Document:

Form of Indemnification Agreement

 Exhibit 10.1 
  
 INDEMNIFICATION AGREEMENT 
  
 THIS INDEMNIFICATION AGREEMENT is made and entered into this 15th day of November, 2005 (this “Agreement”), by and between NovaStar Financial, Inc., a Maryland corporation (the “Company”), and
                     (“Indemnitee”). 
  
 RECITALS 
  
 A. The Company and Indemnitee recognize the increasing difficulty in obtaining directors’ and officers’ liability insurance, the significant
increases in the cost of such insurance and the general reductions in the coverage of such insurance. 
  
 B. The Company and Indemnitee further recognize the substantial increase in corporate litigation in general, subjecting officers and directors to
expensive litigation risk at the same time that the availability and coverage of liability insurance has been severely limited. 
  
 C. Indemnitee does not regard the current protection available as adequate under the present circumstances, and Indemnitee and other officers and
directors of the Company may not be willing to continue to serve as officers and directors without the protection provided by this Agreement. 
  
 D. The Company desires to attract and retain the services of highly qualified individuals, such as Indemnitee, to serve as officers and directors of the
Company and to indemnify its officers and directors so as to provide them with the maximum protection permitted by law. 
  
 AGREEMENT 
  
 The Company and Indemnitee hereby agree as follows: 
  
 1. Definitions. For purposes of this Agreement: 
  
 (a) “Change in Control” shall be deemed to have occurred if the conditions set forth in any one of the following paragraphs
shall have been satisfied: 
  
 (i) any
“person” as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) (other than the Company; any trustee or other fiduciary holding securities under an executive benefit plan of
the Company; or any company owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of the stock of the Company), is or becomes the “beneficial owner” (as defined by Rule
13d-3 under the Exchange Act), directly or indirectly, of the securities of the Company (not including any securities acquired directly from the Company or from a transferor in a transaction expressly approved or consented to by the Board of
Directors) representing more than 25% of the combined voting power of the Company’s then outstanding securities; or 

 (ii) during any period of two consecutive years (not including any period prior to the
execution of this Agreement), individuals who at the beginning of such period constitute the Board of Directors and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a
transaction described in clause (i), (ii) or (iv) of this section), (A) whose election by the Board of Directors or nomination for election by the Company’s stockholders was approved by a vote of at least (2/3) of the
directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved or (B) whose election is to replace a person who ceases to be a director due to
death, disability or age, cease for any reason to constitute a majority thereof; or 
  
 (iii) the stockholders of the Company approve a merger or consolidation of the Company with another corporation, other than (A) a
merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity),
in combination with the ownership of any trustee or other fiduciary holding securities under an executive benefit plan of the Company, at least 75% of the combined voting power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or (B) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no person acquires more than 50% of the combined voting power
of the Company’s then outstanding securities; or 
  
 (iv) the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all the Company’s assets. 
  
 (b) “Corporate Status” means with respect to the
Indemnitee the status of such person as a director, trustee, officer, manager, employee or agent of the Company or of any other corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise for
which such person is or was serving at the request of the Company. 
  
 (c) “Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding for which indemnification is sought by Indemnitee 
  
 (d) “Effective Date” means the date of this
Agreement. 
  
 (e) “Expenses” includes
all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other
disbursements or expenses of the types customarily incurred, and actually incurred, in connection with prosecuting, defending, preparing to prosecute or defend, investigating, or being or preparing to be a witness in a Proceeding. 
  

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 (f) “Independent Counsel” means a law firm, or a member of a law firm, that is
experienced in matters of corporation law and has not, nor in the past five years has been, retained to represent the Company or Indemnitee in any matter material to either such party, or any other party to or witness in the Proceeding giving rise
to a claim for indemnification under this Agreement. “Independent Counsel” does not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either
the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. If a Change of Control has not occurred, Independent Counsel shall be selected by the Board of Directors, with the approval of Indemnitee, which
approval will not be unreasonably withheld. If a Change of Control has occurred, Independent Counsel shall be selected by Indemnitee, with the approval of the Board of Directors, which approval will not be unreasonably withheld. 
  
 (g) “Liabilities” means liabilities of any
type whatsoever incurred by reason of (i) Indemnitee’s Corporate Status, or (ii) any action taken (or failure to act) by him or on his behalf in his Corporate Status, including, but not limited to, any judgments, fines (including any
excise taxes assessed on Indemnitee with respect to an employee benefit plan), ERISA excise taxes and penalties, and penalties and amounts paid in settlement of any Proceeding (including all interest, assessments and other charges paid or payable in
connection with or in respect of such judgments, fines, penalties or amounts paid in settlement). 
  
 (h) “Proceeding” includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution
mechanism, investigation, administrative hearing or any other proceeding, whether civil, criminal, administrative or investigative (including on appeal), including any such proceeding (i) pending or completed on or before the Effective Date, or
(ii) with respect to any act or omission of the Company or any members of the Company’s board of directors committed prior to the Effective Date, unless otherwise specifically agreed in writing by the Company and Indemnitee. 
  
 2. Services by Indemnitee. Indemnitee will serve as a director
and/or officer of the Company. However, this Agreement does not impose any obligation on Indemnitee or the Company to continue Indemnitee’s service to the Company beyond any period otherwise required by law or by other agreements or commitments
of the parties, if any. 
  
 3. Indemnification -
General. The Company will indemnify, and advance Expenses to, Indemnitee as provided in this Agreement and otherwise to the maximum extent permitted by Maryland law in effect on the Effective Date and as amended from time to time. However,
no change in Maryland law will have the effect of reducing the benefits available to Indemnitee based on Maryland law as in effect on the Effective Date. The rights of Indemnitee provided in this Section 3 include, without limitation, the
rights set forth in the other sections of this Agreement, including any additional indemnification permitted by Section 2-418(g) of the Maryland General Corporation Law (the “MGCL”). 
  
 4. Third Party Proceedings. Indemnitee is entitled to the
rights of indemnification provided in this Section 4 if, by reason of his Corporate Status, he is, or is threatened to be, made 
  

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 a party to or a witness in any Proceeding, other than a Proceeding by or in the right of the Company. Under this
Section 4, Indemnitee will be indemnified against all Liabilities and Expenses actually and reasonably incurred by him or on his behalf in connection with a Proceeding by reason of his Corporate Status unless one of the following is
established: 
  
 (a) The act or omission of
Indemnitee was material to the matter giving rise to the Proceeding, and 
  
 (i) was committed in bad faith, or 
  
 (ii) was the result of active and deliberate dishonesty; 
  
 (b) Indemnitee actually received an improper personal benefit in money, property or services; or 
  
 (c) In the case of any criminal Proceeding, Indemnitee had
reasonable cause to believe that his conduct was unlawful. 
  
 5.
Proceedings by or in the Right of the Company. Indemnitee is entitled to the rights of indemnification provided in this Section 5 if, by reason of his Corporate Status, he is, or is threatened to be, made a party to or a witness
in any Proceeding brought by or in the right of the Company to procure a judgment in its favor. Under this Section 5, Indemnitee will be indemnified against all Liabilities and Expenses actually and reasonably incurred by him or on his behalf
in connection with such Proceeding, unless one of the following is established: 
  
 (a) The act or omission of Indemnitee was material to the matter giving rise to such a Proceeding, and 
  
 (i) was committed in bad faith, or 
  
 (ii) was the result of active and deliberate dishonesty; or

  
 (b) Indemnitee actually received an improper
personal benefit in money, property or services. 
  
 6.
Court-Ordered Indemnification. Notwithstanding any other provision of this Agreement, a court of appropriate jurisdiction, upon application of Indemnitee and such notice as the court requires, may order indemnification in certain
circumstances. However, indemnification for any Proceeding by or in the right of the Company, or in which liability has been adjudged in the circumstances described in Section 2-418(c) of the MGCL, will be limited to Expenses actually and
reasonably incurred by Indemnitee or on his behalf in connection with a Proceeding. The circumstances under which a court may order such indemnification as it deems proper are: 
  
 (a) If it determines that Indemnitee is entitled to reimbursement under Section 2-418(d)(1) of the
MGCL, the court will order indemnification, in which case Indemnitee will be entitled to recover the expenses of securing such reimbursement; or 
  

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 (b) If it determines that Indemnitee is fairly and reasonably entitled to indemnification
in view of all the relevant circumstances, whether or not Indemnitee has: 
  
 (i) met the standards of conduct set forth in Section 2-418(b) of the MGCL; or 
  
 (ii) been adjudged liable for receipt of an improper personal benefit under Section 2-418(c) of the MGCL. 
  
 7. Indemnification for Expenses of a Party Who is Wholly or Partly
Successful. Notwithstanding any other provision of this Agreement, and without limiting any such provision, to the extent that Indemnitee is, by reason of his Corporate Status, made a party to and is successful, on the merits or otherwise,
in the defense of any Proceeding, he will be indemnified for all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or
otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company will indemnify Indemnitee under this Section 7 for all Expenses actually and reasonably incurred by him or on his behalf in connection with
each successfully resolved claim, issue or matter, allocated on a reasonable and proportionate basis. For purposes of this Section 7 and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with
or without prejudice, will be deemed to be a successful result as to such claim, issue or matter. 
  
 8. Advance of Expenses. The Company will advance all reasonable Expenses actually and reasonably incurred by or on behalf of Indemnitee in
connection with any Proceeding (other than a Proceeding brought to enforce indemnification under this Agreement, applicable law, the Charter or Bylaws of the Company, any agreement, a resolution of the stockholders entitled to vote generally in the
election of directors or a resolution of the Board of Directors), to which Indemnitee is, or is threatened to be, made a party or a witness, within 10 days after the receipt by the Company of a written statement or statements from Indemnitee
requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements must reasonably evidence the Expenses incurred by Indemnitee. The statement or statements must
include a written affirmation by Indemnitee of Indemnitee’s good faith belief that the standard of conduct necessary for indemnification by the Company, as authorized by law and by this Agreement, has been met. The statement or statements must
also include a written undertaking by or on behalf of Indemnitee, in substantially the form attached hereto as Exhibit A, or in such form as may be required under applicable law as in effect at the time the undertaking is signed. The
undertaking requires Indemnitee to reimburse the portion of any Expenses advanced to him relating to claims, issues or matters in the Proceeding for which it is ultimately determined pursuant to Section 9 of this Agreement that the standard of
conduct was not met and which have not been successfully resolved as described in Section 7 of this Agreement. Such reimbursement will be made within 30 days of such determination; provided, however, that if Indemnitee has commenced, or
commences within such 30-day period, legal proceedings in a court of competent jurisdiction to secure a determination that he should be indemnified under applicable law, any determination made by the Company that Indemnitee is not entitled to
indemnification will not be binding, and Indemnitee will not be required to reimburse the Company for any Expenses until a final judicial 
  

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 determination is made with respect thereto (as to which all rights of appeal therefrom have been exhausted or have
lapsed). To the extent that Expenses advanced to Indemnitee do not relate to a specific claim, issue or matter in the Proceeding, such Expenses will be allocated on a reasonable and proportionate basis. The undertaking required by this
Section 8 will be an unlimited general obligation by or on behalf of Indemnitee and will be accepted without reference to Indemnitee’s financial ability to repay such advanced Expenses and without any requirement to post security therefor.

  
 9. Procedure for Determination of Entitlement to
Indemnification. 
  
 (a) To obtain
indemnification under this Agreement, Indemnitee must submit to the Company a written request, including such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent
Indemnitee is entitled to indemnification. The Secretary of the Company will, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification. 
  
 (b) Upon proper written request for indemnification by
Indemnitee, a determination, if required by applicable law, with respect to Indemnitee’s entitlement to indemnification will promptly be made in the following manner: 
  
 (i) if a Change in Control has occurred, by Independent Counsel in a written opinion to the Board of
Directors, a copy of which will be delivered to Indemnitee; or 
  
 (ii) if a Change of Control has not occurred, 
  
 (A) by the Board of Directors (or a duly authorized committee thereof) by a majority vote of a quorum consisting of Disinterested
Directors, or 
  
 (B) if a quorum of the Board
of Directors consisting of Disinterested Directors is not obtainable or, even if obtainable, such quorum of Disinterested Directors so directs, by Independent Counsel in a written opinion to the Board of Directors, a copy of which will be delivered
to Indemnitee, or 
  
 (C) if so directed by a
majority of the members of the Board of Directors, by the stockholders of the Company. 
  
 (c) If it is determined that Indemnitee is entitled to indemnification, payment to Indemnitee will be made within 10 days after such
determination. Indemnitee will cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity, upon reasonable advance
request, any documentation or information that is not privileged or otherwise protected from disclosure, and that is reasonably available to Indemnitee and reasonably necessary to such determination in the discretion of the Board of Directors or
Independent Counsel if retained pursuant to Section 9(b). Any Expenses 
  

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 actually and reasonably incurred by Indemnitee in cooperating with the person, persons or entity making
such determination will be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company will indemnify and hold Indemnitee harmless therefrom. 
  
 (d) If the person or persons empowered or selected under
Section 9(b) to determine whether Indemnitee is entitled to indemnification has/have not made a determination within 30 days after receipt by the Company of a written request from Indemnitee for indemnification, the requisite determination of
entitlement to indemnification will be deemed to have been made in favor of the Indemnitee, and he will be entitled to such indemnification, absent (i) an intentional misstatement by Indemnitee of a material fact, or an intentional omission of
a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification; or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 30-day
period may be extended for a reasonable time, not to exceed an additional 15 days, if the person or persons making such determination reasonably and in good faith requires such additional time to complete the obtaining or evaluation of documentation
and/or information relating thereto. In the event that the determination as to entitlement to indemnification is made by Independent Counsel or the stockholders of the Company, the 30-day period shall not begin until the Independent Counsel is
selected or until a meeting of the stockholders has been held, provided, however, the notice of any such meeting and any necessary proxy statement must have been filed with the Securities and Exchange Commission within 30 days of the submission by
the Indemnitee of a written request for indemnification. 
  
 10.
Presumptions and Effect of Certain Proceedings. 
  
 (a) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination must presume that Indemnitee is entitled to indemnification under this
Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 9(a). Anyone seeking to overcome this presumption will have the burden of proof and the burden of persuasion, by clear and convincing evidence. In
addition, if the person or persons making a determination pursuant to Section 9(b) determine(s) that Indemnitee is not entitled to indemnification hereunder, such determination will not create a presumption against Indemnitee’s entitlement
to indemnification in any later action, suit or proceeding initiated by Indemnitee to enforce his rights under this Agreement. 
  
 (b) The termination of any Proceeding by judgment, order, settlement, conviction, a plea of nolo contendere or its equivalent, or an entry
of an order of probation prior to judgment, does not create a presumption that Indemnitee did not meet the requisite standard of conduct described herein for indemnification. 
  

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 11. Remedies of Indemnitee. 
  
 (a) Indemnitee will be entitled to an adjudication in an appropriate court located in the State of Maryland,
or in any other court of competent jurisdiction, of his entitlement to such indemnification or advance of Expenses if any of the following occur: 
  
 (i) a determination is made pursuant to Section 9 of this Agreement that Indemnitee is not entitled to indemnification under this
Agreement; 
  
 (ii) advance of Expenses is not
timely made pursuant to Section 8 of this Agreement; 
  
 (iii) payment of indemnification is not made pursuant to Section 7 of this Agreement within 10 days after receipt by the Company of a written request therefor; or 
  
 (iv) payment of indemnification is not made within
10 days after (A) a determination has been made that Indemnitee is entitled to indemnification, or (B) the end of the 30-day period after which Indemnitee is deemed to be entitled to indemnification pursuant to Section 9(e).

  
 (b) As an alternative to the remedy described
in Section 11(a), Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the commercial Arbitration Rules of the American Arbitration Association. Indemnitee must commence such proceeding
for adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding under Section 11(a). 
  
 (c) In any judicial proceeding or arbitration commenced pursuant to this Section 11 the Company has the
burden of proof and the burden of persuasion, by clear and continuing evidence, that Indemnitee is not entitled to indemnification or advance of Expenses, as the case may be. 
  
 (d) If a determination has been made under Section 9(b) of this Agreement that Indemnitee is entitled
to indemnification, the Company will be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 11, unless Indemnitee makes a misstatement of a material fact, or omits a material fact necessary
to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification. 
  
 (e) If Indemnitee seeks a judicial adjudication of or an award in arbitration to enforce his rights under, or to recover damages for
breach of, this Agreement, under this Section 11, then Indemnitee will be entitled to recover from the Company, and will be indemnified by the Company for, any and all Expenses actually and reasonably incurred by him in such judicial
adjudication or arbitration. If it is determined in such judicial adjudication or arbitration that Indemnitee is entitled to receive part but not all of the indemnification or advance of Expenses sought, the Expenses incurred by Indemnitee in
connection with such judicial adjudication or arbitration will be appropriately prorated. 
  

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 12. Defense of the Underlying Proceeding. 
  
 (a) Indemnitee must notify the Company promptly upon being
served with or receiving any summons, citation, subpoena, complaint, indictment, information, notice, request or other document relating to any Proceeding that may result in the right to indemnification or the advance of Expenses hereunder. However,
the failure to give any such notice will not disqualify Indemnitee from the right, or otherwise affect in any manner any right of Indemnitee, to indemnification or the advance of Expenses under this Agreement unless the Company’s ability to
defend in such Proceeding or to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only to the extent the Company is actually so prejudiced. 
  
 (b) Subject to the provisions of the last sentence of this
Section 12(b) and of Sections 12(c) and 12(d), the Company will have the right to defend Indemnitee in any Proceeding that may give rise to indemnification hereunder, subject to Indemnitee’s approval of counsel, which approval may not
be unreasonably withheld. However, the Company must notify Indemnitee of any such decision to defend within 15 calendar days following receipt of notice of any such Proceeding under Section 12(a). The Company may not, without the prior written
consent of Indemnitee, consent to the entry of any judgment against Indemnitee, or enter into any settlement or compromise that (A) includes an admission of Indemnitee’s fault or (B) does not include, as an unconditional term, the
full release of Indemnitee from all liability in respect of such Proceeding. Such release must be in form and substance reasonably satisfactory to Indemnitee. This Section 12(b) does not apply to a Proceeding brought by Indemnitee under
Section 11 or Section 19. 
  
 (c)
Indemnitee will be entitled to representation by separate legal counsel of Indemnitee’s choice, subject to the Company’s prior approval, which approval may not be unreasonably withheld, at the expense of the Company, in a Proceeding to
which Indemnitee is a party by reason of Indemnitee’s Corporate Status, in the following circumstances: 
  
 (i) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval may not be unreasonably
withheld, that he may have separate defenses or counterclaims to assert with respect to any issue that may not be consistent with other defendants in such Proceeding; 
  
 (ii) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which
approval may not be unreasonably withheld, that an actual or apparent conflict of interest or potential conflict of interest exists between Indemnitee and the Company; or 
  
 (iii) if the Company fails to assume the defense of such Proceeding in a timely manner. 
  

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 (d) In addition, if the Company fails to comply with any of its obligations under this
Agreement or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any Proceeding to deny or to recover from Indemnitee the benefits intended to be provided to Indemnitee
hereunder, Indemnitee shall have the right to retain counsel of Indemnitee’s choice, subject to the prior approval of the Company, which shall not be unreasonably withheld, at the expense of the Company (subject to Section 11(e)), to
represent Indemnitee in connection with any such matter. 
  
 13.
Non-Exclusivity; Survival of Rights; Subrogation; Insurance. 
  
 (a) The rights of indemnification and advance of Expenses provided by this Agreement will not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Charter
or Bylaws of the Company, any agreement or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision
hereof may limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. 
  
 (b) If any payment is made under this Agreement, the Company
will be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who will execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to
enable the Company to bring suit to enforce such rights. 
  
 (c) The Company will not be liable under this Agreement to make any payment of amounts otherwise indemnifiable or payable or reimbursable as Expenses hereunder if and to the extent that Indemnitee has otherwise
actually received such payment under any insurance policy, contract, agreement or otherwise. 
  
 14. Insurance. The Company will use its reasonable best efforts to acquire directors and officers liability insurance, on terms and conditions deemed appropriate by the Board of Directors of the Company,
with the advice of counsel, covering Indemnitee or any claim made against Indemnitee for service as a director or officer of the Company and covering the Company for any indemnification or advance of Expenses made by the Company to Indemnitee for
any claims made against Indemnitee for service as a director or officer of the Company. Without limiting any other obligation under this Agreement, the Company will indemnify Indemnitee for any payment by Indemnitee arising out of the amount of any
deductible or retention and the amount of any excess of Liabilities and Expenses actually and reasonably incurred by Indemnitee in connection with a Proceeding over the coverage of any insurance referred to in the previous sentence. 
  
 15. Indemnification for Expenses of a Witness. Notwithstanding
any other provision of this Agreement, if Indemnitee is or may be, by reason of his Corporate Status, a witness in any Proceeding, whether instituted by the Company or any other party, and to which Indemnitee is not a party but in which the
Indemnitee receives a subpoena to testify, he will be advanced all reasonable Expenses and indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. 
  

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 16. Duration of Agreement; Binding Effect. 
  
 (a) All agreements and obligations of the Company contained
herein will continue during the period Indemnitee is a director, trustee, officer, manager, employee or agent of the Company or of any other corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other
enterprise for which such person is or was serving at the request of the Company and will continue thereafter so long as Indemnitee is, or may be, subject to any possible Proceeding by reason of the fact that Indemnitee was a director, trustee,
officer, manager, employee or agent of the Company or was serving in any other capacity referred to herein. 
  
 (b) The indemnification and advance of Expenses provided by, or granted under, this Agreement will be binding upon and enforceable by the
parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company). The indemnification and
advance of Expenses will inure to the benefit of Indemnitee and his spouse, assigns, heirs, devisees, executors and administrators and other legal representatives. 
  
 (c) The Company will require and cause any successor to all, substantially all or a substantial part, of the
business and/or assets of the Company - whether direct or indirect by purchase, merger, consolidation or otherwise - to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform if no such succession had taken place. Such assumption by any successor must be in writing in form and substance satisfactory to Indemnitee. 
  
 17. Severability. If any provision or provisions of this Agreement are held to be invalid, illegal or
unenforceable for any reason whatsoever, the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be
invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) will not in any way be affected or impaired thereby. To the fullest extent possible, the provisions of this Agreement (including, without limitation, each
portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) will be construed so as to give effect to the intent manifested thereby.

  
 18. Exception to Right of Indemnification or Advance of
Expenses. Notwithstanding any other provision of this Agreement, Indemnitee will not be entitled to indemnification or advance of Expenses under this Agreement with respect to any Proceeding brought by Indemnitee, unless: 
  
 (a) The Proceeding is brought to enforce indemnification
under this Agreement, and then only to the extent in accordance with and as authorized by Sections 8 and 11 of this Agreement; or 
  

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 (b) The Company’s Bylaws, the Charter, a resolution of the stockholders entitled to
vote generally in the election of directors or of the Board of Directors or an agreement approved by the Board of Directors to which the Company is a party expressly provides otherwise. 
  
 19. Specific Performance. The Company and Indemnitee recognize that if any provision of this Agreement is
violated by the Company, Indemnitee may be without an adequate remedy at law. Accordingly, in the event of any such violation, Indemnitee will be entitled, if Indemnitee so elects, to institute proceedings, either in law or at equity, to obtain
damages, to enforce specific performance, to enjoin such violation, or to obtain any relief or any combination of the foregoing as Indemnitee may elect it to pursue. 
  
 20. Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which will be
deemed to be an original but all of which together will constitute one and the same Agreement. One such counterpart signed by the party against whom enforceability is sought will be sufficient to evidence the existence of this Agreement. 

 
 21. Headings. The headings of the paragraphs of this
Agreement are inserted for convenience only and will not be deemed to constitute part of this Agreement or to affect the construction thereof. 
  
 22. Modification and Waiver. No supplement, modification or amendment of this Agreement will be binding unless executed in writing by both
of the parties hereto. No waiver of any of the provisions of this Agreement will be deemed or constitute a waiver of any other provisions hereof (whether or not similar), nor will such waiver constitute a continuing waiver. 
  
 23. Notices. Addresses for notice to either party are as shown
on the signature pages of this Agreement, or as later modified by written notice. All notices, requests, demands and other communications hereunder must be in writing and will be deemed to have been duly given if: 
  
 (a) Delivered by hand and receipted for by the party to whom
said notice or other communication has been directed; or 
  
 (b) Mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed. 
  
 24. Governing Law. The parties agree that this Agreement will be governed by, and construed and enforced in
accordance with, the laws of the State of Maryland, without regard to its conflicts of laws rules. 
  
 25. Miscellaneous. Use of the masculine pronoun will be deemed to include usage of the feminine pronoun where appropriate. 
  
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 IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above
written. 
  

							
	ATTEST:	 	 	 	 	 	 
			
	 	 	 	 	COMPANY
			
	 	 	 	 	NOVASTAR FINANCIAL, INC.
				
	 	 	 	 	By:	 	  

	(SEAL)	 	 	 	Name:	 	  

	  

	 	 	 	Title:	 	  

	 	 	 	 	 	 	 
	 	 	 	 	Address:	 	8140 Ward Parkway, Suite 300
	 	 	 	 	 	 	Kansas City MO, 64114
			
	WITNESS:	 	 	 	INDEMNITEE
			
	 	 	 	 	

	  

	 	 	 	[Name of Indemnitee]
				
	 	 	 	 	Address:	 	  

	 	 	 	 	 	 	  

	 	 	 	 	 	 	  

  

 13 

 EXHIBIT A 
  

FORM OF UNDERTAKING TO REPAY EXPENSES ADVANCED 
  
 The Board of Directors of NovaStar Financial, Inc. 
  

	Re:	Undertaking to Repay Expenses Advanced 

  
 Ladies and Gentlemen: 
  
 This undertaking is being provided pursuant to that certain Indemnification Agreement dated the day of
            , 200    , by and between NovaStar Financial, Inc. (the “Company”) and the undersigned Indemnitee (the “Indemnification
Agreement”), pursuant to which I am entitled to advance of expenses in connection with [Description of Proceeding] (the “Proceeding”). 
  
 Terms used herein and not otherwise defined have the meanings specified in the Indemnification Agreement. 
  
 I am subject to the Proceeding by reason of my Corporate Status or by reason of alleged
actions or omissions by me in such capacity. I hereby affirm that at all times, insofar as I was involved as [a director] [an officer] of the Company, in any of the facts or events giving rise to the Proceeding, I (1) acted in good faith and
honestly, (2) did not receive any improper personal benefit in money, property or services and (3) in the case of any criminal Proceeding, had no reasonable cause to believe that any act or omission by me was unlawful. 
  
 In consideration of the advance of Expenses by the Company for reasonable attorneys’
fees and related expenses incurred by me in connection with the Proceeding (the “Advanced Expenses”), I hereby agree that if, in connection with the Proceeding, it is determined that (1) an act or omission by me was material to the
matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (2) I actually received an improper personal benefit in money, property or services or (3) in
the case of any criminal Proceeding, I had reasonable cause to believe that my conduct was unlawful, then I must reimburse the portion of the Expenses relating to the claims, issues or matters in the Proceeding as to which the foregoing findings
have been established and which have not been successfully resolved as described in Section 7 of the Indemnification Agreement within the time periods set forth in and otherwise in accordance with Section 8 of the Indemnification
Agreement. To the extent that Advanced Expenses do not relate to a specific claim, issue or matter in the Proceeding, I agree that such Expenses will be allocated on a reasonable and proportionate basis. 
  

 14 

 IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking on this
     day of             , 200    . 
  

	
	  

  

	
	 WITNESS:

	
	  

	
	 (SEAL)

  

 15Form of Warrant Agreement

 Exhibit 4.8 
  

WARRANT AGREEMENT 
  
 Agreement made as of                     , 2005
between Israel Growth Partners Acquisition Corp., a Delaware corporation, with offices at Ziv Towers, Building D, 24 Raoul Wallenberg St., Tel-Aviv 69719, Israel, (“Company”), and American Stock Transfer & Trust Company, a New
York corporation, with offices at 59 Maiden Lane, New York, New York 10038 (“Warrant Agent”). 
  
 WHEREAS, the Company has heretofore sold and delivered to its initial security holders, including its officers and directors (collectively,
“Insiders”), an aggregate of (i) 2,475,000 Class W Warrants (“Class W Warrants”) and (ii) 2,475,000 Class Z Warrants (“Class Z Warrants”), each such Warrant evidencing the right of the holder thereof to purchase one
share of the Company’s common stock, par value $0.0001 per share (“Common Stock”), for $5.00, subject to adjustment as described herein (the Class W Warrants and the Class Z Warrants sold to the Insiders being hereinafter referred to,
collectively, as “Insiders’ Warrants”); and 
  
 WHEREAS, the Company is engaged in a public offering (“Public Offering”) of Units (“Units”) and, in connection therewith, has determined to issue and deliver up to (i) 8,165,000 Class W Warrants and 8,165,000 Class Z
Warrants (collectively, “Public Warrants”) to the public investors, and (ii) 355,000 Class W Warrants and 355,000 Class Z Warrants to HCFP/Brenner Securities LLC (“Brenner”) or its designees (“Representative’s
Warrants” and, collectively with the Insiders’ Warrants and the Public Warrants, the “Warrants”); and 
  
 WHEREAS, the Company has filed with the Securities and Exchange Commission a Registration Statement, No.
333-             on Form S-1 (“Registration Statement”) for the registration, under the Securities Act of 1933, as amended (“Act”) of, among other securities, the
Warrants and the Common Stock issuable upon exercise of the Warrants; and 
  
 WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, registration, transfer, exchange, redemption and exercise of
the Warrants; and 
  
 WHEREAS, the Company desires to provide for
the form and provisions of the Warrants, the terms upon which they shall be issued and exercised, and the respective rights, limitation of rights, and immunities of the Company, the Warrant Agent, and the holders of the Warrants; and 
  
 WHEREAS, all acts and things have been done and performed which are necessary
to make the Warrants, when executed on behalf of the Company and countersigned by or on behalf of the Warrant Agent, as provided herein, the valid, binding and legal obligations of the Company, and to authorize the execution and delivery of this
Agreement. 
  
 NOW, THEREFORE, in consideration of the mutual
agreements herein contained, the parties hereto agree as follows: 
  
 1.
Appointment of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company for the Warrants, and the Warrant Agent hereby accepts such appointment and agrees to perform the same in accordance with the terms
and conditions set forth in this Agreement. 

 2. Warrants. 
  
 2.1 Form of Warrant. Each Warrant shall be issued in registered form only, shall be in substantially the respective forms of Exhibits A and B
hereto, the provisions of which are incorporated herein and shall be signed by, or bear the facsimile signature of, the Chairman of the Board or President and Treasurer, Secretary or Assistant Secretary of the Company and shall bear a facsimile of
the Company’s seal. In the event the person whose facsimile signature has been placed upon any Warrant shall have ceased to serve in the capacity in which such person signed the Warrant before such Warrant is issued, it may be issued with the
same effect as if he or she had not ceased to be such at the date of issuance. 
  
 2.2 Effect of Countersignature. Unless and until countersigned by the Warrant Agent pursuant to this Agreement, a Warrant shall be invalid and of no effect and may not be exercised by the holder thereof.

  
 2.3 Registration. 
  
 2.3.1 Warrant Register. The Warrant Agent shall
maintain books (“Warrant Register”), for the registration of original issuance and the registration of transfer of the Warrants. Upon the initial issuance of the Warrants, the Warrant Agent shall issue and register the Warrants in the
names of the respective holders thereof in such denominations and otherwise in accordance with instructions delivered to the Warrant Agent by the Company. 
  
 2.3.2 Registered Holder. Prior to due presentment for registration of transfer of any Warrant, the Company and the Warrant Agent
may deem and treat the person in whose name such Warrant shall be registered upon the Warrant Register (“registered holder”), as the absolute owner of such Warrant and of each Warrant represented thereby (notwithstanding any notation of
ownership or other writing on the Warrant Certificate made by anyone other than the Company or the Warrant Agent), for the purpose of any exercise thereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected
by any notice to the contrary. 
  
 2.4 Detachability of
Warrants. The securities comprising the Units will not be separately transferable until 90 days after the date hereof unless Brenner informs the Company of its decision to allow earlier separate trading, but in no event will Brenner allow
separate trading of the securities comprising the Units until the Company files a Current Report on Form 8-K which includes an audited balance sheet reflecting the receipt by the Company of the gross proceeds of the Public Offering including the
proceeds received by the Company from the exercise of the Underwriter’s over-allotment option, if the over-allotment option is exercised prior to the filing of the Form 8-K. 
  
 2.5 Warrant Attributes. The Insiders’ Warrants, the Public Warrants and the Representative’s Warrants shall
have the same terms except with respect to the Warrant Price and Exercise Period as set forth below in Sections 3.1 and 3.2. 
  

 2 

 3. Terms and Exercise of Warrants. 
  
 3.1 Warrant Price. Each Insiders’ Warrant and Public Warrant shall, when countersigned by the Warrant Agent,
entitle the registered holder thereof, subject to the provisions of such Insiders’ Warrant and Public Warrant, as applicable, and of this Warrant Agreement, to purchase from the Company the number of shares of Common Stock stated therein, at
the price of $5.00 per whole share, subject to the adjustments provided in Section 4 hereof and in the last sentence of this Section 3.1. Each Representative’s Warrant shall, when countersigned by the Warrant Agent, entitle the registered
holder thereof, subject to the provisions of such Representative’s Warrant and of this Warrant Agreement, to purchase from the Company the number of shares of Common Stock stated therein, at the price of $5.50 per whole share, subject to the
adjustments provided in Section 4 hereof. The term “Warrant Price” as used in this Warrant Agreement refers to the price per share at which Common Stock may be purchased at the time a Warrant is exercised. The Company in its sole
discretion may lower the Warrant Price at any time prior to the Expiration Date. 
  
 3.2 Duration of Warrants. 
  
 3.2.1 A Class W Warrant or Class Z Warrant may be exercised only during the period (“Exercise Period”) commencing on the later of the consummation by the Company of a merger, capital stock exchange, asset
acquisition or other similar business combination (“Business Combination”) (as described more fully in the Company’s Registration Statement) and
                , 2006. Each Insiders’ Warrant and Public Warrant shall terminate at 5:00 p.m., New York City time, on the earlier to occur of (i)
                , 2010 if a Class W Warrant or                 , 2012 if a Class Z
Warrant, as applicable, or (ii) the date fixed for redemption of the Warrants as provided in Section 6 of this Agreement (“Expiration Date”). Each Representative’s Warrant shall terminate at 5:00 p.m., New York City time, on the
earlier to occur of (i)                 , 2010 or (ii) the date fixed for redemption of the Warrants as provided in Section 6 of this Agreement. 
  
 3.2.2 Except with respect to the right to receive the
Redemption Price (as set forth in Section 6 hereunder), each Warrant not exercised on or before the Expiration Date shall become void, and all rights thereunder and all rights in respect thereof under this Agreement shall cease at the close of
business on the Expiration Date. The Company in its sole discretion may extend the duration of the Warrants by delaying the Expiration Date. 
  
 3.3 Exercise of Warrants. 
  
 3.3.1 Payment. Subject to the provisions of the Warrant and this Warrant Agreement, a Warrant, when countersigned by the Warrant
Agent, may be exercised by the registered holder thereof by surrendering it, at the office of the Warrant Agent, or at the office of its successor as Warrant Agent, in the Borough of Manhattan, City and State of New York, with the subscription form,
as set forth in the Warrant, duly executed, and by paying in full, in lawful money of the United States, in cash, good certified check or good bank draft payable to the order of the Company (or as otherwise agreed to by the Company), the Warrant
Price for each full share of Common Stock as to which the Warrant is exercised and any and all applicable taxes 

  

 3 

 
due in connection with the exercise of the Warrant, the exchange of the Warrant for the Common Stock, and the issuance of the Common Stock. 
  
 3.3.2 Issuance of Certificates. As soon as
practicable after the exercise of any Warrant and the clearance of the funds in payment of the Warrant Price, the Company shall issue to the registered holder of such Warrant a certificate or certificates for the number of full shares of Common
Stock to which he is entitled, registered in such name or names as may be directed by him, her or it, and if such Warrant shall not have been exercised in full, a new countersigned Warrant for the number of shares as to which such Warrant shall not
have been exercised. Notwithstanding the foregoing, the Company shall not be obligated to deliver any securities pursuant to the exercise of a Warrant unless a registration statement under the Act with respect to the Common Stock is effective.
Warrants may not be exercised by, or securities issued to, any registered holder in any state in which such exercise would be unlawful. 
  
 3.3.3 Valid Issuance. All shares of Common Stock issued upon the proper exercise of a Warrant in conformity with this Agreement
shall be validly issued, fully paid and nonassessable. 
  
 3.3.4 Date of Issuance. Each person in whose name any such certificate for shares of Common Stock is issued shall for all purposes be deemed to have become the holder of record of such shares on the date on which the Warrant was
surrendered and payment of the Warrant Price was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person
shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open. 
  
 3.3.5 Warrant Solicitation and Warrant Solicitation Fee. 
  
 (a) The Company has engaged Brenner, on a non-exclusive basis, as its agent for the solicitation of the
exercise of the Warrants. The Company, at its cost, will (i) assist Brenner with respect to such solicitation, if requested by Brenner, and (ii) provide Brenner, and direct the Company’s transfer agent and the Warrant Agent to deliver to
Brenner, lists of the record and, to the extent known, beneficial owners of the Company’s Warrants. The Company hereby instructs the Warrant Agent to cooperate with Brenner in every respect in connection with Brenner’s solicitation
activities, including, but not limited to, providing to Brenner, at the Company’s cost, a list of record and beneficial holders of the Warrants and circulating a prospectus or offering circular disclosing the compensation arrangements
referenced in Section 3.3.5(b) below to holders of the Warrants at the time of exercise of the Warrants. In addition to the conditions set forth in Section 3.3.5(b), Brenner shall accept payment of the warrant solicitation fee provided in Section
3.3.5(b) only if it has provided bona fide services to the Company in connection with the exercise of the Warrants and only to the extent that an investor who exercises his Warrants specifically designates, in writing, that Brenner solicited his
exercise. In addition to soliciting, either orally or in writing, the exercise of Warrants by a Warrant holder, such services may also include disseminating information, either orally or in writing, to Warrant holders about the Company or the market
for the Company’s securities, or assisting in the processing of the exercise of Warrants. 
  

 4 

 (b) In each instance in which a Warrant is exercised, the Warrant Agent shall promptly
give written notice of such exercise to the Company and Brenner (“Warrant Agent’s Exercise Notice”). If, upon the exercise of any Warrant more than one year from the effective date of the Registration Statement, (i) the market price
of the Company’s Common Stock is greater than the Warrant Price, (ii) disclosure of compensation arrangements between the Company and Brenner with respect to the solicitation of the exercise of the Warrants was made both at the time of the
Public Offering and at the time of exercise (by delivery of the Prospectus or as otherwise required by applicable law, rule or regulation), (iii) the holder of the Warrant confirms in writing that the exercise of the Warrant was solicited by
Brenner, (iv) the Warrant was not held in a discretionary account, and (v) the solicitation of the exercise of the Warrant was not in violation of Regulation M (as such rule or any successor rule may be in effect as of such time of exercise)
promulgated under the Securities Exchange Act of 1934, as amended, then the Warrant Agent, simultaneously with the distribution of the Common Stock underlying the Warrants so exercised in accordance with the instructions from the Company following
receipt of the proceeds to the Company received upon exercise of such Warrant(s), shall, on behalf of the Company, pay a fee of 5% of the Warrant Price to Brenner, provided that Brenner delivers to the Warrant Agent within ten (10) business days
from the date on which Brenner has received the Warrant Agent’s Exercise Notice, a certificate that the conditions set forth in the preceding clauses (iii), (iv) and (v) have been satisfied. Notwithstanding the foregoing, no fee will be paid to
Brenner with respect to the exercise by the Underwriters or their affiliates or the Company’s officers or directors of Warrants purchased by it or them upon exercise of the Representative’s Warrants and still held by any of the
Underwriters or them for its or their own account. Brenner and the Company may at any time during business hours, examine the records of the Warrant Agent, including its ledger of original Warrant certificates returned to the Warrant Agent upon
exercise of Warrants. 
  
 (c) The provisions of
this Section 3.3.5. may not be modified, amended or deleted without the prior written consent of Brenner. 
  
 4. Adjustments. 
  
 4.1
Stock Dividends – Split-Ups. If after the date hereof, and subject to the provisions of Section 4.6 below, the number of outstanding shares of Common Stock is increased by a stock dividend payable in shares of Common Stock, or by a
split-up of shares of Common Stock, or other similar event, then, on the effective date of such stock dividend, split-up or similar event, the number of shares of Common Stock issuable on exercise of each Warrant shall be increased in proportion to
such increase in outstanding shares of Common Stock. 
  
 4.2
Aggregation of Shares. If after the date hereof, and subject to the provisions of Section 4.6, the number of outstanding shares of Common Stock is decreased by a consolidation, combination, reverse stock split or reclassification of shares of
Common Stock or other similar event, then, on the effective date of such consolidation, combination, reverse stock split, reclassification or similar event, the number of shares of Common Stock issuable on exercise of each Warrant shall be decreased
in proportion to such decrease in outstanding shares of Common Stock. 
  

 5 

 4.3 Adjustments in Exercise Price. Whenever the number of shares of Common Stock purchasable upon
the exercise of the Warrants is adjusted, as provided in Section 4.1 and 4.2 above, the Warrant Price shall be adjusted (to the nearest cent) by multiplying such Warrant Price immediately prior to such adjustment by a fraction (x) the numerator of
which shall be the number of shares of Common Stock purchasable upon the exercise of the Warrants immediately prior to such adjustment, and (y) the denominator of which shall be the number of shares of Common Stock so purchasable immediately
thereafter. 
  
 4.4 Replacement of Securities upon
Reorganization, etc. In case of any reclassification or reorganization of the outstanding shares of Common Stock (other than a change covered by Section 4.1 or 4.2 hereof or that solely affects the par value of such shares of Common Stock), or
in the case of any merger or consolidation of the Company with or into another corporation (other than a consolidation or merger in which the Company is the continuing corporation and that does not result in any reclassification or reorganization of
the outstanding shares of Common Stock), or in the case of any sale or conveyance to another corporation or entity of the assets or other property of the Company as an entirety or substantially as an entirety in connection with which the Company is
dissolved, the Warrant holders shall thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the Warrants and in lieu of the shares of Common Stock of the Company immediately theretofore
purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation,
or upon a dissolution following any such sale or transfer, that the Warrant holder would have received if such Warrant holder had exercised his, her or its Warrant(s) immediately prior to such event; and if any reclassification also results in a
change in shares of Common Stock covered by Section 4.1 or 4.2, then such adjustment shall be made pursuant to Sections 4.1, 4.2, 4.3 and this Section 4.4. The provisions of this Section 4.4 shall similarly apply to successive reclassifications,
reorganizations, mergers or consolidations, sales or other transfers. 
  
 4.5 Notices of Changes in Warrant. Upon every adjustment of the Warrant Price or the number of shares issuable upon exercise of a Warrant, the Company shall give written notice thereof to the Warrant Agent, which notice shall state
the Warrant Price resulting from such adjustment and the increase or decrease, if any, in the number of shares purchasable at such price upon the exercise of a Warrant, setting forth in reasonable detail the method of calculation and the facts upon
which such calculation is based. Upon the occurrence of any event specified in Sections 4.1, 4.2, 4.3 or 4.4, then, in any such event, the Company shall give written notice to the Warrant holder, at the last address set forth for such holder in the
warrant register, of the record date or the effective date of the event. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such event. 
  
 4.6 No Fractional Shares. Notwithstanding any provision contained in this Warrant Agreement to the contrary, the
Company shall not issue fractional shares upon exercise of Warrants. If, by reason of any adjustment made pursuant to this Section 4, the holder of any Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest in
a 

  

 6 

 
share, the Company shall, upon such exercise, round up to the nearest whole number the number of the shares of Common Stock to be issued to the Warrant
holder. 
  
 4.7 Form of Warrant. The form of Warrant need
not be changed because of any adjustment pursuant to this Section 4, and Warrants issued after such adjustment may state the same Warrant Price and the same number of shares as is stated in the Warrants initially issued pursuant to this Agreement.
However, the Company may at any time in its sole discretion make any change in the form of Warrant that the Company may deem appropriate and that does not affect the substance thereof, and any Warrant thereafter issued or countersigned, whether in
exchange or substitution for an outstanding Warrant or otherwise, may be in the form as so changed. 
  
 5. Transfer and Exchange of Warrants. 
  
 5.1 Registration of Transfer. The Warrant Agent shall register the transfer, from time to time, of any outstanding Warrant upon the Warrant Register, upon surrender of such Warrant for transfer, properly
endorsed with signatures properly guaranteed and accompanied by appropriate instructions for transfer. Upon any such transfer, a new Warrant representing an equal aggregate number of Warrants shall be issued and the old Warrant shall be cancelled by
the Warrant Agent. The Warrants so cancelled shall be delivered by the Warrant Agent to the Company from time to time upon request. 
  
 5.2 Procedure for Surrender of Warrants. Warrants may be surrendered to the Warrant Agent, together with a written request for exchange or
transfer, and thereupon the Warrant Agent shall issue in exchange therefor one or more new Warrants as requested by the registered holder of the Warrants so surrendered, representing an equal aggregate number of Warrants; provided, however, that in
the event that a Warrant surrendered for transfer bears a restrictive legend, the Warrant Agent shall not cancel such Warrant and issue new Warrants in exchange therefor until the Warrant Agent has received an opinion of counsel for the Company
stating that such transfer may be made and indicating whether the new Warrants must also bear a restrictive legend. 
  
 5.3 Fractional Warrants. The Warrant Agent shall not be required to effect any registration of transfer or exchange which will result in the
issuance of a warrant certificate for a fraction of a warrant. 
  
 5.4 Service Charges. No service charge shall be made for any exchange or registration of transfer of Warrants. 
  
 5.5 Warrant Execution and Countersignature. The Warrant Agent is hereby authorized to countersign and to deliver, in accordance with the terms of
this Agreement, the Warrants required to be issued pursuant to the provisions of this Section 5, and the Company, whenever required by the Warrant Agent, will supply the Warrant Agent with Warrants duly executed on behalf of the Company for such
purpose. 
  

 7 

 6. Redemption. 
  
 6.1 Redemption. Subject to Section 6.4 hereof, the Class W Warrants and/or Class Z Warrants may be redeemed, at the option of the Company, in whole
or in part, at any time after they become exercisable and prior to their expiration, at the office of the Warrant Agent, upon the notice referred to in Section 6.2, at the price of $.05 per Warrant (“Redemption Price”), provided that the
last sales price of the Common Stock has been at least $7.50 per share (subject to adjustment in accordance with Section 4 hereof), in the case of the Class W Warrants, and $8.75 per share (subject to adjustment in accordance with Section 4 hereof),
in the case of the Class Z Warrants, as applicable, on any twenty (20) trading days within any thirty (30) trading day period ending on the third business day prior to the date on which notice of redemption is given. In the event of a redemption for
less than all of the Class W Warrants and/or Class Z Warrants, warrants shall be redeemed pro rata, with respect to each of the Class W Warrants and the Class Z Warrants. The provisions of this Section 6.1 may not be modified, amended or deleted
without the prior written consent of Brenner. In determining whether to grant consent to any redemption, Brenner will assess the relative strengths of the securities markets and small capitalization companies, in general, and the trading pattern of,
and demand for the Company’s securities in particular. 
  
 6.2 Date Fixed for, and Notice of, Redemption. In the event the Company shall elect to redeem any or all of the Class W and/or Class Z Warrants, as applicable, the Company shall fix a date for the redemption. Notice of redemption
shall be mailed by first class mail, postage prepaid, by the Company not less than 30 days prior to the date fixed for redemption to the registered holders of the Class W or Class Z Warrants, as applicable, to be redeemed at their last addresses as
they shall appear on the registration books. Any notice mailed in the manner herein provided shall be conclusively presumed to have been duly given whether or not the registered holder received such notice. 
  
 6.3 Exercise After Notice of Redemption. The Class W or Class Z
Warrants, as applicable, may be exercised in accordance with Section 3 of this Agreement at any time after notice of redemption shall have been given by the Company pursuant to Section 6.2. hereof and prior to the time and date fixed for redemption.
On and after the redemption date, the record holders of such Warrants shall have no further rights except to receive, upon surrender of the Warrants, the Redemption Price. 
  
 6.4 Exclusion of Certain Warrants. 
  
 (a) The Company understands that the redemption rights provided for by this Section 6 apply only to
outstanding Warrants. To the extent a person holds rights to purchase Warrants, such purchase rights shall not be extinguished by redemption. However, once such purchase rights are exercised, the Company may redeem the Warrants issued upon such
exercise provided that the criteria for redemption is met. The provisions of this Section 6.4(a) may not be modified, amended or deleted without the prior written consent of Brenner. 
  
 (b) The Insider Warrants may not be redeemed by the Company so long as such Insider Warrants are held by the
Insiders. However, once an Insider transfers his 

  

 8 

 
Insider Warrants, such Insider Warrants shall then be redeemable by the Company pursuant to Section 6 hereof. 
  
 7. Other Provisions Relating to Rights of Holders of Warrants. 
  
 7.1 No Rights as Stockholder. A Warrant does not entitle the
registered holder thereof to any of the rights of a stockholder of the Company, including, without limitation, the right to receive dividends, or other distributions, exercise any preemptive rights to vote or to consent or to receive notice as
stockholders in respect of the meetings of stockholders or the election of directors of the Company or any other matter. 
  
 7.2 Lost, Stolen, Mutilated, or Destroyed Warrants. If any Warrant is lost, stolen, mutilated, or destroyed, the Company and the Warrant Agent may
on such terms as to indemnity or otherwise as they may in their discretion impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination, tenor, and date as the Warrant so lost,
stolen, mutilated, or destroyed. Any such new Warrant shall constitute a substitute contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated, or destroyed Warrant shall be at any time enforceable by anyone.

  
 7.3 Reservation of Common Stock. The Company shall at
all times reserve and keep available a number of its authorized but unissued shares of Common Stock that will be sufficient to permit the exercise in full of all outstanding Warrants issued pursuant to this Agreement. 
  
 7.4 Registration of Common Stock. The Company agrees that prior to the
commencement of the Exercise Period, it shall file with the Securities and Exchange Commission a post-effective amendment to the Registration Statement, or a new registration statement, for the registration, under the Act, of, and it shall take such
action as is necessary to qualify for sale, in those states in which the Warrants were initially offered by the Company, the Common Stock issuable upon exercise of the Warrants. In either case, the Company will use its best efforts to cause the same
to become effective and to maintain the effectiveness of such registration statement until the expiration of the Warrants in accordance with the provisions of this Agreement. The provisions of this Section 7.4 may not be modified, amended or deleted
without the prior written consent of Brenner. 
  
 8. Concerning the Warrant
Agent and Other Matters. 
  
 8.1 Payment of Taxes. The
Company will from time to time promptly pay all taxes and charges that may be imposed upon the Company or the Warrant Agent in respect of the issuance or delivery of shares of Common Stock upon the exercise of Warrants, but the Company shall not be
obligated to pay any transfer taxes in respect of the Warrants or such shares. 
  
 8.2 Resignation, Consolidation, or Merger of Warrant Agent. 
  
 8.2.1 Appointment of Successor Warrant Agent. The Warrant Agent, or any successor to it hereafter appointed, may resign its duties
and be discharged from all further duties and liabilities hereunder after giving sixty (60) days’ notice in writing to the Company. If the 

  

 9 

 
office of the Warrant Agent becomes vacant by resignation or incapacity to act or otherwise, the Company shall appoint in writing a successor Warrant Agent
in place of the Warrant Agent. If the Company shall fail to make such appointment within a period of 30 days after it has been notified in writing of such resignation or incapacity by the Warrant Agent or by the holder of the Warrant (who shall,
with such notice, submit his Warrant for inspection by the Company), then the holder of any Warrant may apply to the Supreme Court of the State of New York for the County of New York for the appointment of a successor Warrant Agent at the
Company’s cost. Any successor Warrant Agent, whether appointed by the Company or by such court, shall be a corporation organized and existing under the laws of the State of New York, in good standing and having its principal office in the
Borough of Manhattan, City and State of New York, and authorized under such laws to exercise corporate trust powers and subject to supervision or examination by federal or state authority. After appointment, any successor Warrant Agent shall be
vested with all the authority, powers, rights, immunities, duties, and obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant Agent hereunder, without any further act or deed; but if for any reason it becomes
necessary or appropriate, the predecessor Warrant Agent shall execute and deliver, at the expense of the Company, an instrument transferring to such successor Warrant Agent all the authority, powers, and rights of such predecessor Warrant Agent
hereunder; and upon request of any successor Warrant Agent the Company shall make, execute, acknowledge, and deliver any and all instruments in writing for more fully and effectually vesting in and confirming to such successor Warrant Agent all such
authority, powers, rights, immunities, duties, and obligations. 
  
 8.2.2 Notice of Successor Warrant Agent. In the event a successor Warrant Agent shall be appointed, the Company shall give notice thereof to the predecessor Warrant Agent and the transfer agent for the Common
Stock not later than the effective date of any such appointment. 
  
 8.2.3 Merger or Consolidation of Warrant Agent. Any corporation into which the Warrant Agent may be merged or with which it may be consolidated or any corporation resulting from any merger or consolidation to
which the Warrant Agent shall be a party shall be the successor Warrant Agent under this Agreement without any further act. 
  
 8.3 Fees and Expenses of Warrant Agent. 
  
 8.3.1 Remuneration. The Company agrees to pay the Warrant Agent reasonable remuneration for its services as such Warrant Agent
hereunder and will reimburse the Warrant Agent upon demand for all expenditures that the Warrant Agent may reasonably incur in the execution of its duties hereunder. 
  
 8.3.2 Further Assurances. The Company agrees to perform, execute, acknowledge, and deliver or cause
to be performed, executed, acknowledged, and delivered all such further and other acts, instruments, and assurances as may reasonably be required by the Warrant Agent for the carrying out or performing of the provisions of this Agreement.

  

 10 

 8.4 Liability of Warrant Agent. 
  
 8.4.1 Reliance on Company Statement. Whenever in the performance of its duties under this Warrant
Agreement, the Warrant Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and established by a statement signed by the President or Chairman of the Board of the Company and delivered to the Warrant Agent. The Warrant Agent may rely upon such statement
for any action taken or suffered in good faith by it pursuant to the provisions of this Agreement. 
  
 8.4.2 Indemnity. The Warrant Agent shall be liable hereunder only for its own negligence, willful misconduct or bad faith. The
Company agrees to indemnify the Warrant Agent and save it harmless against any and all liabilities, including judgments, costs and reasonable counsel fees, for anything done or omitted by the Warrant Agent in the execution of this Agreement except
as a result of the Warrant Agent’s negligence, willful misconduct, or bad faith. 
  
 8.4.3 Exclusions. The Warrant Agent shall have no responsibility with respect to the validity of this Agreement or with respect to
the validity or execution of any Warrant (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Warrant; nor shall it be responsible to make
any adjustments required under the provisions of Section 4 hereof or responsible for the manner, method, or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment; nor shall it by any act
hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of Common Stock to be issued pursuant to this Agreement or any Warrant or as to whether any shares of Common Stock will when issued be
valid and fully paid and nonassessable. 
  
 8.5 Acceptance of
Agency. The Warrant Agent hereby accepts the agency established by this Agreement and agrees to perform the same upon the terms and conditions herein set forth and among other things, shall account promptly to the Company with respect to
Warrants exercised and concurrently account for, and pay to the Company, all moneys received by the Warrant Agent for the purchase of shares of the Company’s Common Stock through the exercise of Warrants. 
  
 9. Miscellaneous Provisions. 
  
 9.1 Successors. All the covenants and provisions of this Agreement by
or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit of their respective successors and assigns. 
  
 9.2 Notices. Any notice, statement or demand authorized by this Warrant Agreement to be given or made by the Warrant Agent or by the holder of any
Warrant to or on the Company shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five days after deposit of such notice, postage 

  

 11 

 
prepaid, addressed (until another address is filed in writing by the Company with the Warrant Agent), as follows: 
  
 Israel Growth Partners Acquisition Corp. 
 Ziv Towers, Building D 
 24 Raoul Wallenberg
St. 
 Tel-Aviv 69719 
 Israel

 Attn: Chief Financial Officer 
  
 Any notice, statement or demand authorized by this Agreement to be given or made by the holder of any Warrant or by the Company to or on the Warrant Agent shall be
sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the
Warrant Agent with the Company), as follows: 
  
 American Stock
Transfer & Trust Company 
 6201 15th Avenue, 3rd Floor 
 Brooklyn, New York 11219 
 Attn: Compliance
Department 
  
 with a copy in each case to: 
  
 Blank Rome LLP 
 The Chrysler Building 
 405 Lexington Avenue

 New York, New York 10174 
 Attn: Robert L. Mittman, Esq. 
  
 and 
  
 Graubard Miller 
 The Chrysler Building 
 405 Lexington Avenue

 New York, New York 10174 
 Attn: David Alan Miller, Esq. 
  
 and 
  
 HCFP/Brenner Securities LLC 
 888 Seventh Avenue, 17th Floor 
 New York, New York 10106 
 Attn: Ira Scott Greenspan 
  
 9.3
Applicable Law. The validity, interpretation, and performance of this Agreement and of the Warrants shall be governed in all respects by the laws of the State of New York, 

  

 12 

 
without giving effect to conflict of laws. The Company hereby agrees that any action, proceeding or claim against it arising out of or relating in any way to
this Agreement shall be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The
Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenience forum. Any such process or summons to be served upon the Company may be served by transmitting a copy thereof by registered or
certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in Section 9.2 hereof. Such mailing shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding or
claim. 
  
 9.4 Persons Having Rights under this Agreement.
Nothing in this Agreement expressed and nothing that may be implied from any of the provisions hereof is intended, or shall be construed, to confer upon, or give to, any person or corporation other than the parties hereto and the registered holders
of the Warrants and, for the purposes of Sections 3.3.5, 6.1, 6.4, 7.4 and 9.2 hereof, Brenner, any right, remedy, or claim under or by reason of this Warrant Agreement or of any covenant, condition, stipulation, promise, or agreement hereof.
Brenner shall be deemed to be a third-party beneficiary of this Agreement with respect to Sections 3.3.5, 6.1, 6.4, 7.4 and 9.2 hereof. All covenants, conditions, stipulations, promises, and agreements contained in this Warrant Agreement shall be
for the sole and exclusive benefit of the parties hereto (and Brenner with respect to the Sections 3.3.5, 6.1, 6.4, 7.4 and 9.2 hereof) and their successors and assigns and of the registered holders of the Warrants. 
  
 9.5 Examination of the Warrant Agreement. A copy of this Agreement
shall be available at all reasonable times at the office of the Warrant Agent in the Borough of Manhattan, City and State of New York, for inspection by the registered holder of any Warrant. The Warrant Agent may require any such holder to submit
his Warrant for inspection by it. 
  
 9.6 Counterparts.
This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 
  
 9.7 Effect of Headings. The Section headings herein are for
convenience only and are not part of this Warrant Agreement and shall not affect the interpretation thereof. 
  

 13 

 IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as of the day and year
first above written. 
  

											
	 ATTEST:
	 	 	 	 ISRAEL GROWTH PARTNERS
 ACQUISITION CORP.

				
	 	 	 	 	 By:
	 	 
	 	 	 	 	 	 	 	 	 Name:
	 	 Dror Gad

	 	 	 	 	 	 	 	 	 Title:
	 	 Chief Financial Officer and
 Executive Vice President

			
	 ATTEST:
	 	 	 	 AMERICAN STOCK TRANSFER
 & TRUST COMPANY

				
	 	 	 	 	 By:
	 	 
	 	 	 	 	 	 	 	 	 Name:
	 	 
	 	 	 	 	 	 	 	 	 Title:
	 	 

  

 14

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