Common use of Form of Security Clause in Contracts

Form of Security. (i) Tenant must deliver to the City no later than the earlier to occur of: a) 30 days after the Effective Date or b) the date the City delivers possession of any portion of the Leased Space, an irrevocable, unconditional sight draft Letter of Credit in favor of the City. The face amount of the Letter of Credit and any replacements or renewals of it must be maintained by Tenant, through and including the date that is 180 days after the expiration of the Term or termination of this Agreement, as follows: the face amount of the Letter of Credit must at all times equal a) during the first and second Lease Years, 50% of the MAG for said Lease Years (without consideration of any pro-rationing on account of either a Lease Year of less than 12 months or partial occupancy of the Leased Space) and b) in each Lease Year thereafter, 50% of the MAG payable during the prior Lease Year. The Letter of Credit must be in the form set forth in Exhibit 7or as otherwise approved by the Corporation Counsel. (ii) In lieu of the Letter of Credit, Tenant may provide cash or a cashier's check in the same amount for immediate deposit in the City’s accounts. The Letter of Credit, cash or cashier's check, as applicable, is referred to in this Agreement as the "Security." The original Letter of Credit, and all replacements of it, must be issued with an expiry date of at least one year after their respective dates of issuance. The Security secures the faithful performance by Tenant of all of Tenant's obligations under this Agreement. The Commissioner is entitled to draw on any such Letter of Credit unless proof of renewal of the Letter of Credit or a replacement Letter of Credit in form and substance satisfactory to the Corporation Counsel has been furnished to the Corporation Counsel at least 30 days before its expiration date. The City will hold the proceeds as a cash Security to secure the full and faithful performance of Tenant's obligations under this Agreement. The Commissioner is not obligated to pay or credit Tenant with interest on any Security. (iii) The Commissioner also is entitled to draw on the Letter of Credit in whole or in part upon the occurrence of an Event of Default, in which event the Commissioner is entitled to apply or retain all or any part of the proceeds of it or any cash or other Security deposited by Tenant and held by the City for the payment of any obligation of Tenant arising before or after the Event of Default. (iv) The Letter of Credit must provide that the Commissioner may draw upon the Letter of Credit in whole or in part upon the delivery by the Commissioner to the issuer of the Letter of Credit of a demand for payment, purportedly signed by the Commissioner, together with a written statement that the Commissioner is entitled to draw upon the Letter of Credit under the terms of this Agreement. If amounts are drawn upon the Letter of Credit or amounts of a cash Security are applied by the Commissioner in accordance with the terms of this Agreement, Tenant must reinstate the Letter of Credit or cash Security to its full amount required in this Agreement within 5 days following notification by the Commissioner of the City’s draw upon the Letter of Credit or use of the cash Security. The rights reserved to the Commissioner or the City under the Letter of Credit or any cash Security are in addition to any rights they may have under this Agreement or under law.

Form of Security. (i) Tenant Airport Network must deliver to the City no later than the earlier to occur of: a) 30 days after the Effective Date or b) the date the City delivers possession of any portion of the Leased SpaceDBO, an irrevocable, unconditional sight draft Letter of Credit in favor of the City. The face amount of the Letter of Credit and any replacements or renewals of it must be maintained by TenantAirport Network, through and including the date that is 180 days after the expiration of the Term or termination of this Agreement, as follows: the face amount of the Letter of Credit must at all times equal a) during $[ ] this amount will be maintained for the first Term and second Lease Yearswill not be required to be adjusted, 50% of unless the MAG for said Lease Years (without consideration of any pro-rationing on account of either a Lease Year of less than 12 months or partial occupancy of Commissioner deems it necessary and provides Airport Network the Leased Space) and b) requirement to increase in each Lease Year thereafter, 50% of the MAG payable during the prior Lease Yearwriting. The Letter of Credit must be in the form set forth in Exhibit 7or 6 or as otherwise approved by the Corporation Counsel. (ii) In lieu of the Letter of Credit, Tenant Airport Network may provide cash or a cashier's check in the same amount for immediate deposit in the City’s accounts. The Letter of Credit, cash or cashier's check, as applicable, is referred to in this Agreement as the "Security." The original Letter of Credit, and all replacements of it, must be issued with an expiry date of at least one year after their respective dates of issuance. The Security secures the faithful performance by Tenant Airport Network of all of TenantAirport Network's obligations under this Agreement. The Commissioner is entitled to draw on any such Letter of Credit unless proof of renewal of the Letter of Credit or a replacement Letter of Credit in form and substance satisfactory to the Corporation Counsel Comptroller has been furnished to the Corporation Counsel Commissioner at least 30 days before its expiration date. The City will hold the proceeds as a cash Security to secure the full and faithful performance of TenantAirport Network's obligations under this Agreement. The Commissioner is not obligated to pay or credit Tenant Airport Network with interest on any Security. (iii) The Commissioner also is entitled to draw on the Letter of Credit in whole or in part upon the occurrence of an Event of Default, in which event the Commissioner is entitled to apply or retain all or any part of the proceeds of it or any cash or other Security deposited by Tenant Airport Network and held by the City for the payment of any obligation of Tenant Airport Network arising before or after the Event of Default. (iv) The Letter of Credit must provide that the Commissioner may draw upon the Letter of Credit in whole or in part upon the delivery by the Commissioner to the issuer of the Letter of Credit of a demand for payment, purportedly signed by the Commissioner, together with a written statement that the Commissioner is entitled to draw upon the Letter of Credit under the terms of this Agreement. If amounts are drawn upon the Letter of Credit or amounts of a cash Security are applied by the Commissioner in accordance with the terms of this Agreement, Tenant Airport Network must reinstate the Letter of Credit or cash Security to its full amount required in this Agreement within 5 days following notification by the Commissioner of the City’s draw upon the Letter of Credit or use of the cash Security. The rights reserved to the Commissioner or the City under the Letter of Credit or any cash Security are in addition to any rights they may have under this Agreement or under law.

Form of Security. (i) Tenant Licensee must deliver to the City no later than the earlier to occur of: a) 30 days after the Effective Date or b) the date Delivery Date for the City delivers possession of any portion of the Leased first Licensed Space, an irrevocable, unconditional sight draft Letter of Credit in favor of the City. The face amount of the Letter of Credit and any replacements or renewals of it must be maintained by TenantLicensee, through and including the date that is 180 days after the expiration of the Term or termination of this Agreement, as follows: the face amount of the Letter of Credit must at all times equal a) during the first and second Lease Years, 50% of the MAG for said Lease Years (without consideration of any pro-rationing on account of either a Lease Year of less than 12 months or partial occupancy of Fixed Fee due in the Leased Space) and b) in each Lease Year thereafter, 50% of the MAG payable during the prior Lease Initial License Year. The Letter of Credit must be in the form set forth in Exhibit 7or 5 or as otherwise approved by the Corporation Counsel. (ii) In lieu of the Letter of Credit, Tenant Licensee may provide cash or a cashier's check in the same amount for immediate deposit in the City’s accounts. The Letter of Credit, cash or cashier's check, as applicable, is referred to in this Agreement as the "Security." The original Letter of Credit, and all replacements of it, must be issued with an expiry date of at least one year after their respective dates of issuance. The Security secures the faithful performance by Tenant Licensee of all of TenantLicensee's obligations under this Agreement. The Commissioner is entitled to draw on any such Letter of Credit unless proof of renewal of the Letter of Credit or a replacement Letter of Credit in form and substance satisfactory to the Corporation Counsel Comptroller has been furnished to the Corporation Counsel Commissioner at least 30 days before its expiration date. The City will hold the proceeds as a cash Security to secure the full and faithful performance of TenantLicensee's obligations under this Agreement. The Commissioner is not obligated to pay or credit Tenant Licensee with interest on any Security. (iii) The Commissioner also is entitled to draw on the Letter of Credit in whole or in part upon the occurrence of an Event of Default, in which event the Commissioner is entitled to apply or retain all or any part of the proceeds of it or any cash or other Security deposited by Tenant Licensee and held by the City for the payment of any obligation of Tenant Licensee arising before or after the Event of Default. (iv) The Letter of Credit must provide that the Commissioner may draw upon the Letter of Credit in whole or in part upon the delivery by the Commissioner to the issuer of the Letter of Credit of a demand for payment, purportedly signed by the Commissioner, together with a written statement that the Commissioner is entitled to draw upon the Letter of Credit under the terms of this Agreement. If amounts are drawn upon the Letter of Credit or amounts of a cash Security are applied by the Commissioner in accordance with the terms of this Agreement, Tenant Licensee must reinstate the Letter of Credit or cash Security to its full amount required in this Agreement within 5 days following notification by the Commissioner of the City’s draw upon the Letter of Credit or use of the cash Security. The rights reserved to the Commissioner or the City under the Letter of Credit or any cash Security are in addition to any rights they may have under this Agreement or under law.

Form of Security. (i) Tenant must deliver to provide the City no later than the earlier to occur of: a) 30 days after the Effective Date or b) the date the City delivers possession of any portion of the Leased Space, an irrevocable, unconditional sight draft Letter of Credit in favor of the City. The face amount of the Letter of Credit and any replacements or renewals of it must be maintained by Tenant, through and including the date that is 180 days after the expiration of the Term or termination of this Agreement, as follows: the face amount of the Letter of Credit must at all times equal a) during the first and second Lease Years, 50% of the MAG for said Lease Years (without consideration of any pro-rationing on account of either a Lease Year of less than 12 months or partial occupancy of the Leased Space) and b) in each Lease Year thereafter, thereafter be 50% of an amount equal to the MAG payable during Rent Tenant is required to have paid the prior City for the immediately preceding Lease Year, excluding any Additional Rent. The Letter of Credit must be in the form set forth in Exhibit 7or as otherwise approved by the Corporation Counsel. (ii) In lieu of the Letter of Credit, Tenant may provide cash or a cashier's ’s check in the same amount for immediate deposit in the City’s accounts. The Letter of Credit, cash or cashier's ’s check, as applicable, is referred to in this Agreement as the "“Security." ” The original Letter of Credit, and all replacements of it, must be issued with an expiry date of at least one year after their respective dates of issuance. The Security secures the faithful performance by Tenant of all of Tenant's ’s obligations under this Agreement. The Commissioner is entitled to draw on any such Letter of Credit unless proof of renewal of the Letter of Credit or a replacement Letter of Credit in form and substance satisfactory to the Corporation Counsel has been furnished to the Corporation Counsel at least 30 days before its expiration date. The City will hold the proceeds as a cash Security to secure the full and faithful performance of Tenant's ’s obligations under this Agreement. The Commissioner is not obligated to pay or credit Tenant with interest on any Security.. SAMPLE (iii) The Commissioner also is entitled to draw on the Letter of Credit in whole or in part upon the occurrence of an Event of Default, in which event the Commissioner is entitled to apply or retain all or any part of the proceeds of it or any cash or other Security deposited by Tenant and held by the City for the payment of any obligation of Tenant arising before or after the Event of Default. (iv) The Letter of Credit must provide that the Commissioner may draw upon the Letter of Credit in whole or in part upon the delivery by the Commissioner to the issuer of the Letter of Credit of a demand for payment, purportedly signed by the Commissioner, together with a written statement that the Commissioner is entitled to draw upon the Letter of Credit under the terms of this Agreement. If amounts are drawn upon the Letter of Credit or amounts of a cash Security are applied by the Commissioner in accordance with the terms of this Agreement, Tenant must reinstate the Letter of Credit or cash Security to its full amount required in this Agreement within 5 days following notification by the Commissioner of the City’s draw upon the Letter of Credit or use of the cash Security. The rights reserved to the Commissioner or the City under the Letter of Credit or any cash Security are in addition to any rights they may have under this Agreement or under law.

Form of Security. (i) Tenant must deliver to the City no later than the earlier to occur of: a) 30 days after the Effective Date or b) the date the City delivers possession of any portion of the Leased Space, an irrevocable, unconditional sight draft Letter of Credit in favor of the City. The face amount of the Letter of Credit and any replacements or renewals of it must be maintained by Tenant, through and including the date that is 180 days after the expiration of the Term or termination of this Agreement, as follows: the face amount of the Letter of Credit must at all times equal a) during the first and second Lease Years, 50% of the MAG for said Lease Years (without consideration of any pro-rationing on account of either a Lease Year of less than 12 months or partial occupancy of the Leased Space) and b) in each Lease Year thereafter, 50% of the MAG payable during the prior Lease Year. The Letter of Credit must Any Security issued hereunder shall be in substantially the form following form: NovaStar Financial, Inc., a corporation organized and existing under the laws of Maryland (hereinafter called the “Company,” which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to _____________________ (the “Holder”), or registered assigns, the principal sum of Twenty-Seven Million, Five Hundred Thousand Dollars ($27,500,000) on March 30, 2033 [If the Security is a Global Security, then insert: or such other principal amount represented hereby as may be set forth in Exhibit 7or as otherwise approved by the Corporation Counsel. (ii) In lieu records of the Letter of Credit, Tenant may provide cash or a cashier's check in the same amount for immediate deposit in the City’s accounts. The Letter of Credit, cash or cashier's check, as applicable, is Securities Registrar hereinafter referred to in this Agreement accordance with the Indenture]. The Company further promises to pay interest on said principal sum as set forth in Article III of the "Security." Indenture, the payment terms of which are hereby incorporated by reference and made a part hereof as if expressly set forth herein. The original Letter amount of Creditinterest payable shall be computed on the basis of a 360-day year and the actual number of days elapsed in the relevant interest period. The interest so payable, and all replacements of itpunctually paid or duly provided for, must be issued with an expiry date of at least one year after their respective dates of issuance. The Security secures the faithful performance by Tenant of all of Tenant's obligations under this Agreement. The Commissioner is entitled to draw on any such Letter of Credit unless proof of renewal of Interest Payment Date shall, as provided in the Letter of Credit or a replacement Letter of Credit in form and substance satisfactory Indenture, be paid to the Corporation Counsel has been furnished Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest installment. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Corporation Counsel Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at least 30 days before its expiration date. The City will hold the proceeds as close of business on a cash Security to secure the full and faithful performance of Tenant's obligations under this Agreement. The Commissioner is not obligated to pay or credit Tenant with interest on any Security. (iii) The Commissioner also is entitled to draw on the Letter of Credit in whole or in part upon the occurrence of an Event of Default, in which event the Commissioner is entitled to apply or retain all or any part of the proceeds of it or any cash or other Security deposited by Tenant and held by the City Special Record Date for the payment of any obligation of Tenant arising before or after the Event of Default. (iv) The Letter of Credit must provide that the Commissioner may draw upon the Letter of Credit in whole or in part upon the delivery such Defaulted Interest to be fixed by the Commissioner Trustee, notice whereof shall be given to Holders of Securities not less than ten (10) days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Senior Notes may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture. Payment of principal of, premium, if any, and interest on this Security shall be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Payments of principal, premium, if any, and interest due at the Maturity of this Security shall be made at the Place of Payment upon surrender of such Securities to the issuer Paying Agent, and payments of interest shall be made, subject to such surrender where applicable, by wire transfer at such place and to such account at a banking institution in the Letter of Credit of a demand United States as may be designated in writing to the Paying Agent at least ten (10) Business Days prior to the date for payment, purportedly signed payment by the CommissionerPerson entitled thereto unless proper written transfer instructions have not been received by the relevant record date, together with a written statement that in which case such payments shall be made by check mailed to the Commissioner is address of such Person as such address shall appear in the Security Register. Unless the certificate of authentication hereon has been executed by the Trustee by manual signature, this Security shall not be entitled to draw upon the Letter of Credit any benefit under the terms of this Agreement. If amounts are drawn upon the Letter of Credit Indenture or amounts of a cash Security are applied by the Commissioner in accordance with the terms of this Agreement, Tenant must reinstate the Letter of Credit be valid or cash Security to its full amount required in this Agreement within 5 days following notification by the Commissioner of the City’s draw upon the Letter of Credit or use of the cash Security. The rights reserved to the Commissioner or the City under the Letter of Credit or obligatory for any cash Security are in addition to any rights they may have under this Agreement or under lawpurpose.

Form of Security. (i) Tenant must deliver to the City no later than the earlier to occur of: a) 30 days after the Effective Date or b) the date the City delivers possession of any portion of the Leased Space, an irrevocable, unconditional sight draft Letter of Credit in favor of the City. The face amount of the Letter of Credit and any replacements or renewals of it must be maintained by Tenant, through and including the date that is 180 days after the expiration of the Term or termination of this Agreement, as follows: the face amount of the Letter of Credit must at all times equal a) during the first and second Lease Years, 50% of the MAG for said Lease Years (without consideration of any pro-rationing on account of either a Lease Year of less than 12 months or partial occupancy of the Leased Space) and b) in each Lease Year thereafter, 50% of the MAG payable during the prior Lease Year. The Letter of Credit must Any Security issued hereunder shall be in substantially the form following form: No. __ $[27,500,000] NovaStar Financial, Inc., a corporation organized and existing under the laws of Maryland (hereinafter called the “Company,” which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to _____________________ (the “Holder”), or registered assigns, the principal sum of [Twenty-Seven Million, Five Hundred Thousand Dollars ($27,500,000)] on March 30, 2033 [If the Security is a Global Security, then insert: or such other principal amount represented hereby as may be set forth in Exhibit 7or as otherwise approved by the Corporation Counsel. (ii) In lieu records of the Letter of Credit, Tenant may provide cash or a cashier's check in the same amount for immediate deposit in the City’s accounts. The Letter of Credit, cash or cashier's check, as applicable, is Securities Registrar hereinafter referred to in this Agreement accordance with the Indenture]. The Company further promises to pay interest on said principal sum as set forth in Article III of the "Security." Indenture, the payment terms of which are hereby incorporated by reference and made a part hereof as if expressly set forth herein. The original Letter amount of Creditinterest payable shall be computed on the basis of a 360-day year and the actual number of days elapsed in the relevant interest period. The interest so payable, and all replacements of itpunctually paid or duly provided for, must be issued with an expiry date of at least one year after their respective dates of issuance. The Security secures the faithful performance by Tenant of all of Tenant's obligations under this Agreement. The Commissioner is entitled to draw on any such Letter of Credit unless proof of renewal of Interest Payment Date shall, as provided in the Letter of Credit or a replacement Letter of Credit in form and substance satisfactory Indenture, be paid to the Corporation Counsel has been furnished Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest installment. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Corporation Counsel Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at least 30 days before its expiration date. The City will hold the proceeds as close of business on a cash Security to secure the full and faithful performance of Tenant's obligations under this Agreement. The Commissioner is not obligated to pay or credit Tenant with interest on any Security. (iii) The Commissioner also is entitled to draw on the Letter of Credit in whole or in part upon the occurrence of an Event of Default, in which event the Commissioner is entitled to apply or retain all or any part of the proceeds of it or any cash or other Security deposited by Tenant and held by the City Special Record Date for the payment of any obligation of Tenant arising before or after the Event of Default. (iv) The Letter of Credit must provide that the Commissioner may draw upon the Letter of Credit in whole or in part upon the delivery such Defaulted Interest to be fixed by the Commissioner Trustee, notice whereof shall be given to Holders of Securities not less than ten (10) days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Senior Notes may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture. Payment of principal of, premium, if any, and interest on this Security shall be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Payments of principal, premium, if any, and interest due at the Maturity of this Security shall be made at the Place of Payment upon surrender of such Securities to the issuer Paying Agent, and payments of interest shall be made, subject to such surrender where applicable, by wire transfer at such place and to such account at a banking institution in the Letter of Credit of a demand United States as may be designated in writing to the Paying Agent at least ten (10) Business Days prior to the date for payment, purportedly signed payment by the CommissionerPerson entitled thereto unless proper written transfer instructions have not been received by the relevant record date, together with a written statement that in which case such payments shall be made by check mailed to the Commissioner is address of such Person as such address shall appear in the Security Register. Unless the certificate of authentication hereon has been executed by the Trustee by manual signature, this Security shall not be entitled to draw upon the Letter of Credit any benefit under the terms of this Agreement. If amounts are drawn upon the Letter of Credit Indenture or amounts of a cash Security are applied by the Commissioner in accordance with the terms of this Agreement, Tenant must reinstate the Letter of Credit be valid or cash Security to its full amount required in this Agreement within 5 days following notification by the Commissioner of the City’s draw upon the Letter of Credit or use of the cash Security. The rights reserved to the Commissioner or the City under the Letter of Credit or obligatory for any cash Security are in addition to any rights they may have under this Agreement or under lawpurpose.

Form of Security. (i) Tenant must deliver to the City no later than the earlier to occur of: a) 30 business days after the Effective Date or b) the date Delivery Date for the City delivers possession of any portion of the first Leased Space, an irrevocable, unconditional sight draft Letter of Credit in favor of the City. The face amount of the Letter of Credit and any replacements or renewals of it must be maintained by Tenant, through and including the date that is 180 days after the expiration of the Term or termination of this Agreement, as follows: the face amount of the Letter of Credit must at all times equal a) during the first and second Lease Years, 5025% of second full Lease Year MAG in the form of an irrevocable letter of credit issued in favor of the City or a cash deposit. If a letter of credit is provided as the form security, it will not be required to be adjusted throughout the Term, even as the MAG for said Lease Years (without consideration of any pro-rationing on account of either a Lease Year of less than 12 months increases or partial occupancy of the Leased Space) and b) in each Lease Year thereafter, 50% of the MAG payable during the prior Lease Yeardecreases. The Letter of Credit must be in the form set forth in Exhibit 7or 6 or as otherwise approved by the Corporation Counsel. (ii) In lieu of the Letter of Credit, Tenant may provide cash or a cashier's check in the same amount for immediate deposit in the City’s accounts. The Letter of Credit, cash or cashier's ’s check, as applicable, is referred to in this Agreement as the "“Security." ” The original Letter of Credit, and all replacements of it, must be issued with an expiry date of at least one year after their respective dates of issuance. The Security secures the faithful performance by Tenant of all of Tenant's ’s obligations under this Agreement. The Commissioner is entitled to draw on any such Letter of Credit unless proof of renewal of the Letter of Credit or a replacement Letter of Credit in form and substance satisfactory to the Corporation Counsel Comptroller has been furnished to the Corporation Counsel Commissioner at least 30 days before its expiration date. The City will hold the proceeds as a cash Security to secure the full and faithful performance of Tenant's ’s obligations under this Agreement. The Commissioner is not obligated to pay or credit Tenant with interest on any Security. (iii) The Commissioner also is entitled to draw on the Letter of Credit in whole or in part upon the occurrence of an Event of Default, in which event the Commissioner is entitled to apply or retain all or any part of the proceeds of it or any cash or other Security deposited by Tenant and held by the City for the payment of any obligation of Tenant arising before or after the Event of Default. (iv) The Letter of Credit must provide that the Commissioner may draw upon the Letter of Credit in whole or in part upon the delivery by the Commissioner to the issuer of the Letter of Credit of a demand for payment, purportedly signed by the Commissioner, together with a written statement that the Commissioner is entitled to draw upon the Letter of Credit under the terms of this Agreement. If amounts are drawn upon the Letter of Credit or amounts of a cash Security are applied by the Commissioner in accordance with the terms of this Agreement, Tenant must reinstate the Letter of Credit or cash Security to its full amount required in this Agreement within 5 days following notification by the Commissioner of the City’s draw upon the Letter of Credit or use of the cash Security. The rights reserved to the Commissioner or the City under the Letter of Credit or any cash Security are in addition to any rights they may have under this Agreement or under law.

Form of Security. (i) Tenant must deliver to the City no later than the earlier to occur of: a) 30 days after the Effective Date or b) the date the City delivers possession of any portion of the Leased Space, an irrevocable, unconditional sight draft Letter of Credit in favor of the City. The face amount of the Letter of Credit and any replacements or renewals of it must be maintained by Tenant, through and including the date that is 180 days after the expiration of the Term or termination of this Agreement, as follows: the face amount of the Letter of Credit must at all times equal a) during the first and second Lease Years, 50% of the MAG for said Lease Years (without consideration of any pro-rationing on account of either a Lease Year of less than 12 months or partial occupancy of the Leased Space) and b) in each Lease Year thereafter, 50% of the MAG payable during the prior Lease Year. The Letter of Credit must Any Security issued hereunder shall be in substantially the form following form: No. $ NovaStar Mortgage, Inc., a corporation organized and existing under the laws of Virginia (hereinafter called the “Company,” which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to (the “Holder”), or registered assigns, the principal sum of Dollars ($ ) on June 30, 2036 [If the Security is a Global Security, then insert: or such other principal amount represented hereby as may be set forth in Exhibit 7or as otherwise approved by the Corporation Counsel. (ii) In lieu records of the Letter of Credit, Tenant may provide cash or a cashier's check in the same amount for immediate deposit in the City’s accounts. The Letter of Credit, cash or cashier's check, as applicable, is Securities Registrar hereinafter referred to in this Agreement accordance with the Indenture]. The Company further promises to pay interest on said principal sum as set forth in Article III of the "Security." Indenture, the payment terms of which are hereby incorporated by reference and made a part hereof as if expressly set forth herein. The original Letter amount of Creditinterest payable shall be computed on the basis of a 360-day year and the actual number of days elapsed in the relevant interest period. The interest so payable, and all replacements of itpunctually paid or duly provided for, must be issued with an expiry date of at least one year after their respective dates of issuance. The Security secures the faithful performance by Tenant of all of Tenant's obligations under this Agreement. The Commissioner is entitled to draw on any such Letter of Credit unless proof of renewal of Interest Payment Date shall, as provided in the Letter of Credit or a replacement Letter of Credit in form and substance satisfactory Indenture, be paid to the Corporation Counsel has been furnished Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest installment. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Corporation Counsel Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at least 30 days before its expiration date. The City will hold the proceeds as close of business on a cash Security to secure the full and faithful performance of Tenant's obligations under this Agreement. The Commissioner is not obligated to pay or credit Tenant with interest on any Security. (iii) The Commissioner also is entitled to draw on the Letter of Credit in whole or in part upon the occurrence of an Event of Default, in which event the Commissioner is entitled to apply or retain all or any part of the proceeds of it or any cash or other Security deposited by Tenant and held by the City Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities not less than ten (10) days prior to such Special Record Date, or be paid at any obligation time in any other lawful manner not inconsistent with the requirements of Tenant arising before any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture. Payment of principal of, premium, if any, and interest on this Security shall be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Payments of principal, premium, if any, and interest due at the Maturity of this Security shall be made at the Place of Payment upon surrender of such Securities to the Paying Agent, and payments of interest shall be made, subject to such surrender where applicable, by wire transfer at such place and to such account at a banking institution in the United States as may be designated in writing to the Paying Agent 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. Notwithstanding the foregoing, so long as the Holder of this Security is the Property Trustee, the payment of the principal of (and premium, if any) and interest (including any overdue installment of interest and Additional Tax Sums, if any) on this Security will be made at such place and to such account as may be designated by the Property Trustee. The indebtedness evidenced by this Security 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, and this Security is issued subject to the provisions of the Indenture with respect thereto. Each Holder of this Security, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on his, her or its behalf to take such actions as may be necessary or appropriate to effectuate the subordination so provided and (c) appoints the Trustee his, her or its attorney-in-fact for any and all such purposes. Each Holder hereof, by his, her or its acceptance hereof, waives all notice of the acceptance of the subordination provisions contained herein and in the Indenture by each holder of Senior Debt, whether now outstanding or hereafter incurred, and waives reliance by each such holder upon said provisions. Unless the certificate of authentication hereon has been executed by the Trustee by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. This Security is one of a duly authorized issue of securities of the Company (the “Securities”) issued under the Junior Subordinated Indenture, dated as of [ ], 2009 (the “Indenture”), between the Company and The Bank of New York Mellon Trust Company, National Association, as Trustee (in such capacity, the “Trustee,” which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee, the holders of Senior Debt, the Holders of the Securities and the holders of the Preferred Securities, and of the terms upon which the Securities are, and are to be, authenticated and delivered. All terms used in this Security that are defined in the Indenture or in the Amended and Restated Trust Agreement, dated as of [ ], 2009 (as modified, amended or supplemented from time to time, the “Trust Agreement”), relating to the NovaStar Capital Trust II/B (the “Trust”) among the Company, as Depositor, the trustees named therein and the Holders from time to time of the Trust Securities issued pursuant thereto, shall have the meanings assigned to them in the Indenture or the Trust Agreement, as the case may be. The Company may, on any Interest Payment Date, at its option, upon not less than thirty (30) days’ nor more than sixty (60) days’ written notice to the Holders of the Securities (unless a shorter notice period shall be satisfactory to the Trustee) on or after June 30, 2011 and subject to the Event terms and conditions of Default. (iv) The Letter Article XI of Credit must provide that the Commissioner may draw upon the Letter of Credit Indenture, redeem this Security in whole at any time or in part from time to time at a Redemption Price equal to one hundred percent (100%) of the principal amount hereof, together, in the case of any such redemption, with accrued interest, including any Additional Interest, through but excluding the date fixed as the Redemption Date. In addition, upon the delivery occurrence and during the continuation of a Special Event, the Company may, at its option, upon not less than thirty (30) days’ nor more than sixty (60) days’ written notice to the Holders of the Securities (unless a shorter notice period shall be satisfactory to the Trustee), redeem this Security, in whole but not in part, subject to the terms and conditions of Article XI of the Indenture at a Redemption Price equal to one hundred seven and one half percent (107.5%) of the principal amount hereof, together, in the case of any such redemption, with accrued interest, including any Additional Interest, through but excluding the date fixed as the Redemption Date. In the event of redemption of this Security in part only, a new Security or Securities for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof. If less than all the Securities are to be redeemed, the particular Securities to be redeemed shall be selected not more than sixty (60) days prior to the Redemption Date by the Commissioner to Trustee from the issuer Outstanding Securities not previously called for redemption, by such method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of a portion of the Letter principal amount of Credit of a demand for payment, purportedly signed by the Commissioner, together with a written statement that the Commissioner is entitled to draw upon the Letter of Credit under the terms of this Agreement. If amounts are drawn upon the Letter of Credit or amounts of a cash Security are applied by the Commissioner in accordance with the terms of this Agreement, Tenant must reinstate the Letter of Credit or cash Security to its full amount required in this Agreement within 5 days following notification by the Commissioner of the City’s draw upon the Letter of Credit or use of the cash any Security. The Indenture permits, with certain exceptions as therein provided, the Company and the Trustee at any time to enter into a supplemental indenture or indentures for the purpose of modifying in any manner the rights reserved and obligations of the Company and of the Holders of the Securities, with the consent of the Holders of not less than a majority in principal amount of the Outstanding Securities. The Indenture also contains provisions permitting Holders of specified percentages in principal amount of the Securities, on behalf of the Holders of all Securities, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security. No reference herein to the Commissioner Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium, if any, and interest, including any Additional Interest (to the extent legally enforceable), on this Security at the times, place and rate, and in the coin or currency, herein prescribed. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is restricted to transfers to “Qualified Purchasers” (as such term is defined in the Investment Company Act of 1940, as amended,) and is registrable in the Securities Register, upon surrender of this Security for registration of transfer at the office or agency of the Company maintained for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Securities Registrar and duly executed by, the Holder hereof or such Holder’s attorney duly authorized in writing, and thereupon one or more new Securities, of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. The Securities are issuable only in registered form without coupons in minimum denominations of $100,000 and any integral multiple of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities are exchangeable for a like aggregate principal amount of Securities and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. The Company, the Trustee and any agent of the Company or the City under Trustee may treat the Letter Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. The Company and, by its acceptance of Credit this Security or a beneficial interest herein, the Holder of, and any cash Person that acquires a beneficial interest in, this Security are in addition to any rights they may have under agree that, for United States federal, state and local tax purposes, it is intended that this Agreement or under lawSecurity constitute indebtedness.

Form of Security. (i) Tenant must deliver to the City no later than the earlier to occur of: a) 30 days after the Effective Date or b) the date the City delivers possession of any portion of the Leased Space, an irrevocable, unconditional sight draft Letter of Credit in favor of the City. The face amount of the Letter of Credit and any replacements or renewals of it must be maintained by Tenant, through and including the date that is 180 days after the expiration of the Term or termination of this Agreement, as follows: the face amount of the Letter of Credit must at all times equal a) during the first and second Lease Years, 50% of the MAG for said Lease Years (without consideration of any pro-rationing on account of either a Lease Year of less than 12 months or partial occupancy of the Leased Space) and b) in each Lease Year thereafter, 50% of the MAG payable during the prior Lease Year. The Letter of Credit must Any Security issued hereunder shall be in substantially the form following form: No. $ NovaStar Mortgage, Inc., a corporation organized and existing under the laws of Virginia (hereinafter called the “Company,” which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to (the “Holder”), or registered assigns, the principal sum of Dollars ($ ) on March 30, 2035 [If the Security is a Global Security, then insert: or such other principal amount represented hereby as may be set forth in Exhibit 7or as otherwise approved by the Corporation Counsel. (ii) In lieu records of the Letter of Credit, Tenant may provide cash or a cashier's check in the same amount for immediate deposit in the City’s accounts. The Letter of Credit, cash or cashier's check, as applicable, is Securities Registrar hereinafter referred to in this Agreement accordance with the Indenture]. The Company further promises to pay interest on said principal sum as set forth in Article III of the "Security." Indenture, the payment terms of which are hereby incorporated by reference and made a part hereof as if expressly set forth herein. The original Letter amount of Creditinterest payable shall be computed on the basis of a 360-day year and the actual number of days elapsed in the relevant interest period. The interest so payable, and all replacements of itpunctually paid or duly provided for, must be issued with an expiry date of at least one year after their respective dates of issuance. The Security secures the faithful performance by Tenant of all of Tenant's obligations under this Agreement. The Commissioner is entitled to draw on any such Letter of Credit unless proof of renewal of Interest Payment Date shall, as provided in the Letter of Credit or a replacement Letter of Credit in form and substance satisfactory Indenture, be paid to the Corporation Counsel has been furnished Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest installment. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Corporation Counsel Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at least 30 days before its expiration date. The City will hold the proceeds as close of business on a cash Security to secure the full and faithful performance of Tenant's obligations under this Agreement. The Commissioner is not obligated to pay or credit Tenant with interest on any Security. (iii) The Commissioner also is entitled to draw on the Letter of Credit in whole or in part upon the occurrence of an Event of Default, in which event the Commissioner is entitled to apply or retain all or any part of the proceeds of it or any cash or other Security deposited by Tenant and held by the City Special Record Date for the payment of any obligation of Tenant arising before or after the Event of Default. (iv) The Letter of Credit must provide that the Commissioner may draw upon the Letter of Credit in whole or in part upon the delivery such Defaulted Interest to be fixed by the Commissioner Trustee, notice whereof shall be given to Holders of Securities not less than ten (10) days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture. Payment of principal of, premium, if any, and interest on this Security shall be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Payments of principal, premium, if any, and interest due at the Maturity of this Security shall be made at the Place of Payment upon surrender of such Securities to the issuer Paying Agent, and payments of interest shall be made, subject to such surrender where applicable, by wire transfer at such place and to such account at a banking institution in the United States as may be designated in writing to the Paying Agent 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. Notwithstanding the foregoing, so long as the Holder of this Security is the Property Trustee, the payment of the Letter principal of Credit (and premium, if any) and interest (including any overdue installment of a demand for paymentinterest and Additional Tax Sums, purportedly signed if any) on this Security will be made at such place and to such account as may be designated by the CommissionerProperty Trustee. The indebtedness evidenced by this Security is, together to the extent provided in the Indenture, subordinate and junior in right of payment to the prior payment in full of all Senior Debt, and this Security is issued subject to the provisions of the Indenture with a written statement that respect thereto. Each Holder of this Security, by accepting the Commissioner is same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on his, her or its behalf to take such actions as may be necessary or appropriate to effectuate the subordination so provided and (c) appoints the Trustee his, her or its attorney-in-fact for any and all such purposes. Each Holder hereof, by his, her or its acceptance hereof, waives all notice of the acceptance of the subordination provisions contained herein and in the Indenture by each holder of Senior Debt, whether now outstanding or hereafter incurred, and waives reliance by each such holder upon said provisions. Unless the certificate of authentication hereon has been executed by the Trustee by manual signature, this Security shall not be entitled to draw upon the Letter of Credit any benefit under the terms of this Agreement. If amounts are drawn upon the Letter of Credit Indenture or amounts of a cash Security are applied by the Commissioner in accordance with the terms of this Agreement, Tenant must reinstate the Letter of Credit be valid or cash Security to its full amount required in this Agreement within 5 days following notification by the Commissioner of the City’s draw upon the Letter of Credit or use of the cash Security. The rights reserved to the Commissioner or the City under the Letter of Credit or obligatory for any cash Security are in addition to any rights they may have under this Agreement or under lawpurpose.

Form of Security. (i) Tenant must deliver to the City no later than the earlier to occur of: a) 30 days after the Effective Date or b) the date the City delivers possession of any portion of the Leased Space, an irrevocable, unconditional sight draft Letter of Credit in favor of the City. The face amount of the Letter of Credit and any replacements or renewals of it must be maintained by Tenant, through and including the date that is 180 days after the expiration of the Term or termination of this Agreement, as follows: the face amount of the Letter of Credit must at all times equal a) during the first and second Lease Years, 50% of the MAG for said Lease Years (without consideration of any pro-rationing on account of either a Lease Year of less than 12 months or partial occupancy of the Leased Space) and b) in each Lease Year thereafter, 50% of the MAG payable during the prior Lease Year. The Letter of Credit must Any Security issued hereunder shall be in substantially the form following form: NovaStar Financial, Inc., a corporation organized and existing under the laws of Maryland (hereinafter called the “Company,” which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to _____________________ (the “Holder”), or registered assigns, the principal sum of [Thirty Million, Nine Hundred Thirty-Seven Thousand, Five Hundred Dollars ($30,937,500)] on March 30, 2033 [If the Security is a Global Security, then insert: or such other principal amount represented hereby as may be set forth in Exhibit 7or as otherwise approved by the Corporation Counsel. (ii) In lieu records of the Letter of Credit, Tenant may provide cash or a cashier's check in the same amount for immediate deposit in the City’s accounts. The Letter of Credit, cash or cashier's check, as applicable, is Securities Registrar hereinafter referred to in this Agreement accordance with the Indenture]. The Company further promises to pay interest on said principal sum as set forth in Article III of the "Security." Indenture, the payment terms of which are hereby incorporated by reference and made a part hereof as if expressly set forth herein. The original Letter amount of Creditinterest payable shall be computed on the basis of a 360-day year and the actual number of days elapsed in the relevant interest period. The interest so payable, and all replacements of itpunctually paid or duly provided for, must be issued with an expiry date of at least one year after their respective dates of issuance. The Security secures the faithful performance by Tenant of all of Tenant's obligations under this Agreement. The Commissioner is entitled to draw on any such Letter of Credit unless proof of renewal of Interest Payment Date shall, as provided in the Letter of Credit or a replacement Letter of Credit in form and substance satisfactory Indenture, be paid to the Corporation Counsel has been furnished Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest installment. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Corporation Counsel Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at least 30 days before its expiration date. The City will hold the proceeds as close of business on a cash Security to secure the full and faithful performance of Tenant's obligations under this Agreement. The Commissioner is not obligated to pay or credit Tenant with interest on any Security. (iii) The Commissioner also is entitled to draw on the Letter of Credit in whole or in part upon the occurrence of an Event of Default, in which event the Commissioner is entitled to apply or retain all or any part of the proceeds of it or any cash or other Security deposited by Tenant and held by the City Special Record Date for the payment of any obligation of Tenant arising before or after the Event of Default. (iv) The Letter of Credit must provide that the Commissioner may draw upon the Letter of Credit in whole or in part upon the delivery such Defaulted Interest to be fixed by the Commissioner Trustee, notice whereof shall be given to Holders of Securities not less than ten (10) days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Senior Notes may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture. Payment of principal of, premium, if any, and interest on this Security shall be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Payments of principal, premium, if any, and interest due at the Maturity of this Security shall be made at the Place of Payment upon surrender of such Securities to the issuer Paying Agent, and payments of interest shall be made, subject to such surrender where applicable, by wire transfer at such place and to such account at a banking institution in the Letter of Credit of a demand United States as may be designated in writing to the Paying Agent at least ten (10) Business Days prior to the date for payment, purportedly signed payment by the CommissionerPerson entitled thereto unless proper written transfer instructions have not been received by the relevant record date, together with a written statement that in which case such payments shall be made by check mailed to the Commissioner is address of such Person as such address shall appear in the Security Register. Unless the certificate of authentication hereon has been executed by the Trustee by manual signature, this Security shall not be entitled to draw upon the Letter of Credit any benefit under the terms of this Agreement. If amounts are drawn upon the Letter of Credit Indenture or amounts of a cash Security are applied by the Commissioner in accordance with the terms of this Agreement, Tenant must reinstate the Letter of Credit be valid or cash Security to its full amount required in this Agreement within 5 days following notification by the Commissioner of the City’s draw upon the Letter of Credit or use of the cash Security. The rights reserved to the Commissioner or the City under the Letter of Credit or obligatory for any cash Security are in addition to any rights they may have under this Agreement or under lawpurpose.

Form of Security. (i) Tenant must deliver to the City no later than the earlier to occur of: a) 30 days after the Effective Date or b) the date Delivery Date for the City delivers possession of any portion of the first Leased Space, an irrevocable, unconditional sight draft Letter of Credit in favor of the City. The face amount of the Letter of Credit and any replacements or renewals of it must be maintained by Tenant, through and including the date that is 180 days after the expiration of the Term or termination of this Agreement, as follows: the face amount of the Letter of Credit must at all times equal a) during the first and second Lease Years, 5025% of the MAG for said estimated third full Lease Years Year MAG, or other amount agreed to by the City (without consideration of any pro-rationing on account of either a Lease Year of less than 12 months or partial occupancy of the Leased Space) and b) in each Lease Year thereafterthe letter of credit will be required to be adjusted, 50% of as the MAG payable during increases or decreases throughout the prior Lease Yearterm. The Letter of Credit must be in the form set forth in Exhibit 7or 6 or as otherwise approved by the Corporation Counsel. (ii) In lieu of the Letter of Credit, Tenant may provide cash or a cashier's check in the same amount for immediate deposit in the City’s accounts. The Letter of Credit, cash or cashier's check, as applicable, is referred to in this Agreement as the "Security." The original Letter of Credit, and all replacements of it, must be issued with an expiry date of at least one year after their respective dates of issuance. The Security secures the faithful performance by Tenant of all of Tenant's obligations under this Agreement. The Commissioner is entitled to draw on any such Letter of Credit unless proof of renewal of the Letter of Credit or a replacement Letter of Credit in form and substance satisfactory to the Corporation Counsel Comptroller has been furnished to the Corporation Counsel Commissioner at least 30 days before its expiration date. The City will hold the proceeds as a cash Security to secure the full and faithful performance of Tenant's obligations under this Agreement. The Commissioner is not obligated to pay or credit Tenant with interest on any Security. (iii) The Commissioner also is entitled to draw on the Letter of Credit in whole or in part upon the occurrence of an Event of Default, in which event the Commissioner is entitled to apply or retain all or any part of the proceeds of it or any cash or other Security deposited by Tenant and held by the City for the payment of any obligation of Tenant arising before or after the Event of Default. (iv) The Letter of Credit must provide that the Commissioner may draw upon the Letter of Credit in whole or in part upon the delivery by the Commissioner to the issuer of the Letter of Credit of a demand for payment, purportedly signed by the Commissioner, together with a written statement that the Commissioner is entitled to draw upon the Letter of Credit under the terms of this Agreement. If amounts are drawn upon the Letter of Credit or amounts of a cash Security are applied by the Commissioner in accordance with the terms of this Agreement, Tenant must reinstate the Letter of Credit or cash Security to its full amount required in this Agreement within 5 days following notification by the Commissioner of the City’s draw upon the Letter of Credit or use of the cash Security. The rights reserved to the Commissioner or the City under the Letter of Credit or any cash Security are in addition to any rights they may have under this Agreement or under law.