions exempt from registration under the Securities Act, and in compliance with applicable state securities or blue sky laws; and 
 (ii) the taking of any other reasonable actions necessary or desirable to carry out any of the foregoing activities. 
 (c) Notwithstanding anything herein to the contrary, the Administrative Trustees are authorized and directed to conduct the affairs of the Trust and
authorized to operate the Trust so that the Trust will not be taxable as a corporation or classified as other than a grantor trust for United States federal income tax purposes, so that the Notes will be treated as indebtedness of the Depositor for
United States federal income tax purposes and so that the Trust will not be deemed to be an “investment company” required to be registered under the Investment Company Act. In respect thereof, each Administrative Trustee is authorized to
take any action, not inconsistent with applicable law, the Certificate of Trust or this Trust Agreement, that such Administrative Trustee determines in his or her discretion to be necessary or desirable for such purposes, as long as such action does
not adversely affect in any material respect the interests of the Holders of the Outstanding Preferred Securities. In no event shall the Administrative Trustees be liable to the Trust or the Holders for any failure to comply with this
Section 2.5 to the extent that such failure results solely from a change in law or regulation or in the interpretation thereof. 
 (d) Any action taken by a Trustee in accordance with his, her or its powers shall constitute the act of and serve to bind the Trust. In dealing with any Trustee acting on behalf of the Trust, no Person shall be required to inquire into the
authority of such Trustee to bind the Trust. Persons dealing with the Trust are entitled to rely conclusively on the power and authority of any Trustee as set forth in this Trust Agreement. 
 Section 2.6. Assets of Trust. 
 The assets of the Trust shall consist of the Trust Property. 
 Section 2.7. Title to Trust Property. 
 (a) Legal title to all Trust Property shall be vested at all times in the Property Trustee and shall be held and administered by the Property Trustee in
trust for the benefit of the Trust and the Holders in accordance with this Trust Agreement. 
 (b) The Holders shall not have any right or
title to the Trust Property other than the undivided beneficial interest in the assets of the Trust conferred by their Trust Securities and they shall have no right to call for any partition or division of property, profits or rights of the Trust
except as described below. The Trust Securities shall be personal property giving only the rights specifically set forth therein and in this Trust Agreement. 
  

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 SECTION 2.8 Optional Exchange of Exchange Notes for Notes. 
 The Exchange Note Issuer shall have the right to consummate an exchange of the Exchange Notes for the Notes, in whole but not in part, by giving notice
thereof to the Property Trustee not less than thirty (30) days prior to the specified date for such exchange, together with copies of the proposed Exchange Agreement, Exchange Note Indenture and Exchange Note required in connection with such
exchange, in each case marked to show any changes made from the respective required forms therefor. If the Property Trustee shall approve such changes, then the Exchange Note Issuer may exchange its Exchange Notes for the Notes by causing duly
executed and delivered copies of the Exchange Agreement, the Exchange Note Indenture and the Exchange Note in the approved respective forms thereof to be delivered to the Property Trustee on or before such specified exchange date and satisfying (or
causing to be satisfied) the conditions precedent to such exchange set forth in such Exchange Agreement. Upon the consummation of such exchange, all references herein to the “Notes” shall be deemed to include and to refer to the Exchange
Notes. 
 ARTICLE III 
 PAYMENT
ACCOUNT; PAYING AGENTS 
 Section 3.1. Payment Account. 
 (a) On or prior to the Exchange Date, the Property Trustee shall establish the Payment Account. The Property Trustee and the Paying Agent shall have
exclusive control and sole right of withdrawal with respect to the Payment Account for the purpose of making deposits in and withdrawals from the Payment Account in accordance with this Trust Agreement. All monies and other property deposited or
held from time to time in the Payment Account shall be held by the Property Trustee in the Payment Account for the exclusive benefit of the Holders and for Distribution as herein provided. 
 (b) The Property Trustee shall deposit in the Payment Account, promptly upon receipt, all payments of principal of, premium, if any, or interest on, and
any other payments with respect to, the Notes. Amounts held in the Payment Account shall not be invested by the Property Trustee pending distribution thereof. 
 Section 3.2. Appointment of Paying Agents. 
 The Property Trustee is hereby appointed as the
initial Paying Agent and the Property Trustee hereby accepts such appointment. The Paying Agent shall make Distributions to Holders from the Payment Account and shall report the amounts of such Distributions to the Property Trustee and the
Administrative Trustees. Any Paying Agent shall have the revocable power to withdraw funds from the Payment Account solely for the purpose of making the Distributions referred to above. The Administrative Trustees may revoke such power and remove
the Paying Agent in their sole discretion. Any Person acting as Paying Agent shall be permitted to resign as 

  

 17 

 
Paying Agent upon thirty (30) days’ written notice to the Administrative Trustees and the Property Trustee. If the Property Trustee shall no longer
be the Paying Agent or a successor Paying Agent shall resign or its authority to act be revoked, the Administrative Trustees shall appoint a successor (which shall be a bank or trust company) to act as Paying Agent. Such successor Paying Agent
appointed by the Administrative Trustees shall execute and deliver to the Trustees an instrument in which such successor Paying Agent shall agree with the Trustees that as Paying Agent, such successor Paying Agent will hold all sums, if any, held by
it for payment to the Holders in trust for the benefit of the Holders entitled thereto until such sums shall be paid to such Holders. The Paying Agent shall return all unclaimed funds to the Property Trustee and upon removal of a Paying Agent such
Paying Agent shall also return all funds in its possession to the Property Trustee. The provisions of Article VIII shall apply to the Property Trustee also in its role as Paying Agent, for so long as the Property Trustee shall act as Paying
Agent and, to the extent applicable, to any other Paying Agent appointed hereunder. Any reference in this Trust Agreement to the Paying Agent shall include any co-paying agent unless the context requires otherwise. 
 ARTICLE IV 
 DISTRIBUTIONS; OTHER PAYMENTS;
REDEMPTION 
 Section 4.1. Distributions; Payments of Liquidation Amount. 
 (a) The Trust Securities represent undivided beneficial interests in the Trust Property, and Distributions (including any Additional Interest Amounts)
will be made on the Trust Securities at the rate and on the dates that payments of interest (including any Additional Interest) are made on the Notes. Accordingly: 
 (i) Distributions on the Trust Securities shall be cumulative, and shall accumulate whether or not there are funds of the Trust available
for the payment of Distributions. Distributions shall accumulate from January 1, 2009, and, except as provided in clause (ii) below, shall be payable quarterly in arrears on March 30, June 30, September 30 and
December 30 of each year, commencing on the first such date after the Exchange Date. If any date on which a Distribution is otherwise payable on the Trust Securities is not a Business Day, then the payment of such Distribution shall be made on
the next succeeding Business Day (and no interest shall accrue in respect of the amounts whose payment is so delayed for the period from and after each such date until the next succeeding Business Day), except that, if such Business Day falls in the
next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case, with the same force and effect as if made on such date (each date on which Distributions are payable in accordance with this
Section 4.1(a)(i), a “Distribution Date”); and 
 (ii) Distributions shall accumulate in respect
of the Trust Securities at the following rates, such rate being the rate of interest payable on the Notes: 
 (A) Beginning as
of January 1, 2009 (the “Original Interest Accrual Date”) through December 31, 2009, at the rate of one percent (1.0%) per annum of the Liquidation Amount of the Trust Securities, unless an Interest Coverage Trigger
with 

  

 18 

 
respect to the quarter then just ended has occurred in which case the Distribution for the distribution period ending on the next succeeding Distribution
Date shall accrue at a variable rate equal to LIBOR plus 3.50% per annum of the Liquidation Amount of the Trust Securities; and 
 (B) Beginning January 1, 2010 until the earlier of (1) February 18, 2019 or (2) the occurrence of an Interest Coverage Trigger, at the rate of one percent (1.0%) per annum of the Liquidation Amount of the Trust
Securities and, thereafter, at a variable rate, reset quarterly, equal to LIBOR plus 3.50% per annum of the Liquidation Amount of the Trust Securities. LIBOR shall be determined by the Calculation Agent in accordance with Schedule A. The amount
of Distributions payable for any period less than a full Distribution period shall be computed on the basis of a 360-day year and the actual number of days elapsed in the relevant Distribution period. The amount of Distributions payable for any
period shall include any Additional Interest Amounts in respect of such period; and 
 (iii) Distributions on the Trust
Securities shall be made by the Paying Agent from the Payment Account and shall be payable on each Distribution Date only to the extent that the Trust has funds then on hand and available in the Payment Account for the payment of such Distributions.

 (b) Distributions on the Trust Securities with respect to a Distribution Date shall be payable to the Holders thereof as they appear on
the Securities Register for the Trust Securities at the close of business on the relevant record date, which shall be at the close of business on the fifteenth (15th) day (whether or not a Business Day) preceding the relevant Distribution Date.
Distributions payable on any Trust Securities that are not punctually paid on any Distribution Date as a result of the Depositor having failed to make an interest payment under the Notes will cease to be payable to the Person in whose name such
Trust Securities are registered on the relevant record date, and such defaulted Distributions and any Additional Interest Amounts will instead be payable to the Person in whose name such Trust Securities are registered on the special record date, or
other specified date for determining Holders entitled to such defaulted Distribution and Additional Interest Amount, established in the same manner, and on the same date, as such is established with respect to the Notes under the Indenture.

 (c) As a condition to the payment of any principal of or interest on the Trust Securities without the imposition of withholding tax, the
Administrative Trustees shall require the previous delivery of properly completed and signed applicable U.S. federal income tax certifications (generally, an Internal Revenue Service Form W-9 (or applicable successor form) in the case of a person
that is a “United States person” within the meaning of Section 7701(a)(30) of the Code or an Internal Revenue Service Form W-8 BEN (or applicable successor form) in the case of a person that is not a “United States person”
within the meaning of Section 7701(a)(30) of the Code) and any other certification acceptable to it to enable the Property Trustee or any Paying Agent to determine their respective duties and liabilities with respect to any taxes or other
charges that they may be required to pay, deduct or withhold in respect of such Trust Securities. 
  

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 Section 4.2. Redemption. 
 (a) On each Note Redemption Date and on the stated maturity (or any date of principal repayment upon early maturity) of the Notes and on each other date
on (or in respect of) which any principal on the Notes is repaid, the Trust will be required to redeem a Like Amount of Trust Securities at the Redemption Price. 
 (b) Notice of redemption shall be given by the Property Trustee by first-class mail, postage prepaid, mailed not less than thirty (30) nor more than sixty (60) days prior to the Redemption Date to each
Holder of Trust Securities to be redeemed, at such Holder’s address appearing in the Securities Register. All notices of redemption shall state: 
 (i) the Redemption Date; 
 (ii) the Redemption Price or, if the Redemption Price cannot be
calculated prior to the time the notice is required to be sent, the estimate of the Redemption Price provided pursuant to the Indenture, as calculated by the Depositor, together with a statement that it is an estimate and that the actual Redemption
Price will be calculated by the Calculation Agent on the fifth (5th) Business Day prior to the Redemption Date (and if an estimate is provided, a further notice shall be sent of the actual Redemption Price on the date that such Redemption Price
is calculated); 
 (iii) if less than all the Outstanding Trust Securities are to be redeemed, the identification (and, in the
case of partial redemption, the respective amounts) and Liquidation Amounts of the amount of and particular Trust Securities to be redeemed; 
 (iv) that on the Redemption Date, the Redemption Price will become due and payable upon each such Trust Security, or portion thereof, to be redeemed and that Distributions thereon will cease to accumulate on such
Trust Security or such portion, as the case may be, on and after said date, except as provided in Section 4.2(d); 
 (v) the place or places where the Trust Securities are to be surrendered for the payment of the Redemption Price; and 
 (vi) such other provisions as the Property Trustee deems relevant. 
 (c) The Trust Securities (or portion thereof) redeemed on each
Redemption Date shall be redeemed at the Redemption Price with the proceeds from the contemporaneous redemption or payment at maturity of Notes. Redemptions of the Trust Securities (or portion thereof) shall be made and the Redemption Price shall be
payable on each Redemption Date only to the extent that the Trust has funds then on hand and available in the Payment Account for the payment of such Redemption Price. Under the Indenture, the Notes may be redeemed by the Depositor on any Interest
Payment Date, at the Depositor’s option, on or after June 30, 2011, in whole or in part from time to time, at the Optional Note Redemption Price. The Notes may also be redeemed by the Depositor, at its option, pursuant to the terms of the
Indenture, in whole but not in part, upon the occurrence and during the continuation of an Investment Company Event or Tax Event, at the Special Note Redemption Price. 
  

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 (d) If the Property Trustee gives a notice of redemption in respect of any Preferred Securities, then by
10:00 A.M., New York City time, on the Redemption Date, the Depositor shall deposit sufficient funds with the Property Trustee to pay the Redemption Price. If such deposit has been made by such time, then by 12:00 noon, New York City time, on the
Redemption Date, the Property Trustee will, with respect to Book-Entry Preferred Securities, irrevocably deposit with the Depositary for such Book-Entry Preferred Securities, to the extent available therefor, funds sufficient to pay the applicable
Redemption Price and will give such Depositary irrevocable instructions and authority to pay the Redemption Price to the Holders of the Preferred Securities. With respect to Preferred Securities that are not Book-Entry Preferred Securities, the
Property Trustee will irrevocably deposit with the Paying Agent, to the extent available therefor, funds sufficient to pay the applicable Redemption Price and will give the Paying Agent irrevocable instructions and authority to pay the Redemption
Price to the Holders of the Preferred Securities upon surrender of their Preferred Securities Certificates. Notwithstanding the foregoing, Distributions payable on or prior to the Redemption Date for any Trust Securities (or portion thereof) called
for redemption shall be payable to the Holders of such Trust Securities as they appear on the Securities Register on the relevant record dates for the related Distribution Dates. If notice of redemption shall have been given and funds deposited as
required, then upon the date of such deposit, all rights of Holders holding Trust Securities (or portion thereof) so called for redemption will cease, except the right of such Holders to receive the Redemption Price and any Distribution payable in
respect of the Trust Securities on or prior to the Redemption Date, but without interest, and, in the case of a partial redemption, the right of such Holders to receive a new Trust Security or Securities of authorized denominations, in aggregate
Liquidation Amount equal to the unredeemed portion of such Trust Security or Securities, and such Trust Securities (or portion thereof) called for redemption will cease to be Outstanding. In the event that any date on which any Redemption Price is
payable is not a Business Day, then payment of the Redemption Price payable on such date will be made on the next succeeding Business Day (and no interest shall accrue in respect of the amounts whose payment is so delayed for the period from and
after each such date until the next succeeding Business Day), except that, if such Business Day falls in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case, with the same force and
effect as if made on such date. In the event that payment of the Redemption Price in respect of any Trust Securities (or portion thereof) called for redemption is improperly withheld or refused and not paid either by the Trust or by the Depositor,
Distributions on such Trust Securities (or portion thereof) will continue to accumulate, as set forth in Section 4.1, from the Redemption Date originally established by the Trust for such Trust Securities (or portion thereof) to the date
such Redemption Price is actually paid, in which case the actual payment date will be the date fixed for redemption for purposes of calculating the Redemption Price. 
 (e) Subject to Section 4.3(a), if less than all the Outstanding Trust Securities are to be redeemed on a Redemption Date, then the aggregate Liquidation Amount of the Trust Securities to be redeemed shall
be allocated pro rata to the Common Securities and the Preferred Securities based upon the relative aggregate Liquidation Amounts of the Common Securities and the Preferred Securities. The Preferred Securities to be redeemed shall be selected
on a pro rata basis based upon their respective Liquidation Amounts not more than sixty (60) days prior to the Redemption Date by the Property Trustee from the Outstanding Preferred Securities not previously called for redemption;
provided, that with respect to Holders that would be required to hold less than one hundred (100) but more than zero (0) Trust Securities as a result of such redemption, the Trust shall redeem Trust Securities of each such 

  

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Holder so that after such redemption such Holder shall hold either one hundred (100) Trust Securities or such Holder no longer holds any Trust
Securities, and shall use such method (including, without limitation, by lot) as the Trust shall deem fair and appropriate; and provided, further, that so long as the Preferred Securities are Book-Entry Preferred Securities, such
selection shall be made in accordance with the Applicable Depositary Procedures for the Preferred Securities held by such Depositary. The Property Trustee shall promptly notify the Securities Registrar in writing of the Preferred Securities (or
portion thereof) selected for redemption and, in the case of any Preferred Securities selected for partial redemption, the Liquidation Amount thereof to be redeemed. For all purposes of this Trust Agreement, unless the context otherwise requires,
all provisions relating to the redemption of Preferred Securities shall relate, in the case of any Preferred Securities redeemed or to be redeemed only in part, to the portion of the aggregate Liquidation Amount of Preferred Securities that has been
or is to be redeemed. 
 (f) The Trust in issuing the Trust Securities may use “CUSIP” numbers (if then generally in use), and, if
so, the Property Trustee shall indicate the “CUSIP” numbers of the Trust Securities in notices of redemption and related materials as a convenience to Holders; provided, that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Trust Securities or as contained in any notice of redemption and related materials. 
 Section 4.3. Subordination of Common Securities. 
 (a) Payment of Distributions (including any Additional Interest
Amounts) on, the Redemption Price of and the Liquidation Distribution in respect of, the Trust Securities, as applicable, shall be made, pro rata among the Common Securities and the Preferred Securities based on the Liquidation Amount of the
respective Trust Securities; provided, that if on any Distribution Date, Redemption Date or Liquidation Date an Event of Default shall have occurred and be continuing, no payment of any Distribution (including any Additional Interest Amounts)
on, Redemption Price of or Liquidation Distribution in respect of, any Common Security, and no other payment on account of the redemption, liquidation or other acquisition of Common Securities, shall be made unless payment in full in cash of all
accumulated and unpaid Distributions (including any Additional Interest Amounts) on all Outstanding Preferred Securities for all Distribution periods terminating on or prior thereto, or in the case of payment of the Redemption Price the full amount
of such Redemption Price on all Outstanding Preferred Securities then called for redemption, or in the case of payment of the Liquidation Distribution the full amount of such Liquidation Distribution on all Outstanding Preferred Securities, shall
have been made or provided for, and all funds immediately available to the Property Trustee shall first be applied to the payment in full in cash of all Distributions (including any Additional Interest Amounts) on, or the Redemption Price of or the
Liquidation Distribution in respect of, the Preferred Securities then due and payable. 
 (b) In the case of the occurrence of any Event of
Default, the Holders of the Common Securities shall have no right to act with respect to any such Event of Default under this Trust Agreement until all such Events of Default with respect to the Preferred Securities have been cured, waived or
otherwise eliminated. Until all such Events of Default under this Trust Agreement with respect to the Preferred Securities have been so cured, waived or otherwise eliminated, the Property Trustee shall act solely on behalf of the 

  

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Holders of the Preferred Securities and not on behalf of the Holders of the Common Securities, and only the Holders of all the Preferred Securities will have
the right to direct the Property Trustee to act on their behalf. 
 Section 4.4. Payment Procedures. 
 Payments of Distributions (including any Additional Interest Amounts), the Redemption Price, Liquidation Amount or any other amounts in respect of the
Preferred Securities shall be made by wire transfer at such place and to such account at a banking institution in the United States as may be designated in writing at least ten (10) Business Days prior to the date for payment by the Person
entitled thereto unless proper written transfer instructions have not been received by the relevant record date, in which case such payments shall be made by check mailed to the address of such Person as such address shall appear in the Securities
Register. If any Preferred Securities are held by a Depositary, such Distributions thereon shall be made to the Depositary in immediately available funds. Payments in respect of the Common Securities shall be made in such manner as shall be mutually
agreed between the Property Trustee and the Holder of all the Common Securities. 
 Section 4.5. Withholding Tax. 
 The Trust, the Property Trustee and the Administrative Trustees shall comply with all withholding and backup withholding tax requirements under United
States federal, state and local law. The Property Trustee and the Administrative Trustees on behalf of the Trust shall request, and the Holders shall provide to the Trust, such forms or certificates as are necessary to establish an exemption from
withholding and backup withholding tax with respect to each Holder and any representations and forms as shall reasonably be requested by the Property Trustee and the Administrative Trustees on behalf of the Trust to assist it in determining the
extent of, and in fulfilling, its withholding and backup withholding tax obligations. The Property Trustee and the Administrative Trustees shall file required forms with applicable jurisdictions and, unless an exemption from withholding and backup
withholding tax is properly established by a Holder, shall remit amounts withheld with respect to the Holder to applicable jurisdictions. To the extent that the Trust is required to withhold and pay over any amounts to any jurisdiction with respect
to Distributions or allocations to any Holder, the amount withheld shall be deemed to be a Distribution in the amount of the withholding to the Holder. In the event of any claimed overwithholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not withheld from actual Distributions made, the Property Trustee and the Administrative Trustees on behalf of the Trust may reduce subsequent Distributions by the amount of such
required withholding. 
 Section 4.6. Tax Returns and Other Reports. 
 The Administrative Trustees shall prepare (or cause to be prepared) at the principal office of the Trust in the United States, as defined for purposes of
Treasury regulations section 301.7701-7, at the Depositor’s expense, and file, all United States federal, state and local tax and information returns and reports required to be filed by or in respect of the Trust. The Administrative Trustees
shall prepare at the principal office of the Trust in the United States, as defined for purposes of Treasury regulations section 301.7701-7, and furnish (or cause to be prepared and furnished), by January 31 in each taxable year of the Trust to
each Holder all Internal 

  

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Revenue Service forms and returns required to be provided by the Trust. The Administrative Trustees shall provide the Depositor, the Existing TRUPS Holders
and the Property Trustee with a copy of all such returns and reports promptly after such filing or furnishing. 
 Section 4.7.
Payment of Taxes, Duties, Etc. of the Trust. 
 Upon receipt under the Notes of Additional Tax Sums and upon the written direction of
the Administrative Trustees, the Property Trustee shall promptly pay, solely out of monies on deposit pursuant to this Trust Agreement, any Additional Taxes imposed on the Trust by the United States or any other taxing authority. 
 Section 4.8. Payments under Indenture or Pursuant to Direct Actions. 
 Any amount payable hereunder to any Holder of Preferred Securities shall be reduced by the amount of any corresponding payment such Holder (or any Owner
with respect thereto) has directly received pursuant to Section 5.8 of the Indenture or Section 6.10(b) of this Trust Agreement. 
 Section 4.9. Exchanges. 
 (a) If at any time the Depositor or any of its Affiliates (in either case, a
“Depositor Affiliate”) is the Owner or Holder of any Preferred Securities, such Depositor Affiliate shall have the right to deliver to the Property Trustee all or such portion of its Preferred Securities as it elects and, subject to
compliance with Sections 2.2 and 3.5 of the Indenture, receive, in exchange therefor, a Like Amount of Notes. Such election shall be exercisable effective on any Distribution Date by such Depositor Affiliate delivering to the Property Trustee
(i) at least ten (10) Business Days prior to the Distribution Date on which such exchange is to occur, the registration instructions and the documentation, if any, required pursuant to Sections 2.2 and 3.5 of the Indenture to enable the
Indenture Trustee to issue the requested Like Amount of Notes, (ii) a written notice of such election specifying the Liquidation Amount of Preferred Securities with respect to which such election is being made and the Distribution Date on which
such exchange shall occur, which Distribution Date shall be not less than ten (10) Business Days after the date of receipt by the Property Trustee of such election notice and (iii) shall be conditioned upon such Depositor Affiliate having
delivered or caused to be delivered to the Property Trustee or its designee the Preferred Securities that are the subject of such election by 10:00 A.M. New York City time, on the Distribution Date on which such exchange is to occur. After the
exchange, such Preferred Securities will be canceled and will no longer be deemed to be Outstanding and all rights of the Depositor Affiliate with respect to such Preferred Securities will cease. 
 (b) In the case of an exchange described in Section 4.9(a), the Property Trustee on behalf of the Trust will, on the date of such exchange,
exchange Notes having a principal amount equal to a proportional amount of the aggregate Liquidation Amount of the Outstanding Common Securities, based on the ratio of the aggregate Liquidation Amount of the Preferred Securities exchanged pursuant
to Section 4.9(a) divided by the aggregate Liquidation Amount of the Preferred Securities Outstanding immediately prior to such exchange, for such proportional amount of Common Securities held by the Depositor (which contemporaneously
shall be 

  

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canceled and no longer be deemed to be Outstanding); provided, that the Depositor delivers or causes to be delivered to the Property Trustee or its
designee the required amount of Common Securities to be exchanged by 10:00 A.M. New York City time, on the Distribution Date on which such exchange is to occur. 
 Section 4.10. Calculation Agent. 
 (a) The Property Trustee shall initially, and, subject to the
immediately following sentence, for so long as it holds any of the Notes, be the Calculation Agent for purposes of determining LIBOR for each Distribution Date, as applicable. The Calculation Agent may be removed by the Administrative Trustees at
any time. If the Calculation Agent is unable or unwilling to act as such or is removed by the Administrative Trustees, the Administrative Trustees will promptly appoint as a replacement Calculation Agent the London office of a leading bank which is
engaged in transactions in six (6)-month Eurodollar deposits in the international Eurodollar market and which does not control or is not controlled by or under common control with the Administrative Trustee or its Affiliates. The Calculation Agent
may not resign its duties without a successor having been duly appointed. 
 (b) The Calculation Agent shall be required to agree, and the
Property Trustee as the initial Calculation Agent hereby agrees, that, as soon as possible after 11:00 A.M. (London time) on each LIBOR Determination Date, but in no event later than 11:00 A.M. (London time) on the Business Day immediately following
each LIBOR Determination Date, the Calculation Agent will calculate the interest rate (rounded to the nearest cent, with half a cent being rounded upwards) for the related Distribution Date, and will communicate such rate and amount to the
Depositor, the Administrative Trustees, the Note Trustee, the Property Trustee (if the Property Trustee is not the Calculation Agent), each Paying Agent and the Depositary. The Calculation Agent will also specify to the Administrative Trustees the
quotations upon which the foregoing rates and amounts, if applicable, are based and, in any event, the Calculation Agent shall notify the Administrative Trustees before 5:00 P.M. (London time) on each LIBOR Determination Date that either:
(i) it has determined or is in the process of determining the foregoing rates and amounts, if applicable, or (ii) it has not determined and is not in the process of determining the foregoing rates and amounts, if applicable, together with
its reasons therefor. The Calculation Agent’s determination of the foregoing rates and amounts, if applicable, for any Distribution Date will (in the absence of manifest error) be final and binding upon all parties. For the sole purpose of
calculating the interest rate for the Trust Securities, “Business Day” shall be defined as any day on which dealings in deposits in Dollars are transacted in the London interbank market. 
 Section 4.11. Certain Accounting Matters. 
 (a) At all times during the existence of the Trust, the Administrative Trustees shall keep, or cause to be kept at the principal office of the Trust in the United States, as defined for purposes of Treasury
Regulations section 301.7701-7, full books of account, records and supporting documents, which shall reflect in reasonable detail each transaction of the Trust. The books of account shall be maintained on the accrual method of accounting, in
accordance with U.S. generally accepted accounting principles, consistently applied. 
  

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 (b) The Administrative Trustees shall either (i) if the Depositor is then subject to such reporting
requirements, cause each Form 10-K and Form 10-Q prepared by the Depositor and filed with the Commission in accordance with the Exchange Act to be delivered to each Holder, with a copy to the Property Trustee, within thirty (30) days after the
filing thereof or (ii) cause to be prepared at the principal office of the Trust in the United States, as defined for purposes of Treasury Regulations section 301.7701-7, and delivered to each of the Holders, with a copy to the Property
Trustee, within ninety (90) days after the end of each Fiscal Year, annual financial statements of the Trust, including a balance sheet of the Trust as of the end of such Fiscal Year and the related statements of income or loss. 
 (c) If the Depositor intends to file its annual and quarterly information with the Commission in electronic form pursuant to Regulation S-T of the
Commission using the Commission’s Electronic Data Gathering, Analysis and Retrieval (“EDGAR”) system, the Administrative Trustees shall notify the Property Trustee in the manner prescribed herein of each such annual and quarterly
filing. The Property Trustee is hereby authorized and directed to access the EDGAR system for purposes of retrieving the financial information so filed. Compliance with the foregoing shall constitute delivery by the Administrative Trustees of its
financial statements to the Property Trustee in compliance with the provisions of Section 314(a) of the Trust Indenture Act, if applicable. The Property Trustee shall have no duty to search for or obtain any electronic or other filings that the
Depositor makes with the Commission, regardless of whether such filings are periodic, supplemental or otherwise. Delivery of reports, information and documents to the Property Trustee pursuant to this Section 4.11(c) shall be solely for
purposes of compliance with this Section 4.11 and, if applicable, with Section 314(a) of the Trust Indenture Act. The Property Trustee’s receipt of such reports, information and documents shall not constitute notice to it of the
content thereof or any matter determinable from the content thereof, including the compliance of the Depositor with any of its covenants hereunder, as to which the Property Trustee is entitled to rely upon Officers’ Certificates. 
 (d) The Trust shall maintain one or more bank accounts in the United States, as defined for purposes of Treasury Regulations section 301.7701-7, in the
name and for the sole benefit of the Trust; provided, however, that all payments of funds in respect of the Notes held by the Property Trustee shall be made directly to the Payment Account and no other funds of the Trust shall be
deposited in the Payment Account. The sole signatories for such accounts (including the Payment Account) shall be designated by the Property Trustee. 
 ARTICLE V 
 SECURITIES 
 Section 5.1. Initial Ownership. 
 Upon the creation of the Trust and the contribution by the
Depositor referred to in Section 2.3 and until the issuance of the Trust Securities, and at any time during which no Trust Securities are Outstanding, the Depositor shall be the sole beneficial owner of the Trust. 
  

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 Section 5.2. Authorized Trust Securities. 
 The Trust shall be authorized to issue one series of Preferred Securities having an aggregate Liquidation Amount of $50,000,000 and one series of Common
Securities having an aggregate Liquidation Amount of $1,550,000. 
 Section 5.3. Issuance of the Common Securities; Subscription and
Acquisition of Notes. 
 On the Exchange Date, an Administrative Trustee, on behalf of the Trust, shall execute and deliver to the
Depositor Common Securities Certificates, registered in the name of the Depositor, evidencing an aggregate of One Thousand Five Hundred Fifty (1,550) Common Securities having an aggregate Liquidation Amount of One Million Five Hundred Fifty
Thousand Dollars ($1,550,000). Contemporaneously therewith and following the receipt by the Depositor of all of the issued and outstanding Existing Preferred Securities, and issuance of an aggregate of Fifty Thousand (50,000) Preferred
Securities having an aggregate Liquidation Amount of Fifty Million Dollars ($50,000,000), an Administrative Trustee, on behalf of the Trust, shall acquire from the Depositor Notes to be registered in the name of the Property Trustee on behalf of the
Trust and having an aggregate principal amount equal to Fifty One Million Five Hundred Fifty Thousand Dollars ($51,550,000). 
 Section 5.4. The Securities Certificates. 
 (a) The Preferred Securities Certificates shall be issued in minimum
denominations of $100,000 Liquidation Amount and integral multiples of $1,000 in excess thereof, and the Common Securities Certificates shall be issued in minimum denominations of $10,000 Liquidation Amount and integral multiples of $1,000 in excess
thereof. The Securities Certificates shall be executed on behalf of the Trust by manual or facsimile signature of at least one Administrative Trustee. Securities Certificates bearing the signatures of individuals who were, at the time when such
signatures shall have been affixed, authorized to sign such Securities Certificates on behalf of the Trust shall be validly issued and entitled to the benefits of this Trust Agreement, notwithstanding that such individuals or any of them shall have
ceased to be so authorized prior to the delivery of such Securities Certificates or did not have such authority at the date of delivery of such Securities Certificates. 
 (b) On the Exchange Date, upon the written order of an authorized officer of the Depositor, the Administrative Trustees shall cause Securities Certificates to be executed on behalf of the Trust and delivered, without
further corporate action by the Depositor, in authorized denominations to the Escrow Agent pursuant to the Existing Exchange Agreement. 
 (c) The Preferred Securities issued to QIB/QPs may be, except as provided in Section 5.6, Book-Entry Preferred Securities issued in the form of one or more Global Preferred Securities registered in the name of the Depositary, or
its nominee and deposited with the Depositary or the Property Trustee as a custodian for the Depositary for credit by the Depositary to the respective accounts of the Depositary Participants thereof (or such other accounts as they may direct). The
Preferred Securities issued to a Person other than a QIB/QP shall be issued in the form of Definitive Preferred Securities Certificates. 
  

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 (d) A Preferred Security shall not be valid until authenticated by the manual signature of an authorized
signatory of the Property Trustee. Such signature shall be conclusive evidence that the Preferred Security has been authenticated under this Trust Agreement. Upon written order of the Trust signed by one Administrative Trustee, the Property Trustee
shall authenticate and deliver one or more Preferred Security Certificates evidencing the Preferred Securities for original issue. The Property Trustee may appoint an authenticating agent that is a U.S. Person acceptable to the Trust to authenticate
the Preferred Securities. A Common Security need not be so authenticated and shall be valid upon execution by one or more Administrative Trustees. The form of this certificate of authentication is specified in Section 5.13. 

(e) As of the Exchange Date and upon issuance of the Trust Securities as provided in this Trust Agreement and in the Existing Exchange Agreement, the
Trust Securities so issued shall be deemed to be validly issued, fully paid and nonassessable, and each Holder thereof shall be entitled to the benefits provided by this Trust Agreement. 
 Section 5.5. Rights of Holders. 
 The Trust Securities shall have no, and the issuance of the Trust Securities is not subject to, preemptive or similar rights and when issued and delivered to Holders will be fully paid and non-assessable by the Trust. Except as provided in
Section 5.11(b), the Holders of the Trust Securities, in their capacities as such, shall be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware as in effect from time to time. 
 Section 5.6. Book-Entry Preferred Securities.

 (a) A Global Preferred Security may be exchanged, in whole or in part, for Definitive Preferred Securities Certificates registered in the
names of the Owners only if such exchange complies with Section 5.7 and (i) the Depositary advises the Administrative Trustees and the Property Trustee in writing that the Depositary is no longer willing or able properly to
discharge its responsibilities with respect to the Global Preferred Security, and no qualified successor is appointed by the Administrative Trustees within ninety (90) days of receipt of such notice, (ii) the Depositary ceases to be a
clearing agency registered under the Exchange Act and the Administrative Trustees fail to appoint a qualified successor within ninety (90) days of obtaining knowledge of such event, (iii) the Administrative Trustees at their option advise
the Property Trustee in writing that the Trust elects to terminate the book-entry system through the Depositary or (iv) a Note Event of Default has occurred and is continuing. Upon the occurrence of any event specified in clause (i), (ii),
(iii) or (iv) above in this Section 5.6(a), the Administrative Trustees shall notify the Depositary and instruct the Depositary to notify all Owners of Book-Entry Preferred Securities, the Delaware Trustee and the Property
Trustee of the occurrence of such event and of the availability of the Definitive Preferred Securities Certificates to Owners of the Preferred Securities requesting the same. Upon the issuance of Definitive Preferred Securities Certificates, the
Trustees shall recognize the Holders of the Definitive Preferred Securities Certificates as Holders. Notwithstanding the foregoing, if an Owner of a beneficial interest in a Global Preferred Security wishes at any time to transfer an interest in
such Global Preferred Security to a Person other than a QIB/QP or an Existing TRUPS Holder, such transfer shall be effected, subject to the Applicable Depositary Procedures, in accordance with the provisions of 

  

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this Section 5.6 and Section 5.7, and the transferee shall receive a Definitive Preferred Securities Certificate in connection with
such transfer. A holder of a Definitive Preferred Securities Certificate that is a QIB/QP or an Existing TRUPS Holder may, upon request and in accordance with the provisions of this Section 5.6 and Section 5.7, exchange such
Definitive Preferred Securities Certificate for a beneficial interest in a Global Preferred Security. 
 (b) If any Global Preferred Security
is to be exchanged for Definitive Preferred Securities Certificates or canceled in part, or if any Definitive Preferred Securities Certificate is to be exchanged in whole or in part for any Global Preferred Security, then either (i) such Global
Preferred Security shall be so surrendered for exchange or cancellation as provided in this Article V or (ii) the aggregate Liquidation Amount represented by such Global Preferred Security shall be reduced, subject to
Section 5.4, or increased by an amount equal to the Liquidation Amount represented by that portion of the Global Preferred Security to be so exchanged or canceled, or equal to the Liquidation Amount represented by such Definitive
Preferred Securities Certificates to be so exchanged for any Global Preferred Security, as the case may be, by means of an appropriate adjustment made on the records of the Securities Registrar, whereupon the Property Trustee, in accordance with the
Applicable Depositary Procedures, shall instruct the Depositary or its authorized representative to make a corresponding adjustment to its records. Upon any such surrender to the Administrative Trustees or the Securities Registrar of any Global
Preferred Security or Securities by the Depositary, accompanied by registration instructions, the Administrative Trustees, or any one of them, shall execute the Definitive Preferred Securities Certificates in accordance with the instructions of the
Depositary and, the Property Trustee, upon receipt thereof and of a written order of the Trust executed by one Administrative Trustee, shall authenticate and deliver such Definitive Preferred Securities Certificates. None of the Securities Registrar
or the Trustees shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be fully protected in relying on, such instructions. 
 (c) Every Definitive Preferred Securities Certificate executed and delivered upon registration or transfer of, or in exchange for or in lieu of, a Global
Preferred Security or any portion thereof shall be executed and delivered in the form of, and shall be, a Global Preferred Security, unless such Preferred Securities Certificate is registered in the name of a Person other than the Depositary for
such Global Preferred Security or a nominee thereof. 
 (d) The Depositary or its nominee, as registered owner of a Global Preferred
Security, shall be the Holder of such Global Preferred Security for all purposes under this Trust Agreement and the Global Preferred Security, and Owners with respect to a Global Preferred Security shall hold such interests pursuant to the
Applicable Depositary Procedures. The Securities Registrar and the Trustees shall be entitled to deal with the Depositary for all purposes of this Trust Agreement relating to the Global Preferred Securities (including the payment of the Liquidation
Amount of and Distributions on the Book-Entry Preferred Securities represented thereby and the giving of instructions or directions by Owners of Book-Entry Preferred Securities represented thereby and the giving of notices) as the sole Holder of the
Book-Entry Preferred Securities represented thereby and shall have no obligations to the Owners thereof. None of the Trustees nor the Securities Registrar shall have any liability in respect of any transfers effected by the Depositary. 

 

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 (e) The rights of the Owners of the Book-Entry Preferred Securities shall be exercised only through the
Depositary and shall be limited to those established by law, the Applicable Depositary Procedures and agreements between such Owners and the Depositary and/or the Depositary Participants; provided, that solely for the purpose of determining
whether the Holders of the requisite amount of Preferred Securities have voted on any matter provided for in this Trust Agreement, to the extent that Preferred Securities are represented by a Global Preferred Security, the Trustees may conclusively
rely on, and shall be fully protected in relying on, any written instrument (including a proxy) delivered to the Property Trustee by the Depositary or a Depositary Participant setting forth the Owners’ votes or assigning the right to vote on
any matter to any other Persons either in whole or in part. To the extent that Preferred Securities are represented by a Global Preferred Security, the initial Depositary will make book-entry transfers among the Depositary Participants and receive
and transmit payments on the Preferred Securities that are represented by a Global Preferred Security to such Depositary Participants, and none of the Depositor or the Trustees shall have any responsibility or obligation with respect thereto.

 (f) To the extent that a notice or other communication to the Holders is required under this Trust Agreement, for so long as Preferred
Securities are represented by a Global Preferred Security, the Trustees shall give all such notices and communications to the Depositary, and shall have no obligations to the Owners. 
 Section 5.7. Registration of Transfer and Exchange of Preferred Securities Certificates. 
 (a) The Property Trustee shall keep or cause to be kept, at the Corporate Trust Office, a register or registers (the “Securities
Register”) in which the registrar and transfer agent with respect to the Trust Securities (the “Securities Registrar”), subject to such reasonable regulations as it may prescribe, shall provide for the registration of
Preferred Securities Certificates and Common Securities Certificates and registration of transfers and exchanges of Preferred Securities Certificates as herein provided. The Person acting as the Property Trustee shall at all times also be the
Securities Registrar. The provisions of Article VIII shall apply to the Property Trustee in its role as Securities Registrar. 
 (b)
Subject to Section 5.7(d), upon surrender for registration of transfer of any Preferred Securities Certificate at the office or agency maintained pursuant to Section 5.7(f), the Administrative Trustees or any one of them
shall execute by manual or facsimile signature and deliver to the Property Trustee, and upon receipt thereof the Property Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Preferred
Securities Certificates in authorized denominations of a like aggregate Liquidation Amount as may be required by this Trust Agreement dated the date of execution by such Administrative Trustee or Trustees. At the option of a Holder, Preferred
Securities Certificates may be exchanged for other Preferred Securities Certificates in authorized denominations and of a like aggregate Liquidation Amount upon surrender of the Preferred Securities Certificate to be exchanged at the office or
agency maintained pursuant to Section 5.7(f). Whenever any Preferred Securities Certificates are so surrendered for exchange, the Administrative Trustees or any one of them shall execute by manual or facsimile signature and deliver to
the Property Trustee, and upon receipt thereof the Property Trustee shall authenticate and deliver, the Preferred Securities Certificates that the Holder making the exchange is entitled to receive. 
  

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 (c) The Securities Registrar shall not be required (i) to issue, register the transfer of or
exchange any Preferred Security during a period beginning at the opening of business fifteen (15) days before the day of selection for redemption of such Preferred Securities pursuant to Article IV and ending at the close of business on
the day of mailing of the notice of redemption or (ii) to register the transfer of or exchange any Preferred Security so selected for redemption in whole or in part, except, in the case of any such Preferred Security to be redeemed in part, any
portion thereof not to be redeemed. 
 (d) Every Preferred Securities Certificate presented or surrendered for registration of transfer or
exchange shall be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Securities Registrar duly executed by the Holder or such Holder’s attorney duly authorized in writing and accompanied by a
certificate of the transferee substantially in the form set forth as Exhibit E attached hereto. 
 (e) No service charge shall be made
for any registration of transfer or exchange of Preferred Securities Certificates, but the Property Trustee on behalf of the Trust may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with
any transfer or exchange of Preferred Securities Certificates. 
 (f) The Administrative Trustees shall designate an office or offices or
agency or agencies where Preferred Securities Certificates may be surrendered for registration of transfer or exchange and initially designate the Corporate Trust Office of the Property Trustee as the office and agency for such purposes. The
Administrative Trustees shall give prompt written notice to the Depositor, the Property Trustee and to the Holders of any change in the location of any such office or agency. 
 (g) The Preferred Securities may only be transferred to a “Qualified Purchaser” as such term is defined in Section 2(a)(51) of the
Investment Company Act. 
 Neither the Property Trustee nor the Securities Registrar shall be responsible for ascertaining whether any
transfer hereunder complies with the registration provisions of or any exemptions from the Securities Act, applicable state securities laws or the applicable laws of any other jurisdiction, ERISA, the Code or the Investment Company Act;
provided, that if a certificate of the transferee is specifically required by the express terms of this Section 5.7 to be delivered to the Property Trustee or the Securities Registrar by a Holder or transferee of a Preferred
Security, the Property Trustee and the Securities Registrar shall be under a duty to receive and examine the same to determine whether such certificate substantially conforms on its face to the requirements of this Trust Agreement and shall promptly
notify the party delivering the same if such certificate does not comply with such terms. 
 Section 5.8. Mutilated, Destroyed, Lost
or Stolen Securities Certificates. 
 (a) If any mutilated Securities Certificate shall be surrendered to the Securities Registrar
together with such security or indemnity as may be required by the Securities Registrar to save each of the Trustees harmless, then, the Administrative Trustees, or any one of them, on behalf of the Trust, shall execute and make available for
delivery and, with respect to Preferred Securities, the Property Trustee shall authenticate, in exchange therefor a new Securities Certificate of like class, tenor and denomination. 
  

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 (b) If the Securities Registrar shall receive evidence to its satisfaction of the destruction, loss or
theft of any Securities Certificate and there shall have been delivered to the Securities Registrar such security or indemnity as may be required by it to save each of the Trustees harmless, then in the absence of notice that such Securities
Certificate shall have been acquired by a bona fide purchaser, the Administrative Trustees, or any one of them, on behalf of the Trust, shall execute and make available for delivery, and, with respect to Preferred Securities, the Property Trustee
upon the written order of the Trust executed by one Administrative Trustee shall authenticate, in exchange for or in lieu of any such destroyed, lost or stolen Securities Certificate, a new Securities Certificate of like class, tenor and
denomination. 
 (c) In connection with the issuance of any new Securities Certificate under this Section 5.8, the Administrative
Trustees or the Securities Registrar may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith. 
 (d) Any duplicate Securities Certificate issued pursuant to this Section 5.8 shall constitute conclusive evidence of an undivided beneficial
interest in the assets of the Trust corresponding to that evidenced by the mutilated, lost, stolen or destroyed Securities Certificate, as if originally issued, whether or not the lost, stolen or destroyed Securities Certificate shall be found at
any time. 
 (e) If any such mutilated, destroyed, lost or stolen Securities Certificate has become or is about to become due and payable,
the Depositor in its discretion may provide the Administrative Trustee with the funds to pay such Trust Security and upon receipt of such funds, the Administrative Trustee, shall pay such Trust Security instead of issuing a new Securities
Certificate. 
 (f) The provisions of this Section 5.8 are exclusive and shall preclude (to the extent lawful) all other rights
and remedies with respect to the replacement of mutilated, destroyed, lost or stolen Securities Certificates. 
 Section 5.9. Persons
Deemed Holders. 
 The Trustees and the Securities Registrar shall each treat the Person in whose name any Securities Certificate shall be
registered in the Securities Register as the Holder of the Trust Securities represented by such Securities Certificate for the purpose of receiving Distributions and for all other purposes whatsoever, and none of the Trustees and the Securities
Registrar shall be bound by any notice to the contrary. 
 Section 5.10. Cancellation. 
 All Preferred Securities Certificates surrendered for registration of transfer or exchange or for payment shall, if surrendered to any Person other than
the Property Trustee, be delivered to the Property Trustee, and any such Preferred Securities Certificates and Preferred Securities Certificates surrendered directly to the Property Trustee for any such purpose shall be promptly canceled 

  

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by the Property Trustee. The Administrative Trustees may at any time deliver to the Property Trustee for cancellation any Preferred Securities Certificates
previously delivered hereunder that the Administrative Trustees may have acquired in any manner whatsoever, and all Preferred Securities Certificates so delivered shall be promptly canceled by the Property Trustee. No Preferred Securities
Certificates shall be executed and delivered in lieu of or in exchange for any Preferred Securities Certificates canceled as provided in this Section 5.10, except as expressly permitted by this Trust Agreement. All canceled Preferred
Securities Certificates shall be retained by the Property Trustee in accordance with its customary practices. 
 Section 5.11.
Ownership of Common Securities by Depositor. 
 (a) On the Exchange Date, the Depositor shall acquire, and thereafter shall retain,
beneficial and record ownership of the Common Securities. Neither the Depositor nor any successor Holder of the Common Securities may transfer less than all of the Common Securities, and the Depositor or any such successor Holder may transfer the
Common Securities only (i) in connection with a consolidation or merger of the Depositor into another Person, or any conveyance, transfer or lease by the Depositor of its properties and assets substantially as an entirety to any Person (in
which event such Common Securities will be transferred to such surviving entity, transferee or lessee, as the case may be), pursuant to Section 8.1 of the Indenture or (ii) to the Depositor or an Affiliate of the Depositor, in each such
case in compliance with applicable law (including the Securities Act and applicable state securities and blue sky laws). To the fullest extent permitted by law, any attempted transfer of the Common Securities other than as set forth in the
immediately preceding sentence shall be void. The Administrative Trustees shall cause each Common Securities Certificate issued to the Depositor to contain a legend stating substantially “THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT IN
COMPLIANCE WITH APPLICABLE LAW AND SECTION 5.11 OF THE TRUST AGREEMENT.” 
 (b) Any Holder of the Common Securities shall be liable for
the debts and obligations of the Trust in the manner and to the extent set forth herein with respect to the Depositor and agrees that it shall be subject to all liabilities to which the Depositor may be subject and, prior to becoming such a Holder,
shall deliver to the Administrative Trustees an instrument of assumption satisfactory to such Trustees. 
 Section 5.12. Restrictive
Legends. 
 (a) Each Preferred Security Certificate shall bear a legend in substantially the following form: 
 “[IF THIS SECURITY IS A GLOBAL SECURITY INSERT: THIS PREFERRED SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE TRUST AGREEMENT
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY (“DTC”) OR A NOMINEE OF DTC. THIS PREFERRED SECURITY IS EXCHANGEABLE FOR PREFERRED SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR
ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE TRUST AGREEMENT, AND NO TRANSFER OF THIS PREFERRED SECURITY (OTHER 

  

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THAN A TRANSFER OF THIS PREFERRED SECURITY AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC) MAY BE
REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES. 
 UNLESS THIS PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO
NOVASTAR CAPITAL TRUST I/B OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY PREFERRED SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.] 
 THE PREFERRED SECURITIES REPRESENTED BY THIS CERTIFICATE WERE
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND SUCH PREFERRED SECURITIES OR ANY INTEREST THEREIN, MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF ANY PREFERRED SECURITIES IS HEREBY NOTIFIED THAT THE SELLER OF THE PREFERRED SECURITIES MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A UNDER THE SECURITIES ACT. 
 THE HOLDER OF THE PREFERRED SECURITIES REPRESENTED BY THIS
CERTIFICATE AGREES FOR THE BENEFIT OF THE TRUST AND THE DEPOSITOR THAT (A) SUCH PREFERRED SECURITIES MAY BE OFFERED, RESOLD OR OTHERWISE TRANSFERRED ONLY (I) TO THE TRUST OR (II) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
“QUALIFIED PURCHASER” (AS DEFINED IN SECTION 2(a)(51) OF THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED), AND (B) THE HOLDER WILL NOTIFY ANY PURCHASER OF ANY PREFERRED SECURITIES FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN
(A) ABOVE. 
 THE PREFERRED SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING AN AGGREGATE LIQUIDATION AMOUNT OF NOT
LESS THAN $100,000. TO THE FULLEST EXTENT PERMITTED BY LAW, ANY ATTEMPTED TRANSFER OF PREFERRED SECURITIES, OR ANY INTEREST THEREIN, IN A BLOCK HAVING AN AGGREGATE LIQUIDATION AMOUNT OF LESS THAN $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF
SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. TO THE FULLEST EXTENT PERMITTED BY LAW, ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE 

  

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THE HOLDER OF SUCH PREFERRED SECURITIES FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF THE LIQUIDATION AMOUNT OF OR DISTRIBUTIONS ON SUCH
PREFERRED SECURITIES, OR ANY INTEREST THEREIN, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH PREFERRED SECURITIES. 
 THE PREFERRED SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE PROVISIONS OF AN AMENDED AND RESTATED TRUST AGREEMENT OF NOVASTAR CAPITAL TRUST I/B DATED FEBRUARY 18, 2009 (A COPY OF WHICH IS ON FILE WITH
THE SECRETARY OF THE DEPOSITOR) AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH THE PROVISIONS OF SUCH TRUST AGREEMENT. THE HOLDER OF THIS PREFERRED SECURITY, OR ANY INTEREST
THEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT PLAN, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974, AS AMENDED (“ERISA”), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) (EACH A “PLAN”), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN
ASSETS” BY REASON OF ANY PLAN’S INVESTMENT IN THE ENTITY, AND NO PERSON INVESTING “PLAN ASSETS” OF ANY PLAN MAY ACQUIRE OR HOLD THIS PREFERRED SECURITY OR ANY INTEREST THEREIN. ANY PURCHASER OR HOLDER OF THE PREFERRED
SECURITIES OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE IS APPLICABLE,
A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE.” 
 (b) The above legend shall not be removed from any of the Preferred Securities Certificates unless there is delivered to the Property Trustee and the
Depositor satisfactory evidence, which may include an opinion of counsel, as may be reasonably required to ensure that any future transfers thereof may be made without restriction under or violation of the provisions of the Securities Act and other
applicable law. Upon provision of such satisfactory evidence, one or more of the Administrative Trustees on behalf of the Trust shall execute and deliver to the Property Trustee, and the Property Trustee shall authenticate and deliver, at the
written direction of the Administrative Trustees and the Depositor, Preferred Securities Certificates that do not bear the legend. 
  

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 Section 5.13. Form of Certificate of Authentication. 
 The Property Trustee’s certificate of authentication shall be in substantially the following form: 
 This is one of the Preferred Securities referred to in the within-mentioned Trust Agreement. 
  

					
	Dated:	  	THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION, not in its individual capacity, but solely as Property Trustee
			
		  	By:	  	  

		  	Name:	  	  

		  	Title:	  	Authorized signatory

 ARTICLE VI 
 MEETINGS; VOTING; ACTS OF HOLDERS 
 Section 6.1. Notice of Meetings. 
 Notice of all meetings of the Holders of the Preferred Securities, stating the time, place and purpose of the meeting, shall be given by the Property
Trustee pursuant to Section 10.8 to each Holder of Preferred Securities, at such Holder’s registered address, at least fifteen (15) days and not more than ninety (90) days before the meeting. At any such meeting, any
business properly before the meeting may be so considered whether or not stated in the notice of the meeting. Any adjourned meeting may be held as adjourned without further notice. 
 Section 6.2. Meetings of Holders of the Preferred Securities. 
 (a) No annual meeting of Holders is required to be held. The Property Trustee, however, shall call a meeting of the Holders of the Preferred Securities to vote on any matter upon the written request of the Holders of
at least twenty-five percent (25%) in aggregate Liquidation Amount of the Outstanding Preferred Securities and the Administrative Trustees or the Property Trustee may, at any time in their discretion, call a meeting of the Holders of the
Preferred Securities to vote on any matters as to which such Holders are entitled to vote. 
 (b) The Holders of at least a Majority in
Liquidation Amount of the Preferred Securities, present in person or by proxy, shall constitute a quorum at any meeting of the Holders of the Preferred Securities. 
 (c) If a quorum is present at a meeting, an affirmative vote by the Holders present, in person or by proxy, holding Preferred Securities representing at least a Majority in Liquidation Amount of the Preferred
Securities held by the Holders present, either in person or by proxy, at such meeting shall constitute the action of the Holders of the Preferred Securities, unless this Trust Agreement requires a lesser or greater number of affirmative votes.

  

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 Section 6.3. Voting Rights. 
 Holders shall be entitled to one vote for each $10,000 of Liquidation Amount represented by their Outstanding Trust Securities in respect of any matter as
to which such Holders are entitled to vote. 
 Section 6.4. Proxies, Etc. 
 At any meeting of Holders, any Holder entitled to vote thereat may vote by proxy; provided, that no proxy shall be voted at any meeting unless it
shall have been placed on file with the Administrative Trustees, or with such other officer or agent of the Trust as the Administrative Trustees may direct, for verification prior to the time at which such vote shall be taken. Pursuant to a
resolution of the Property Trustee, proxies may be solicited in the name of the Property Trustee or one or more officers of the Property Trustee. Only Holders of record shall be entitled to vote. When Trust Securities are held jointly by several
Persons, any one of them may vote at any meeting in person or by proxy in respect of such Trust Securities, but if more than one of them shall be present at such meeting in person or by proxy, and such joint owners or their proxies so present
disagree as to any vote to be cast, such vote shall not be received in respect of such Trust Securities. A proxy purporting to be executed by or on behalf of a Holder shall be deemed valid unless challenged at or prior to its exercise, and the
burden of proving invalidity shall rest on the challenger. No proxy shall be valid more than three (3) years after its date of execution. 
 Section 6.5. Holder Action by Written Consent. 
 Any action that may be taken by Holders of Preferred Securities at a
meeting may be taken without a meeting and without prior notice if Holders holding at least a Majority in Liquidation Amount of all Preferred Securities entitled to vote in respect of such action (or such lesser or greater proportion thereof as
shall be required by any other provision of this Trust Agreement) shall consent to the action in writing; provided, that notice of such action is promptly provided to the Holders of Preferred Securities that did not consent to such action.
Any action that may be taken by the Holders of all the Common Securities may be taken without a meeting and without prior notice if such Holders shall consent to the action in writing. 
 Section 6.6. Record Date for Voting and Other Purposes. 
 Except as provided in Section 6.10(a), for the purposes of determining the Holders who are entitled to notice of and to vote at any meeting or to act by written consent, or to participate in any
distribution on the Trust Securities in respect of which a record date is not otherwise provided for in this Trust Agreement, or for the purpose of any other action, the Administrative Trustees may from time to time fix a date, not more than ninety
(90) days prior to the date of any meeting of Holders or the payment of a Distribution or other action, as the case may be, as a record date for the determination of the identity of the Holders of record for such purposes. 
  

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 Section 6.7. Acts of Holders. 
 (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Trust Agreement to be given, made
or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent thereof duly appointed in writing; and, except as otherwise expressly provided herein,
such action shall become effective when such instrument or instruments are delivered to an Administrative Trustee. A Depositary that is a Holder of a Global Preferred Security may provide its proxy or proxies to the beneficial owners of interests in
any such Global Preferred Security through such Depositary’s standing instructions and customary practices. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the
“Act” of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Trust Agreement and conclusive in favor of
the Trustees, if made in the manner provided in this Section 6.7. 
 (b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such
instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than such signer’s individual capacity, such certificate or affidavit shall also constitute sufficient proof of such
signer’s authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner that any Trustee receiving the same deems sufficient.

 (c) The ownership of Trust Securities shall be proved by the Securities Register. 
 (d) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Trust Security shall bind every future
Holder of the same Trust Security and the Holder of every Trust Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustees, the
Administrative Trustees or the Trust in reliance thereon, whether or not notation of such action is made upon such Trust Security. 
 (e)
Without limiting the foregoing, a Holder entitled hereunder to take any action hereunder with regard to any particular Trust Security may do so with regard to all or any part of the Liquidation Amount of such Trust Security or by one or more duly
appointed agents each of which may do so pursuant to such appointment with regard to all or any part of such Liquidation Amount. 
 (f) If
any dispute shall arise among the Holders or the Trustees with respect to the authenticity, validity or binding nature of any request, demand, authorization, direction, notice, consent, waiver or other Act of such Holder or Trustee under this
Article VI, then the determination of such matter by the Property Trustee shall be conclusive with respect to such matter. 
  

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 Section 6.8. Inspection of Records. 
 Upon reasonable written notice to the Administrative Trustees and the Property Trustee, the records of the Trust shall be open to inspection by any Holder
during normal business hours for any purpose reasonably related to such Holder’s interest as a Holder. 
 Section 6.9.
Limitations on Voting Rights. 
 (a) Except as expressly provided in this Trust Agreement and in the Indenture and as otherwise
required by law, no Holder of Preferred Securities shall have any right to vote or in any manner otherwise control the administration, operation and management of the Trust or the obligations of the parties hereto, nor shall anything herein set
forth, or contained in the terms of the Securities Certificates, be construed so as to constitute the Holders from time to time as partners or members of an association. 
 (b) So long as any Notes are held by the Property Trustee on behalf of the Trust, the Property Trustee shall not (i) direct the time, method and place of conducting any proceeding for any remedy available to the
Note Trustee, or exercise any trust or power conferred on the Property Trustee with respect to the Notes, (ii) waive any past default that may be waived under Section 5.13 of the Indenture or waive compliance with any covenant or condition
under Section 10.7 of the Indenture, (iii) exercise any right to rescind or annul a declaration that the principal of all the Notes shall be due and payable or (iv) consent to any amendment, modification or termination of the
Indenture or the Notes, where such consent shall be required, without, in each case, obtaining the prior approval of the Holders of at least a Majority in Liquidation Amount of the Preferred Securities; provided, that where a consent under
the Indenture would require the consent of each holder of Notes (or each Holder of Preferred Securities) affected thereby, no such consent shall be given by the Property Trustee without the prior written consent of each such Holder of Preferred
Securities. The Property Trustee shall not revoke any action previously authorized or approved by a vote of the Holders of the Preferred Securities, except by a subsequent vote of the Holders of the Preferred Securities. In addition to obtaining the
foregoing approvals of the Holders of the Preferred Securities, prior to taking any of the foregoing actions, the Property Trustee shall, at the expense of the Depositor, obtain an Opinion of Counsel experienced in such matters to the effect that
such action shall not cause the Trust to be taxable as a corporation or classified as other than a grantor trust for United States federal income tax purposes. 
 (c) If any proposed amendment to the Trust Agreement provides for, or the Trustees otherwise propose to effect, (i) any action that would adversely affect in any material respect the powers, preferences or
special rights of the Preferred Securities, whether by way of amendment to this Trust Agreement or otherwise or (ii) the dissolution, winding-up or termination of the Trust, other than pursuant to the terms of this Trust Agreement, then the
Holders of Outstanding Preferred Securities as a class will be entitled to vote on such amendment or proposal and such amendment or proposal shall not be effective except with the approval of the Holders of at least a Majority in Liquidation Amount
of the Preferred Securities. Notwithstanding any other provision of this Trust Agreement, no amendment to this Trust Agreement may be made if, as a result of such amendment, it would cause the Trust to be taxable as a corporation or classified as
other than a grantor trust for United States federal income tax purposes. 
  

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 Section 6.10. Acceleration of Maturity; Rescission of Annulment; Waivers of Past Defaults.

 (a) For so long as any Preferred Securities remain Outstanding, if, upon a Note Event of Default, the Note Trustee fails or the holders of
not less than twenty-five percent (25%) in principal amount of the outstanding Notes fail to declare the principal of all of the Notes to be immediately due and payable, the Holders of at least twenty-five percent (25%) in Liquidation
Amount of the Preferred Securities then Outstanding shall have the right to make such declaration by a notice in writing to the Property Trustee, the Depositor and the Note Trustee. At any time after a declaration of acceleration with respect to the
Notes has been made and before a judgment or decree for payment of the money due has been obtained by the Note Trustee as provided in the Indenture, the Holders of at least a Majority in Liquidation Amount of the Preferred Securities, by written
notice to the Property Trustee, the Depositor and the Note Trustee, may rescind and annul such declaration and its consequences if: 
 (i) the Depositor has paid or deposited with the Note Trustee a sum sufficient to pay: 
 (A) all overdue
installments of interest on all of the Notes; 
 (B) any accrued Additional Interest on all of the Notes; 
 (C) the principal of and any premium, if any, on any Notes that have become due otherwise than by such declaration of acceleration and
interest and Additional Interest thereon at the rate borne by the Notes; and 
 (D) all sums paid or advanced by the Note
Trustee under the Indenture and the reasonable compensation, expenses, disbursements and advances of the Note Trustee, the Property Trustee and their agents and counsel; and 
 (ii) all Note Events of Default, other than the non-payment of the principal of the Notes that has become due solely by such acceleration,
have been cured or waived as provided in Section 5.13 of the Indenture. 
 Upon receipt by the Property Trustee of written notice
requesting such an acceleration, or rescission and annulment thereof, by Holders of any part of the Preferred Securities, a record date shall be established for determining Holders of Outstanding Preferred Securities entitled to join in such notice,
which record date shall be at the close of business on the day the Property Trustee receives such notice. The Holders of Preferred Securities on such record date, or their duly designated proxies, and only such Persons, shall be entitled to join in
such notice, whether or not such Holders remain Holders after such record date; provided, that, unless such declaration of acceleration, or rescission and annulment, as the case may be, shall have become effective by virtue of the requisite
percentage having joined in such notice prior to the day that is ninety (90) days after such record date, such notice of declaration of acceleration, or rescission and annulment, as the case may be, shall automatically and without further
action by any Holder be canceled and of no further effect. Nothing in this paragraph shall prevent a Holder, or a proxy of a Holder, from giving, after expiration of such ninety (90)-day period, a new written notice of declaration of acceleration,
or rescission and annulment thereof, as the case may be, that is identical to a written notice that has been canceled pursuant to the proviso to the immediately preceding sentence, in which event a new record date shall be established pursuant to
the provisions of this Section 6.10(a). 
  

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 (b) For so long as any Preferred Securities remain Outstanding, to the fullest extent permitted by law
and subject to the terms of this Trust Agreement and the Indenture, upon a Note Event of Default specified in paragraph (a) or (b) of Section 5.1 of the Indenture, any Holder of Preferred Securities shall have the right to institute a
proceeding directly against the Depositor, pursuant to Section 5.8 of the Indenture, for enforcement of payment to such Holder of any amounts payable in respect of Notes having an aggregate principal amount equal to the aggregate Liquidation
Amount of the Preferred Securities of such Holder. Except as set forth in Section 6.10(a) and this Section 6.10(b), the Holders of Preferred Securities shall have no right to exercise directly any right or remedy available to
the holders of, or in respect of, the Notes. 
 (c) Notwithstanding paragraphs (a) and (b) of this Section 6.10, the
Holders of at least a Majority in Liquidation Amount of the Preferred Securities may, on behalf of the Holders of all the Preferred Securities, waive any Note Event of Default, except any Note Event of Default arising from the failure to pay any
principal of, premium, if any, or interest on (including any Additional Interest) the Notes (unless such Note Event of Default has been cured and a sum sufficient to pay all matured installments of interest and all principal and premium, if any, on
all Notes due otherwise than by acceleration has been deposited with the Note Trustee) or a Note Event of Default in respect of a covenant or provision that under the Indenture cannot be modified or amended without the consent of the holder of each
outstanding Note. Upon any such waiver, such Note Event of Default shall cease to exist and any Note Event of Default arising therefrom shall be deemed to have been cured for every purpose of the Indenture; but no such waiver shall affect any
subsequent Note Event of Default or impair any right consequent thereon. 
 (d) Notwithstanding paragraphs (a) and (b) of this
Section 6.10, the Holders of at least a Majority in Liquidation Amount of the Preferred Securities may, on behalf of the Holders of all the Preferred Securities, waive any past Event of Default and its consequences, except any Event of
Default which is attributable to a Note Event of Default which may not be waived pursuant to paragraph (c) of this Section 6.10. Upon such waiver, any such Event of Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this Trust Agreement, but no such waiver shall extend to any subsequent or other Event of Default or impair any right consequent thereon. 
 (e) The Holders of a Majority in Liquidation Amount of the Preferred Securities shall have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Property Trustee in respect of this Trust Agreement or the Notes or exercising any trust or power conferred upon the Property Trustee under this Trust Agreement; provided, that, subject to
Sections 8.5 and 8.7, the Property Trustee shall have the right to decline to follow any such direction if the Property Trustee being advised by counsel determines that the action so directed may not lawfully be taken, or if the
Property Trustee in good faith shall, by an officer or officers of the Property Trustee, determine that the proceedings so directed would be illegal or involve it in personal liability or be unduly prejudicial to the rights of Holders not party to
such direction; provided, further, that nothing in this Trust Agreement shall impair the right of the Property Trustee to take any action deemed proper by the Property Trustee and which is not inconsistent with such direction.

  

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 ARTICLE VII 
 REPRESENTATIONS AND WARRANTIES 
 Section 7.1. Representations and Warranties of the Property Trustee
and the Delaware Trustee. 
 The Property Trustee and the Delaware Trustee, each severally on behalf of and as to itself, hereby
represents and warrants for the benefit of the Depositor and the Holders on the Execution Date and the Exchange Date that: 
 (a) the Property Trustee is a national banking association, duly organized and validly existing under the laws of the United States; 
 (b) the Property Trustee has full corporate power, authority and legal right to execute, deliver and perform its obligations under this Trust Agreement and has taken all necessary action to authorize the execution,
delivery and performance by it of this Trust Agreement; 
 (c) the Delaware Trustee is a Delaware banking corporation, duly
formed and validly existing under the laws of the State of Delaware; 
 (d) the Delaware Trustee has full corporate power,
authority and legal right to execute, deliver and perform its obligations under this Trust Agreement and has taken all necessary action to authorize the execution, delivery and performance by it of this Trust Agreement; 
 (e) this Trust Agreement has been duly authorized, executed and delivered by the Property Trustee and the Delaware Trustee and constitutes
the legal, valid and binding agreement of each of the Property Trustee and the Delaware Trustee enforceable against each of them in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws affecting creditors’ rights generally and to general principles of equity; 
 (f) the
execution, delivery and performance of this Trust Agreement have been duly authorized by all necessary corporate or other action on the part of the Property Trustee and the Delaware Trustee and do not require any approval of stockholders of the
Property Trustee and the Delaware Trustee and such execution, delivery and performance will not (i) violate the Restated Organization Certificate or Articles of Association or By-laws of the Property Trustee or the Delaware Trustee,
(ii) violate any provision of, or constitute, with or without notice or lapse of time, a default under, or result in the imposition of any lien on any properties included in the Trust Property pursuant to the provisions of any indenture,
mortgage, credit agreement, license or other agreement or instrument to which the Property Trustee or the Delaware Trustee is a party or by which it is bound, or (iii) violate any applicable law, governmental rule or regulation of the United
States or the State of Delaware, as the case may be, governing the banking, trust or general powers of the Property Trustee or the Delaware Trustee or any order, judgment or decree applicable to the Property Trustee or the Delaware Trustee;

  

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 (g) neither the authorization, execution or delivery by the Property Trustee or the
Delaware Trustee of this Trust Agreement nor the consummation of any of the transactions by the Property Trustee or the Delaware Trustee contemplated herein requires the consent or approval of, the giving of notice to, the registration with or the
taking of any other action with respect to any governmental authority or agency under any existing law of the United States or the State of Delaware governing the banking, trust or general powers of the Property Trustee or the Delaware Trustee, as
the case may be; and 
 (h) to the best of each of the Property Trustee’s and the Delaware Trustee’s knowledge,
there are no proceedings pending or threatened against or affecting the Property Trustee or the Delaware Trustee in any court or before any governmental authority, agency or arbitration board or tribunal that, individually or in the aggregate, would
materially and adversely affect the Trust or would question the right, power and authority of the Property Trustee or the Delaware Trustee, as the case may be, to enter into or perform its obligations as one of the Trustees under this Trust
Agreement. 
 Section 7.2. Representations and Warranties of Depositor. 
 The Depositor hereby represents and warrants for the benefit of the Holders and the Trustees on the Execution Date and the Exchange Date that: 

(a) the Depositor is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation;

 (b) upon approval of this Trust Agreement and the other Operative Documents by the United States Bankruptcy Court for the
District of Delaware (the “Bankruptcy Court”), the Depositor will have full corporate power, authority and legal right to execute, deliver and perform its obligations under this Trust Agreement and will have taken all necessary
action to authorize the execution, delivery and performance by it of this Trust Agreement; 
 (c) this Trust Agreement has
been duly authorized, executed and delivered by the Depositor and, upon approval of this Trust Agreement and the other Operative Documents by the Bankruptcy Court, will constitute the legal, valid and binding agreement of the Depositor enforceable
against the Depositor in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and to general principles of equity; 
 (d) upon approval of this Trust Agreement and the other Operative Documents by the Bankruptcy Court, the Securities Certificates issued at
the Exchange Date on behalf of the Trust will have been duly authorized and will have been duly and validly executed, issued and delivered by the applicable Trustees pursuant to the terms and provisions of, and in accordance with the requirements
of, this Trust Agreement and the Existing Exchange Agreement and the Holders will be, as of the Exchange Date (as defined in the Existing Exchange Agreement), entitled to the benefits of this Trust Agreement; 
  

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 (e) upon approval of this Trust Agreement and the other Operative Documents by the
Bankruptcy Court, the execution, delivery and performance of this Trust Agreement will have been duly authorized by all necessary corporate or other action on the part of the Depositor and will not require any approval of stockholders of the
Depositor and such execution, delivery and performance will not (i) violate the certificate or articles of incorporation or by-laws (or other organizational documents) of the Depositor or (ii) violate any applicable law, governmental rule
or regulation governing the Depositor or any material portion of its property or any order, judgment or decree applicable to the Depositor or any material portion of its property 
 (f) neither the authorization, execution or delivery by the Depositor of this Trust Agreement nor the consummation of any of the
transactions by the Depositor contemplated herein requires the consent or approval of, the giving of notice to, the registration with or the taking of any other action with respect to any governmental authority or agency under any existing law
governing the Depositor or any material portion of its property other than the approval of the Bankruptcy Court; and 
 (g)
there are no proceedings pending or, to the best of the Depositor’s knowledge, threatened against or affecting the Depositor or any material portion of its property in any court or before any governmental authority, agency or arbitration board
or tribunal that, individually or in the aggregate, would materially and adversely affect the Trust or would question the right, power and authority of the Depositor, as the case may be, to enter into or perform its obligations under this Agreement,
other than the proceedings pending before the Bankruptcy Court on the date hereof. 
 ARTICLE VIII 
 THE TRUSTEES 
 Section 8.1. Number of
Trustees. 
 The number of Trustees shall be five (5); provided, that the Property Trustee and the Delaware Trustee may be the same
Person, in which case the number of Trustees shall be four (4). The number of Trustees may be increased or decreased by Act of the Holder of the Common Securities subject to Sections 8.2, 8.3, and 8.4. The death, resignation,
retirement, removal, bankruptcy, incompetence or incapacity to perform the duties of a Trustee shall not operate to annul, dissolve or terminate the Trust. 
 Section 8.2. Property Trustee Required. 
 There shall at all times be a Property Trustee
hereunder with respect to the Trust Securities. The Property Trustee shall be a corporation or national banking association organized and doing business under the laws of the United States or of any state thereof, authorized to exercise corporate
trust powers, having a combined capital and surplus of at least fifty million dollars ($50,000,000), 

  

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subject to supervision or examination by federal or state authority and having an office within the United States. If any such Person publishes reports of
condition at least annually pursuant to law or to the requirements of its supervising or examining authority, then for the purposes of this Section 8.2, the combined capital and surplus of such Person shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so published. If at any time the Property Trustee shall cease to be eligible in accordance with the provisions of this Section 8.2, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article VIII. 
 Section 8.3. Delaware Trustee Required.

 (a) If required by the Delaware Statutory Trust Act, there shall at all times be a Delaware Trustee with respect to the Trust Securities.
The Delaware Trustee shall either be (i) a natural person who is at least 21 years of age and a resident of the State of Delaware or (ii) a legal entity that has its principal place of business in the State of Delaware, otherwise meets the
requirements of applicable Delaware law and shall act through one or more persons authorized to bind such entity. If at any time the Delaware Trustee shall cease to be eligible in accordance with the provisions of this Section 8.3, it
shall resign immediately in the manner and with the effect hereinafter specified in this Article VIII. The Delaware Trustee shall have the same rights, privileges and immunities as the Property Trustee. 
 (b) The Delaware Trustee shall not be entitled to exercise any powers, nor shall the Delaware Trustee have any of the duties and responsibilities, of the
Property Trustee or the Administrative Trustees set forth herein. The Delaware Trustee shall be one of the trustees of the Trust for the sole and limited purpose of fulfilling the requirements of Section 3807 of the Delaware Statutory Trust Act
and for taking such actions as are required to be taken by a Delaware trustee under the Delaware Statutory Trust Act. The duties (including fiduciary duties), liabilities and obligations of the Delaware Trustee shall be limited to (a) accepting
legal process served on the Trust in the State of Delaware and (b) the execution of any certificates required to be filed with the Secretary of State of the State of Delaware that the Delaware Trustee is required to execute under
Section 3811 of the Delaware Statutory Trust Act and there shall be no other duties (including fiduciary duties) or obligations, express or implied, at law or in equity, of the Delaware Trustee. 
 Section 8.4. Appointment of Administrative Trustees. 
 (a) There shall at all times be one or more Administrative Trustees hereunder with respect to the Trust Securities. Each Administrative Trustee shall be either a natural person who is at least 21 years of age or a
legal entity that shall act through one or more persons authorized to bind that entity. Each of the individuals identified as an “Administrative Trustee” in the preamble of this Trust Agreement hereby accepts his or her appointment as
such. 
 (b) Except where a requirement for action by a specific number of Administrative Trustees is expressly set forth in this Trust
Agreement, any act required or permitted to be taken by, and any power of the Administrative Trustees may be exercised by, or with the consent of, any one such Administrative Trustee. Whenever a vacancy in the offices of the Administrative Trustees
shall occur, until such vacancy is filled by the appointment of an Administrative Trustee in accordance with Section 8.11, the Administrative 

  

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Trustees in office, regardless of their number (and notwithstanding any other provision of this Trust Agreement), shall have all the powers granted to the
Administrative Trustees and shall discharge all the duties imposed upon the Administrative Trustees by this Trust Agreement. 
 Section 8.5. Duties and Responsibilities of the Trustees. 
 (a) The rights, immunities, duties and responsibilities of
the Trustees shall be as provided by this Trust Agreement and there shall be no other duties (including fiduciary duties) or obligations, express or implied, at law or in equity, of the Trustees; provided, however, that if an
Event of Default known to the Property Trustee has occurred and is continuing, the Property Trustee shall, prior to the receipt of directions, if any, from the Holders of at least a Majority in Liquidation Amount of the Preferred Securities,
exercise such of the rights and powers vested in it by this Trust Agreement, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own
affairs. Notwithstanding the foregoing, no provision of this Trust Agreement shall require any of the Trustees to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the
exercise of any of its or their rights or powers, if it or they shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. Whether or not herein
expressly so provided, every provision of this Trust Agreement relating to the conduct or affecting the liability of or affording protection to the Trustees shall be subject to the provisions of this Section 8.5. Nothing in this Trust
Agreement shall be construed to release any Administrative Trustee from liability for his or her own negligent action, negligent failure to act or his or her own willful misconduct. To the extent that, at law or in equity, a Trustee has duties and
liabilities relating to the Trust or to the Holders, such Trustee shall not be liable to the Trust or to any Holder for such Trustee’s good faith reliance on the provisions of this Trust Agreement. The provisions of this Trust Agreement, to the
extent that they restrict the duties and liabilities of the Trustees otherwise existing at law or in equity, are agreed by the Depositor and the Holders to replace such other duties and liabilities of the Trustees. 
 (b) All payments made by the Property Trustee or a Paying Agent in respect of the Trust Securities shall be made only from the revenue and proceeds from
the Trust Property and only to the extent that there shall be sufficient revenue or proceeds from the Trust Property to enable the Property Trustee or a Paying Agent to make payments in accordance with the terms hereof. Each Holder, by its
acceptance of a Trust Security, agrees that it will look solely to the revenue and proceeds from the Trust Property to the extent legally available for distribution to it as herein provided and that the Trustees are not personally liable to it for
any amount distributable in respect of any Trust Security or for any other liability in respect of any Trust Security. This Section 8.5(b) does not limit the liability of the Trustees expressly set forth elsewhere in this Trust
Agreement. 
 (c) No provisions of this Trust Agreement shall be construed to relieve the Property Trustee from liability with respect to
matters that are within the authority of the Property Trustee under this Trust Agreement for its own negligent action, negligent failure to act or willful misconduct, except that: 
 (i) the Property Trustee shall not be liable for any error or judgment made in good faith by an authorized officer of the Property
Trustee, unless it shall be proved that the Property Trustee was negligent in ascertaining the pertinent facts; 
  

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 (ii) the Property Trustee shall not be liable with respect to any action taken or omitted
to be taken by it in good faith in accordance with the direction of the Holders of at least a Majority in Liquidation Amount of the Preferred Securities relating to the time, method and place of conducting any proceeding for any remedy available to
the Property Trustee hereunder or under the Indenture, or exercising any trust or power conferred upon the Property Trustee under this Trust Agreement; 
 (iii) the Property Trustee’s sole duty with respect to the custody, safe keeping and physical preservation of the Notes and the Payment Account shall be to deal with such Trust Property in a similar manner as the
Property Trustee deals with similar property for its own account, subject to the protections and limitations on liability afforded to the Property Trustee under this Trust Agreement; 
 (iv) the Property Trustee shall not be liable for any interest on any money received by it except as it may otherwise agree in writing
with the Depositor; and money held by the Property Trustee need not be segregated from other funds held by it except in relation to the Payment Account maintained by the Property Trustee pursuant to Section 3.1 and except to the extent
otherwise required by law; and 
 (v) the Property Trustee shall not be responsible for monitoring the compliance by the
Administrative Trustees or the Depositor with their respective duties under this Trust Agreement, or for monitoring the compliance by the parties to the Existing Exchange Agreement with their respective duties under the Existing Exchange Agreement,
nor shall the Property Trustee be liable for the default or misconduct of any other Trustee or the Depositor. 
 Section 8.6. Notices
of Defaults and Extensions. 
 (a) Within ninety (90) days after the occurrence of a default actually known to the Property Trustee,
the Property Trustee shall transmit notice of such default to the Holders, the Administrative Trustees and the Depositor, unless such default shall have been cured or waived. For the purpose of this Section 8.6, the term
“default” means any event that is, or after notice or lapse of time or both would become, an Event of Default. 
 (b) The
Property Trustee shall not be deemed to have knowledge of any default or Event of Default unless either (i) a Responsible Officer of the Property Trustee shall have actual knowledge or (ii) the Property Trustee shall have received written
notice thereof from the Depositor, any Administrative Trustee or a Holder. 
 (c) The Property Trustee shall notify all Holders of the
Preferred Securities of any notice of default received with respect to the Notes. 
  

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 Section 8.7. Certain Rights of Property Trustee. 
 Subject to the provisions of Section 8.5: 
 (a) the Property Trustee may conclusively rely and shall be protected in acting or refraining from acting in good faith and in accordance with the terms hereof upon any resolution, Opinion of Counsel, Officers’
Certificate or other certificate, written representation of a Holder or transferee, certificate of auditors or any other resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, appraisal, bond,
debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; 
 (b) if (i) in performing its duties under this Trust Agreement the Property Trustee is required to decide between alternative courses
of action, (ii) in construing any of the provisions of this Trust Agreement the Property Trustee finds a provision ambiguous or inconsistent with any other provisions contained herein or (iii) the Property Trustee is unsure of the
application of any provision of this Trust Agreement, then, except as to any matter as to which the Holders of the Preferred Securities are entitled to vote under the terms of this Trust Agreement, the Property Trustee shall deliver written notice
to the Depositor requesting the Depositor’s written instruction as to the course of action to be taken and the Property Trustee shall take such action, or refrain from taking such action, as the Property Trustee shall be instructed in writing
to take, or to refrain from taking, by the Depositor; provided, that if the Property Trustee does not receive such instructions of the Depositor within ten (10) Business Days after it has delivered such notice or such reasonably shorter
period of time set forth in such notice, the Property Trustee may, but shall be under no duty to, take such action, or refrain from taking such action, as the Property Trustee shall deem advisable and in the best interests of the Holders, in which
event the Property Trustee shall have no liability except for its own negligence, bad faith or willful misconduct; 
 (c) any
direction or act of the Depositor contemplated by this Trust Agreement shall be sufficiently evidenced by an Officers’ Certificate unless otherwise expressly provided herein; 
 (d) any direction or act of an Administrative Trustee contemplated by this Trust Agreement shall be sufficiently evidenced by a
certificate executed by such Administrative Trustee and setting forth such direction or act; 
 (e) the Property Trustee shall
have no duty to see to any recording, filing or registration of any instrument (including any financing or continuation statement or any filing under tax or securities laws) or any re-recording, re-filing or re-registration thereof; 
 (f) the Property Trustee may consult with counsel (which counsel may be counsel to the Property Trustee, the Depositor or any of its
Affiliates, and may include any of its employees) and the advice of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance 

  

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thereon and in accordance with such advice; the Property Trustee shall have the right at any time to seek instructions concerning the administration of this
Trust Agreement from any court of competent jurisdiction; 
 (g) the Property Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Trust Agreement at the request or direction of any of the Holders pursuant to this Trust Agreement, unless such Holders shall have offered to the Property Trustee reasonable security or indemnity
against the costs, expenses (including reasonable attorneys’ fees and expenses) and liabilities that might be incurred by it in compliance with such request or direction, including reasonable advances as may be requested by the Property
Trustee; provided, however, that nothing contained in this Section 8.7(g) shall be construed to relieve the Property Trustee, upon the occurrence of an Event of Default (of which the Property Trustee has knowledge (as
provided in Section 8.6(b)), of its obligation to exercise the rights and powers vested in it by this Trust Agreement; provided, further, that nothing contained in this Section 8.7(g) shall prevent the Property
Trustee from exercising its rights under Section 8.11 hereof; 
 (h) the Property Trustee shall not be bound to
make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, approval, bond, debenture, note or other evidence of indebtedness or other
paper or document, unless requested in writing to do so by one or more Holders, but the Property Trustee may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Property Trustee shall determine to
make such inquiry or investigation, it shall be entitled to examine the books, records and premises of the Depositor, personally or by agent or attorney; 
 (i) the Property Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through its agents, attorneys, custodians or nominees and the Property Trustee shall
not be responsible for any negligence or misconduct on the part of any such agent, attorney, custodian or nominee appointed with due care by it hereunder; 
 (j) whenever in the administration of this Trust Agreement the Property Trustee shall deem it desirable to receive instructions with respect to enforcing any remedy or right hereunder, the Property Trustee
(i) may request instructions from the Holders (which instructions may only be given by the Holders of the same proportion in Liquidation Amount of the Trust Securities as would be entitled to direct the Property Trustee under this Trust
Agreement in respect of such remedy, right or action), (ii) may refrain from enforcing such remedy or right or taking such other action until such instructions are received and (iii) shall be protected in acting in accordance with such
instructions; 
 (k) except as otherwise expressly provided by this Trust Agreement, the Property Trustee shall not be under
any obligation to take any action that is discretionary under the provisions of this Trust Agreement; 
  

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 (l) without prejudice to any other rights available to the Property Trustee under
applicable law, when the Property Trustee incurs expenses or renders services in connection with a Bankruptcy Event, such expenses (including legal fees and expenses of its agents and counsel) and the compensation for such services are intended to
constitute expenses of administration under any bankruptcy law or law relating to creditors rights generally; and 
 (m)
whenever in the administration of this Trust Agreement the Property Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Property Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on its part, request and rely on an Officers’ Certificate which, upon receipt of such request, shall be promptly delivered by the Depositor. 
 No provision of this Trust Agreement shall be deemed to impose any duty or obligation on any Trustee to perform any act or acts or exercise any right,
power, duty or obligation conferred or imposed on it, in any jurisdiction in which it shall be illegal, or in which such Person shall be unqualified or incompetent in accordance with applicable law, to perform any such act or acts, or to exercise
any such right, power, duty or obligation. 
 Section 8.8. Delegation of Power. 
 Any Trustee may, by power of attorney consistent with applicable law, delegate to any other natural person over the age of 21 its, his or her power for
the purpose of executing any documents contemplated in Section 2.5. The Trustees shall have power to delegate from time to time to such of their number or to the Depositor the doing of such things and the execution of such instruments
either in the name of the Trust or the names of the Trustees or otherwise as the Trustees may deem expedient, to the extent such delegation is not prohibited by applicable law or contrary to the provisions of this Trust Agreement. 
 Section 8.9. May Hold Securities. 
 Any Trustee or any other agent of any Trustee or the Trust, in its individual or any other capacity, may become the owner or pledgee of Trust Securities and except as provided in the definition of the term “Outstanding” in
Article I, may otherwise deal with the Trust with the same rights it would have if it were not a Trustee or such other agent. 
 Section 8.10. Compensation; Reimbursement; Indemnity. 
 The Depositor agrees: 
 (a) to pay to the Trustees from time to time such reasonable compensation for all services rendered by them hereunder as may be agreed by
the Depositor and the Trustees from time to time (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); 
 (b) to reimburse the Trustees upon request for all reasonable expenses, disbursements and advances incurred or made by the Trustees in
accordance with any provision of this Trust Agreement (including the reasonable compensation and the expenses and disbursements of their agents and counsel), except any such expense, disbursement or advance as may be attributable to their gross
negligence, bad faith or willful misconduct; and 
  

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 (c) to the fullest extent permitted by applicable law, to indemnify and hold harmless
(i) each Trustee, (ii) any Affiliate of any Trustee, (iii) any officer, director, shareholder, employee, representative or agent of any Trustee or any Affiliate of any Trustee and (iv) any employee or agent of the Trust (referred
to herein as an “Indemnified Person”) from and against any loss, damage, liability, tax (other than income, franchise or other taxes imposed on amounts paid pursuant to Section 8.10(a) or (b) hereof),
penalty, expense or claim of any kind or nature whatsoever incurred without negligence, bad faith or willful misconduct on its part, arising out of or in connection with the acceptance or administration of the Trust hereunder, including the
advancement of funds to cover the reasonable costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. 
 The Trust shall have no payment, reimbursement or indemnity obligations to the Trustees under this Section 8.10. The provisions of this
Section 8.10 shall survive the termination of this Trust Agreement and the earlier removal or resignation of any Trustee. 
 No
Trustee may claim any Lien on any Trust Property whether before or after termination of the Trust as a result of any amount due pursuant to this Section 8.10. 
 To the fullest extent permitted by law, in no event shall the Property Trustee and the Delaware Trustee be liable for any indirect, special, punitive or consequential loss or damage of any kind whatsoever, including,
but not limited to, lost profits, even if such Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action. 
 In no event shall the Property Trustee or the Delaware Trustee be liable for any failure or delay in the performance of its obligations hereunder because of circumstances beyond its control, including, but not limited
to, acts of God, flood, war (whether declared or undeclared), terrorism, fire, riot, embargo, government action, including any laws, ordinances, regulations, governmental action or the like which delay, restrict or prohibit the providing of the
services contemplated by this Trust Agreement. 
 Section 8.11. Resignation and Removal; Appointment of Successor. 
 (a) Except as set forth in Section 8.4, no resignation or removal of any Trustee and no appointment of a successor Trustee pursuant to this
Article VIII shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 8.12. 
 (b) A Trustee may resign at any time by giving written notice thereof to the Depositor and, in the case of the Property Trustee and the Delaware Trustee,
to the Holders. 
  

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 (c) Unless an Event of Default shall have occurred and be continuing, the Property Trustee or the
Delaware Trustee, or both of them, may be removed (with or without cause) at any time by Act of the Holder of Common Securities. If an Event of Default shall have occurred and be continuing, the Property Trustee or the Delaware Trustee, or both of
them, may be removed (with or without cause) at such time by Act of the Holders of at least a Majority in Liquidation Amount of the Preferred Securities, delivered to the removed Trustee (in its individual capacity and on behalf of the Trust). An
Administrative Trustee may be removed (with or without cause) only by Act of the Holder of the Common Securities at any time. 
 (d) If any
Trustee shall resign, be removed or become incapable of acting as Trustee, or if a vacancy shall occur in the office of any Trustee for any reason, at a time when no Event of Default shall have occurred and be continuing, the Holder of the Common
Securities, by Act of the Holder of the Common Securities, shall promptly appoint a successor Trustee or Trustees, and such successor Trustee and the retiring Trustee shall comply with the applicable requirements of Section 8.12. If the
Property Trustee or the Delaware Trustee shall resign, be removed or become incapable of continuing to act as the Property Trustee or the Delaware Trustee, as the case may be, at a time when an Event of Default shall have occurred and be continuing,
the Holders of the Preferred Securities, by Act of the Holders of a Majority in Liquidation Amount of the Preferred Securities, shall promptly appoint a successor Property Trustee or Delaware Trustee, as applicable, and such successor Property
Trustee or Delaware Trustee and the retiring Property Trustee or Delaware Trustee shall comply with the applicable requirements of Section 8.12. Except as set forth in Section 8.4, if an Administrative Trustee shall resign,
be removed or become incapable of acting as Administrative Trustee, at a time when an Event of Default shall have occurred and be continuing, the Holder of the Common Securities by Act of the Holder of Common Securities shall promptly appoint a
successor Administrative Trustee and such successor Administrative Trustee and the retiring Administrative Trustee shall comply with the applicable requirements of Section 8.12. If no successor Trustee shall have been so appointed by the
Holder of the Common Securities or Holders of the Preferred Securities, as the case may be, and accepted appointment in the manner required by Section 8.12 within thirty (30) days after the giving of a notice of resignation by a
Trustee, the removal of a Trustee, or a Trustee becoming incapable of acting as such Trustee, any Holder who has been a Holder of Preferred Securities for at least six (6) months may, on behalf of himself, herself or itself and all others
similarly situated, and any resigning Trustee may, in each case, at the expense of the Depositor, petition any court of competent jurisdiction for the appointment of a successor Trustee. 
 (e) The Depositor shall give notice of each resignation and each removal of the Property Trustee or the Delaware Trustee and each appointment of a
successor Property Trustee or Delaware Trustee to all Holders in the manner provided in Section 10.8. Each notice shall include the name of the successor Property Trustee or Delaware Trustee and the address of its Corporate Trust Office
if it is the Property Trustee. 
 (f) Notwithstanding the foregoing or any other provision of this Trust Agreement, in the event any
Administrative Trustee or a Delaware Trustee who is a natural person dies or becomes, in the opinion of the Holder of Common Securities, incompetent or incapacitated, the vacancy created by such death, incompetence or incapacity may be filled by
(i) the unanimous act of the remaining Administrative Trustees if there are at least two (2) of them or (ii) otherwise by the Holder of the Common Securities (with the successor in each case being a Person who satisfies the
eligibility requirement for Administrative Trustees or Delaware Trustee, as the case may be, set forth in Sections 8.3 and 8.4). 
  

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 (g) Upon the appointment of a successor Delaware Trustee, such successor Delaware Trustee shall file a
Certificate of Amendment to the Certificate of Trust with the Secretary of State of the State of Delaware in accordance with Section 3810 of the Delaware Statutory Trust Act. 
 Section 8.12. Acceptance of Appointment by Successor. 
 (a) In case of the appointment hereunder of a successor Trustee, each successor Trustee shall execute and deliver to the Depositor and to the retiring Trustee an instrument accepting such appointment, and thereupon
the resignation or removal of the retiring Trustee shall become effective and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but,
on request of the Trust or any successor Trustee such retiring Trustee shall, upon payment of its charges, duly assign, transfer and deliver to such successor Trustee all Trust Property, all proceeds thereof and money held by such retiring Trustee
hereunder with respect to the Trust Securities and the Trust. 
 (b) Upon request of any such successor Trustee, the Trust (or the retiring
Trustee if requested by the Depositor) shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers, trusts and duties referred to in the preceding paragraph.

 (c) No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article VIII. 
 Section 8.13. Merger, Conversion, Consolidation or Succession to Business.

 Any Person into which the Property Trustee or the Delaware Trustee may be merged or converted or with which it may be consolidated, or any
Person resulting from any merger, conversion or consolidation to which such Trustee shall be a party, or any Person succeeding to all or substantially all the corporate trust business of such Trustee, shall be the successor of such Trustee
hereunder, without the execution or filing of any paper or any further act on the part of any of the parties hereto; provided, that such Person shall be otherwise qualified and eligible under this Article VIII. 
 Section 8.14. Not Responsible for Recitals or Issuance of Securities. 
 The recitals contained herein and in the Securities Certificates shall be taken as the statements of the Trust and the Depositor, and the Trustees do not
assume any responsibility for their correctness. The Trustees make no representations as to the title to, or value or condition of, the Trust Property of the Trust or any part thereof, nor as to the validity or sufficiency of this Trust Agreement,
the Notes or the Trust Securities. The Trustees shall not be accountable for the use or application by the Depositor of the proceeds of the Notes. 
  

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 It is expressly understood and agreed by the parties hereto that insofar as any document, agreement or
certificate is executed on behalf of the Trust by any Trustee (i) such document, agreement or certificate is executed and delivered by such Trustee, not in its individual capacity but solely as Trustee under this Trust Agreement in the exercise
of the powers and authority conferred and vested in it, (ii) each of the representations, undertakings and agreements made on the part of the Trust is made and intended not as representations, warranties, covenants, undertakings and agreements
by any Trustee in its individual capacity but is made and intended for the purpose of binding only the Trust and (iii) under no circumstances shall any Trustee in its individual capacity be personally liable for the payment of any indebtedness
or expenses of the Trust or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Trust under this Trust Agreement or any other document, agreement or certificate. 
 Section 8.15. Property Trustee May File Proofs of Claim. 
 (a) In case of any Bankruptcy Event (or event that with the passage of time would become a Bankruptcy Event) relative to the Trust or any other obligor upon the Trust Securities or the Trust Property or of such other
obligor or their creditors, the Property Trustee (irrespective of whether any Distributions on the Trust Securities shall then be due and payable and irrespective of whether the Property Trustee shall have made any demand on the Trust for the
payment of any past due Distributions) shall be entitled and empowered, to the fullest extent permitted by law, by intervention in such proceeding or otherwise: 
 (i) to file and prove a claim for the whole amount of any Distributions owing and unpaid in respect of the Trust Securities and to file
such other papers or documents as may be necessary or advisable in order to have the claims of the Property Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Property Trustee, its agents and
counsel) and of the Holders allowed in such judicial proceeding; and 
 (ii) to collect and receive any monies or other
property payable or deliverable on any such claims and to distribute the same; 
 and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such proceeding is hereby authorized by each Holder to make such payments to the Property Trustee and, in the event the Property Trustee shall consent to the making of such payments directly to the Holders, to pay to
the Property Trustee first any amount due it for the reasonable compensation, expenses, disbursements and advances of the Property Trustee, its agents and counsel, and any other amounts due the Property Trustee. 
 (b) Nothing herein contained shall be deemed to authorize the Property Trustee to authorize or consent to or accept or adopt on behalf of any Holder any
plan of reorganization, arrangement, adjustment or compensation affecting the Trust Securities or the rights of any Holder thereof or to authorize the Property Trustee to vote in respect of the claim of any Holder in any such proceeding. 

 

 54 

 Section 8.16. Reports to the Property Trustee. 
 (a) The Depositor and the Administrative Trustees shall deliver to the Property Trustee, not later than forty-five (45) days after the end of each of
the first three (3) fiscal quarters of each fiscal year of the Depositor and not later than ninety (90) days after the end of each fiscal year of the Depositor ending after the date of this Trust Agreement, an officers’ certificate
(substantially in the form attached hereto as Exhibit F) covering the preceding fiscal year, stating whether or not to the knowledge of the signers thereof the Depositor, the Administrative Trustees or the Trust are in default in the
performance or observance of any of the terms, provisions and conditions of this Trust Agreement (without regard to any period of grace or requirement of notice provided hereunder) and, if the Depositor, the Administrative Trustees or the Trust
shall be in default, specifying all such defaults and the nature and status thereof of which they have knowledge. 
 (b) The Depositor shall
furnish to (i) the Property Trustee, (ii) the Existing TRUPS Holders, for so long as they are Owners, at their respective addresses listed on Schedule 8.16 or to such other respective addresses as any such Existing TRUPS Holder
shall notify the Depositor in writing and (iii) any Owner of the Preferred Securities reasonably identified to the Depositor and the Trust (which identification may be made either by such Owner): 
 (i) a duly completed and executed officer’s financial certificate substantively and substantially in the form attached hereto as
Exhibit F, including the calculation of the Interest Coverage Calculation and Interest Coverage Trigger and the financial statements and other supporting financial information referenced in such Exhibit, which certificate and financial
statements shall be so furnished by the Depositor not later than forty-five (45) days after the end of each of the first three (3) fiscal quarters of each fiscal year of the Depositor and not later than ninety (90) days after the end
of each fiscal year of the Depositor; and 
 (ii) copies of all correspondence, notices, forms, filings, reports and other
documents required to be provided by the Depositor, whether acting through an Administrative Trustee or otherwise, to the Existing TRUPS Holders, Property Trustee or Delaware Trustee under this Trust Agreement. 
 (c) The Property Trustee shall obtain all reports, certificates and information, which it is entitled to obtain under each of the Operative Documents.

 ARTICLE IX 
 TERMINATION,
LIQUIDATION AND MERGER 
 Section 9.1. Dissolution Upon Expiration Date. 
 Unless earlier dissolved, the Trust shall automatically dissolve on March 15, 2040 (the “Expiration Date”), and the Trust Property
shall be liquidated in accordance with Section 9.4. 
  

 55 

 Section 9.2. Early Termination. 
 The first to occur of any of the following events is an “Early Termination Event”, upon the occurrence of which the Trust shall be
dissolved: 
 (a) the occurrence of a Bankruptcy Event in respect of, or the dissolution or liquidation of, the Depositor, in
its capacity as the Holder of the Common Securities, unless the Depositor shall have transferred the Common Securities as provided by Section 5.11, in which case this provision shall refer instead to any such successor Holder of the
Common Securities; 
 (b) the written direction to the Property Trustee from the Holder of the Common Securities at any time
to dissolve the Trust and, after satisfaction of any liabilities of the Trust as required by applicable law, to distribute the Notes to the Holders in exchange for the Preferred Securities (which direction is optional and wholly within the
discretion of the Holder of the Common Securities); 
 (c) the redemption of all of the Preferred Securities in connection
with the payment at maturity or redemption of all the Notes; and 
 (d) the entry of an order for dissolution of the Trust by
a court of competent jurisdiction. 
 Section 9.3. Termination. The respective obligations and responsibilities of the Trustees
and the Trust shall terminate upon the latest to occur of the following: (a) the distribution by the Property Trustee to the Holders of all amounts required to be distributed hereunder upon the liquidation of the Trust pursuant to
Section 9.4, or upon the redemption of all of the Trust Securities pursuant to Section 4.2; (b) the satisfaction of any expenses owed by the Trust; and (c) the discharge of all administrative duties of the
Administrative Trustees, including the performance of any tax reporting obligations with respect to the Trust or the Holders. 
 Section 9.4. Liquidation. 
 (a) If an Early Termination Event specified in Section 9.2(a),
(b) or (d) occurs or, upon the Expiration Date, the Trust shall be liquidated by the Property Trustee as expeditiously as the Property Trustee shall determine to be possible by distributing, after satisfaction of liabilities
to creditors of the Trust as provided by applicable law, to each Holder a Like Amount of Notes, subject to Section 9.4(d) and the transfer restrictions set forth in the form of legend to the Notes in Section 2.2 of the Indenture.
Notice of liquidation shall be given by the Property Trustee not less than thirty (30) nor more than sixty (60) days prior to the Liquidation Date to each Holder of Trust Securities at such Holder’s address appearing in the Securities
Register. All such notices of liquidation shall: 
 (i) state the Liquidation Date; 
 (ii) state that from and after the Liquidation Date, the Trust Securities will no longer be deemed to be Outstanding and (subject to
Section 9.4(d)) any Securities Certificates not surrendered for exchange will be deemed to represent a Like Amount of Notes; and 
  

 56 

 (iii) provide such information with respect to the mechanics by which Holders may
exchange Securities Certificates for Notes, or if Section 9.4(d) applies, receive a Liquidation Distribution, as the Property Trustee shall deem appropriate. 
 (b) Except where Section 9.2(c) or 9.4(d) applies, in order to effect the liquidation of the Trust and distribution of the Notes to the Holders, the Property Trustee, either itself acting as
exchange agent or through the appointment of a separate exchange agent, shall establish a record date for such distribution (which shall not be more than forty-five (45) days prior to the Liquidation Date nor prior to the date on which notice
of such liquidation is given to the Holders) and establish such procedures as it shall deem appropriate to effect the distribution of Notes in exchange for the Outstanding Securities Certificates. 
 (c) Except where Section 9.2(c) or 9.4(d) applies, after the Liquidation Date, (i) the Trust Securities will no longer be deemed
to be Outstanding, (ii) certificates representing a Like Amount of Notes will be issued to Holders of Securities Certificates, upon surrender of such Certificates to the exchange agent for exchange, (iii) the Depositor shall use its best
efforts to have the Notes listed on the New York Stock Exchange or on such other exchange, interdealer quotation system or self-regulatory organization on which the Preferred Securities are then listed, if any, (iv) Securities Certificates not
so surrendered for exchange will be deemed to represent a Like Amount of Notes bearing accrued and unpaid interest in an amount equal to the accumulated and unpaid Distributions on such Securities Certificates until such certificates are so
surrendered (and until such certificates are so surrendered, no payments of interest or principal will be made to Holders of Securities Certificates with respect to such Notes) and (v) all rights of Holders holding Trust Securities will cease,
except the right of such Holders to receive Notes upon surrender of Securities Certificates. 
 (d) Notwithstanding the other provisions of
this Section 9.4, if distribution of the Notes in the manner provided herein is determined by the Property Trustee not to be permitted or practical, the Trust Property shall be liquidated, and the Trust shall be wound up by the Property
Trustee in such manner as the Property Trustee reasonably determines. In such event, Holders will be entitled to receive out of the assets of the Trust available for distribution to Holders, after satisfaction of liabilities to creditors of the
Trust as provided by applicable law, an amount equal to the Liquidation Amount per Trust Security plus accumulated and unpaid Distributions thereon to the date of payment (such amount being the “Liquidation Distribution”). If, upon
any such winding up the Liquidation Distribution can be paid only in part because the Trust has insufficient assets available to pay in full the aggregate Liquidation Distribution, then, subject to the next succeeding sentence, the amounts payable
by the Trust on the Trust Securities shall be paid on a pro rata basis (based upon Liquidation Amounts). The Holder of the Common Securities will be entitled to receive Liquidation Distributions upon any such winding up pro rata (based
upon Liquidation Amounts) with Holders of all Trust Securities, except that, if an Event of Default has occurred and is continuing, the Preferred Securities shall have a priority over the Common Securities as provided in Section 4.3.

  

 57 

 Section 9.5. Mergers, Consolidations, Amalgamations or Replacements of Trust. 
 The Trust may not merge with or into, consolidate, amalgamate, or be replaced by, or convey, transfer or lease its properties and assets substantially as
an entirety to, any Person except pursuant to this Article IX. At the request of the Holders of the Common Securities, without the consent of the Holders of the Preferred Securities, the Trust may merge with or into, consolidate, amalgamate,
or be replaced by or convey, transfer or lease its properties and assets substantially as an entirety to a trust organized as such under the laws of any State; provided, that: 
 (a) such successor entity either (i) expressly assumes all of the obligations of the Trust under this Trust Agreement with respect to
the Preferred Securities or (ii) substitutes for the Preferred Securities other securities having substantially the same terms as the Preferred Securities (such other Securities, the “Successor Securities”) so long as the
Successor Securities have the same priority as the Preferred Securities with respect to distributions and payments upon liquidation, redemption and otherwise; 
 (b) a trustee of such successor entity possessing substantially the same powers and duties as the Property Trustee is appointed to hold
the Notes; 
 (c) if the Preferred Securities or the Notes are rated, such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the Preferred Securities or the Notes (including any Successor Securities) to be downgraded by any nationally recognized statistical rating organization that then assigns a rating to the Preferred
Securities or the Notes; 
 (d) the Preferred Securities are listed, or any Successor Securities will be listed upon notice of
issuance, on any national securities exchange or interdealer quotation system on which the Preferred Securities are then listed, if any; 
 (e) such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not adversely affect the rights, preferences and privileges of the Holders of the Preferred Securities (including any
Successor Securities) in any material respect; 
 (f) such successor entity has a purpose substantially identical to that of
the Trust; 
 (g) prior to such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, the Depositor
has received an Opinion of Counsel to the effect that (i) such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not adversely affect the rights, preferences and privileges of the Holders of the Preferred
Securities (including any Successor Securities) in any material respect; (ii) following such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, neither the Trust nor such successor entity will be required to
register as an “investment company” under the Investment Company Act and (iii) following such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, the Trust (or the successor entity) will continue to be
classified as a grantor trust for U.S. federal income tax purposes; and 
  

 58 

 (h) the Depositor or its permitted transferee owns all of the common securities of such
successor entity. 
 Notwithstanding the foregoing, the Trust shall not, except with the consent of Holders of all of the Preferred Securities, consolidate,
amalgamate, merge with or into, or be replaced by or convey, transfer or lease its properties and assets substantially as an entirety to any other Person or permit any other entity to consolidate, amalgamate, merge with or into or replace, the Trust
if such consolidation, amalgamation, merger, replacement, conveyance, transfer or lease would cause the Trust or the successor entity to be taxable as a corporation or classified as other than a grantor trust for United States federal income tax
purposes or cause the Notes to be treated as other than indebtedness of the Depositor for United States federal income tax purposes. 
 ARTICLE X 
 MISCELLANEOUS PROVISIONS 
 Section 10.1. Limitation of Rights of Holders. 
 Except as set forth in Section 9.2,
the death, bankruptcy, termination, dissolution or incapacity of any Person having an interest, beneficial or otherwise, in Trust Securities shall not operate to terminate this Trust Agreement, nor annul, dissolve or terminate the Trust nor entitle
the legal representatives or heirs of such Person or any Holder for such Person, to claim an accounting, take any action or bring any proceeding in any court for a partition or winding up of the arrangements contemplated hereby, nor otherwise affect
the rights, obligations and liabilities of the parties hereto or any of them. 
 Section 10.2. Agreed Tax Treatment of Trust and
Trust Securities. 
 The parties hereto and, by its acceptance or acquisition of a Trust Security or a beneficial interest therein, the
Holder of, and any Person that acquires a beneficial interest in, such Trust Security intend and agree to treat the Trust as a grantor trust for United States federal, state and local tax purposes, and to treat the Trust Securities (including all
payments and proceeds with respect to such Trust Securities) as undivided beneficial ownership interests in the Trust Property (and payments and proceeds therefrom, respectively) for United States federal, state and local tax purposes and to treat
the Notes as indebtedness of the Depositor for United States federal, state and local tax purposes. The provisions of this Trust Agreement shall be interpreted to further this intention and agreement of the parties. 
 Section 10.3. Amendment. 
 (a)
This Trust Agreement may be amended from time to time by the Property Trustee, the Administrative Trustees and the Holder of all the Common Securities, without the consent of any Holder of the Preferred Securities, (i) to cure any ambiguity,
correct or supplement any provision herein that may be defective or inconsistent with any other provision herein, (ii) to make or amend any other provisions with respect to matters or questions arising under this Trust Agreement, which shall
not be inconsistent with the 

  

 59 

 
other provisions of this Trust Agreement, (iii) to modify, eliminate or add to any provisions of this Trust Agreement to such extent as shall be
necessary to ensure that the Trust will neither be taxable as a corporation nor be classified as other than a grantor trust for United States federal income tax purposes at all times that any Trust Securities are Outstanding or to ensure that the
Notes are treated as indebtedness of the Depositor for United States federal income tax purposes, or to ensure that the Trust or the Depositor will not be required to register as an “investment company” under the Investment Company Act or
(iv) to add to the covenants, restrictions or obligations of the Depositor; provided, that in the case of clauses (i), (ii), (iii) or (iv), such action shall not adversely affect in any material respect the interests of any Holder.

 (b) Except as provided in Section 10.3(c), any provision of this Trust Agreement may be amended by the Property Trustee, the
Administrative Trustees and the Holder of all of the Common Securities and with (i) the consent of Holders of at least a Majority in Liquidation Amount of the Outstanding Preferred Securities and (ii) receipt by the Trustees of an Opinion
of Counsel to the effect that such amendment or the exercise of any power granted to the Trustees in accordance with such amendment will not cause the Trust to be taxable as a corporation or classified as other than a grantor trust for United States
federal income tax purposes or affect the treatment of the Notes as indebtedness of the Depositor for United States federal income tax purposes or affect the Trust’s exemption from status (or from any requirement to register) as an
“investment company” under the Investment Company Act. 
 (c) Notwithstanding any other provision of this Trust Agreement, without
the consent of each Holder, this Trust Agreement may not be amended to (i) change the accrual rate, amount, currency or timing of any Distribution on or the Redemption Price of the Trust Securities or otherwise adversely affect the amount of
any Distribution or other payment required to be made in respect of the Trust Securities as of a specified date, (ii) restrict or impair the right of a Holder to institute suit for the enforcement of any such payment on or after such date,
(iii) reduce the percentage of aggregate Liquidation Amount of Outstanding Preferred Securities, the consent of whose Holders is required for any such amendment, or the consent of whose Holders is required for any waiver of compliance with any
provision of this Trust Agreement or of defaults hereunder and their consequences provided for in this Trust Agreement; (iv) impair or adversely affect the rights and interests of the Holders in the Trust Property, or permit the creation of any
Lien on any portion of the Trust Property; or (v) modify the definition of “Outstanding,” this Section 10.3(c), Sections 4.1, 4.2, 4.3, 6.10(e) or Article IX. 
 (d) Notwithstanding any other provision of this Trust Agreement, no Trustee shall enter into or consent to any amendment to this Trust Agreement that
would cause the Trust to be taxable as a corporation or to be classified as other than a grantor trust for United States federal income tax purposes or that would cause the Notes to fail or cease to be treated as indebtedness of the Depositor for
United States federal income tax purposes or that would cause the Trust to fail or cease to qualify for the exemption from status (or from any requirement to register) as an “investment company” under the Investment Company Act.

 (e) If any amendment to this Trust Agreement is made, the Administrative Trustees or the Property Trustee shall promptly provide to the
Holders, the Depositor and the Note Trustee a copy of such amendment. 
  

 60 

 (f) No Trustee shall be required to enter into any amendment to this Trust Agreement that affects its own
rights, duties or immunities under this Trust Agreement. The Trustees shall be entitled to receive an Opinion of Counsel and an Officers’ Certificate stating that any amendment to this Trust Agreement is in compliance with this Trust Agreement
and all conditions precedent herein provided for relating to such action have been met. 
 (g) No amendment or modification to this Trust
Agreement that adversely affects in any material respect the rights, duties, liabilities, indemnities or immunities of the Delaware Trustee hereunder shall be permitted without the prior written consent of the Delaware Trustee. 
 Section 10.4. Separability. 
 If
any provision in this Trust Agreement or in the Securities Certificates shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby, and there
shall be deemed substituted for the provision at issue a valid, legal and enforceable provision as similar as possible to the provision at issue. 
 Section 10.5. Governing Law. 
 THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE HOLDERS, THE TRUST,
THE DEPOSITOR AND THE TRUSTEES WITH RESPECT TO THIS TRUST AGREEMENT AND THE TRUST SECURITIES SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE WITHOUT REFERENCE TO ITS CONFLICTS OF LAWS PROVISIONS.

 Section 10.6. Successors. 
 This Trust Agreement shall be binding upon and shall inure to the benefit of any successor to the Depositor, the Trust and any Trustee, including any successor by operation of law. Except in connection with a
transaction involving the Depositor that is permitted under Article VIII of the Indenture and pursuant to which the assignee agrees in writing to perform the Depositor’s obligations hereunder, the Depositor shall not assign its
obligations hereunder. 
 Section 10.7. Headings. 
 The Article and Section headings are for convenience only and shall not affect the construction of this Trust Agreement 
 Section 10.8. Reports, Notices and Demands. 
 (a) Any report, notice, demand or other
communication that by any provision of this Trust Agreement is required or permitted to be given or served to or upon any Holder or the Depositor may be given or served in writing delivered in person, or by reputable, overnight courier, by telecopy
or by deposit thereof, first-class postage prepaid, in the United States mail, addressed, (i) in the case of a Holder of Preferred Securities, to such Holder as such Holder’s name and address may appear on the Securities Register; and
(ii) in the case of the Holder of all the Common Securities or the Depositor, to NovaStar Financial, Inc., 2114 Central Street, Suite 600, 

  

 61 

 
Kansas City, MO 64108, Attention: Chief Executive Officer, or to such other address as may be specified in a written notice by the Holder of all the Common
Securities or the Depositor, as the case may be, to the Property Trustee. Such report, notice, demand or other communication to or upon a Holder or the Depositor shall be deemed to have been given when received in person, within one
(1) Business Day following delivery by overnight courier, when telecopied with receipt confirmed, or within three (3) Business Days following delivery by mail, except that if a notice or other document is refused delivery or cannot be
delivered because of a changed address of which no notice was given, such notice or other document shall be deemed to have been delivered on the date of such refusal or inability to deliver. 
 (b) Any notice, demand or other communication that by any provision of this Trust Agreement is required or permitted to be given or served to or upon the
Property Trustee, the Delaware Trustee, the Administrative Trustees or the Trust shall be given in writing by deposit thereof, first-class postage prepaid, in the U.S. mail, personal delivery or facsimile transmission, addressed to such Person as
follows: (i) with respect to the Property Trustee to 601 Travis, 16th Floor, Houston, Texas 77002, Attention: Global Corporate Trust– NovaStar Capital Trust I/B, facsimile no. (713) 483-6001, (ii) with respect to the Delaware
Trustee, to White Clay Center, Route 273, Newark, DE 19711, Attention: Global Corporate Trust, facsimile no. (302) 453-4400; (iii) with respect to the Administrative Trustees, to them at the address above for notices to the Depositor,
marked “Attention: Administrative Trustees of NovaStar Capital Trust I/B”, and (iv) with respect to the Trust, to its principal executive office specified in Section 2.2, with a copy to the Property Trustee. Such notice,
demand or other communication to or upon the Trust, the Property Trustee or the Administrative Trustees shall be deemed to have been sufficiently given or made only upon actual receipt of the writing by the Trust, the Property Trustee or the
Administrative Trustees. 
 (c) The Property Trustee may, but is not required to, rely upon and comply with instructions and directions sent
by email or facsimile (or any other reasonable means of communication), by persons believed by the Property Trustee in good faith to be authorized to provide such instructions or direction; provided, however, that the Property Trustee
may require such additional evidence, confirmation or certification from any such party or parties as the Property Trustee, in its reasonable discretion, deems necessary or advisable before acting or refraining from acting upon any such instruction
or direction. 
 (d) The Property Trustee agrees to accept and act upon instructions or directions pursuant to this Trust Agreement sent by
unsecured email, facsimile transmission or other similar unsecured electronic methods, provided, however, that any Person providing such instructions or directions shall provide to the Property Trustee an incumbency certificate listing
such designated persons, which incumbency certificate shall be amended whenever a person is to be added or deleted from the listing. If such Person elects to give the Property Trustee email or facsimile instructions (or instructions by a similar
electronic method) and the Property Trustee in its discretion elects to act in good faith upon such instructions, the Property Trustee’s reasonable understanding of such instructions shall be deemed controlling. The Property Trustee shall not
be liable for any losses, costs or expenses arising directly or indirectly from the Property Trustee’s good faith and reasonable reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent
with a subsequent written instruction received by the Property Trustee after such compliance. Each Person 

  

 62 

 
providing instructions or directions to the Property Trustee hereunder agrees to assume all risks arising out of the use of such electronic methods to submit
instructions and directions to the Property Trustee, including without limitation the risk of the Property Trustee acting, in good faith, on unauthorized instructions, and the risk of interception and misuse by third parties. 
 Section 10.9. Agreement Not to Petition. 
 Each of the Trustees and the Depositor agree for the benefit of the Holders that, until at least one (1) year and one (1) day after the Trust has been terminated in accordance with Article IX, they shall not file, or join
in the filing of, a petition against the Trust under any Bankruptcy Law or otherwise join in the commencement of any proceeding against the Trust under any Bankruptcy Law. If the Depositor takes action in violation of this Section 10.9,
the Property Trustee agrees, for the benefit of Holders, that at the expense of the Depositor, it shall file an answer with the applicable bankruptcy court or otherwise properly contest the filing of such petition by the Depositor against the Trust
or the commencement of such action and raise the defense that the Depositor has agreed in writing not to take such action and should be estopped and precluded therefrom and such other defenses, if any, as counsel for the Property Trustee or the
Trust may assert. 
 Section 10.10. Counterparts. 
 This Trust Agreement may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.
Delivery of an executed signature page of this instrument by facsimile transmission shall be effective as delivery of a manually executed counterpart hereof. 
 [signature page follows] 
  

 63 

 IN WITNESS WHEREOF, the parties hereto have executed this Amended and Restated Trust Agreement as of the
day and year first above written. 
  

											
		 		 		    	 NOVASTAR MORTGAGE, INC.,
 as Depositor

	 	
						
		 		 		    	By:	 	  
	 	
		 		 		    	Name:	 	  
	 	
		 		 		    	Title:	 	  
	 	
				
	THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION, not in its individual capacity but solely as Property Trustee	 		    	 BNY MELLON TRUST OF DELAWARE,
 as Delaware
Trustee
	 	
						
	By:	 	  
	 		    	By:	 	  
	 	
	Name:	 	  
	 		    	Name:	 	  
	 	
	Title:	 	  
	 		    	Title:	 	  
	 	
				
	  
	 	,	    	  
	 	,
	as Administrative Trustee	 		    	as Administrative Trustee	 	
						
	Name:	 	W. Lance Anderson	 		    	Name:	 	Matthew R. Kaltenrieder	 	
					
	  
	 	,	    		 		 	
	as Administrative Trustee	 		    		 		 	
						
	Name:	 	Rodney E. Schwatken	 		    		 		 	

 Exhibit A 
 FORM OF 
 CERTIFICATE OF TRUST 
 OF 
 NOVASTAR CAPITAL TRUST I/B 
 This Certificate of Trust of NovaStar Capital Trust I/B (the “Trust”) is being duly executed and filed by the undersigned, as trustee,
to form a statutory trust under the Delaware Statutory Trust Act (12 Del. C. § 3801, et seq.) (the “Act”). 
 1. Name. The name of the statutory trust formed by this Certificate of Trust is: NovaStar Capital Trust I/B. 
 2. Delaware Trustee. The name and business address of the trustee of the Trust with its principal place of business in the State of Delaware are BNY Mellon Trust of Delaware, White Clay Center, Route 273, Newark, DE 19711, Attention:
Global Corporate Trust. 
 3. Effective Date. This Certificate of Trust shall be effective upon filing with the Secretary of State of
the State of Delaware. 
 IN WITNESS WHEREOF, the undersigned, being the trustee of the Trust, has duly executed this Certificate of Trust in
accordance with Section 3811(a)(1) of the Act. 
  

			
	BNY MELLON TRUST OF DELAWARE, not in its individual capacity, but solely as Delaware trustee
		
	By:	 	  

	Name:	 	  

	Title:	 	  

  

 A-1 

 Exhibit B 
 [FORM OF COMMON SECURITIES CERTIFICATE] 
 THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE 

SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS OR 
 ANY OTHER APPLICABLE SECURITIES LAWS AND MAY NOT BE OFFERED, 
 SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO AN 
 EXEMPTION FROM REGISTRATION. THIS CERTIFICATE IS NOT 
 TRANSFERABLE EXCEPT IN COMPLIANCE WITH APPLICABLE LAW AND 
 SECTION 5.11 OF THE TRUST
AGREEMENT 
  

							
	Certificate Number	 		 		 	Number of Common Securities
	          C-[    ]	 		 		 	[    ]

 Certificate Evidencing Common Securities 
 of 
 NOVASTAR CAPITAL TRUST I/B 
 Common Securities 
 (liquidation amount $1,000 per Common Security) 
 NOVASTAR CAPITAL TRUST I/B, a statutory trust created under the laws of the State of Delaware (the “Trust”), hereby certifies that NovaStar Mortgage,
Inc., a Virginia corporation (the “Holder”), is the registered owner of [AMOUNT (#)] common securities of the Trust representing undivided common beneficial interests in the assets of the Trust and designated the
“NovaStar Capital Trust I/B Common Securities (liquidation amount $1,000 per Common Security)” (the “Common Securities”). Except in accordance with Section 5.11 of the Trust Agreement (as defined below), the Common
Securities are not transferable and, to the fullest extent permitted by law, any attempted transfer hereof other than in accordance therewith shall be void. The designations, rights, privileges, restrictions, preferences and other terms and
conditions of the Common Securities are set forth in, and this certificate and the Common Securities represented hereby are issued and shall in all respects be subject to the terms and conditions of, the Amended and Restated Trust Agreement of the
Trust, dated as of February 18, 2009, as the same may be amended from time to time (the “Trust Agreement”), among NovaStar Mortgage, Inc., as Depositor, The Bank of New York Mellon Trust Company, National Association, as
Property Trustee, BNY Mellon Trust of Delaware, as Delaware Trustee, and the Administrative Trustees named therein. The Trust will furnish a copy of the Trust Agreement to the Holder without charge upon written request to the Trust at its principal
place of business or registered office. 
  

 B-1 

 Upon receipt of this certificate, the Holder is bound by the Trust Agreement and is entitled to the benefits thereunder.

 This Common Securities Certificate shall be governed by and construed in accordance with the laws of the State of Delaware without reference to its
conflicts of law provisions. 
 All capitalized terms used but not defined in this Common Securities Certificate are used with the meanings specified in the
Trust Agreement, including the Schedule and Exhibits thereto. 
 IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has executed on behalf
of the Trust this Common Securities Certificate this [DAY] day of [MONTH], [YEAR]. 
  

			
	NOVASTAR CAPITAL TRUST I/B
		
	By:	 	  

	Name:	 	  

		 	Administrative Trustee

  

 B-2 

 Exhibit C 
 [FORM OF PREFERRED SECURITIES CERTIFICATE] 
 “[IF THIS SECURITY IS A GLOBAL SECURITY INSERT: THIS
PREFERRED SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE TRUST AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY (“DTC”) OR A NOMINEE OF DTC. THIS PREFERRED SECURITY IS
EXCHANGEABLE FOR PREFERRED SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE TRUST AGREEMENT, AND NO TRANSFER OF THIS PREFERRED SECURITY (OTHER THAN A TRANSFER OF THIS
PREFERRED SECURITY AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES. 
 UNLESS THIS PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO NOVASTAR CAPITAL TRUST I/B OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY PREFERRED SECURITY ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.] 
 THE PREFERRED SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND SUCH PREFERRED SECURITIES OR ANY INTEREST THEREIN MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF ANY
PREFERRED SECURITIES IS HEREBY NOTIFIED THAT THE SELLER OF THE PREFERRED SECURITIES MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A UNDER THE SECURITIES ACT. 
 THE HOLDER OF THE PREFERRED SECURITIES REPRESENTED BY THIS CERTIFICATE AGREES FOR THE BENEFIT OF THE TRUST AND THE DEPOSITOR THAT (A) SUCH PREFERRED SECURITIES MAY
BE OFFERED, RESOLD OR OTHERWISE TRANSFERRED ONLY (I) TO THE TRUST OR (II) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A “QUALIFIED PURCHASER” (AS DEFINED IN SECTION 2(a)(51) OF THE INVESTMENT COMPANY ACT 

  

 C-1 

 
OF 1940, AS AMENDED), AND (B) THE HOLDER WILL NOTIFY ANY PURCHASER OF ANY PREFERRED SECURITIES FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN
(A) ABOVE. 
 THE PREFERRED SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING AN AGGREGATE LIQUIDATION AMOUNT OF NOT LESS THAN
$100,000. TO THE FULLEST EXTENT PERMITTED BY LAW, ANY ATTEMPTED TRANSFER OF PREFERRED SECURITIES, OR ANY INTEREST THEREIN, IN A BLOCK HAVING AN AGGREGATE LIQUIDATION AMOUNT OF LESS THAN $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF SHALL BE
DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. TO THE FULLEST EXTENT PERMITTED BY LAW, ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH PREFERRED SECURITIES FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT
OF THE LIQUIDATION AMOUNT OF OR DISTRIBUTIONS ON SUCH PREFERRED SECURITIES, OR ANY INTEREST THEREIN, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH PREFERRED SECURITIES. 
 THE PREFERRED SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE PROVISIONS OF AN AMENDED AND RESTATED TRUST AGREEMENT OF NOVASTAR CAPITAL TRUST I/B DATED AS
OF FEBRUARY 18, 2009 (A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE DEPOSITOR) AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH THE PROVISIONS OF SUCH TRUST AGREEMENT. THE
HOLDER OF THIS PREFERRED SECURITY, OR ANY INTEREST THEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT PLAN, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE
I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) (EACH A “PLAN”), OR AN ENTITY WHOSE
UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF ANY PLAN’S INVESTMENT IN THE ENTITY, AND NO PERSON INVESTING “PLAN ASSETS” OF ANY PLAN MAY ACQUIRE OR HOLD THIS PREFERRED SECURITY OR ANY INTEREST THEREIN. ANY PURCHASER
OR HOLDER OF THE PREFERRED SECURITIES OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975
OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE. 
 THIS OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES, INCLUDING THE FEDERAL DEPOSIT INSURANCE CORPORATION
(THE “FDIC”). 
  

 C-2 

			
	Certificate Number	  	         Preferred Securities
		  	         Aggregate Liquidation Amount

 CUSIP NO. 
  

 
 Certificate Evidencing
Preferred Securities 
 of 
 NOVASTAR CAPITAL TRUST I/B 
 Preferred Securities 
 (liquidation amount $1,000 per Preferred Security) 
 NOVASTAR CAPITAL TRUST I/B, a statutory trust created under the laws of
the State of Delaware (the “Trust”), hereby certifies that                     , a
                     (the “Holder”), is the registered owner of [AMOUNT (#)] Preferred Securities [IF THE PREFERRED
SECURITY IS A GLOBAL SECURITY, THEN INSERT: or such other number of Preferred Securities represented hereby as may be set forth in the records of the Securities Registrar hereinafter referred to in accordance with the Trust Agreement (as defined
below)] of the Trust representing an undivided preferred beneficial interest in the assets of the Trust and designated the “NOVASTAR CAPITAL TRUST I/B Preferred Securities, (liquidation amount $1,000 per Preferred Security)” (the
“Preferred Securities”). Subject to the terms and conditions of the Trust Agreement (as defined below), the Preferred Securities are transferable on the books and records of the Trust, in person or by a duly authorized attorney,
upon surrender of this certificate duly endorsed and in proper form for transfer as provided in Section 5.7 of the Trust Agreement. The designations, rights, privileges, restrictions, preferences and other terms and conditions of the Preferred
Securities are set forth in, and this certificate and the Preferred Securities represented hereby are issued and shall in all respects be subject to the terms and conditions of, the Amended and Restated Trust Agreement of the Trust, dated as of
February 18, 2009, as the same may be amended from time to time (the “Trust Agreement”), among NovaStar Mortgage, Inc., as Depositor, The Bank of New York Mellon Trust Company, National Association, as Property Trustee, BNY
Mellon Trust of Delaware, as Delaware Trustee, and the Administrative Trustees named therein. The Trust will furnish a copy of the Trust Agreement to the Holder without charge upon written request to the Property Trustee at its Corporate Trust
Office. 
 Upon receipt of this certificate, the Holder is bound by the Trust Agreement and is entitled to the benefits thereunder. 
 This Preferred Securities Certificate shall be governed by and construed in accordance with the laws of the State of Delaware without reference to its conflicts of law
provisions. 
 All capitalized terms used but not defined in this Preferred Securities Certificate are used with the meanings specified in the Trust
Agreement, including the Schedule and Exhibits thereto. 
  

 C-3 

 IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has executed on behalf of the Trust this Preferred
Securities Certificate this [DAY] day of [MONTH], [YEAR]. 
  

			
	NOVASTAR CAPITAL TRUST I/B
		
	By:	 	  

	Name:	 	  

		 	Administrative Trustee

 This is one of the Preferred Securities referred to in the within-mentioned Trust Agreement.

 Dated: 
  

			
	THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION, not in its individual capacity, but solely as Property Trustee
		
	By:	 	  

	Name:	 	  

	Title:	 	Authorized signatory
		 	

  

 C-4 

 [FORM OF REVERSE OF SECURITY] 
 Distributions on the Trust Securities shall be cumulative, and shall accumulate whether or not there are funds of the Trust available for the payment of
Distributions. Distributions shall accumulate from January 1, 2009, and, except as provided below, shall be payable quarterly in arrears on March 30, June 30, September 30 and December 30 of each year, commencing
on the first such date after the Exchange Date, at the following rates: 
 (i) Beginning as of January 1, 2009 through
December 31, 2009, at the rate of one percent (1.0%) per annum of the Liquidation Amount of the Trust Securities, unless an Interest Coverage Trigger with respect to the quarter then just ended has occurred in which case the Distribution
for the distribution period ending on the next succeeding Distribution Date shall accrue at a variable rate equal to LIBOR plus 3.50% per annum of the Liquidation Amount of the Trust Securities; and 
 (ii) Beginning January 1, 2010 until the earlier of (1) February 18, 2019 or (2) the occurrence of an Interest
Coverage Trigger, at the rate of one percent (1.0%) per annum of the Liquidation Amount of the Trust Securities and, thereafter, at a variable rate, reset quarterly, equal to LIBOR plus 3.50% per annum of the Liquidation Amount of the
Trust Securities. LIBOR shall be determined by the Calculation Agent in accordance with Schedule A. The amount of Distributions payable for any period less than a full Distribution period shall be computed on the basis of a 360-day year and the
actual number of days elapsed in the relevant Distribution period. The amount of Distributions payable for any period shall include any Additional Interest Amounts in respect of such period; 
 Distributions on the Trust Securities shall be made by the Paying Agent from the Payment Account and shall be payable on each Distribution Date only to
the extent that the Trust has funds then on hand and available in the Payment Account for the payment of such Distributions. 
 Distributions
on the Securities must be paid on the dates payable to the extent that the Trust has funds available for the payment of such Distributions in the Payment Account of the Trust. The Trust’s funds available for Distribution to the Holders of the
Preferred Securities will be limited to payments received from the Depositor. 
 During any Event of Default, the Depositor shall not
(i) declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of the Depositor’s capital stock or (ii) make any payment of principal of or any interest or
premium, if any, on or repay, repurchase or redeem any debt securities of the Depositor that rank pari passu in all respects with or junior in interest to the Notes (other than (a) repurchases, redemptions or other acquisitions of shares of
capital stock of the Depositor in connection with (1) any employment contract, benefit plan or other similar arrangement with or for the benefit of any one or more employees, officers, directors or consultants, (2) a dividend reinvestment
or stockholder stock purchase plan or (3) the issuance of capital stock of the Depositor (or securities convertible into or exercisable for such capital stock) as consideration in an acquisition transaction entered into prior to the applicable
Event of Default, (b) as a result of an exchange or conversion of any 

  

 C-5 

 
class or series of the Depositor’s capital stock (or any capital stock of a Subsidiary (as defined in the Indenture) of the Depositor) for any class or
series of the Depositor’s capital stock or of any class or series of the Depositor’s indebtedness for any class or series of the Depositor’s capital stock, (c) the purchase of fractional interests in shares of the
Depositor’s capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged, (d) any declaration of a dividend in connection with any Rights Plan (as defined in the
Indenture), the issuance of rights, stock or other property under any Rights Plan, or the redemption or repurchase of rights pursuant thereto or (e) any dividend in the form of stock, warrants, options or other rights where the dividend stock
or the stock issuable upon exercise of such warrants, options or other rights is the same stock as that on which the dividend is being paid or ranks pari passu with or junior to such stock). 
 On each Note Redemption Date, on the stated maturity (or any date of principal repayment upon early maturity) of the Notes and on each other date on (or
in respect of) which any principal on the Notes is repaid, the Trust will be required to redeem a Like Amount of Trust Securities at the Redemption Price. Under the Indenture, the Notes may be redeemed by the Depositor on any Interest Payment Date,
at the Depositor’s option, on or after March 30, 2010 in whole or in part from time to time at the Optional Note Redemption Price of the principal amount thereof or the redeemed portion thereof, as applicable, together, in the case of any
such redemption, with accrued interest, including any Additional Interest, to but excluding the date fixed for redemption. The Notes may also be redeemed by the Depositor, at its option, at any time, in whole but not in part, upon the occurrence of
an Investment Company Event or a Tax Event at the Special Note Redemption Price; and provided, further, that such Investment Company Event or a Tax Event is continuing on the Redemption Date. 
 The Trust Securities redeemed on each Redemption Date shall be redeemed at the Redemption Price with the proceeds from the contemporaneous redemption or
payment at maturity of Notes. Redemptions of the Trust Securities (or portion thereof) shall be made and the Redemption Price shall be payable on each Redemption Date only to the extent that the Trust has funds then on hand and available in the
Payment Account for the payment of such Redemption Price. 
 Payments of Distributions (including any Additional Interest Amounts), the
Redemption Price, Liquidation Amount or any other amounts in respect of the Preferred Securities shall be made by wire transfer at such place and to such account at a banking institution in the United States as may be designated in writing at least
ten (10) Business Days prior to the date for payment by the Person entitled thereto unless proper written transfer instructions have not been received by the relevant record date, in which case such payments shall be made by check mailed to the
address of such Person as such address shall appear in the Security Register. If any Preferred Securities are held by a Depositary, such Distributions shall be made to the Depositary in immediately available funds. 
 The indebtedness evidenced by the Notes is, to the extent provided in the Indenture, subordinate and junior in right of payment to the prior payment in
full of all Senior Debt (as defined in the Indenture), and this Security is issued subject to the provisions of the Indenture with respect thereto. 
  

 C-6 

 ASSIGNMENT 
 FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred Securities Certificate to: 
 (Insert assignee’s social
security or tax identification number) 
 (Insert address and zip code of assignee) 
 and irrevocably appoints 
 agent to transfer this Preferred Securities
Certificate on the books of the Trust. The agent may substitute another to act for him or her. 
 Date:
                     
  

			
	Signature:	 	  

 (Sign exactly as your name appears on the other side of this Preferred Securities Certificate)

 The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to S.E.C. Rule 17Ad-15. 
  

 C-7 

 Exhibit D 
 JUNIOR SUBORDINATED INDENTURE 
 [to be attached] 
  

 D-1 

 Exhibit E 
 FORM OF TRANSFEREE CERTIFICATE 
 TO BE EXECUTED BY TRANSFEREES 
 [DATE], [YEAR] 
 The Bank of New York Mellon Trust
Company, National Association 
 601 Travis, 16th floor 
 Houston, Texas 77002 

			
	Attention:	  	Global Corporate Trust—
		  	 NOVASTAR CAPITAL TRUST I/B
 Mudassir
Mohamed

 NovaStar Mortgage, Inc. 
 NOVASTAR CAPITAL TRUST I/B 
 2114 Central Street 
 Suite
600 
 Kansas City, MO 64108 
  

	 	Re:	Purchase of $              stated liquidation amount of Floating Rate Preferred Securities (the “Preferred
Securities”) of NovaStar Capital Trust I/B 

 Ladies and Gentlemen: 
 In connection with our purchase of the Preferred Securities we confirm that: 
 1. We understand that the Floating Rate Preferred Securities (the “Preferred Securities”) of NOVASTAR CAPITAL TRUST I/B (the
“Trust”) of NovaStar Mortgage, Inc. (the “Company”) executed in connection therewith) and the Floating Rate Junior Subordinated Notes due 2035 of the Company (the “Subordinated Notes”) (the entire
amount of the Trust’s outstanding Preferred Securities and the Subordinated Notes together being referred to herein as the “Offered Securities”), have not been registered under the Securities Act of 1933, as amended (the
“Securities Act”), and may not be offered or sold except as permitted in the following sentence. We agree on our own behalf and on behalf of any investor account for which we are purchasing the Offered Securities that, if we decide
to offer, sell or otherwise transfer any such Offered Securities, such offer, sale or transfer will be made only (a) to the Trust (b) to a person we reasonably believe is a “qualified purchaser” (a “QP”) (as
determined in accordance with section 2(a)(51) of the Investment Company Act of 1940, as amended (the “Investment Company Act”) and in compliance with the Securities Act. We understand that the certificates for any Offered Security
that we receive will bear a legend substantially to the effect of the foregoing. 
 2. We are a “qualified purchaser” within the
meaning of Section 2(a)(51) of the Investment Company Act of 1940, as amended, and are purchasing for our own account or for the account of such a “qualified purchaser,” and we have such knowledge and 

  

 E-1 

 
experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Offered Securities, and we and any
account for which we are acting are each able to bear the economic risks of our or its investment. 
 3. We are acquiring the Offered
Securities purchased by us for our own account (or for one or more accounts as to each of which we exercise sole investment discretion and have authority to make, and do make, the statements contained in this letter) and not with a view to any
distribution of the Offered Securities, subject, nevertheless, to the understanding that the disposition of our property will at all times be and remain within our control. 
 4. In the event that we purchase any Preferred Securities or any Subordinated Notes, we will acquire such Preferred Securities having an aggregate stated
liquidation amount of not less than $100,000 or such Subordinated Notes having an aggregate principal amount not less than $100,000, for our own account and for each separate account for which we are acting. 
 5. We acknowledge that we are not a fiduciary of (i) an employee benefit, individual retirement account or other plan or arrangement subject to
Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”) (each a “Plan”); or
(ii) an entity whose underlying assets include “plan assets” by reason of any Plan’s investment in the entity, and are not purchasing any of the Offered Securities on behalf of or with “plan assets” by reason of any
Plan’s investment in the entity. 
 6. We acknowledge that the Trust and the Company and others will rely upon the truth and accuracy of
the foregoing acknowledgments, representations, warranties and agreements and agree that if any of the acknowledgments, representations, warranties and agreements deemed to have been made by our purchase of any of the Offered Securities are no
longer accurate, we shall promptly notify the Company. If we are acquiring any Offered Securities as a fiduciary or agent for one or more investor accounts, we represent that we have sole discretion with respect to each such investor account and
that we have full power to make the foregoing acknowledgments, representations and agreement on behalf of each such investor account. 
  

			
	  

	 (Name of Purchaser)

		
	 By:
	 	  

	 Name:
	 	  

	 Date:
	 	  

 Upon transfer, the Preferred Securities (having a stated liquidation amount of
$                    ) would be registered in the name of the new beneficial owner as follows. 
  

 E-2 

					
	Name:	 	  
  

	Address:	 
		 	  

		
	Taxpayer ID Number:	 	  

  

 E-3 

 Exhibit F 
 FORM OF OFFICER’S FINANCIAL CERTIFICATE 
 The undersigned, the [Chief Financial
Officer/Treasurer/Assistant Treasurer/ Secretary/ Assistant Secretary, Chairman/Vice Chairman/Chief Executive Officer/President/Vice President] hereby certifies, pursuant to Section 8.16 of the Amended and Restated Trust Agreement, dated as of
February 18, 2009 (the “Trust Agreement”), among NovaStar Mortgage, Inc. (the “Company”), The Bank of New York Mellon Trust Company, National Association, as property trustee, BNY Mellon Trust of Delaware, as Delaware
trustee, and the administrative trustees named therein that, as of [date], [20    ], the Guarantor and its consolidated subsidiaries had the following ratios and balances for the quarter then ended: 
  

									
	EBITDA:	  	  
	  	
			
	Interest Coverage Calculation:	  	  
	  	
					
	Interest Coverage Trigger	  	  
	  	to	  	  
	  	

 [include until the earlier of (1) the
10th anniversary of the date of the Trust Agreement and (2) the date after January 1, 2010 upon which an Interest Coverage Trigger occurs]

 [FOR FISCAL YEAR END: Attached hereto are the audited consolidated financial statements (including the balance sheet, income statement and statement of
cash flows, and notes thereto, together with the report of the independent accountants thereon) of the Company and its consolidated subsidiaries for the three years ended [date], 20    .] 
 [FOR FISCAL QUARTER END: Attached hereto are the unaudited consolidated and consolidating financial statements (including the balance sheet and income statement) of the
Company and its consolidated subsidiaries for the fiscal quarter ended [date], 20    .] 
 The financial statements
fairly present in all material respects, in accordance with U.S. generally accepted accounting principles (“GAAP”), the financial position of the Company and its consolidated subsidiaries, and the results of operations and changes in
financial condition as of the date, and for the [quarter] [annual] period ended [date], 20    , and such financial statements have been prepared in accordance with GAAP consistently applied throughout the period involved (expect
as otherwise noted therein). 
  

 F-1 

 IN WITNESS WHEREOF, the undersigned has executed this Officer’s Financial Certificate as of this
[DATE] day of [MONTH], [YEAR]. 
  

			
	NOVASTAR MORTGAGE, INC.
		
	By:	 	  

	Name:	 	  

	Title:	 	  

		
		 	NovaStar Mortgage, Inc.
		 	 2114 Central Street
 Suite 600
 Kansas City, MO 64108

  

 F-2 

 Schedule A 
 DETERMINATION OF LIBOR 
 With respect to the Trust Securities, the London interbank offered rate
(“LIBOR”) shall be determined by the Calculation Agent in accordance with the following provisions (in each case rounded to the nearest .000001%): 
 (1) On the second LIBOR Business Day (as defined below) prior to an Interest Payment Date (each such day, a “LIBOR Determination Date”), LIBOR for any given security shall for the following interest
payment period equal the rate, as obtained by the Calculation Agent from Bloomberg Financial Markets Commodities News, for three-month Eurodollar deposits that appears on Dow Jones Telerate Page 3750 (as defined in the International Swaps and
Derivatives Association, Inc. 2000 Interest Rate and Currency Exchange Definitions), or such other page as may replace such Page 3750, as of 11:00 A.M. (London time) on such LIBOR Determination Date. 
 (2) If, on any LIBOR Determination Date, such rate does not appear on Dow Jones Telerate Page 3750 or such other page as may replace such Page 3750, the Calculation
Agent shall determine the arithmetic mean of the offered quotations of the Reference Banks (as defined below) to leading banks in the London interbank market for three-month Eurodollar deposits in an amount determined by the Calculation Agent by
reference to requests for quotations as of approximately 11:00 A.M. (London time) on the LIBOR Determination Date made by the Calculation Agent to the Reference Banks. If, on any LIBOR Determination Date, at least two of the Reference Banks provide
such quotations, LIBOR shall equal such arithmetic mean of such quotations. If, on any LIBOR Determination Date, only one or none of the Reference Banks provide such quotations, LIBOR shall be deemed to be the arithmetic mean of the offered
quotations that leading banks in the City of New York selected by the Calculation Agent are quoting on the relevant LIBOR Determination Date for three-month Eurodollar deposits in an amount determined by the Calculation Agent by reference to the
principal London offices of leading banks in the London interbank market; provided, that, if the Calculation Agent is required but is unable to determine a rate in accordance with at least one of the procedures provided above, LIBOR shall be
LIBOR as determined on the previous LIBOR Determination Date. 
 (3) As used herein: “Reference Banks” means four (4) major banks in
the London interbank market selected by the Calculation Agent; and “LIBOR Business Day” means a day on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits) in London.

  

 Schedule A-1 

 Schedule 8.16 
 EXISTING TRUPS HOLDERS 
 Taberna Preferred Funding I, Ltd. 
 Taberna Capital Management, LLC 
 2929 Arch Street, 17th Floor 
 Philadelphia, PA 19104 
 Fax: (215) 243-9030 
 Taberna Preferred Funding II, Ltd. 
 Taberna Capital Management, LLC 
 2929 Arch Street, 17th Floor 
 Philadelphia, PA 19104 
 Fax: (215) 243-9030 
 Email: rlicht@raitft.com and mfralin@tabernasecurities.com 
  

 Schedule 8.16-1

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