Document:

Purchase Agreement

 Exhibit 10.38 
 Execution 
  

 PURCHASE AGREEMENT 
 among 
 NOVASTAR MORTGAGE, INC., 
 NOVASTAR FINANCIAL, INC., 
 NOVASTAR CAPITAL TRUST II, 
 and

 KODIAK WAREHOUSE LLC 
  

 Dated as of April 18, 2006 
  

  

 PURCHASE AGREEMENT 
 ($35,000,000 Trust Preferred Securities) 
 THIS PURCHASE AGREEMENT, dated as of April 18, 2006 (this
“Purchase Agreement”), is entered into among NovaStar Mortgage, Inc., a Virginia corporation (the “Company”), NovaStar Financial, Inc., a Maryland corporation (the “Guarantor”), and NovaStar Capital
Trust II, a Delaware statutory trust (the “Trust”, and together with the Company and the Guarantor, the “Sellers”), on the one hand, and Kodiak Warehouse LLC, a Delaware limited liability company (the
“Purchaser”), on the other hand. 
 WITNESSETH: 
 WHEREAS, the Sellers propose to issue and sell Thirty Five Thousand (35,000) Floating Rate Preferred Securities of the Trust, having a stated
liquidation amount of $1,000 per security, bearing a variable rate, reset quarterly, equal to LIBOR plus 3.50% per annum (as defined in the Indenture (as defined below)) (the “Preferred Securities”); 
 WHEREAS, the entire proceeds from the sale of the Preferred Securities will be combined with the entire proceeds from the sale by the Trust to the
Company of its common securities (the “Common Securities”), and will be used by the Trust to purchase Thirty Six Million Eighty Three Thousand Dollars ($36,083,000) in principal amount of the unsecured junior subordinated notes of
the Company (the “Junior Subordinated Notes”); 
 WHEREAS, the Preferred Securities and the Common Securities for the Trust
will be issued pursuant to the Amended and Restated Trust Agreement (the “Trust Agreement”), dated as of the Closing Date (as defined in Section 2(b) below), among the Company, as depositor, JPMorgan Chase Bank, National
Association, a national banking association, as property trustee (in such capacity, the “Property Trustee”), Chase Bank USA, National Association, a national banking association, as Delaware trustee (in such capacity, the
“Delaware Trustee”), the Administrative Trustees named therein (in such capacities, the “Administrative Trustees”) and the holders from time to time of undivided beneficial interests in the assets of the Trust;

 WHEREAS, the Junior Subordinated Notes will be issued pursuant to a Junior Subordinated Indenture, dated as of the Closing Date (the
“Indenture”), among the Company, NovaStar Financial, Inc. and JPMorgan Chase Bank, National Association, a national banking association, as indenture trustee (in such capacity, the “Indenture Trustee”); and

 WHEREAS, the 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 “Guarantee”), dated as of the Closing Date, between the Guarantor and JPMorgan Chase Bank, National Association, a national
banking association, as guarantee trustee. 
 NOW, THEREFORE, in consideration of the mutual agreements and subject to the terms and
conditions herein set forth, the parties hereto agree as follows: 
 1. Definitions. The Preferred Securities, the Common
Securities and the Junior Subordinated Notes are collectively referred to herein as the “Securities.” This Purchase Agreement, the Indenture, the Trust Agreement, the Guarantee, and the Securities are collectively referred to herein
as the “Operative Documents.” All other capitalized terms used but not defined in this Purchase Agreement shall have the respective meanings ascribed thereto in the Indenture. 

 2. Purchase and Sale of the Preferred Securities. 
 (a) The Trust agrees to sell to the Purchaser, and the Purchaser agrees to purchase from the Trust, the Preferred Securities for an amount (the
“Purchase Price”) equal to Thirty Five Million Dollars ($35,000,000). The Purchaser shall be responsible for any rating agency costs and expenses. The Trust shall use the Purchase Price, together with the proceeds from the sale of
the Common Securities, to purchase the Junior Subordinated Notes. 
 (b) Delivery or transfer of, and payment for, the Preferred Securities
shall be made at 11:00 A.M. New York time, on April 18, 2006 or such later date (not later than April 21, 2006) as the parties may designate (such date and time of delivery and payment for the Preferred Securities being herein called the
“Closing Date”). The Preferred Securities shall be transferred and delivered to the Purchaser against the payment of the Purchase Price to the Trust made by wire transfer in immediately available funds on the Closing Date to a U.S.
account designated in writing by the Company at least two business days prior to the Closing Date. 
 (c) Delivery of the Preferred
Securities shall be made at such location, and in such names and denominations, as the Purchaser shall designate at least two business days in advance of the Closing Date. The Company and the Trust agree to have the Preferred Securities available
for inspection and checking by the Purchaser in New York, New York, not later than 11:00 A.M. New York time, on the business day prior to the Closing Date. The closing for the purchase and sale of the Preferred Securities shall occur at the offices
of Reed Smith LLP, 435 Sixth Avenue, Pittsburgh, PA 15219, or such other place as the parties hereto shall agree. 
 3.
Conditions. The obligations of the parties under this Purchase Agreement are subject to the following conditions: 
 (a) The
representations and warranties contained herein shall be accurate as of the date of delivery of the Preferred Securities. 
 (b)
(i) Orrick, Herrington & Sutcliffe LLP, counsel for the Sellers (the “Company Counsel”), shall have delivered an opinion, dated the Closing Date, addressed to the Purchaser and the Indenture Trustee, in form and
substance satisfactory to the Purchaser; (ii) the Company shall have furnished to the Purchaser the opinion of the Company’s General Counsel in form and substance satisfactory to the Purchaser; and (iii) Irvine Venture Law Firm, LLP,
special tax counsel to the Guarantor shall have delivered an opinion in form and substance satisfactory to the Purchaser. In rendering their opinion, the Company Counsel may rely as to factual matters upon certificates or other documents furnished
by officers, directors and trustees of the Company, the Guarantor and the Trust and by government officials (provided, however, that copies of any such certificates or documents are delivered to the Purchaser) and by and upon such other documents as
such counsel may, in their reasonable opinion, deem appropriate as a basis for the Company Counsel’s opinion. The Company Counsel may specify the jurisdictions in which they are admitted to practice and that they are not admitted to practice in
any other jurisdiction and are not experts in the law of any other jurisdiction. Such Company Counsel Opinion shall not state that they are to be governed or qualified by, or that they are otherwise subject to, any treatise, written policy or other
document relating to legal opinions, including, without limitation, the Legal Opinion Accord of the ABA Section of Business Law (1991). 
 (c) The Purchaser shall have been furnished the opinion of Reed Smith LLP, special tax counsel for the Purchaser, dated the Closing Date, addressed to the Purchaser and the Indenture Trustee, in substantially the form set out in Annex
A hereto. 
 (d) The Purchaser shall have received the opinion of Richards, Layton & Finger, P.A., special Delaware counsel for
the Delaware Trustee, dated the Closing Date, addressed to the Purchaser, the Indenture Trustee, the Delaware Trustee and the Company, in substantially the form set out in Annex B hereto. 

 (e) The Purchaser shall have received the opinion of Gardere Wynne Sewell LLP, special counsel for the
Property Trustee and the Indenture Trustee, dated the Closing Date, addressed to the Purchaser, in substantially the form set out in Annex C hereto. 
 (f) The Purchaser shall have received the opinion of Richards, Layton & Finger, P.A., special Delaware counsel for the Delaware Trustee, dated the Closing Date, addressed to the Purchaser and the Indenture
Trustee, in substantially the form set out in Annex D hereto. 
 (g) The Company shall have furnished to the Purchaser a certificate
of the Company, signed by the Chief Executive Officer, President or a Vice President, and by the Chief Financial Officer, Treasurer or an Assistant Treasurer of the Company, and the Trust shall have furnished to the Purchaser a certificate of the
Trust, signed by an Administrative Trustee of the Trust, in each case dated the Closing Date, and, in the case of the Company, as to (i) and (ii) below and, in the case of the Trust, as to (i) below. 
 (i) the representations and warranties in this Purchase Agreement are true and correct on and as of the Closing Date with the same effect
as if made on the Closing Date, and the Company and the Trust, as applicable, have complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Date; and 
 (ii) since December 31, 2005, there has been no material adverse change in the condition (financial or other), earnings, business or
assets of the Company and its subsidiaries taken as a whole, whether or not arising from transactions occurring in the ordinary course of business (a “Material Adverse Change”). 
 (h) Subsequent to the execution of this Purchase Agreement, 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 the Purchaser’s
reasonable judgment, so material and adverse as to make it impractical or inadvisable to proceed with the purchase of the Preferred Securities. 
 (i) Prior to the Closing Date, the Company and the Trust shall have furnished to the Purchaser and its counsel such further information, certificates and documents as the Purchaser or its counsel may reasonably request. 
 If any of the conditions specified in this Section 3 shall not have been fulfilled when and as provided in this Purchase Agreement, or if any
of the opinions, certificates and documents mentioned above or elsewhere in this Purchase Agreement shall not be reasonably satisfactory in form and substance to the Purchaser or its counsel, this Purchase Agreement and all the Purchaser’s
obligations hereunder may be canceled at the Closing Date by the Purchaser. Notice of such cancellation shall be given to the Company, the Guarantor and the Trust in writing or by telephone or facsimile confirmed in writing. 
 Each certificate signed by any trustee of the Trust or any officer of the Company or the Guarantor and delivered to the Purchaser or the Purchaser’s
counsel in connection with the Operative Documents and the transactions contemplated hereby and thereby shall be deemed to be a representation and warranty of the Trust, the Guarantor and/or the Company, as the case may be, and not by such trustee
or officer in any individual capacity. 

 4. Representations and Warranties of the Company, the Guarantor and the Trust. The Company,
the Guarantor and the Trust jointly and severally represent and warrant to, and agree with the Purchaser, as follows (provided that none of the following representations or warranties apply or relate to any acts or omissions by the Purchaser
or its Affiliates): 
 (a) None of the Company, the Guarantor nor the Trust, nor any of their “Affiliates” (as defined in Rule
501(b) of Regulation D (“Regulation D”) under the Securities Act (as defined below)), nor any person acting on its or their behalf (except for the Purchaser, 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 of any of the Securities under the Securities Act of 1933, as amended (the “Securities
Act”). 
 (b) None of the Company, the Guarantor nor the Trust, nor any of their Affiliates, nor any person acting on its or their
behalf (except for the Purchaser, as to which no representation or warranty is made), has 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. 
 (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 inter-dealer 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 Company, the Guarantor
nor the Trust, nor any of their Affiliates, nor any person acting on its or their behalf, has engaged, or will engage, in any “directed selling efforts” within the meaning of Regulation S under the Securities Act with respect to the
Securities. 
 (e) None the Company, the Guarantor nor the Trust is, and, immediately following consummation of the transactions contemplated
hereby and the application of the net proceeds therefrom, will not 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. 
 (f) None the Company, the Guarantor nor the Trust has paid or agreed to pay to any person any compensation for soliciting
another to purchase any of the Securities, except for the fee that the Company has agreed to pay to TBC Securities, LLC, pursuant to that certain letter agreement dated March 9, 2006, between the Company and TBC Securities, LLC, and except for
the fee to the Company’s introducing agent, Flagstone Securities. 
 (g) The Trust has been duly created 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. The 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 Trust, whether or not occurring in
the ordinary course of business. The Trust is not a party to 

 
or otherwise bound by any agreement other than the Operative Documents and other agreements contemplated by the Operative Documents. The Trust is and will
be, under current law, classified for federal income tax purposes as a grantor trust and not as an association or publicly traded partnership taxable as a corporation. 
 (h) The Trust Agreement has been duly authorized by the Company and, on the Closing Date specified in Section 2(b) hereof, will have been duly executed and delivered by the Company and the Administrative
Trustees of the Trust, and, assuming due authorization, execution and delivery by the Property Trustee and the Delaware Trustee, will be a legal, valid and binding obligation of the Company and the 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 Trust is an employee of the
Company and has been duly authorized by the Company to execute and deliver the Trust Agreement. 
 (i) The Indenture has been duly authorized
by the Company and, on the Closing Date, will have been duly executed and delivered by the Company, and, assuming due authorization, execution and delivery by the Indenture Trustee, 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. 
 (j) The Preferred Securities and the Common Securities have been duly authorized by the Trust and, when authenticated by the Property Trustee (as to
which no representation is made), issued and delivered against payment therefor on the Closing Date in accordance with this Purchase Agreement, in the case of the Preferred Securities, and in accordance with the Common Securities Subscription
Agreement, in the case of the Common Securities, will be validly issued, fully paid and non-assessable and will represent undivided beneficial interests in the assets of the Trust entitled to the benefits of the Trust Agreement, enforceable against
the Trust 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 any preemptive
or other similar rights. On the Closing 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 of any kind (each, a
“Lien”). 
 (k) The Junior Subordinated Notes have been duly authorized by the Company and, on the Closing Date, will have
been duly executed and delivered to the Indenture Trustee for authentication in accordance with the Indenture and, when authenticated in the manner provided for in the Indenture and delivered to the Trust against payment therefor in accordance with
the Junior Subordinated Note Purchase Agreement, will constitute legal, valid and binding obligations of the Company entitled to the benefits of the Indenture, enforceable 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. 
 (l) This Purchase
Agreement has been duly authorized, executed and delivered by the Company and the Trust. 
 (m) The Guarantee has been duly authorized by the
Guarantor and, on the Closing Date, will have been duly 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. 

 (n) Neither the issue and sale of the Common Securities, the Preferred Securities or the Junior
Subordinated Notes, nor the purchase of the Junior Subordinated Notes by the Trust, nor the execution and delivery of and compliance with the Operative Documents by the Company, the Guarantor or the Trust, nor the consummation of the transactions
contemplated herein or therein, (i) will conflict with or constitute a violation or breach of the Trust Agreement or the charter or bylaws 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 the Trust or
the Company or any of its subsidiaries or their respective properties or assets (collectively, the “Governmental Entities”), (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 Trust, the Guarantor, the Company or any of the their subsidiaries pursuant to, any contract, indenture, mortgage, loan agreement, note,
lease or other agreement or instrument to which (A) the Trust, 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) to which 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) would
not, singly or in the aggregate, adversely affect the consummation of the transactions contemplated by the Operative Documents and (Y) would not, singly or in the aggregate, have a material adverse effect on the condition (financial or
otherwise), earnings, business, liabilities and assets (taken as a whole) or business prospects 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. As used herein, a “Repayment Event” means any event or 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 Trust or the Company or any of its
subsidiaries prior to its scheduled maturity. 
 (o) The Company has been duly incorporated and is validly existing as a corporation in good
standing under the laws of Virginia, 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 to be so qualified would not, singly or in the aggregate, have a Material Adverse Effect.

 (p) The Guarantor has been duly organized and is validly existing as a corporation in good standing under the laws of the State of
Maryland, with all requisite corporate power and authority to own, lease and operate its properties and to 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 or its activities requires such qualification, except where the failure of the Guarantor to be so qualified would not, singly or in the aggregate, have a Material Adverse Effect. 
 (q) Neither the Guarantor nor the Company has any subsidiaries that are material to its business, financial condition or earnings other than those
subsidiaries listed in Schedule 1 attached hereto (collectively, the “Significant Subsidiaries”). Each Significant Subsidiary 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. Each Significant Subsidiary 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 to be so qualified would not, singly or in the aggregate, have a Material Adverse Effect. 
 (r) Each of the Trust, the Company, the Guarantor and each of their subsidiaries hold all necessary approvals, authorizations, orders, licenses, consents, registrations, qualifications, certificates and permits (collectively, the
“Governmental Licenses”) of and from Governmental Entities necessary to conduct their respective businesses as now being conducted, and neither the Trust, the Company, the Guarantor nor any of the their subsidiaries 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 Governmental Licenses are valid and in full force and effect, except where the invalidity or the failure of such Governmental 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. 
 (s) All of the issued and outstanding shares of capital stock of
the Company and the Guarantor and each of their subsidiaries are validly issued, fully paid and non-assessable; all of the issued and outstanding capital stock of each subsidiary of the Company and the Guarantor is owned by the Company or the
Guarantor, as the case may be, directly or through subsidiaries, and in the case of the capital stock of each Significant Subsidiary, free and clear of any Lien, claim or equitable right; and none of the issued and outstanding capital stock of the
Company, the Guarantor or any subsidiary was issued in violation of any preemptive or similar rights arising by operation of law, under the charter or by-laws of such entity or under any agreement to which the Company, the Guarantor or any of their
subsidiaries is a party. 
 (t) Neither the Company, the Guarantor nor any of their subsidiaries is (i) in violation of its respective
charter or by-laws or similar organizational documents or (ii) in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease or other
agreement or instrument to which the Company, the Guarantor or any such subsidiary is a party or by which it or any of them may be bound or to which any of the property or assets of any of them is subject, except, in the case of clause (ii), where
such violation or default would not, singly or in the aggregate, have a Material Adverse Effect. 
 (u) 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 Company, the Guarantor or the Trust after due inquiry, threatened against or affecting the Trust, the Guarantor or the
Company or any of their subsidiaries, except for such actions, suits or proceedings that, if adversely determined, would not, singly or in the aggregate, adversely affect the consummation of the transactions contemplated by the Operative Documents
or have a Material Adverse Effect; and the aggregate of all pending legal or governmental proceedings to which the Trust, the Guarantor or the Company or any of their subsidiaries is a party or of which any of their respective properties or assets
is subject, including ordinary routine litigation incidental to the business, are not expected to result in a Material Adverse Effect. 
 (v)
The accountants of the Company and the Guarantor who certified the Financial Statements (as defined below) are independent public accountants of the Company, the Guarantor and their subsidiaries within the meaning of the Securities Act, and the
rules and regulations of the Securities and Exchange Commission (the “Commission”) thereunder. 

 (w) The audited consolidated financial statements (including the notes thereto) and schedules of the
Guarantor and its consolidated subsidiaries for the three fiscal years ended December 31, 2005 (the “Financial Statements”) provided to the Purchaser are the most recent available audited consolidated financial statements of
the Guarantor and its consolidated subsidiaries, respectively, and fairly present in all material respects, in accordance with U.S. generally accepted accounting principles, the financial position of the Guarantor and its consolidated subsidiaries,
and the results of operations and changes in financial condition as of the dates and for the periods therein specified. Such consolidated financial statements and schedules have been prepared in accordance with U.S. generally accepted accounting
principles (“GAAP”) consistently applied throughout the periods involved (except as otherwise noted therein). 
 (x) None of
the Trust, the Company, the Guarantor nor any of their subsidiaries has any material liability, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to
become due, including any liability for taxes (and there is no past or present fact, situation, circumstance, condition or other basis for any present or future action, suit, proceeding, hearing, charge, complaint, claim or demand against the
Company, the Guarantor or their subsidiaries that could give rise to any such liability), except for (i) liabilities set forth in the Financial Statements and (ii) normal fluctuations in the amount of the liabilities referred to in clause
(i) above occurring in the ordinary course of business of the Trust, the Company, the Guarantor and all of their subsidiaries since the date of the most recent balance sheet included in such Financial Statements. 
 (y) Since the date of the Financial Statements, there has not been (A) any Material Adverse Change or (B) any dividend or distribution of any
kind declared, paid or made by the Guarantor on any class of its capital stock other than regular quarterly dividends on the Guarantor’s common stock. 
 (z) The documents of the Guarantor filed with the Commission in accordance with the Exchange Act, from and including the commencement of the fiscal year covered by the Guarantor’s most recent Annual Report on
Form 10-K, at the time they were or hereafter are filed by the Guarantor with the Commission (collectively, the “1934 Act Reports”), complied and will comply in all material respects with the requirements of the Exchange Act and the
rules and regulations of the Commission thereunder (the “1934 Act Regulations”), and, at the date of this Purchase Agreement and on the Closing Date, do not and will not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and other than such instruments, agreements, contracts and other documents
as are filed as exhibits to the Guarantor’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, there are no instruments, agreements, contracts or documents of a character described in Item 601 of
Regulation S-K promulgated by the Commission to which the Guarantor or any of its subsidiaries is a party other than those which are not yet required to be filed. The Guarantor is in compliance with all currently applicable requirements of the
Exchange Act that were added by the Sarbanes-Oxley Act of 2002. 
 (aa) No labor dispute with the employees of the Company, the Guarantor or
any of their subsidiaries exists or, to the knowledge of the executive officers of the Company or the Guarantor, is imminent, except those which would not, singly or in the aggregate, have a Material Adverse Effect. 

 (bb) No filing with, or authorization, approval, consent, license, order, registration, qualification or
decree of, any Governmental Entity, other than those that have been made or obtained, is necessary or required for the performance by the Trust, the Guarantor or the Company of their respective obligations under the Operative Documents, as
applicable, or the consummation by the Trust, the Guarantor and the Company of the transactions contemplated by the Operative Documents. 
 (cc) Each of the Trust, the Company, the Guarantor and each Significant Subsidiary of the Company and the Guarantor has good and marketable title to all of its respective material real and personal properties, in each case free and clear of
all Liens and defects, except for those that would not, singly or in the aggregate, have a Material Adverse Effect or which are granted in assets the purchase of which is funded under warehouse financing arrangements to the applicable warehouse
lender or similar liens, in each case granted in the ordinary course of business; and all of the leases and subleases under which the Trust, the Company, the Guarantor or any Significant Subsidiary of the Company or the Guarantor holds properties
are in full force and effect, except where the failure of such leases and subleases to be in full force and effect would not, singly or in the aggregate, have a Material Adverse Effect, and none of the Trust, the Company, the Guarantor or any
Significant Subsidiary of the Company or the Guarantor has any notice of any claim of any sort that has been asserted by anyone adverse to the rights of the Trust, the Company, the Guarantor or any significant subsidiary of the Company or the
Guarantor under any such leases or subleases, or affecting or questioning the rights of such entity to the continued possession of the leased or subleased premises under any such lease or sublease, except for such claims that would not, singly or in
the aggregate, have a Material Adverse Effect. 
 (dd) Commencing with its taxable year ended December 31, 1996, the Guarantor has been,
and upon the completion of the transactions contemplated hereby, the Guarantor will continue to be, organized and operated in conformity with the requirements for qualification and taxation as a real estate investment trust (a
“REIT’) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”), and the Guarantor’s proposed method of operation will enable it to continue to meet the requirements for
qualification and taxation as a REIT under the Code, and no actions have been taken (or not taken which are required to be taken) which would cause such qualification to be lost. The Guarantor expects to continue to be organized and to operate in a
manner so as to qualify as a REIT in the taxable year ending December 31, 2005 and succeeding taxable years. 
 (ee) The Company, the
Guarantor and each of the Significant Subsidiaries have timely and duly filed all Tax Returns (as defined below) required to be filed by them or have requested an extension thereof, except for those state and local Tax Returns for which the failure
to file would not have a Material Adverse Effect, and all such Tax Returns are true, correct and complete in all material respects. The Company, the Guarantor and each of the Significant Subsidiaries have timely and duly paid in full all material
Taxes required to be paid by them to the extent such Taxes have become due and are not being contested in good faith or would not have a Material Adverse Effect (whether or not such amounts are shown as due on any Tax Return). There are no federal,
state, or other Tax audits or deficiency assessments proposed or pending with respect to the Company, the Guarantor or any of the Significant Subsidiaries, and no such audits or assessments are threatened. As used herein, the terms
“Tax” or “Taxes” mean (i) all federal, state, local, and foreign taxes, and other assessments of a similar nature (whether imposed directly or through withholding), including any interest, additions to tax, or
penalties applicable thereto, imposed by any Governmental Entity, and (ii) all liabilities in respect of such amounts arising as a result of being a member of any affiliated, consolidated, combined, unitary or similar group, as a successor to
another person or by contract. As used herein, the term “Tax Returns” means all federal, state, local, and foreign Tax returns, declarations, statements, reports, schedules, forms, and information returns and any amendments thereto
filed or required to be filed with any Governmental Entity. 

 (ff) The Trust is not 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, in whole or in part, for United States federal income tax purposes, and the Trust is not subject to more than a
de minimis amount of other taxes, duties or other governmental charges. 
 (gg) The books, records and accounts of the Company, the
Guarantor and their subsidiaries accurately and fairly reflect, in reasonable detail, the transactions in, and dispositions of, the assets of, and the results of operations of, the Company, the Guarantor and their subsidiaries. Each of the Company,
the Guarantor and each of their subsidiaries maintains a system of internal accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with
management’s general or specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. 
 (hh) The Company, the Guarantor and the Significant Subsidiaries are insured by insurers of recognized financial responsibility against such losses and
risks and in such amounts in all material respects as are customary in the businesses in which they are engaged or propose to engage after giving effect to the transactions contemplated hereby. All policies of insurance and fidelity or surety bonds
insuring the Company, the Guarantor or any of the Significant Subsidiaries or the Company’s, the Guarantor’s or Significant Subsidiaries’ respective businesses, assets, employees, officers and directors are in full force and effect.

 (ii) The Company, the Guarantor and their subsidiaries or, to the knowledge of the senior executive officers of the Company or the
Guarantor, any person acting on behalf of the Company, the Guarantor and their subsidiaries including, without limitation, any director, officer, agent or employee of the Company, the Guarantor or their subsidiaries has not, directly or indirectly,
while acting on behalf of the Company, the Guarantor and their subsidiaries (i) used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity; (ii) made any unlawful
payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns from corporate funds; (iii) violated any provision of the Foreign Corrupt Practices Act of 1977, as amended; or
(iv) made any other unlawful payment. 
 (jj) The information provided by the Company, the Guarantor and the Trust pursuant to this
Purchase Agreement and the Operative Documents does not, as of the date hereof, and will not as of the Closing Date, contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading. 
 (kk) Except as would not, individually or in the aggregate, result
in a Material Adverse Change, (i) the Company, the Guarantor and their subsidiaries have been and are in compliance with applicable Environmental Laws (as defined below), (ii) none of the Company, the Guarantor any of their subsidiaries or
otherwise disposed of Hazardous Materials (as defined below) on, to, in, under or from the properties owned by it (“Properties”) or any other real properties previously owned, leased or operated by the Company, the Guarantor or any
of their subsidiaries, (iii) neither the Company, the Guarantor nor any of their subsidiaries intends to use the Properties or any subsequently acquired properties, other than in compliance with applicable 

 
Environmental Laws, (iv) neither the Company, the Guarantor nor any of their subsidiaries has received to the knowledge of the senior executives of the
Company or the Guarantor any notice of, or has any knowledge of any occurrence or circumstance which, with notice or passage of time or both, would give rise to a claim under or pursuant to any Environmental Law with respect to the Properties, any
other real properties previously owned, leased or operated by the Company, the Guarantor or any of their subsidiaries, or their respective assets or arising out of the conduct of the Company, the Guarantor or their subsidiaries, and (v) no lien
has been imposed on the Properties by any Governmental Entity in connection with the presence on or off such Property of any Hazardous Material. 
 As used herein, “Hazardous Material” shall include, without limitation, any flammable materials, explosives, radioactive materials, hazardous materials, hazardous substances, hazardous wastes, toxic substances or related
materials, asbestos, petroleum, petroleum products and any hazardous material as defined by any federal, state or local environmental law, statute, ordinance, rule or regulation, including, without limitation, the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. §§ 9601-9675 (“CERCLA”), the Hazardous Materials Transportation Act, as amended, 49 U.S.C. §§ 5101-5127, the Resource Conservation and
Recovery Act, as amended, 42 U.S.C. §§ 6901-6992k, the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. §§ 11001-11050, the Toxic Substances Control Act, 15 U.S.C. §§ 2601-2692, the Federal
Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. §§ 136-136y, the Clean Air Act, 42 U.S.C. §§ 7401-7642, the Clean Water Act (Federal Water Pollution Control Act), 33 U.S.C. §§ 1251-1387, the Safe Drinking Water
Act, 42 U.S.C. §§ 300f-300j-26, and the Occupational Safety and Health Act, 29 U.S.C. §§ 651-678, and any analogous state laws, as any of the above may be amended from time to time and in the regulations promulgated pursuant to
each of the foregoing (including environmental statutes and laws not specifically defined herein) (individually, an “Environmental Law” and collectively, the “Environmental Laws”) or by any Governmental Entity.

 5. Representations and Warranties of the Purchaser. The Purchaser represents and warrants to, and agrees with, the Company,
the Guarantor and the Trust as follows: 
 (a) The Purchaser is aware that the Securities have not been and will not be registered under the
Securities Act and may not be offered or sold within the United States or to “U.S. persons” (as defined in Regulation S under the Securities Act) except in accordance with Rule 903 of Regulation S under the Securities Act or pursuant to an
exemption from the registration requirements of the Securities Act. 
 (b) The Purchaser is an “accredited investor,” as such term
is defined in Rule 501(a) of Regulation D under the Securities Act. 
 (c) Neither the Purchaser, nor any of the Purchaser’s Affiliates,
nor any person acting on the Purchaser’s or the Purchaser’s Affiliate’s behalf has engaged, or will engage, (i) in any form of “general solicitation or general advertising” (within the meaning of Regulation D under the
Securities Act) or (ii) in any “directed selling efforts” (within the meaning of Regulation S under the Securities Act) in connection with any offer or sale of the Preferred Securities. 
 (d) The Purchaser understands and acknowledges that (i) no public market exists for any of the Securities and that it is unlikely that a public
market will ever exist for the Securities, (ii) the Purchaser is purchasing the 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 

 
Securities pursuant to an effective registration statement under the Securities Act or pursuant to an exemption therefrom or in a transaction not subject
thereto, and the Purchaser agrees to the legends and transfer restrictions applicable to the Securities, and (iii) the Purchaser has had the opportunity to ask questions of, and receive answers and request additional information from, the
Company and the Guarantor and such questions have been answered to its satisfaction and the Purchaser has consulted with its own legal and other advisers in connection herewith and as it deems necessary and is aware that it may be required to bear
the economic risk of an investment in the Securities until the maturity thereof. 
 (e) The Purchaser is a company with limited liability
duly incorporated, validly existing and in good standing under the laws of the jurisdiction of organization 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 purchase the Securities. 
 (f) This Purchase Agreement has been duly authorized, executed and delivered by the Purchaser 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 Purchaser, other than those that have been made or obtained, is necessary or required for the performance by the Purchaser
of its obligations under this Purchase Agreement or to consummate the transactions contemplated herein. 
 (g) The Purchaser is a
“Qualified Purchaser” as such term is defined in Section 2(a)(51) of the Investment Company Act. 
 6. Covenants and
Agreements of the Company, the Guarantor and the Trust. The Company, the Guarantor and the Trust jointly and severally agree with the Purchaser as follows (provided that none of the following covenants apply or relate to any acts of
the Purchaser or its Affiliates): 
 (a) During the period from the date of this Agreement to the Closing Date, the Company and the Trust
shall use commercially reasonable efforts and take all action necessary or appropriate to cause their representations and warranties contained in Section 4 hereof to be true as of the Closing Date, after giving effect to the transactions
contemplated by this Purchase Agreement, as if made on and as of the Closing Date. 
 (b) The Company, the Guarantor and the Trust will
arrange for the qualification of the Preferred Securities for sale under the state blue sky laws of such jurisdictions as the Purchaser may designate and will maintain such qualifications in effect so long as required for the sale of the Preferred
Securities. The Company, the Guarantor or the Trust, as the case may be, will promptly advise the Purchaser of the receipt by the Company, the Guarantor or the Trust, as the case may be, of any notification with respect to the suspension of the
qualification of the Preferred Securities for sale in any such jurisdiction or the initiation or threatening of any proceeding for such purpose. 
 (c) None of the Company, the Guarantor nor the Trust 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 (other than the Purchaser) to, resell any Preferred
Securities that have been acquired by any of them. 
 (d) None of the Company, the Guarantor nor the Trust will, nor will either of them
permit any of their Affiliates or any person acting on their behalf to, engage in any “directed selling efforts” within the meaning of Regulation S under the Securities Act with respect to the Securities. 

 (e) None of the Company, the Guarantor nor the Trust will, nor will either of them permit any of their
Affiliates or any person acting on their behalf to, directly or indirectly, make offers or sales of any security, or solicit offers to buy any security, under circumstances that would require the registration of any of the Securities under the
Securities Act. 
 (f) None of the Company, the Guarantor nor the Trust will, nor will either of them permit any of its Affiliates or any
person acting on their behalf to, engage in any form of “general solicitation or general advertising” (within the meaning of Regulation D) in connection with any offer or sale of the any of the Securities. 
 (g) 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 inter-dealer quotation system and (ii) none of the Company, the Guarantor nor the 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). 
 (h) The Company shall furnish to (i) the holders, and subsequent holders of the Preferred Securities, (ii) Purchaser at 2107 Wilson Blvd.,
Suite 450, Arlington, VA 22201, Attention: Robert Hurley, Chief Financial Officer, or such other address as designated by Purchaser) and (iii) any beneficial owner of the Securities reasonably identified to the Company and the Trust (which
identification may be made by either such beneficial owner or by Purchaser), a duly completed and executed certificate in the form attached hereto as Annex E, including the financial statements referenced in such Annex, 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. 
 Each of the Company, the Guarantor and the Trust will, during any period in which it is not subject to and in compliance
with section 13 or 15(d) of the Exchange Act, or it is 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 the Securities and to each prospective purchaser
(as designated by such holder) of the Securities, upon the request of such holder or prospective purchaser, any information required to be provided by Rule 144A(d)(4) under the Securities Act. If the Company, the Guarantor and the Trust 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 Purchaser, the holders of the Securities, and the
prospective purchasers designated by the Purchaser and such holders, from time to time, of the Securities. 
 (i) None of the Company, the
Guarantor nor the Trust will, until one hundred eighty (180) days following the Closing Date, without the Purchaser’s prior written consent, offer, sell, contract to sell, grant any option to purchase or otherwise dispose of, directly or
indirectly, (i) any Preferred Securities or other securities substantially similar to the Preferred Securities other than as contemplated by this Purchase Agreement or (ii) any other securities convertible into, or exercisable or
exchangeable for, any Preferred Securities or other securities substantially similar to the Preferred Securities; provided, for the avoidance of doubt, that no such consent shall be required (a) if such other securities have a different
maturity date, interest rate and other terms than those of the Preferred Securities or (b) if, after giving effect to any such offer, sale or option, the offer, sale or option of such other securities shall not result in the required
registration of the sale of the Preferred Securities as contemplated herein. 

 (j) The Guarantor will use its best efforts to meet the requirements to qualify as a REIT under Sections
856 through 860 of the Code, effective for the taxable year ending December 31, 2005 (and each fiscal quarter of such year) and succeeding taxable years. 
 (k) None of the Company, the Guarantor nor the 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. 
 (l) The Purchaser shall have the right under this Purchase Agreement, the Indenture and
the Trust Agreement to request the substitution of new notes for all or a portion of the Junior Subordinated Notes held by the Trust. The Trust shall be required under the terms of this Purchase Agreement, the Indenture and the Trust Agreement 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 Purchaser 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 of the Company and
the Trust acknowledges and agrees that, to the extent of the principal amount of the Replacement Notes issued to the Trust under the Indenture, the Purchaser (and each successor to the Purchaser’s interest in the Preferred Securities) will
require the Trust to issue a new series of Preferred Securities having a principal 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 the Trust to the holders of Replacement Securities, must relate solely to the 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 of the
Guarantor, the Company and the Trust agrees to cooperate with all reasonable requests of the Purchaser in connection with any of the foregoing; provided, that, except as set forth herein, no action requested of the Company or the Trust in
connection with such cooperation shall otherwise modify the obligations or rights of the Company pursuant to such documents. The Purchaser shall pay all reasonable expenses in connection with the issuance of the Replacement Notes and the Replacement
Securities. 
 7. Payment of Expenses. The Company, as depositor of the Trust, agrees to pay all costs and expenses incident to
the performance of the obligations of the Company and the Trust under this Purchase Agreement, whether or not the transactions contemplated herein are consummated or this Purchase Agreement is terminated, including all costs and expenses incident to
(i) the authorization, issuance, sale and delivery of the Preferred Securities and any taxes payable in connection therewith; (ii) the fees and expenses of qualifying the Preferred Securities under the securities laws of the several
jurisdictions as provided in Section 6(b); (iii) the fees and expenses of the counsel, the accountants and any other experts or advisors retained by the Company, the Guarantor or the Trust; (iv) the fees and all reasonable
expenses of the Property Trustee, the Delaware Trustee, the Indenture Trustee and any other trustee or paying agent appointed under the Operative Documents, including the fees and disbursements of counsel for such trustees, which fees shall not
exceed $3,500 for the fees and expenses of Richards, Layton & Finger, P.A., special Delaware counsel retained by the Delaware Trustee in connection with the Closing, and $4,000 in administrative fees annually; (v) $25,000 for the fees

 
and expenses of Reed Smith LLP, special counsel retained by the Purchaser; and (vi) a due diligence fee in an amount equal to $12,500 ($5,000 of which
was paid upon execution of the Letter of Intent) payable to the Purchaser or its designee. 
 If the sale of the Preferred Securities
provided for in this Purchase Agreement is not consummated because any condition set forth in Section 3 hereof to be satisfied by any of the Guarantor, the Company or the Trust is not satisfied, because this Purchase Agreement is
terminated pursuant to Section 9 hereof or because of any failure, refusal or inability on the part of the Guarantor, the Company or the Trust to perform all obligations and satisfy all conditions on its part to be performed or satisfied
hereunder other than by reason of a default by the Purchaser, the Guarantor or the Company will reimburse the Purchaser upon demand for all reasonable out-of-pocket expenses (including the fees and expenses of each of the Purchaser’s counsel
specified in subparagraphs (v) and (vi) of the immediately preceding paragraph) that shall have been incurred by the Purchaser in connection with the proposed purchase and sale of the Preferred Securities. Neither the Guarantor nor the
Company shall in any event be liable to the Purchaser for the loss of anticipated profits from the transactions contemplated by this Purchase Agreement. 
 8. Indemnification. 
 (a) Each of the Company, the Guarantor and the Trust agree jointly and
severally to indemnify and hold harmless the Purchaser and the Purchaser’s affiliates (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 (i) any untrue statement or alleged untrue statement of a material fact contained in any information or
documents furnished or made available to the Purchaser by or on behalf of the Company, the Guarantor or the Trust by an Administrative Trustee, (ii) 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, (iii) the breach or alleged breach of any representation, warranty or agreement of either Seller contained herein or (iv) the execution and delivery by the Company, the Guarantor
and/or the Trust of this Purchase 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 the 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 which the Company, the Guarantor or the Trust may otherwise
have. 
 (b) The Company agrees to indemnify the Trust against all loss, liability, claim, damage and expense whatsoever due from the Trust
under paragraph (a) above. 
 (c) 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. Purchaser 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 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. 
 9. Termination: Representations and Indemnities to Survive. This Purchase Agreement shall be subject
to termination in the absolute discretion of the Purchaser, by notice given to the Company, the Guarantor and the Trust prior to delivery of and payment for the Preferred Securities, if prior to such time (i) a downgrading shall have occurred
in the rating accorded the Company’s debt securities or preferred stock by any “nationally recognized statistical rating organization,” as that term is used by the Commission in Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act, or such
organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of the Company’s debt securities or preferred stock, (ii) the Trust shall be unable to sell and deliver to
the Purchaser at least $35,000,000 stated liquidation value of Preferred Securities, (iii) a suspension or material limitation in trading in securities generally shall have occurred on the New York Stock Exchange, (iv) a suspension or
material limitation in trading in any of the Guarantor’s securities shall have occurred on the exchange or quotation system upon which the Guarantor’s securities are traded, if any, (v) a general moratorium on commercial business
activities shall have been declared either by federal or applicable state authorities or (vi) there shall have occurred any outbreak or escalation of hostilities, or declaration by the United States of a national emergency or war or other
calamity or crisis the effect of which on financial markets is such as to make it, in the Purchaser’s judgment, impracticable or inadvisable to proceed with the offering or delivery of the Preferred Securities. The respective agreements,
representations, warranties, indemnities and other statements of the Company, the Guarantor and the Trust or their respective officers or trustees and of the Purchaser set forth in or made pursuant to this Purchase Agreement will remain in full
force and effect, regardless of any investigation made by or on behalf of the Purchaser, the Company, the Guarantor or the Trust or any of the their respective officers, directors, trustees or controlling persons, and will survive delivery of and
payment for the Preferred Securities. The provisions of Sections 7 and 8 shall survive the termination or cancellation of this Purchase Agreement. 
 10. Amendments. This Purchase 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. 
 11. Notices. All communications hereunder will be in writing and effective only on receipt, and, if sent to the Purchaser, will be mailed,
delivered by hand or courier or sent by facsimile and confirmed to the Purchaser c/o Kodiak Warehouse LLC, 2107 Wilson Blvd., Suite 450, Arlington, VA 22201, Attention: Robert Hurley, Chief Financial Officer, Facsimile: (703) 351-7901; with a
copy to Reed Smith LLP, 435 Sixth Avenue, Pittsburgh, Pennsylvania 15219, 

 
Attention: Ronald L. Francis, Jr., Facsimile: (412) 288-3063 or other address as the Purchaser shall designate for such purpose in a notice to the
Company, the Guarantor and the Trust; and if sent to the Company, the Guarantor or the Trust, will be mailed, delivered by hand or courier or sent by facsimile and confirmed to it at NovaStar Mortgage, Inc., 8140 Ward Parkway, Suite 300, Kansas
City, MO 64114, Attention: Gregory S. Metz, Facsimile: (816) 627-5693. 
 12. Successors and Assigns. This Purchase
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 Purchase Agreement is intended or shall be construed to give any person other
than the parties hereto and the affiliates, directors, officers, employees, agents and controlling persons referred to in Section 8 hereof and their successors, assigns, heirs and legal representatives, any right or obligation hereunder.
None of the rights or obligations of the Company, the Guarantor or the Trust under this Purchase Agreement may be assigned, whether by operation of law or otherwise, without the Purchaser’s prior written consent. The rights and obligations of
the Purchaser under this Purchase Agreement may be assigned by the Purchaser without the Company’s, the Guarantor’s or the Trust’s consent; provided that the assignee assumes the obligations of the Purchaser under this Purchase
Agreement. 
 13. Applicable Law. THIS PURCHASE 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). 
 14. Submission to Jurisdiction. ANY LEGAL ACTION OR PROCEEDING BY OR AGAINST ANY PARTY HERETO OR WITH RESPECT TO OR ARISING OUT OF THIS PURCHASE 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 PURCHASE 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 PURCHASE AGREEMENT. 
 15. Counterparts and Facsimile. This Purchase 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 Purchase Agreement may be executed by any one or more of the parties hereto by facsimile.

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

  

					
	NOVASTAR MORTGAGE, INC.
		
	By:	 	 /s/ Gregory S. Metz

	Name:	 	Gregory S. Metz
	Title:	 	Senior Vice President, Chief Financial Officer and Assistant Secretary
	
	NOVASTAR CAPITAL TRUST II
		
	By:	 	NovaStar Mortgage, Inc., as Depositor
		
	By:	 	 /s/ Gregory S. Metz

	Name:	 	Gregory S. Metz
	Title:	 	Senior Vice President, Chief Financial Officer and Assistant Secretary
	
	NOVASTAR FINANCIAL, INC.
		
	By:	 	 /s/ Gregory S. Metz

	Name:	 	Gregory S. Metz
	Title:	 	Senior Vice President, Chief Financial Officer
		 	and Assistant Secretary
	
	KODIAK WAREHOUSE LLC
		
	By:	 	Kodiak Funding, L.P.,
		 	Its sole member
			
		 	By:	 	Kodiak Funding Company, Inc.
		 		 	Its general partner
		
	By:	 	 /s/ Robert M. Hurley

	Name:	 	Robert M. Hurley
	Title:	 	Chief Financial Officer

 SCHEDULE 1 
 List of Significant Subsidiaries 
 NovaStar Home Mortgage, Inc. 

 ANNEX A 
 Pursuant to Section 3(c) of the Purchase Agreement, Reed Smith LLP, special tax counsel for the Purchaser, shall deliver an opinion to the effect that: 
 (i) the Trust will be classified for United States federal income tax purposes as a grantor trust and not as an association or a publicly
traded partnership taxable as a corporation; and 
 (ii) for United States federal income tax purposes, the Junior
Subordinated Notes will constitute indebtedness of the Company. 
 In rendering such opinions, such counsel may (A) state that its
opinion is limited to the federal laws of the United States and (B) rely as to matters of fact, to the extent deemed proper, on certificates of responsible officers of the Company and public officials. 
  

 A-1 

 ANNEX B 
 Pursuant to Section 3(d) of the Purchase Agreement, Richards, Layton & Finger, P.A., special Delaware counsel for the Delaware Trustee, shall deliver an opinion to the effect that: 
 (i) the Trust has been duly created and is validly existing in good standing as a statutory trust under the Delaware Statutory Trust Act,
and all filings required under the laws of the State of Delaware with respect to the creation and valid existence of the Trust as a statutory trust have been made; 
 (ii) under the Delaware Statutory Trust Act and the Trust Agreement, the Trust has the trust power and authority (A) to own property
and conduct its business, all as described in the Trust Agreement, (B) to execute and deliver, and to perform its obligations under, each of the Purchase Agreement, the Common Securities Subscription Agreement, the Junior Subordinated Note
Purchase Agreement and the Preferred Securities and the Common Securities and (C) to purchase and hold the Junior Subordinated Notes; 
 (iii) under the Delaware Statutory Trust Act, the certificate attached to the Trust Agreement as Exhibit C is an appropriate form of certificate to evidence ownership of the Preferred Securities; the Preferred
Securities have been duly authorized by the Trust Agreement and, when issued and delivered against payment of the consideration as set forth in the Purchase Agreement, the Preferred Securities will be validly issued and (subject to the
qualifications set forth in this paragraph) fully paid and nonassessable and will represent undivided beneficial interests in the assets of the Trust; the holders of the Preferred Securities will be entitled to the benefits of the Trust Agreement
and, as beneficial owners of the Trust, will 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; and such counsel
may note that the holders of the Preferred Securities may be obligated, pursuant to the Trust Agreement, to (A) provide indemnity and/or security in connection with and pay taxes or governmental charges arising from transfers or exchanges of
Preferred Securities certificates and the issuance of replacement Preferred Securities certificates and (B) provide security or indemnity in connection with requests of or directions to the Property Trustee to exercise its rights and remedies
under the Trust Agreement; 
 (iv) the Common Securities have been duly authorized by the Trust Agreement and, when issued and
delivered by the Trust to the Company against payment therefor as described in the Trust Agreement and the Common Securities Subscription Agreement, will be validly issued and fully paid and will represent undivided beneficial interests in the
assets of the Trust entitled to the benefits of the Trust Agreement; 
 (v) under the Delaware Statutory Trust Act and the
Trust Agreement, the issuance of the Preferred Securities and the Common Securities is not subject to preemptive or other similar rights; 
 (vi) under the Delaware Statutory Trust Act and the Trust Agreement, the execution and delivery by the Trust of the Purchase Agreement, the Common Securities Subscription Agreement and the Junior Subordinated Note
Purchase Agreement, and the performance by the Trust of its obligations thereunder, have been duly authorized by all necessary trust action on the part of the Trust; 
 (vii) the Trust Agreement constitutes a legal, valid and binding obligation of the Company and the Trustees, and is enforceable against
the Company and the Trustees, 

  

 B-1 

 
in accordance with its terms subject, as to enforcement, to the effect upon the Trust Agreement of (i) bankruptcy, insolvency, moratorium, receivership,
reorganization, liquidation, fraudulent conveyance or transfer and other similar laws relating to or affecting the rights and remedies of creditors generally, (ii) principles of equity, including applicable law relating to fiduciary duties
(regardless of whether considered and applied in a proceeding in equity or at law), and (iii) the effect of applicable public policy on the enforceability of provisions relating to indemnification or contribution; 
 (viii) the issuance and sale by the Trust of the Preferred Securities and the Common Securities, the purchase by the Trust of the Junior
Subordinated Notes, the execution, delivery and performance by the Trust of the Purchase Agreement, the Common Securities Subscription Agreement and the Junior Subordinated Note Purchase Agreement, the consummation by the Trust of the transactions
contemplated by the Purchase Agreement and compliance by the Trust with its obligations thereunder do not violate (i) any of the provisions of the Certificate of Trust or the Amended and Restated Trust Agreement or (ii) any applicable
Delaware law, rule or regulation; 
 (ix) no filing with, or authorization, approval, consent, license, order, registration,
qualification or decree of, any Delaware court or Delaware Governmental Entity or Delaware agency is necessary or required solely in connection with the issuance and sale by the Trust of the Common Securities or the Preferred Securities, the
purchase by the Trust of the Junior Subordinated Notes, the execution, delivery and performance by the Trust of the Purchase Agreement, the Common Securities Subscription Agreement and the Junior Subordinated Note Purchase Agreement, the
consummation by the Trust of the transactions contemplated by the Purchase Agreement and compliance by the Trust with its obligations thereunder; and 
 (x) the holders of the Preferred Securities (other than those holders who reside or are domiciled in the State of Delaware) will have no liability for income taxes imposed by the State of Delaware solely as a result
of their participation in the Trust and the Trust will not be liable for any income tax imposed by the State of Delaware. 
 In rendering
such opinions, such counsel may (A) state that its opinion is limited to the laws of the State of Delaware, (B) rely as to matters of fact, to the extent deemed proper, on certificates of responsible officers of the Company and public
officials and (C) take customary assumptions and exceptions as to enforceability and other matters. 
  

 B-2 

 ANNEX C 
 Pursuant to Section 3(e) of the Purchase Agreement, Gardere Wynne Sewell LLP, special counsel for the Property Trustee and the Indenture Trustee, shall deliver an opinion to the effect that: 
 (i) JPMorgan Chase Bank, National Association (the “Bank”), is a national banking association with trust powers, duly and
validly existing under the laws of the United States of America, with corporate power and authority to execute, deliver and perform its obligations under the Indenture and to authenticate and deliver the Securities, and is duly eligible and
qualified to act as Trustee under the Indenture pursuant to Section 6.1 thereof and as Property Trustee under the Trust Agreement pursuant to Section 8.2 thereof. (The Indenture and the Trust Agreement are each, an “Agreement”
and together, the “Agreements”). 
 (ii) Each Agreement has been duly authorized, executed and delivered by the Bank
and constitutes the valid and binding obligation of the Bank, enforceable against it in accordance with its terms except (A) as may be limited by bankruptcy, fraudulent conveyance, fraudulent transfer, insolvency, reorganization, liquidation,
receivership, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights generally, and by general equitable principles, regardless of whether considered in a proceeding in equity or at law and (B) that the
remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought. 
 (iii) Neither the execution or delivery by the Bank of the Agreements, the authentication and delivery of the Preferred Securities (as
defined in the Trust Agreement) and junior subordinated notes (issued under the Indenture, and together with the Preferred Securities, the “Securities”) by the Trustee pursuant to the terms of the Agreements, nor the performance by the
Bank of its obligations under the Agreements (A) requires the consent or approval of, the giving of notice to or the registration or filing with, any governmental authority or agency under any existing law of the United States of America
governing the banking or trust powers of the Bank or (B) violates or conflicts with the Articles of Association or By-laws of the Bank or any law or regulation of the State of New York or the United States of America governing the banking or
trust powers of the Bank. 
 (iv) The Securities have been authenticated and delivered by a duly authorized officer of the
Bank. 
 In rendering such opinions, such counsel may (A) state that its opinion is limited to the laws of the State of New York and the
laws of the United States of America, (B) rely as to matters of fact, to the extent deemed proper, on certificates of responsible officers of JPMorgan Chase Bank, National Association, the Company and public officials, and (C) make
customary assumptions and exceptions as to enforceability and other matters. 
  

 C-1 

 ANNEX D 
 Pursuant to Section 3(f) of the Purchase Agreement, Richards, Layton & Finger, P.A., counsel for the Delaware Trustee, shall deliver an opinion to the effect that: 
 (i) Chase Bank USA, National Association, is duly formed and validly existing as a national banking association under the federal laws of
the United States of America with trust powers and with its principal place of business in the State of Delaware; 
 (ii)
Chase Bank USA, National Association, has the corporate power and authority to execute, deliver and perform its obligations under, and has taken all necessary corporate action to authorize the execution, delivery and performance of, the Trust
Agreement and to consummate the transactions contemplated thereby; 
 (iii) The Trust Agreement has been duly authorized,
executed and delivered by Chase Bank USA, National Association, and constitutes a legal, valid and binding obligation of Chase Bank USA, National Association, and is enforceable against Chase Bank USA, National Association, in accordance with its
terms subject as to enforcement, to the effect upon the Trust Agreement of (i) applicable bankruptcy, insolvency, reorganization, moratorium, receivership, fraudulent conveyance or transfer and similar laws relating to or affecting the rights
and remedies of creditors generally, (ii) principles of equity, including applicable law relating to fiduciary duties (regardless of whether considered and applied in a proceeding in equity or at law), and (iii) the effect of applicable
public policy on the enforceability of provisions relating to indemnification or contribution; 
 (iv) The execution, delivery
and performance by Chase Bank USA, National Association, of the Trust Agreement do not conflict with or result in a violation of (A) articles of association or by-laws of Chase Bank USA, National Association, or (B) any law or regulation
of the State of Delaware or the United States of America governing the trust powers of Chase Bank USA, National Association, or, to our knowledge, without independent investigation, of any indenture, mortgage, bank credit agreement, note or bond
purchase agreement, long-term lease, license or other agreement or instrument to which Chase Bank USA, National Association, is a party or by which it is bound or, to our knowledge, without independent investigation, of any judgment or order
applicable to Chase Bank USA, National Association; and 
 (v) No approval, authorization or other action by, or filing with,
any Governmental Entity of the State of Delaware or the United States of America governing the trust powers of Chase Bank USA, National Association, is required in connection with the execution and delivery by Chase Bank USA, National Association,
of the Trust Agreement or the performance by Chase Bank USA, National Association, of its obligations thereunder, except for the filing of the Certificate of Trust with the Secretary of State of the State of Delaware, which Certificate of Trust has
been filed with the Secretary of State of the State of Delaware. 
 In rendering such opinions, such counsel may (A) state that its
opinion is limited to the laws of the State of Delaware and the federal laws of the United States governing the trust powers of Chase Bank USA, National Association, (B) rely as to matters of fact, to the extent deemed proper, on certificates
of responsible officers of the Company and public officials and (C) take customary assumptions and exceptions. 
  

 D-1 

 ANNEX E 
 OFFICER’S FINANCIAL CERTIFICATE 
 The undersigned, the [Chairman/Vice Chairman/Chief Executive
Officer/President/ Vice President/Chief FINANCIAL Officer/Treasurer/Assistant Treasurer], hereby certifies, pursuant to Section 6(h) of the Purchase Agreement, dated as of April __, 2006, among NovaStar Mortgage, Inc. (the “Company”),
NovaStar Financial, Inc., NovaStar Capital Trust II (the “Trust”), on the one hand, and Kodiak Warehouse LLC on the other hand, that, as of [date], [20    ], the Company, if applicable, and its Subsidiary had the
following ratios and balances: 
  

					
	 As of [Quarterly/Annual Financial Date], 20    
	  			
	 Senior secured indebtedness for borrowed money (“Debt”)
	  	$	            	 
	 Senior unsecured Debt
	  	$	            	 
	 Subordinated Debt
	  	$	            	 
	 Total Debt
	  	$	            	 
	 Ratio of (x) senior secured and unsecured Debt to (y) total Debt
	  	 	            	%

	*	A table describing the quarterly report calculation procedures is provided on page 

 [FOR FISCAL YEAR END: Attached hereto arc 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.] 
 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 interim]
[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). 
  

 E-1 

 IN WITNESS WHEREOF, the undersigned has executed this Officer’s Financial Certificate as of this
     day of [                                ],
20[    ]. 
  

			
	NOVASTAR MORTGAGE, INC.
		
	 By:
	 	  

	Name:	 	  

	Title:	 	  

	
	NovaStar Mortgage, Inc.
	 8140 Ward Parkway
 Suite 300
 Kansas City, MO 64114

  

 E-2Trust Agreement

 Exhibit 10.39 
 Execution 
 AMENDED AND RESTATED TRUST AGREEMENT 
 Among 
 NOVASTAR MORTGAGE, INC.,

 as Depositor 
 JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, 
 as Property Trustee 
 CHASE BANK USA, NATIONAL ASSOCIATION, 
 as Delaware Trustee 
 and 
 THE ADMINISTRATIVE TRUSTEES NAMED HEREIN 
 as Administrative Trustees 
  

 Dated as of April 18, 2006

  

 NOVASTAR CAPITAL
TRUST II 

 CONTENTS 
  

			
	Clause	  	Page
	 ARTICLE I DEFINED TERMS
	  	1
		
	 SECTION 1.1 Definitions.
	  	1
		
	 ARTICLE II THE TRUST
	  	10
		
	 SECTION 2.1 Name.
	  	10
		
	 SECTION 2.2 Office of the Delaware Trustee; Principal Place of Business.
	  	10
		
	 SECTION 2.3 Initial Contribution of Trust Property; Fees, Costs and Expenses.
	  	10
		
	 SECTION 2.4 Purposes of Trust.
	  	10
		
	 SECTION 2.5 Authorization to Enter into Certain Transactions.
	  	11
		
	 SECTION 2.6 Assets of Trust.
	  	13
		
	 SECTION 2.7 Title to Trust Property.
	  	13
		
	 ARTICLE III PAYMENT ACCOUNT; PAYING AGENTS
	  	14
		
	 SECTION 3.1 Payment Account.
	  	14
		
	 SECTION 3.2 Appointment of Paying Agents.
	  	14
		
	 ARTICLE IV DISTRIBUTIONS; REDEMPTION
	  	15
		
	 SECTION 4.1 Distributions.
	  	15
		
	 SECTION 4.2 Redemption.
	  	16
		
	 SECTION 4.3 Subordination of Common Securities.
	  	18
		
	 SECTION 4.4 Payment Procedures.
	  	19
		
	 SECTION 4.5 Withholding Tax.
	  	19
		
	 SECTION 4.6 Tax Returns and Other Reports.
	  	20
		
	 SECTION 4.7 Payment of Taxes, Duties, Etc. of the Trust.
	  	20
		
	 SECTION 4.8 Payments under Indenture or Pursuant to Direct Actions.
	  	20
		
	 SECTION 4.9 Exchanges.
	  	20
		
	 SECTION 4.10 Calculation Agent.
	  	21
		
	 SECTION 4.11 Certain Accounting Matters.
	  	21
		
	 ARTICLE V SECURITIES
	  	22
		
	 SECTION 5.1 Initial Ownership.
	  	22
		
	 SECTION 5.2 Authorized Trust Securities.
	  	23
		
	 SECTION 5.3 Issuance of the Common Securities; Subscription and Purchase of Notes.
	  	23
		
	 SECTION 5.4 The Securities Certificates.
	  	23
		
	 SECTION 5.5 Rights of Holders.
	  	24

  

 -i- 

			
	 SECTION 5.6 Book-Entry Preferred Securities.
	  	24
		
	 SECTION 5.7 Registration of Transfer and Exchange of Preferred Securities Certificates.
	  	26
		
	 SECTION 5.8 Mutilated, Destroyed, Lost or Stolen Securities Certificates.
	  	27
		
	 SECTION 5.9 Persons Deemed Holders.
	  	28
		
	 SECTION 5.10 Cancellation.
	  	28
		
	 SECTION 5.11 Ownership of Common Securities by Depositor.
	  	28
		
	 SECTION 5.12 Restricted Legends.
	  	29
		
	 SECTION 5.13 Form of Certificate of Authentication.
	  	31
		
	 ARTICLE VI MEETINGS; VOTING; ACTS OF HOLDERS
	  	31
		
	 SECTION 6.1 Notice of Meetings.
	  	31
		
	 SECTION 6.2 Meetings of Holders of the Preferred Securities.
	  	31
		
	 SECTION 6.3 Voting Rights.
	  	32
		
	 SECTION 6.4 Proxies, Etc.
	  	32
		
	 SECTION 6.5 Holder Action by Written Consent.
	  	32
		
	 SECTION 6.6 Record Date for Voting and Other Purposes.
	  	32
		
	 SECTION 6.7 Acts of Holders.
	  	33
		
	 SECTION 6.8 Inspection of Records.
	  	34
		
	 SECTION 6.9 Limitations on Voting Rights.
	  	34
		
	 SECTION 6.10 Acceleration of Maturity; Rescission of Annulment; Waivers of Past Defaults.
	  	35
		
	 ARTICLE VII REPRESENTATIONS AND WARRANTIES
	  	37
		
	 SECTION 7.1 Representations and Warranties of the Property Trustee and the Delaware Trustee.
	  	37
		
	 SECTION 7.2 Representations and Warranties of Depositor.
	  	38
		
	 ARTICLE VIII THE TRUSTEES
	  	39
		
	 SECTION 8.1 Number of Trustees.
	  	39
		
	 SECTION 8.2 Property Trustee Required.
	  	39
		
	 SECTION 8.3 Delaware Trustee Required.
	  	39
		
	 SECTION 8.4 Appointment of Administrative Trustees.
	  	40
		
	 SECTION 8.5 Duties and Responsibilities of the Trustees.
	  	40
		
	 SECTION 8.6 Notices of Defaults and Extensions.
	  	42
		
	 SECTION 8.7 Certain Rights of Property Trustee.
	  	42
		
	 SECTION 8.8 Delegation of Power.
	  	44
		
	 SECTION 8.9 May Hold Securities.
	  	45
		
	 SECTION 8.10 Compensation; Reimbursement; Indemnity.
	  	45

  

 -ii- 

			
	 SECTION 8.11 Resignation and Removal; Appointment of Successor.
	  	46
		
	 SECTION 8.12 Acceptance of Appointment by Successor.
	  	47
		
	 SECTION 8.13 Merger, Conversion, Consolidation or Succession to Business.
	  	47
		
	 SECTION 8.14 Not Responsible for Recitals Issuance of Securities & Representations.
	  	48
		
	 SECTION 8.15 Property Trustee May File Proofs of Claim.
	  	48
		
	 SECTION 8.16 Reports to the Property Trustee.
	  	49
		
	 ARTICLE IX TERMINATION, LIQUIDATION AND MERGER
	  	49
		
	 SECTION 9.1 Dissolution Upon Expiration Date.
	  	49
		
	 SECTION 9.2 Early Termination.
	  	49
		
	 SECTION 9.3 Termination.
	  	50
		
	 SECTION 9.4 Liquidation.
	  	50
		
	 SECTION 9.5 Mergers, Consolidations, Amalgamations or Replacements of Trust.
	  	52
		
	 ARTICLE X MISCELLANEOUS PROVISIONS
	  	53
		
	 SECTION 10.1 Limitation of Rights of Holders.
	  	53
		
	 SECTION 10.2 Agreed Tax Treatment of Trust and Trust Securities.
	  	53
		
	 SECTION 10.3 Amendment.
	  	53
		
	 SECTION 10.4 Separability.
	  	55
		
	 SECTION 10.5 Governing Law.
	  	55
		
	 SECTION 10.6 Successors.
	  	55
		
	 SECTION 10.7 Headings.
	  	55
		
	 SECTION 10.8 Reports, Notices and Demands.
	  	55
		
	 SECTION 10.9 Agreement Not to Petition.
	  	56
		
	 SECTION 10.10 Counterparts
	  	57

  

					
	 Exhibit A
	  	 Certificate of Trust
	  	A-1
	 Exhibit B
	  	 Form of Common Securities Certificate
	  	B-1
	 Exhibit C
	  	 Form of Preferred Securities Certificate
	  	C-1
	 Exhibit D
	  	 Junior Subordinated Indenture
	  	D-1
	 Exhibit E
	  	 Form of Transferor Certificate to be Executed by Transferees
	  	E-1
	 Exhibit F
	  	 Form of Officer’s Financial Certificate of the Depositor
	  	F-1
			
	 Schedule A
	  	 Calculation of LIBOR
	  	

  

 -iii- 

 THIS AMENDED AND RESTATED
TRUST AGREEMENT, dated as of April 18, 2006, among (i) NovaStar Mortgage, Inc., a Virginia corporation (including any successors or permitted assigns, the “Depositor”), (ii) JPMorgan
Chase Bank, National Association, as property trustee (in such capacity, the “Property Trustee”), (iii) Chase Bank USA, National Association, as Delaware trustee (in such capacity, the “Delaware Trustee”),
(iv) Scott F. Hartman, an individual, Gregory S. Metz, an individual and Jeffrey D. Ayers, an individual, each of whose address is c/o NovaStar Financial, Inc., 8140 Ward Parkway, Suite 300, Kansas City, MO 64114, 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”) and (v) the
several Holders, as hereinafter defined. 
 WITNESSETH 
 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 April 13, 2006 (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 as Exhibit A; 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 and sale of the Preferred Securities by the Trust pursuant to the Purchase 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” 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. 
 “Additional Taxes” has the meaning
specified in Section 1.1 of the Indenture. 
 “Additional Tax Sums” has the meaning specified in
Section 10.5 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 
  

 -2- 

 (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. 
 “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. 
 “Closing Date” has the meaning specified in the Purchase Agreement. 
 “Code” means the United States Internal Revenue Code of 1986, as amended. 
 “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 as
Exhibit B. 
 “Common Security” means an undivided beneficial interest in the assets of the Trust, having a
Liquidation Amount of $1,000 and having the rights 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 600 Travis, 50th floor, Houston, Texas 77019, Attention: Worldwide Securities Services – NovaStar Capital Trust II. Initially, all notices and correspondence
shall be addressed to Mudassir Mohamed, telephone 713-216-2826. 
 “Definitive Preferred Securities Certificates” means
Preferred Securities issued in certificated, fully registered form that are not Global Preferred Securities. 
  

 -3- 

 “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. 
 “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. 

“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. 
 “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 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 
  

 -4- 

 (e) the 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, and any successor statute thereto, in each case as amended from time to time. 
 “Exchange Notes” has the meaning
given to such term in the Indenture. 
 “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. 
 “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, NovaStar Financial, Inc. 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, as amended or supplemented from time to time. 
 “Indenture Redemption
Price” means the Optional Note Redemption Price or the Special Note Redemption Price, as applicable. 
 “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 

  

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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 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 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. 
 “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 which is not an Officers’ Certificate) shall include: 
 (a) a statement by each officer signing the Officers’ Certificate that such officer has read the covenant or condition and the definitions 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;

 (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 covenant or condition has been complied with; and 
  

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 (d) a statement as to whether, in the opinion of such officer, such condition or covenant has been
complied with. 
 “Operative Documents” means the Purchase 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 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 to the Redemption Date, plus the related amount of the 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. 
 “Optional 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 percent (100%) of the outstanding principal amount of such
Note, together with accrued interest, including any Additional Interest (to the extent legally enforceable), thereon through but not including the date fixed as such Redemption Date. 
 “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”, when used with respect to any Trust Securities, means, 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 
 (c) Trust Securities that have been paid or in exchange 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, legal and binding
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 

  

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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 Security” means an undivided beneficial interest in the assets of the Trust, having a Liquidation Amount of $1,000 and having
the rights provided therefor in this Trust Agreement. 
 “Preferred Securities Certificate” means a certificate evidencing
ownership of Preferred Securities, substantially in the form attached as Exhibit C. 
 “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. 
 “Purchase Agreement” means the Purchase Agreement executed and
delivered by the Trust, NovaStar Financial, Inc., the Depositor and the Purchaser, contemporaneously with the execution and delivery of this Trust Agreement, as amended from time to time. 
 “Purchaser” means Kodiak Warehouse LLC, a Delaware limited liability company. 
 “QIB” means a “qualified institutional buyer” as defined in Rule 144A under the Securities Act of 1933, as amended.

 “QP” means a “qualified purchaser” as defined in Section 2(a)(51) under the Investment Company Act of
1940, as amended. 
 “QIB/QP” means a QIB that is also a QP. 
 “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. 
  

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 “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 Worldwide Securities
Services department of the Property Trustee having direct responsibility for the administration of this Trust Agreement. 
 “Securities Act” means the Securities Act of 1933, and 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. 
 “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. 
 “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 II,” which was created on April 13, 2006 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 all Schedules and Exhibits. 
 “Trustees” means the Administrative Trustees, the Property Trustee and the Delaware Trustee, each as defined in this Article I. 
  

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 “Trust Property” means (a) the Notes or, following an exchange of the Exchange
Notes for the Notes pursuant to the Indenture, 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. 
 ARTICLE II 
 THE TRUST 
 SECTION 2.1 Name.

 The trust continued hereby shall be known as “NovaStar Capital Trust II”, 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. 
 SECTION 2.2 Office of the Delaware Trustee; Principal Place of Business. 
 The address of the Delaware Trustee in the State of Delaware is Chase Bank USA, National Association, 500 Stanton Christiana Road, Building 4
(3rd floor), Newark, DE 19713, Attention: Worldwide Securities Services, 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 executive office of the Trust is 8140 Ward Parkway, Suite 300, Kansas City, MO 64114,
Attention: Gregory S. Metz, 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 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 and sell Trust Securities and use the proceeds from
such sale to acquire the Notes and (ii) 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 

  

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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. 
 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 and sale 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 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 purchase agreement; 
 (C) assisting in the sale 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 Paying Agent and Securities Registrar in accordance with this Trust Agreement; 
 (F) execution 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 Purchase Agreement and application for a taxpayer identification number for the Trust; 
  

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 (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); 
 (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 that such Administrative Trustee has the power to execute pursuant to
this Trust Agreement; and 
 (K) the taking of any action incidental to the foregoing as such Administrative Trustee may from
time to time determine is necessary or advisable to give effect to the terms of this Trust Agreement. 
 (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 collection 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; and 
 (I) the taking of any
action incidental to the foregoing as the Property Trustee may from time to time 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 issue and sale 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 Purchase Agreement
providing for the sale 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 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 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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 ARTICLE III 
 PAYMENT ACCOUNT; PAYING AGENTS 
 SECTION 3.1 Payment Account. 
 (a) On or prior to the Closing 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 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 Paying Agent shall initially be the Property Trustee. 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
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. 
  

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 ARTICLE IV 
 DISTRIBUTIONS; REDEMPTION 
 SECTION 4.1 Distributions. 
 (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 April 18, 2006, 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 June 30, 2006. 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”); 
 (ii) Reserved. 
 (iii) Distributions shall accumulate in respect of the Trust Securities at a variable rate, reset quarterly, equal to LIBOR plus
3.50% per annum of the Liquidation Amount of the Trust Securities, such rate being the rate of interest payable on the Notes. 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 
 (iv) 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 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 

  

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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. 
 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 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 

  

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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 a Tax Event, at the Special Note Redemption Price. 
 (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 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 by the Trust, 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 Trust Securities to 

  

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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 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 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. 
  

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 (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 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. 
 (a) The
Trust and the Property Trustee shall comply with all withholding and backup withholding tax requirements under United States federal, state and local law. The Property Trustee 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 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 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 on behalf of the Trust may reduce subsequent Distributions by the amount of such required
withholding. 
  

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 SECTION 4.6 Tax Returns and Other Reports. 
 The Property Trustee 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 Property Trustee 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 Revenue Service forms and returns required to be provided by the Trust. The Property Trustee shall provide the Depositor, the Purchaser and the Administrative Trustees 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 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 

  

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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 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 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. 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 three-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 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, each Paying Agent and the Depositary. The Calculation Agent will also specify to the Administrative Trustee the quotations upon which the foregoing rates and amounts 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 or (ii) it has not determined and is not in the
process of determining the foregoing rates and amounts, together with its reasons therefor. The Calculation Agent’s determination of the foregoing rates and amounts 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 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 $35,000,000 and one series of Common
Securities having an aggregate Liquidation Amount of $1,083,000. 
 SECTION 5.3 Issuance of the Common Securities; Subscription and
Purchase of Notes. 
 On the Closing 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 Eighty Three (1,083) Common Securities having an aggregate Liquidation Amount of One Million Eighty Three Thousand Dollars
($1,083,000), against receipt by the Trust of the aggregate purchase price of such Common Securities of One Million Eighty Three Thousand Dollars ($1,083,000). Contemporaneously therewith and with the sale by the Trust to the Holders of an aggregate
of Thirty Five Thousand (35,000) Preferred Securities having an aggregate Liquidation Amount of Thirty-Five Million Dollars ($35,000,000), an Administrative Trustee, on behalf of the Trust, shall purchase 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 Thirty Six Million Eighty Three Thousand Dollars ($36,083,000), and, in satisfaction of the purchase price for such Notes, the
Property Trustee, on behalf of the Trust, shall deliver to the Depositor the sum of Thirty Six Million Eighty Three Thousand Dollars ($36,083,000) (being the aggregate amount paid by the Holders for the Preferred Securities, and the amount paid by
the Depositor for the Common Securities). 
 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 Closing 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. 
 (c) The Preferred Securities issued to QIBs/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 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 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 can be found in Section 5.13. 
 SECTION 5.5 Rights of Holders. 
 The
Trust Securities shall have no preemptive or similar rights and when issued and delivered to Holders against payment of the purchase price therefor 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. 
 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, 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, such transfer shall be effected, subject to the Applicable Depositary Procedures, in accordance with the provisions of 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 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. 
  

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 (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. 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 Definitive 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. 
 (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 

  

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Depositary 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 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 the Property Trustee shall authenticate and deliver, the Preferred Securities Certificates that the Holder making the exchange is entitled to receive.

 (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.

  

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 (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 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 as its 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 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 is specifically
required by the express terms of this Section 5.7 to be delivered to the Trustee or the Securities Registrar by a Holder or transferee of a Security, the Trustee and the Securities Registrar shall be under a duty to receive and examine the same
to determine whether or not the 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, the Administrative Trustees, or any one of them, on behalf of the Trust, shall execute and make available for delivery in exchange therefor a new Securities Certificate of like
class, tenor and denomination. 
 (b) If the Securities Registrar shall receive evidence to its satisfaction of the destruction, loss or theft
of any Securities Certificate and there shall be 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 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. 
  

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 (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 owner of 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 by it. 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 Closing 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 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 

  

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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 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 Restricted 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 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 II 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 

  

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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 THE HOLDER OF SUCH PREFERRED SECURITIES FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF PRINCIPAL OF OR
INTEREST 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 HOLDER OF THIS SECURITY, OR ANY INTEREST THEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT 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 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.” 
  

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 (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 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 deliver,
at the written direction of the Administrative Trustees and the Depositor, Preferred Securities Certificates that do not bear the legend. 
 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:	 	JPMorgan Chase Bank, National Association, not in its individual capacity, but solely as Property Trustee
			
		 	By:	 	  

		 		 	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. 
  

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 (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. 
 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 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 though 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 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 the 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 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 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 or any 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. 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, and 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 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 national banking association, duly formed and validly existing under the laws of the United States; 
 (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, as applicable, 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 that: 
 (a) the
Depositor is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation; 
 (b) the
Depositor 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) this Trust Agreement has been duly authorized, executed and delivered by the Depositor and constitutes 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) the Securities Certificates issued at the Closing Date on behalf of the Trust 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 Holders will be, as of such date, entitled to the benefits of this
Trust Agreement; 
 (e) 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 Depositor and do not require any approval of stockholders of the Depositor and such execution, delivery and performance will not (i) violate the articles or certificate 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; 
  

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 (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; 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 Trust Agreement. 
 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 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), 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 

  

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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 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 number of Administrative Trustees shall occur, until such vacancy is filled by the appointment of an Administrative Trustee in accordance with Section 8.11, the Administrative 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 

  

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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; 
 (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 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 

  

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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, 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) Reserved. 
 (c) The Property Trustee shall not be charged with knowledge of any 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, an Administrative Trustee or a Holder. 
 (d) The Property Trustee shall notify all Holders of the Preferred Securities of any notice of default received with respect to the Notes. 
 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, 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 a 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 

  

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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 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 its obligation to exercise the rights and powers in it vested 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; 
  

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 (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;

 (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 be 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 

  

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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 
 (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 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 the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action. 
  

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 In no event shall the Property Trustee and 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) 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. 
 (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, 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. 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 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. 
  

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 (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 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). 
 (g) Upon the appointment of a successor Delaware Trustee, such successor Delaware Trustee shall file a Certificate of Amendment to the Certificate of Trust 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 and trusts 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 

  

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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 Issuance of
Securities & Representations. 
 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 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. 
 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 property of the Trust 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. 
  

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 (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. 
 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 fiscal quarters of the Depositor and not later than ninety (90) days after the end of each fiscal year of the Trust ending after the date of this Trust Agreement, an Officers’ Certificate covering the preceding fiscal year,
stating whether or not to the knowledge of the signers thereof the Depositor and 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 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 (i) to the Property Trustee; (ii) to the Purchaser at 2107 Wilson Blvd., Suite 450, Arlington, VA 22201,
Attention: Robert Hurley, Chief Financial Officer, or at such other address as designated by Purchaser) 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 or by Purchaser) a duly completed and executed certificate substantively and substantially in the form attached hereto as Exhibit F, including the financial statements 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 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. 
 The Property Trustee shall obtain all reports, certificate 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 April 18, 2041 (the ”Expiration
Date”), and the Trust Property shall be liquidated in accordance with Section 9.4. 
 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; 
  

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 (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 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. 
 (a) 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 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. 
 (b) As soon as practicable thereafter, and after satisfaction of liabilities to creditors of the Trust as required by applicable law, including section 3808 of the Delaware Statutory Trust Act, the Delaware Trustee,
when notified in writing of the completion of the winding up of the Trust in accordance with the Delaware Statutory Trust Act, shall terminate the Trust by filing, at the expense of the Depositor, a certificate of cancellation with the Secretary of
State of the State of Delaware. 
 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). 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; 
  

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 (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 
 (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 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 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. 
  

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 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 
  

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 (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, or 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 other provisions of this Trust Agreement, (ii) to modify, eliminate or add to any provisions of this Trust Agreement to 

  

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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 will
not be required to register as an “investment company” under the Investment Company Act or (iii) to add to the covenants, restrictions or obligations of the Depositor; provided, that in the case of clauses (i), (ii) or
(iii), 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 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. In addition to and subject to the foregoing, the Distribution Dates, Redemption Date and
Stated Maturity (as defined in the Indenture) with respect to the Preferred Securities or a portion of the Preferred Securities shall be conformed in connection with any modification of the Interest Payment Date, Redemption Date or Stated Maturity
of the Junior Subordinated Notes made by the Company and the Trust at the direction of any Holder of the Preferred Securities or a portion of the Preferred Securities as set forth in Section 6(l) of the Purchase Agreement; provided, that
all reasonable expenses in connection with such modification shall be paid by the Purchaser (or the successor to the Purchaser’s interest in the Preferred Securities). 
 (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. 
  

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

  

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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, (a) 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 (b) in the case of the Holder of all the
Common Securities or the Depositor, to NovaStar Financial, Inc., 8140 Ward Parkway, Suite 300, Kansas City, MO 64114, Attention: Gregory S. Metz, 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 JPMorgan Chase Bank, National Association, 600 Travis, 50th floor, Houston, TX 77019, Attention: Worldwide Securities Services – NovaStar Capital Trust II, (ii) with respect to the Delaware Trustee, to Chase Bank USA, National Association, c/o JPMorgan Chase Bank, National
Association, 500 Stanton Christiana Road, Building 4 (3rd floor), Newark, DE 19713, Attention: Worldwide Securities
Services, NovaStar Capital Trust II, facsimile no. (302) 552-6280; (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 II”, 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. 
 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 year and one 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.

  

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 SECTION 10.10 Counterparts. This instrument 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. 
 [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 
  

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 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:	 	 /s/ Gregory S. Metz

		 		 	Name:	 	Gregory S. Metz
		 		 	Title:	 	Senior Vice President, Chief Financial Officer
		 		 		 	and Assistant Secretary
		
	JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,	 	CHASE BANK USA, NATIONAL ASSOCIATION,
	as Property Trustee	 	as Delaware Trustee
				
	By:	 	 /s/ Maria D. Calzado
	 	By:	 	 /s/ Sarika M. Sheth

	Name:	 	Maria D. Calzado	 	Name:	 	Sarika M. Sheth
	Title:	 	Vice President	 	Title:	 	Assistant Vice President
		
	 /s/ Gregory S. Metz
	 	 /s/ Scott F. Hartman

	Administrative Trustee	 	Administrative Trustee
	Name:	 	Gregory S. Metz	 	Name:	 	Scott F. Hartman
			
	 /s/ Jeffrey D. Ayers
	 		 	
	Administrative Trustee	 		 	
	Name:	 	Jeffrey D. Ayers	 		 	

 Amended and Restated Trust Agreement 

 Exhibit A 
 CERTIFICATE OF TRUST 
 OF 
 NOVASTAR CAPITAL TRUST II 
 This Certificate of Trust of NovaStar Capital Trust
II (the “Trust”) is being duly executed and filed on behalf of the Trust 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
II. 
 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 Chase Bank USA, National Association, c/o JPMorgan Chase Bank, National Association, 500 Stanton Christiana Road, Building 4 (3rd floor), Newark, Delaware 19713, Attention: Worldwide Securities Services. 
 3. Effective
Date. This Certificate of Trust shall be effective upon its 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. 
  

			
	CHASE BANK USA, NATIONAL ASSOCIATION, 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 
 NOVASTAR CAPITAL TRUST II 
 Floating
Rate Common Securities 
 (liquidation amount $1,000 per Common Security) 
 NovaStar Capital Trust II, 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 One Thousand Eighty Three (1,083) common securities of the Trust representing undivided common beneficial interests in the assets of the Trust and designated the NovaStar
Capital Trust II Floating Rate 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 provisions 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 provisions of, the Amended and Restated Trust Agreement of the Trust, dated as of
April 18, 2006 as the same may be amended from time to time (the “Trust Agreement”), among NovaStar Mortgage, Inc., as Depositor, JPMorgan Chase Bank, National Association, as Property Trustee, Chase Bank USA, National
Association, as Delaware Trustee, the Administrative Trustees named therein and the Holders, from time to time, of Trust Securities. 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. 
 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.

 Terms used but not defined herein have the meanings set forth in the Trust Agreement. 
  

 B-1 

 IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has executed on behalf of the Trust this certificate
this      day of April, 2006. 
  

			
	NOVASTAR CAPITAL TRUST II
		
	By:	 	  

	Name:	 	Scott F. Hartman
		 	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 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 IS 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 

  

 C-1 

 
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 PRINCIPAL OF OR INTEREST 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 HOLDER OF THIS SECURITY, OR ANY INTEREST THEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT 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 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	 	Aggregate Liquidation Amount
		
		 	Preferred Securities
		
		 	35,000,000

 CUSIP NO. 
 Certificate Evidencing Preferred Securities 
 NOVASTAR CAPITAL TRUST II 
 Floating Rate Preferred Securities 
 (liquidation amount $1,000 per Preferred Security) 
 NovaStar Capital Trust II, a statutory trust created under the laws of the State of
Delaware (the “Trust”), hereby certifies that                      (the “Holder”) is the registered owner of Thirty
Five Thousand (35,000) 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 II Floating Rate
Preferred Securities, (liquidation amount $1,000 per Preferred Security) (the “Preferred Securities”). Subject to the terms 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 (as defined below). The designations,
rights, privileges, restrictions, preferences and other terms and provisions 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 provisions of, the Amended and Restated Trust Agreement of the Trust, dated as of April 18, 2006, as the same may be amended from time to time (the “Trust Agreement”), among NovaStar Mortgage, Inc., as Depositor, JPMorgan
Chase Bank, National Association, as Property Trustee, Chase Bank USA, National Association, as Delaware Trustee, the Administrative Trustees named therein and the Holders, from time to time, of Trust Securities. 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 Holders 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. 
 All capitalized terms used but not defined in this preferred Securities Certificate are
used with the meanings specified in the Trust Agreement including the Schedules and Exhibits thereto. 
  

 C-3 

 IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has executed on behalf of the Trust this certificate
this      day of April, 2006. 
  

			
	NOVASTAR CAPITAL TRUST II
		
	By:	 	  

	Name:	 	Scott F. Hartman
		 	Administrative Trustee

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

 Dated: 
  

			
	JPMorgan Chase Bank, National Association, not in its individual capacity, but solely as Property Trustee
		
	By:	 	  

		 	Authorized signatory

  

 C-4 

 [FORM OF REVERSE OF SECURITY] 
 The Trust promises to pay Distributions from April 18, 2006, or from the most recent Distribution Date to which Distributions have be paid or duly
provided for, quarterly in arrears on March 30, June 30, September 30 and December 30 of each year, commencing on June 30, 2006, at a variable rate, reset quarterly, equal to LIBOR plus 3.50% per annum of the
Liquidation Amount of the Preferred Securities represented by this Preferred Securities Certificate, together with any Additional Interest Amounts, in respect to 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, 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 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,
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 of the principal amount thereof or the redeemed portion thereof, as applicable, together, in the case of any such
redemption, with accrued interest, including an 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. 
  

 C-5 

 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 
  

 D-1 

 Exhibit E 
 Form of Transferee Certificate 
 to be Executed by Transferees 
 JPMorgan Chase Bank, National Association 
 600 Travis, 50th floor 
 Houston, Texas 77019

 Attention: Worldwide Securities Services – NovaStar Capital Trust II 
 Attention: Mudassir Mohamed 
 NovaStar Mortgage, Inc. 
 NovaStar Capital Trust II 
 8140 Ward Parkway 
 Suite 300 
 Kansas City, MO 64114 
  

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

 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 II (the “Trust”) of NovaStar Mortgage, Inc. (the “Company”) executed in
connection therewith) and the Floating Rate Junior Subordinated Notes due 2036 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, (i) 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 defined in Section 2(a)(51) of the Investment Company Act of 1940, as amended and in compliance with the Securities
Act of 1933). 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 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. 
  

 E-1 

 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 arc 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:	 	  

	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. 
  

			
	Name:	 	  

			
	Address:	 	  

			
	Taxpayer ID Number:	 	  

  

 E-2 

 Exhibit F 
 Officer’s Financial Certificate 
 The undersigned, the [Chairman/Vice Chairman/Chief Executive
Officer/President/Vice President/Chief Financial Officer/Treasurer/Assistant Treasurer], hereby certifies pursuant to Section 8.16(b) of the Amended and Restated Trust Agreement, dated as of April     , 2006 (the
“Trust Agreement”), among NovaStar Mortgage, Inc. (the “Company”), JPMorgan Chase Bank, National Association, as property trustee, Chase Bank USA, National Association, as Delaware trustee, and the administrative trustees named
therein, that, as of [date], [20    ], the Company had the following ratios and balances: 
  

				
	 As of [Quarterly/Annual Financial Date], 20    
	  		
	 Senior secured indebtedness for borrowed money (“Debt”)
	  	$            	 
	 Senior unsecured Debt
	  	$            	 
	 Subordinated Debt
	  	$            	 
	 Total Debt
	  	$            	 
	 Ratio of (x) senior secured and unsecured Debt to (y) total Debt
	  	            	%

	*	A table describing the officer’s financial certificate calculation procedures is provided on page 3 

 [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
                        , 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). 
 IN WITNESS WHEREOF, the undersigned has executed this Officer’s Financial Certificate as of this
     day of April, 2006. 
  

			
	NOVASTAR MORTGAGE, INC.
		
	By:	 	  

	Name:	 	  

	
	NovaStar Mortgage, Inc.
	8140 Ward Parkway
	Suite 300
	Kansas City, MO 64114

  

 F-1 

 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 a Distribution Date (except with respect to the first interest payment period, such date shall be April 18, 2006) (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 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.

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