**Exhibit10.8**PREFERRED SECURITIES PURCHASE AGREEMENTby and amongNEW CENTURY FINANCIAL CORPORATION,NEW CENTURY CAPITAL TRUST IandKODIAK WAREHOUSE LLC Dated as of September 13, 2006 
 

 
TABLE OF CONTENTS       Page 1. Definitions  1      2. Purchase and Sale of the Preferred Securities  2      3. Conditions  2      4. Representations and Warranties of the Company and the Trust  4      5. Representations and Warranties of the Purchaser  12      6. Covenants and Agreements of the Company and the Trust  13      7. Payment of Expenses  15      8. Indemnification  16      9. Termination; Representations and Indemnities to Survive  17      10. Amendments  18      11. Notices  18      12. Parties in Interest; Successors and Assigns  19      13. Applicable Law  19      14. Submission to Jurisdiction  20      15. Counterparts and Facsimile  20 SCHEDULES AND EXHIBITS     Schedule 4(o) - List of SubsidiariesExhibit A - Form of Maryland Counsel’s Opinion Pursuant to Section 3(b)(i)Exhibit B - Form of Company Special Corporate Counsel’s Opinion Pursuant to Section 3(b)(ii)Exhibit C - Form of Company Special Tax Counsel’s Opinion Pursuant to Section 3(b)(iii)Exhibit D - Form of Purchaser Tax Counsel’s Opinion Pursuant to Section 3(c)Exhibit E - Form of Delaware Counsel’s Trust Opinion Pursuant to Section 3(d)Exhibit F - Form of Property/Indenture Trustee Counsel’s Opinion Pursuant to Section 3(e)Exhibit G - Form of Delaware Trustee Counsel’s Opinion Pursuant to Section 3(f)Exhibit H - Form of Officer’s Financial Certificate Pursuant to Section 6(g)
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PREFERRED SECURITIES PURCHASE AGREEMENT     This PREFERRED SECURITIES PURCHASE AGREEMENT, dated as of September 13, 2006 (this“Purchase Agreement”), is entered into by and among New Century Financial Corporation, aMaryland corporation (the “Company”), and New Century Capital Trust I, a Delaware statutorytrust (the “Trust”, and together with the Company, the “Sellers”), on the one hand,and Kodiak Warehouse LLC, a Delaware limited liability company (the “Purchaser”), on theother hand.W I T N E S S E T H:     WHEREAS, the Trust proposes to issue and sell 50,000 of its preferred securities, having astated liquidation amount of One Thousand Dollars ($1,000) per preferred security, bearingdistributions at a fixed rate of 8.65% per annum of the liquidation amount through the distributionpayment date in September, 2011 and thereafter at a variable rate, reset quarterly, equal to LIBOR(as defined in the Indenture (as defined below)) plus 3.50% per annum of the liquidation amount(the “Preferred Securities”);     WHEREAS, the entire proceeds from the sale by the Trust of the Preferred Securities will becombined with the entire proceeds from the sale to the Company by the Trust of its commonsecurities, having a stated liquidation amount of One Hundred Thousand ($1,000) per common security(the “Common Securities”), and will be used by the Trust to purchase Fifty-One Million FiveHundred Forty-Five Thousand Dollars ($51,545,000) in principal amount of the junior subordinatednotes of the Company (the “Junior Subordinated Notes”);     WHEREAS, the Preferred Securities and the Common Securities for the Trust will be issuedpursuant to the Amended and Restated Trust Agreement (the “Trust Agreement”), dated as ofthe Closing Date (as defined below), among the Company, as depositor, Wells Fargo Bank, N.A., anational banking association, as property trustee (in such capacity, the “PropertyTrustee”), Wells Fargo Delaware Trust Company, a Delaware corporation, as Delaware trustee (insuch capacity, the “Delaware Trustee”), and the Administrative Trustees named therein (insuch capacities, the “Administrative Trustees”); and     WHEREAS, the Junior Subordinated Notes will be issued pursuant to a Junior SubordinatedIndenture, dated as of the Closing Date (the “Indenture”), between the Company and WellsFargo Bank, N.A., a national banking association, as indenture trustee (in such capacity, the“Indenture Trustee”).     NOW, THEREFORE, in consideration of the mutual agreements and subject to the terms andconditions herein set forth, the parties hereto agree as follows:          1. Definitions. The Preferred Securities, the Common Securities and the JuniorSubordinated Notes are collectively referred to herein as the “Securities.” This PurchaseAgreement, the Indenture, the Trust Agreement, the Junior Subordinated Note Purchase Agreement (asdefined below), the Common Securities Subscription Agreement (as defined in the Trust Agreement)and the Securities are collectively referred to herein as the “Operative Documents.” Allother capitalized terms used but not defined in this Purchase Agreement shall have the respectivemeanings ascribed thereto in the Indenture.
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          2. Purchase and Sale of the Preferred Securities.          (a) The Trust agrees to sell to the Purchaser, and the Purchaser agrees to purchase from theTrust, Fifty Million Dollars ($50,000,000) in aggregate stated liquidation amount of the PreferredSecurities for immediately available funds in an amount (the “Purchase Price”) equal toFifty Million Dollars ($50,000,000). The Trust shall use the Purchase Price, together with theproceeds 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 10:00A.M. Chicago time (11:00 A.M. New York City time), on September 13, 2006 or such later date (notlater than September 15, 2006) as the parties may designate (such date and time of delivery andpayment for the Preferred Securities being herein called the “Closing Date”). The PreferredSecurities shall be transferred and delivered to the Purchaser against the payment of the PurchasePrice to the Trust made by wire transfer in immediately available funds on the Closing Date to aU.S. account designated in writing by the Company at least two Business Days prior to the ClosingDate.          (c) Delivery of the Preferred Securities shall be made at such location, and in such names anddenominations, as the Purchaser shall designate at least two Business Days in advance of theClosing Date. The Company and the Trust agree to have the Preferred Securities available forinspection and checking by the Purchaser in Chicago, Illinois, not later than 1:00 P.M., Chicagotime (2:00 P.M. New York City time), on the Business Day prior to the Closing Date. The closing forthe purchase and sale of the Preferred Securities shall occur at the offices of Winston & StrawnLLP, 35 West Wacker Drive, Chicago, Illinois 60601, or such other place as the parties hereto shallagree.          3. Conditions. The obligations of the parties under this Purchase Agreement aresubject to the following conditions:          (a) The representations and warranties contained herein shall be accurate as of the date ofdelivery of the Preferred Securities, unless a representation or warranty is made as of a specificdate, in which case it shall be accurate as of such specific date.          (b) The Purchaser shall have received the opinion of (i) Ballard Spahr Andrews & IngersollLLP, Maryland counsel for the Company (“Maryland Counsel”), dated the Closing Date,addressed to the Purchaser and the Indenture Trustee, in substantially the form set out inExhibit A hereto (subject to customary assumptions and qualifications), (ii) O’Melveny &Myers LLP, special corporate counsel for the Company (the “Company Counsel”), dated theClosing Date, addressed to the Purchaser, in substantially the form set out in Exhibit Bhereto (subject to customary assumptions and qualifications) and (iii) Greenberg Traurig, LLP,special tax counsel to the Company, dated the Closing Date, addressed to the Purchaser insubstantially the form set out in Exhibit C hereto (subject to customary assumptions andqualifications).          (c) The Purchaser shall have received the opinion of Winston & Strawn LLP, special tax counselfor the Purchaser, dated the Closing Date, addressed to the Purchaser and the Indenture Trustee,addressing the matters set out in Exhibit D hereto (subject to customary assumptions andqualifications).
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          (d) The Purchaser shall have received the opinion of Potter Anderson & Corroon LLP, specialDelaware counsel for the Trust, dated the Closing Date, addressed to the Purchaser, the IndentureTrustee, the Delaware Trustee and the Company, in substantially the form set out in ExhibitE hereto (subject to customary assumptions and qualifications).          (e) The Purchaser shall have received the opinion of Potter Anderson & Corroon LLP, specialcounsel for the Property Trustee and the Indenture Trustee, dated the Closing Date, addressed tothe Purchaser and the Company, in substantially the form set out in Exhibit F hereto(subject to customary assumptions and qualifications).          (f) The Purchaser shall have received the opinion of Potter Anderson & Corroon LLP, specialDelaware counsel for the Delaware Trustee, dated the Closing Date, addressed to the Purchaser, theIndenture Trustee and the Company, in substantially the form set out in Exhibit G hereto(subject to customary assumptions and qualifications).          (g) The Purchaser shall have received a certificate of the Company, signed by the ChiefExecutive Officer, President or an Executive Vice President, and the Chief Financial Officer orTreasurer of the Company, and the Purchaser shall have received a certificate of the Trust, signedby an Administrative Trustee of the Trust, in each case dated the Closing Date, and, in the case ofthe Company, as to clauses (i)(A) and (ii) below and, in the case of the Trust, as to clause (i)(B)below:               (i) (A) the representations and warranties of the Company in this Purchase Agreementare true and correct on and as of the Closing Date with the same effect as if made on theClosing Date, unless a representation or warranty is made as of a specific date in whichcase it is true and correct as of such specific date and the Company has complied in allmaterial respects with all the agreements and satisfied in all material respects all theconditions on its part to be performed or satisfied at or prior to the Closing Date; and                   (B) the representations and warranties of the Trust in this Purchase Agreement are trueand correct on and as of the Closing Date with the same effect as if made on the ClosingDate, unless a representation or warranty is made as of a specific date in which case it istrue and complete as of such specific date and the Trust has complied in all materialrespects with all the agreements and satisfied in all material respects all the conditionson its part to be performed or satisfied at or prior to the Closing Date; and               (ii) subsequent to the execution of this Purchase Agreement, there has been no materialadverse change in the condition (financial or otherwise), earnings, business, liabilities orassets of the Company and its subsidiaries taken as a whole (a “Material AdverseChange”).          (h) Subsequent to the execution of this Purchase Agreement, there shall not have been anychange, or any development involving a prospective change, in or affecting the condition (financialor otherwise), earnings, business, liabilities or assets of the Company and its subsidiaries takenas a whole, whether or not occurring in the ordinary course of business, the
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effect of which is, in the Purchaser’s judgment, so material and adverse as to make itimpractical or inadvisable to proceed with the purchase of the Preferred Securities.          (i) Prior to or on the Closing Date, the Purchaser and its counsel shall have received suchfurther information, certificates and documents as the Purchaser or its counsel may reasonablyrequest.          If any of the conditions specified in this Section 3 shall not have been fulfilledwhen and as required by this Purchase Agreement, or if any of the opinions, certificates anddocuments mentioned above or elsewhere in this Purchase Agreement shall not be reasonablysatisfactory in form and substance to the Purchaser or its counsel, this Purchase Agreement and allthe Purchaser’s obligations hereunder may be canceled at, or at any time prior to, the Closing Dateby the Purchaser. Notice of such cancellation shall be given to the Company and the Trust inwriting or by telephone or facsimile confirmed in writing.          Each certificate signed by any trustee of the Trust on behalf of the Trust or any officer ofthe Company on behalf of the Company and delivered to the Purchaser or the Purchaser’s counsel inconnection with the Operative Documents and the transactions contemplated hereby and thereby shallbe deemed to be a representation and warranty of the Trust 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 and the Trust. The Company and theTrust 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 in any way tothe Purchaser or its Affiliates (as defined below) or their acts or omissions):          (a) Neither the Company nor the Trust, nor any of their “Affiliates” (as defined in Rule501(b) of Regulation D (“Regulation D”) under the Securities Act (as defined below))controlled by them, nor any person acting at their direction (except for the Purchaser and itsAffiliates, as to which no representation or warranty is made), has, directly or indirectly, madeoffers or sales of any security, or solicited offers to buy any security, under circumstances thatwould require the registration of any of the Securities under the Securities Act of 1933, asamended (the “Securities Act”).          (b) Neither the Company nor the Trust, nor any of their Affiliates controlled by them, nor anyperson acting at their direction (except for the Purchaser and its Affiliates, as to which norepresentative or warranty is made), engaged in any form of “general solicitation” or “generaladvertising” (within the meaning of Regulation D) in connection with any offer or sale of any ofthe Securities.          (c) The Securities (i) are not and have not been listed on a national securities exchangeregistered under Section 6 of the Securities Exchange Act of 1934, as amended (the “ExchangeAct”), or quoted on a U.S. automated inter-dealer quotation system and (ii) the Securities arenot securities of an open-end investment company, unit investment trust or face-amount certificatecompany that are, or are required to be, registered under Section 8 of the Investment Company Actof 1940, as amended (the “Investment Company Act”), and the
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Securities otherwise satisfy in all material respects the eligibility requirements of Rule144A(d)(3) promulgated pursuant to the Securities Act (“Rule 144A(d)(3)”).          (d) Neither the Company nor the Trust, nor any of their Affiliates controlled by them, nor anyperson acting at their direction (except for the Purchaser and its Affiliates, as to which norepresentation is made), has engaged, or will engage, in any “directed selling efforts” within themeaning of Regulation S (“Regulation S”) under the Securities Act with respect to theSecurities.          (e) Neither the Company nor the Trust is, and, based on the representations and warranties ofthe Purchaser, immediately following consummation of the transactions contemplated hereby and theapplication of the net proceeds therefrom, neither will be, an “investment company” or an entity“controlled” by an “investment company,” in each case within the meaning of Section 3(a) of theInvestment Company Act.          (f) Neither the Company nor the Trust has paid or agreed to pay to any third party anycompensation for soliciting another to purchase any of the Securities, except for (i) the feescontemplated by the Operative Documents, (ii) the fee that the Company has agreed to pay to TBCSecurities, LLC and (iii) the fee to be paid by TBC Securities, LLC, to J.P. Morgan Securities Inc.          (g) The Trust has been duly created and is validly existing in good standing as a statutorytrust under the Delaware Statutory Trust Act, 12 Del. C. §3801, et seq. (the “StatutoryTrust Act”), with all requisite trust power and authority to own property and to conduct itsbusiness and its proposed business and to enter into and perform its obligations under theOperative Documents to which it is a party. The Trust is duly qualified to conduct business as aforeign entity and is in good standing in each jurisdiction in which such qualification isnecessary, except where the failure to so qualify or be in good standing would not have a materialadverse effect on the condition (financial or otherwise), earnings, business or assets of theTrust. The Trust is not a party to or otherwise bound by any agreement other than the OperativeDocuments and the other arrangements and agreements contemplated by the Operative Documents(including, without limitation, the initial trust agreement). The Trust is, and under current lawwill continue to be, classified for federal income tax purposes as a grantor trust and not as anassociation or publicly traded partnership taxable as a corporation.          (h) The Trust Agreement has been duly authorized by the Company and, on the Closing Date, willhave been duly executed and delivered by the Company and the Administrative Trustees, and, assumingdue authorization, execution and delivery thereof by the Property Trustee and the Delaware Trustee,will be a legal, valid and binding obligation of the Company and the Trust, enforceable againstthem in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulentconveyence, moratorium, reorganization and similar laws affecting creditors’ rights generally andto general principles of equity (the “Enforceability Exceptions”). Each of theAdministrative Trustees is an employee of the Company and has been duly authorized by the Companyto execute and deliver the Trust Agreement.
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          (i) The Indenture has been duly authorized by the Company and, on the Closing Date, will havebeen duly executed and delivered by the Company, and, assuming due authorization, execution anddelivery thereof by the Indenture Trustee, will be a legal, valid and binding obligation of theCompany enforceable against it in accordance with its terms, subject to the EnforceabilityExceptions.          (j) The Preferred Securities and the Common Securities have been duly authorized by the Trustand, when authenticated in the manner provided for in the Trust Agreement and issued and deliveredto the Purchaser against payment therefor on the Closing Date in accordance with this PurchaseAgreement, in the case of the Preferred Securities, and in accordance with the Common SecuritiesSubscription Agreement, in the case of the Common Securities, will be validly issued, fully paidand nonassessable and will represent undivided beneficial interests in the assets of the Trustentitled to the benefits of the Trust Agreement. The issuance of the Securities is not subject toany preemptive or other similar rights arising under the organizational documents of the Company orTrust. On the Closing Date, all of the issued and outstanding Common Securities will be directlyowned by the Company free and clear of any pledge, security interest, claim, lien or otherencumbrance of any kind (each, a “Lien”).          (k) The Junior Subordinated Notes have been duly authorized by the Company and, on the ClosingDate, will have been duly executed and delivered to the Indenture Trustee for authentication inaccordance with the Indenture and, when authenticated in the manner provided for in the Indentureand delivered to the Trust against payment therefor in accordance with the Junior Subordinated NotePurchase Agreement (the “Junior Subordinated Note Purchase Agreement”), dated as of thedate hereof, by and between the Company and the Trust, will constitute legal, valid and bindingobligations of the Company entitled to the benefits of the Indenture, enforceable against theCompany in accordance with their terms, subject to the Enforceability Exceptions.          (l) This Purchase Agreement has been duly authorized, executed and delivered by the Companyand the Trust, and, assuming due authorization, execution and delivery thereof by the other partiesthereto, constitutes the legal, valid and binding obligation of the Company and the Trustenforceable against the Company and the Trust in accordance with its terms, subject to theEnforceability Exceptions and the effect of any laws or applicable public policy against theenforcement of the indemnification provisions of this Purchase Agreement set forth in Section8.          (m) Neither the issue and sale of the Common Securities, the Preferred Securities or theJunior Subordinated Notes, nor the purchase of the Common Securities by the Company and thepurchase of the Junior Subordinated Notes by the Trust, nor the execution and delivery of andcompliance with the Operative Documents by the Company or the Trust, nor the consummation of thetransactions contemplated hereby or thereby, (i) will conflict with or constitute a violation orbreach of, or default under, the Trust Agreement or the charter or bylaws or similar organizationaldocuments of the Company or any “significant subsidiary” (as defined in Rule 1-02(w) of RegulationS-X under the Exchange Act) (a “Subsidiary”) of the Company or any applicable material law,statute, rule, regulation, judgment, order, writ or decree of any government, governmentalauthority, agency or instrumentality or court (collectively, the “Governmental Entities”),or any arbitrator, in each case having jurisdiction over the Trust or the
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Company or any of the Company’s Subsidiaries or their respective properties or assets or (ii)will conflict with or constitute a violation or breach of, or a default or Repayment Event (asdefined below) under, or result in the creation or imposition of any Lien upon any property orassets of the Trust, the Company or any of the Company’s Subsidiaries pursuant to, any contract,indenture, mortgage, loan agreement, note, lease or other agreement or instrument to which (A) theTrust, the Company or any of the Company’s Subsidiaries is a party or by which it or any of themmay be bound, or (B) any of the property or assets of any of the Trust, the Company or any of theCompany’s Subsidiaries is subject, except, in the case of this clause (ii), for such conflicts,violations, breaches, defaults, Repayment Events or Liens which (X) would not reasonably beexpected to, singly or in the aggregate, have a material adverse effect on the condition (financialor otherwise), earnings, business, liabilities, assets (taken as a whole) of the Company and itssubsidiaries, taken as a whole, whether or not occurring in the ordinary course of business (a“Material Adverse Effect”) and (Y) would not reasonably be expected to, singly or in theaggregate, adversely affect the consummation of the transactions contemplated by the OperativeDocuments or (iii) require the consent, approval, authorization or order of any court orGovernmental Entity, except for consents, approvals, authorizations or orders that (1) have beenmade or obtained or that will be obtained on or prior to the Closing Date, (2) the failure toobtain would not reasonably be expected to (I) result in a Material Adverse Effect or (II) singlyor in the aggregate, adversely affect the consummation of the transactions contemplated by theOperative Documents, or (3) are required in order to comply with blue sky laws. 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) theright to require the repurchase, redemption or repayment of all or a portion of such indebtednessby the Trust or the Company or any of the Company’s Subsidiaries prior to its scheduled maturity.          (n) The Company has been duly incorporated and is validly existing as a corporation in goodstanding under the laws of Maryland, with all requisite corporate power and authority to own, leaseand operate its properties and conduct its business and is duly qualified to conduct business andis in good standing as a foreign corporation in each jurisdiction where such qualification isnecessary, except where the failure of the Company to be so qualified would not reasonably beexpected to, singly or in the aggregate, have a Material Adverse Effect.          (o) The Company has no Subsidiaries other than those subsidiaries listed in Schedule4(o) hereto. Each Subsidiary has been duly organized and is validly existing as a corporationin good standing under the laws of the jurisdiction in which it is organized, with all requisitecorporate power and authority to own, lease and operate its properties and conduct its business.Each Subsidiary is duly qualified to transact business and is in good standing as a foreigncorporation in each jurisdiction where such qualification is necessary, except where the failure tobe so qualified would not reasonably be expected to, singly or in the aggregate, have a MaterialAdverse Effect.          (p) Each of the Trust, the Company and each of the Company’s Subsidiaries hold all necessaryapprovals, authorizations, orders, licenses, consents, registrations, qualifications, certificatesand permits (collectively, the “Governmental Licenses”) of and from Governmental Entitiesnecessary to conduct their respective businesses as now being conducted, except where the failureto hold such approvals, authorizations, orders, licenses, consents, requirements, qualifications,certificates and permits would not reasonably be expected to have a Material
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Adverse Effect and neither the Trust, the Company nor any of the Company’s Subsidiaries hasreceived any written notice of proceedings relating to the revocation or modification of any suchGovernment License, except where the failure to be so licensed or approved or the receipt of anunfavorable decision, ruling or finding, would not reasonably be expected to, singly or in theaggregate, have a Material Adverse Effect; all of the Governmental Licenses are valid and in fullforce and effect, except where the invalidity or the failure of such Governmental Licenses to be infull force and effect would not reasonably be expected to, singly or in the aggregate, have aMaterial Adverse Effect; and the Company and its Subsidiaries are in compliance with all applicablelaws, rules, regulations, judgments, orders, decrees and consents, except where the failure to bein compliance would not reasonably be expected to, singly or in the aggregate, have a MaterialAdverse Effect.          (q) All of the issued and outstanding shares of common stock of the Company and each of itsSubsidiaries are validly issued, fully paid and nonassessable; all of the issued and outstandingshares of common stock of each Subsidiary of the Company is owned by the Company, directly orthrough subsidiaries, free and clear of any Lien, claim or equitable right; and none of the issuedand outstanding shares of common stock of the Company or any Subsidiary of the Company was issuedin violation of any preemptive or similar rights arising by operation of law, under the charter orby-laws of such entity.          (r) Neither the Company nor any of its Subsidiaries is (i) in violation of its respectivecharter or by-laws 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 or any such Subsidiary is a partyor by which it or any of them may be bound or to which any of the property or assets of any of themis subject, except, in the case of clause (ii), where such violation or default would notreasonably be expected to, singly or in the aggregate, have a Material Adverse Effect.          (s) Except as set forth in the information filed by the Company with the Commission (asdefined below), there is no action, suit or proceeding before or by any Governmental Entity orarbitrator, now pending or, to the knowledge of the Company or the Trust, threatened against oraffecting the Trust or the Company or any of the Company’s Subsidiaries, except for such actions,suits or proceedings that, if adversely determined, would not reasonably be expected to, singly orin the aggregate, materially adversely affect the consummation of the transactions contemplated bythe Operative Documents or have a Material Adverse Effect.          (t) The auditors of the Company who issued their report on the Financial Statements (asdefined below) are independent public accountants of the Company and its subsidiaries as requiredby of the Securities Act, and the rules and regulations of the Securities and Exchange Commission(the “Commission”) thereunder.          (u) The audited consolidated financial statements (including the notes thereto) and schedulesof the Company and its consolidated subsidiaries for the three (3) fiscal years ended December 31,2005 (the “Financial Statements”) and the interim unaudited consolidated financialstatements of the Company and its consolidated subsidiaries for the three and six
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months ended June 30, 2006 (the “Interim Financial Statements”) filed with theCommission fairly present in all material respects, in accordance with U.S. generally acceptedaccounting principles (“GAAP”), the financial position of the Company and its consolidatedsubsidiaries, and the results of operations and changes in financial condition as of the dates andfor the periods therein specified, subject, in the case of Interim Financial Statements, toyear-end adjustments. Such consolidated financial statements and schedules have been prepared inaccordance with GAAP consistently applied throughout the periods involved (except as otherwisenoted therein).          (v) None of the Trust, the Company nor any of the Company’s Subsidiaries has any materialliability, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or tobecome due, including any liability for taxes, except for (i) liabilities set forth in theFinancial Statements or the Interim Financial Statements and the liabilities related to theOperative Documents, (ii) normal fluctuations in the amount of the liabilities referred to inclause (i) above occurring in the ordinary course of affairs of the Trust, the Company and itssubsidiaries since the date of the most recent balance sheet included in such Financial Statementsor the Interim Financial Statements and (iii) liabilities set forth in the 1934 Act Reports (asdefined below).          (w) Since the respective dates of the Financial Statements and the Interim FinancialStatements and except as disclosed in the 1934 Act Reports, there has not been (A) any MaterialAdverse Change or (B) any dividend or distribution of any kind declared, paid or made by theCompany on any class of its capital stock, except for (1) dividends declared, paid or made by theCompany on its 9.125% Series A Cumulative Redeemable Preferred Stock or its 9.75% Series BCumulative Redeemable Preferred Stock and (2) dividends disclosed in the 1934 Act Reports asdeclared which have been subsequently paid or made.          (x) The documents of the Company filed with the Commission from and including January 1, 2006,at the time they were filed by the Company with the Commission (collectively, the “1934 ActReports”), complied and will as of the Closing Date comply in all material respects with therequirements 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 ClosingDate, do not and will not include an untrue statement of a material fact or omit to state amaterial fact required to be stated therein or necessary to make the statements therein, in thelight of the circumstances under which they were made, not misleading. The Company complies in allmaterial respects with all presently applicable provisions of the Sarbanes-Oxley Act of 2002 (the“Sarbanes-Oxley Act”) and is actively taking steps to ensure that it will comply in allmaterial respects with the other applicable provisions of the Sarbanes-Oxley Act upon theeffectiveness of such provisions.          (y) No labor dispute with the employees of the Trust, the Company or any of the Company’sSubsidiaries exists or, to the knowledge of the Company, is imminent, except those which would notreasonably be expected to, singly or in the aggregate, have a Material Adverse Effect.          (z) No filing with, or authorization, approval, consent, license, order, registration,qualification or decree of, any Governmental Entity, other than those that (i) have been made orobtained or that will be obtained on or prior to the Closing Date, (ii) the failure to obtain would
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not reasonably be expected to result in a Material Adverse Effect or adversely affect theconsummation of the transactions contemplated by the Operative Documents, or (iii) are required inorder to comply with the blue sky laws, is necessary or required for the performance by the Trustor the Company of their respective obligations under the Operative Documents, as applicable, or theconsummation by the Trust and the Company of the transactions contemplated by the OperativeDocuments.          (aa) Each of the Trust, the Company and each Subsidiary has good and marketable title to allof its respective material real and personal properties, in each case free and clear of all Liensand defects, except for those that would not reasonably be expected to, singly or in the aggregate,have a Material Adverse Effect or that are granted in properties the purchase of which is fundedunder financing arrangements or that do not affect the value or use of such properties; and all ofthe leases and subleases under which the Trust, the Company or the Company’s Subsidiary holdsproperties are in full force and effect, except where the failure of such leases and subleases tobe in full force and effect would not reasonably be expected to, singly or in the aggregate, have aMaterial Adverse Effect or that would not materially affect the value or use of such properties.          (bb) Commencing with its taxable year ended December 31, 2004, the Company has been, and uponthe completion of the transactions contemplated hereby, the Company will continue to be, organizedand operated in conformity with the requirements for qualification and taxation as a real estateinvestment trust (a “REIT”) under Sections 856 through 860 of the Internal Revenue Code of1986, as amended (the “Code”), and the Company’s proposed method of operation will enableit 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 suchqualification to be lost. The Company currently expects to continue to be organized and to operatein a manner so as to qualify as a REIT in the taxable year ending December 31, 2006 and insucceeding taxable years.          (cc) The Company and each of the Subsidiaries have timely and duly filed all Material TaxReturns (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 aMaterial Adverse Effect, and all such Tax Returns are true, correct and complete in all materialrespects. The Company and each of the Significant Subsidiaries have timely and duly paid in fullall material Taxes required to be paid by them to the extent such Taxes have become due and are notbeing contested in good faith or the failure to pay such Taxes would not have a Material AdverseEffect (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 theCompany 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, andforeign taxes, and other assessments of a similar nature (whether imposed directly or throughwithholding), including any interest, additions to tax, or penalties applicable thereto, imposed byany Governmental Entity, and (ii) all liabilities in respect of such amounts arising as a result ofbeing a member of any affiliated, consolidated, combined, unitary or similar group, as a successorto another person or by contract. As used herein, the term “MaterialTax Returns”means all material federal, state, local, and foreign Tax returns, declarations, statements,reports,
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schedules, forms, and information returns and any amendments thereto filed or required to befiled with any Governmental Entity.          (dd) There are no rulemaking or similar proceedings before the United States Internal RevenueService or comparable federal, state, local or foreign government bodies which involve or affectthe Company or any of its subsidiaries, which, if the subject of an action unfavorable to theCompany or any such subsidiary, could result in a Material Adverse Effect.          (ee) The books, records and accounts of the Company and the Company’s Subsidiaries accuratelyand fairly reflect, in reasonable detail, the transactions in, and dispositions of, the assets of,and the results of operations of, the Company and the Company’s Subsidiaries. The Company and eachof the Company’s Subsidiaries maintains a system of internal accounting controls sufficient toprovide reasonable assurances that (i) transactions are executed in accordance with management’sgeneral or specific authorizations, (ii) transactions are recorded as necessary to permitpreparation 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 specificauthorization and (iv) the recorded accountability for assets is compared with the existing assetsat reasonable intervals and appropriate action is taken with respect to any differences.          (ff) The Company and the Company’s Subsidiaries are insured by insurers of recognizedfinancial responsibility against such losses and risks and in such amounts in all material respectsas are customary in the businesses in which they are engaged or propose to engage after givingeffect to the transactions contemplated hereby. All policies of insurance and fidelity or suretybonds insuring the Company or any of the Subsidiaries or the Company’s or Subsidiaries’ respectivebusinesses, assets, employees, officers and directors are in full force and effect except where thefailure of such insurance policies and fidelity or surety bonds to be in full force and effectwould not reasonably be expected to result in a Material Adverse Effect.          (gg) The Company and the Company’s Subsidiaries, or, to the knowledge of the Company, anyperson acting on behalf of the Company and the Company’s Subsidiaries including, withoutlimitation, any director, officer, agent or employee of the Company or the Company’s Subsidiarieshas not, directly or indirectly, while acting on behalf of the Company and the Company’sSubsidiaries (i) used any corporate funds for unlawful contributions, gifts, entertainment or otherunlawful expenses relating to political activity, (ii) made any unlawful payment to foreign ordomestic government officials or employees or to foreign or domestic political parties or campaignsfrom corporate funds, (iii) violated any provision of the Foreign Corrupt Practices Act of 1977, asamended, or (iv) made any other unlawful payment, except for such actions as would not reasonablybe expected to result in a Material Adverse Effect.          (hh) The information provided by the Company and the Trust pursuant to this Purchase Agreementand the Operative Documents when read together with the information in the 1934 Act Reports doesnot, as of the date hereof, and will not as of the Closing Date, contain any untrue statement of amaterial fact or omit to state any material fact necessary to make the statements therein, in thelight of the circumstances under which they were made, not misleading.
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          (ii) Neither the Company nor, to the Company’s knowledge, any of its Subsidiaries has violatedor received written notice of any violation with respect to any applicable environmental, safety orsimilar law applicable to their respective businesses, the violation of which of which wouldreasonably be expected to result in a Material Adverse Effect.          5. Representations and Warranties of the Purchaser. The Purchaser represents andwarrants to, and agrees with, the Company and the Trust as follows:          (a) The Purchaser is aware that the Preferred Securities have not been and will not beregistered 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) except in accordance with Rule 903 of Regulation S orpursuant 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) ofRegulation D.          (c) Neither the Purchaser, nor any of the Purchaser’s Affiliates, nor any person acting on thePurchaser’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) or (ii) in any“directed selling efforts” (within the meaning of Regulation S), in each case promulgated under theSecurities 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 thePreferred Securities and that it is unlikely that a public market will ever exist for the PreferredSecurities, (ii) the Purchaser is purchasing the Preferred Securities for its own account, forinvestment and not with a view to, or for offer or sale in connection with, any distributionthereof in violation of the Securities Act or other applicable securities laws, subject to anyrequirement of law that the disposition of its property be at all times within its control andsubject to its ability to resell such Preferred Securities pursuant to an effective registrationstatement under the Securities Act or pursuant to an exemption therefrom or in a transaction notsubject thereto, and the Purchaser agrees to the legends and transfer restrictions applicable tothe Preferred Securities contained in the Trust Agreement and the Preferred Securities and thePurchaser shall not transfer the Preferred Securities except in accordance with the Trust Agreementand the Preferred Securities, and (iii) the Purchaser has had the opportunity to ask questions of,and receive answers and request additional information from, the Company and is aware that it maybe required to bear the economic risk of an investment in the Preferred Securities until thematurity thereof.          (e) The Purchaser is a limited liability company duly formed, validly existing and in goodstanding under the laws of the State of Delaware with all requisite (i) limited liability companypower and authority to execute, deliver and perform this Purchase Agreement and the other OperativeDocuments to which it is a party, to make the representations, warranties and covenants andagreements specified herein and therein and to consummate the transactions contemplated herein,including, without limitation, the purchase of the Preferred Securities and (ii) right and power topurchase the Preferred Securities.
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          (f) This Purchase Agreement has been duly authorized, executed and delivered by the Purchaserand no filing with, or authorization, approval, consent, license, order registration, qualificationor decree of, any governmental entity, agency or court having jurisdiction over the Purchaser,other than those that have been made or obtained, is necessary or required for the performance bythe Purchaser of its obligations under the Operative Documents to which it is a party or toconsummate the transactions contemplated herein or for the resale of the Preferred Securities.          (g) The Purchaser is a “Qualified Purchaser” as such term is defined in Section 2(a)(51) ofthe Investment Company Act.          6. Covenants and Agreements of the Company and the Trust. The Company and the Trustjointly and severally covenant and agree with the Purchaser as follows (provided that none of thefollowing covenants apply or relate to the Purchaser or its Affiliates or any of their acts oromissions):          (a) The Company and the Trust will arrange for the qualification of the Preferred Securitiesfor sale under the state blue sky laws of such jurisdictions as the Purchaser may reasonablydesignate and will maintain such qualifications in effect so long as required for the sale of thePreferred Securities; provided, that neither the Company nor the Trust shall be required to qualifyas a foreign corporation or to consent to the service of process under the laws of any suchjurisdiction. The Company or the Trust, as the case may be, will promptly advise the Purchaser ofthe receipt by the Company or the Trust, as the case may be, of any notification with respect tothe suspension of the qualification of the Preferred Securities for sale in any jurisdiction or theinitiation or threatening of any proceeding for such purpose.          (b) Neither the Company nor the Trust will, nor will either of them permit any of itsAffiliates to, nor will either of them permit any person acting on its or their behalf (other thanthe Purchaser and its Affiliates) to, directly or indirectly, resell any Preferred Securities thathave been acquired by any of them.          (c) Neither the Company nor the Trust will, nor will either of them permit any of theirAffiliates or any person acting on their behalf (other than the Purchaser and its Affiliates) to,engage in any “directed selling efforts” within the meaning of Regulation S with respect to theSecurities.          (d) Neither the Company nor the Trust will, nor will either of them permit any of theirAffiliates or any person acting on their behalf to, directly or indirectly, make offers or sales ofany security, or solicit offers to buy any security, under circumstances that would require theregistration of any of the Securities under the Securities Act.          (e) Neither the Company nor the Trust will, nor will either of them permit any of itsAffiliates or any person acting on their behalf (other than the Purchaser and its Affiliates) to,engage in any form of “general solicitation” or “general advertising” (within the meaning ofRegulation D) in connection with any offer or sale of the any of the Securities.          (f) So long as any of the Preferred Securities are outstanding, (i) the Company shall not takeany action to have the Preferred Securities listed on a national securities exchange
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registered under Section 6 of the Exchange Act or quoted in a U.S. automated inter-dealerquotation system, (ii) neither the Company 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, registeredunder Section 8 of the Investment Company Act, and, the Preferred Securities shall otherwisesatisfy the eligibility requirements of Rule 144A(d)(3) and (iii) neither the Company nor the Trustshall engage, or permit any of the Company’s subsidiaries to engage, in any activity that wouldcause the Company or the Trust to be an “investment company” under the provisions of the InvestmentCompany Act.          (g) So long as any of the Preferred Securities are outstanding, each of the Company and theTrust shall furnish to (i) the holder, and subsequent holders, of the Preferred Securities, (ii)Kodiak Capital Management Company LLC, 2107 Wilson Boulevard, Suite 450, Arlington, Virginia 22201,Attention: Robert M. Hurley, or such other address as designated by Kodiak Capital ManagementCompany LLC) and (iii) any beneficial owner of the Preferred Securities reasonably identified tothe Company and the Trust (which identification may be made by either such beneficial owner or byKodiak Capital Management Company LLC), (A) a duly completed and executed officer’s financialcertificate in the form attached hereto as Exhibit H, including the financial statementsreferenced in such Exhibit, which certificate and financial statements shall be so furnished by theCompany and the Trust not later than forty-five (45) days after the end of each of the first threefiscal quarters of each fiscal year of the Company and not later than ninety (90) days after theend of each fiscal year of the Company; provided, however, that so long as theCompany is a publicly reporting company, the Company has filed with the Commission the relevantannual or quarterly report referenced in such certificate and such report is publicly available onthe EDGAR system, then the Company shall not be required to furnish such certificate and financialstatements and (B) a current organizational chart of the Company and its subsidiaries within ninety(90) days after the end of each fiscal year of the Company.          (h) Each of the Company and the Trust, during any period in which it is not subject to and incompliance in all material respects with Section 13 or 15(d) of the Exchange Act, or it is notexempt from such reporting requirements pursuant to and in compliance with Rule 12g3-2(b) under theExchange Act, shall provide to each holder of the Preferred Securities and to each prospectivepurchaser (as designated by such holder) of the Preferred Securities, upon the written request ofsuch holder or prospective purchaser meeting the requirements of a holder under the TrustAgreement, any information required to be provided by Rule 144A(d)(4) under the Securities Act, ifapplicable. If the Company and the Trust are required to register under the Exchange Act, suchreports 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 PreferredSecurities, and the prospective purchasers designated by the Purchaser and such holders, from timeto time, of the Preferred Securities.          (i) Neither the Company nor the Trust will, until one hundred eighty (180) days following theClosing Date, without the Purchaser’s prior written consent, offer, sell, contract to sell, grantany option to purchase or otherwise dispose of, directly or indirectly, (i) any PreferredSecurities or other securities substantially similar to the Preferred Securities other than ascontemplated by this Purchase Agreement or (ii) any other securities convertible into, orexercisable or exchangeable for, any Preferred Securities or other securities substantially similarto the Preferred Securities, unless the Company shall deliver to Purchaser an opinion of counsel
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stating that such offer, sale, contract to sell, option to purchase or disposition will not beintegrated with the offering and sale of the Preferred Securities under this Purchase Agreement ina manner that would require or would have required registration of such offering and sale of thePreferred Securities under the Securities Act.          (j) The Company intends that the Trust is, and under current law will continue to be,classified for federal income tax purposes as a grantor trust and not as a business entity or as anassociation or publicly traded partnership taxable as a corporation and the Company agrees not totake any action inconsistent with such intention, unless otherwise required by law.          (k) Neither the Company nor the Trust will identify any of the Indemnified Parties (as definedbelow) in a press release or any other public statement without the consent of such IndemnifiedParty (which consent shall not unreasonably withheld or delayed) except as required by applicablelaw, and if so required, the Company or the Trust, as applicable, shall provide such IndemnifiedParty with a copy of such press release or public statement prior to the release thereof ifpracticable and permitted by applicable law.          (l) The Purchaser shall have the right under this Purchase Agreement, the Indenture and theTrust Agreement to request the substitution of new notes for all or a portion of the JuniorSubordinated Notes held by the Trust. The Trust shall be required under the terms of this PurchaseAgreement, 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 SubordinatedNotes to the Company. The Replacement Notes shall bear terms identical to the Junior SubordinatedNotes with the sole exception of interest payment dates (and corresponding redemption date andmaturity date), which will be specified by the Purchaser but shall in any event be quarterly. Inno event will the interest payment dates (and corresponding redemption date and maturity date) onthe Replacement Notes vary by more than sixty (60) calendar days from the original interest paymentdates (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 principalamount of the Replacement Notes issued to the Trust under the Indenture, the Purchaser (and eachsuccessor to the Purchaser’s interest in the Preferred Securities) will require the Trust to issuea new series of Preferred Securities having a principal amount related to the principal amount ofthe Replacement Notes (the “Replacement Securities”) to designated holders of PreferredSecurities, provided that any such Replacement Securities, and any distributions from the Trust tothe holders of Replacement Securities, must relate solely to the Trust’s interest in theReplacement Notes and in no event will the Preferred Securities other than the ReplacementSecurities share in the returns from any Replacement Notes. The Replacement Securities shall havepayment dates (and corresponding redemption date and maturity date) that relate to the ReplacementNotes. Each of the Company and the Trust agrees to cooperate with all reasonable requests of thePurchaser in connection with any of the foregoing; provided, that, except as set forthherein, no action requested of the Company or the Trust in connection with such cooperation shallotherwise modify the obligations or the rights of the Company pursuant to such documents. ThePurchaser shall pay all reasonable expenses in connection with the issuance of the ReplacementNotes and the Replacement Securities.          7. Payment of Expenses. The Company, as depositor of the Trust, agrees to pay allcosts and expenses incident to the performance of the obligations of the Company and the
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Trust under this Purchase Agreement, whether or not the transactions contemplated herein areconsummated or this Purchase Agreement is terminated, including all costs and expenses incident to(i) the authorization, issuance and delivery of the Common Securities and the Preferred Securitiesand any taxes payable in connection therewith excluding any taxes in connection with the sale ofthe Preferred Securities by the Purchaser and the subsequent holders, (ii) the fees and expenses ofqualifying the Preferred Securities under the securities laws of the several jurisdictions asprovided in Section 6(a), (iii) the fees and expenses of the counsel, the accountants andany other experts or advisors retained by the Company, (iv) the fees and all reasonable expenses ofthe Property Trustee, the Delaware Trustee, the Indenture Trustee and any other trustee or payingagent appointed under the Operative Documents (including the fees and disbursements of counsel forsuch trustees), which fees and expenses shall not exceed a $2,000 acceptance fee, $5,500 for thefees and expenses of Potter Anderson & Corroon LLP, special counsel retained by the IndentureTrustee and Property Trustee and Special Delaware counsel retained by the Delaware Trustee inconnection with the Closing, and $4,000 in administrative fees annually, and (v) the reasonablecosts and expenses incurred in connection with issuing the Preferred Securities in book-entry formincluding all costs and expenses of The Depositary Trust Company and Portal and related toobtaining CUSIP numbers.          If the sale of the Preferred Securities provided for in this Purchase Agreement is notconsummated because any condition set forth in Section 3 hereof to be satisfied by eitherthe Company or the Trust is not satisfied, because this Purchase Agreement is terminated pursuantto Section 9 or because of any failure, refusal or inability on the part of the Company orthe Trust to perform all obligations and satisfy all conditions on its part to be performed orsatisfied hereunder other than by reason of a default by the Purchaser, the Company will reimbursethe Purchaser upon demand for all reasonable out-of-pocket expenses that shall have been incurredby the Purchaser in connection with the proposed purchase and sale of the Preferred Securities;provided that such expenses shall not exceed $30,000. Neither the Company nor the Trust shall inany event be liable to the Purchaser for the loss of anticipated profits from the transactionscontemplated by this Purchase Agreement.          8. Indemnification. (a) The Company and the Trust agree jointly and severally toindemnify and hold harmless the Purchaser, the Purchaser’s Affiliates and Kodiak Capital ManagementCompany LLC (collectively, the “Indemnified Parties”), each person, if any, who “controls”any of the Indemnified Parties within the meaning of either the Securities Act or the Exchange Act,and the Indemnified Parties’ respective directors, officers, employees and agents (collectively,the “Indemnified Group”), against any and all losses, claims, damages or liabilities, jointor several, to which the Indemnified Parties or any of them may become subject under the SecuritiesAct, the Exchange Act or other federal or state statutory law or regulation, at common law orotherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof)arise out of, are based upon (i) any untrue statement or alleged untrue statement of a materialfact contained in any information or documents furnished or made available to the Purchaser by oron behalf of the Company in connection with this Purchase Agreement or the transactionscontemplated hereby, (ii) the omission or alleged omission to state therein a material factrequired to be stated therein or necessary to make the statements therein not misleading, (iii) thebreach or alleged breach of any representation, warranty or agreement of either Seller containedherein or (iv) the execution and delivery by the Company and/or the Trust of this PurchaseAgreement or any of the other Operative Documents and/or the consummation
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of the transactions contemplated hereby and thereby; provided, however, that none of theCompany or the Trust shall be liable to the extent that any such loss, claim, damage or liabilityarises out of or is based on any statement, act or omission of the Indemnified Group or any memberthereof, and agree to reimburse each such Indemnified Party, as incurred, for any legal or otherexpenses reasonably incurred by them in connection with investigating or defending any such loss,claim, damage, liability or action. The indemnity agreements contained in this Section 8are in addition to any liability which the Company or the Trust may otherwise have.          (b) The Company agrees to indemnify the Trust against all loss, claim, damage, liability andexpense whatsoever due from the Trust under paragraph (a) above.          (c) Promptly after receipt by a member of the Indemnified Group under this Section 8of notice of the commencement of any action, such member will, if a claim in respect thereof is tobe made against the indemnifying party under this Section 8, promptly notify theindemnifying party in writing of the commencement thereof; but the failure so to notify theindemnifying party (i) will not relieve the indemnifying party from liability under paragraph (a)above unless and to the extent that such failure prejudices the indemnifying party and (ii) willnot, in any event, relieve the indemnifying party from any obligations to any member of theIndemnified Group other than the indemnification obligation provided in paragraph (a) above. Theindemnifying party shall be entitled to assume the defense of such action, including the employmentof counsel reasonably satisfactory to the Indemnified Party and the payment of all reasonable feesand expenses of such counsel, as incurred. Any Indemnified Party shall have the right to employseparate counsel in any such action and participate in the defense thereof, but the fees andexpenses of such counsel shall be at the expense of the Indemnified Party unless (i) the employmentof such counsel shall have been specifically authorized in writing by the indemnifying party, (ii)the indemnifying party shall have failed to assume the defense of such action or employ counselreasonably satisfactory to the Indemnified Party or (iii) the named parties to any such action(including any impleaded parties) include both the Indemnified Party and the indemnifying party,and the Indemnified Party shall have been advised by such counsel that there may be one or morelegal defenses available to it which are different from or additional to those available to theindemnifying party (in which case the indemnifying party shall not have the right to assume thedefense of such action on behalf of the Indemnified Party. In no event shall the indemnifying partybe liable for fees and expenses of more than one counsel (in addition to one (1) local counsel, ifnecessary) separate from their own counsel for all Indemnified Parties in connection with any oneaction or separate but similar or related actions arising out of the same general allegations orcircumstances. An indemnifying party will not, without the prior written consent of the IndemnifiedParties, which shall not be unreasonably withheld or delayed, settle or compromise or consent tothe entry of any judgment with respect to any pending or threatened claim, action, suit orproceeding in respect of which indemnification may be sought hereunder (whether or not theIndemnified 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 IndemnifiedParty from all liability arising out of such claim, action, suit or proceeding. Any decisions to bemade by an indemnifying party pursuant to this Section 8 shall be made by the Company.          9. Termination; Representations and Indemnities to Survive. This Purchase Agreementshall be subject to termination in the absolute discretion of the Purchaser, by written
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notice given to the Company and the Trust prior to delivery of and payment for the PreferredSecurities, if prior to such time (i) a downgrading shall have occurred in the rating accorded theCompany’s debt securities or preferred stock by any “nationally recognized statistical ratingorganization,” as that term is used by the Commission in Rule 15c3-1(c)(2)(vi)(F) under theExchange Act, or such organization shall have publicly announced that it has under surveillance orreview, with possible negative implications, its rating of the Company’s debt securities orpreferred stock, (ii) the Trust shall be unable to sell and deliver to the Purchaser at least FiftyMillion Dollars ($50,000,000) in aggregate stated liquidation amount of the Preferred Securities,(iii) a suspension or material limitation in trading in securities generally shall have occurred onthe New York Stock Exchange, (iv) a suspension or material limitation in trading in any of theCompany’s securities shall have occurred on the exchange or quotation system upon which theCompany’ securities are traded, if any, (v) a general moratorium on commercial business activitiesshall have been declared either by federal or Maryland authorities or (vi) there shall haveoccurred any outbreak or escalation of hostilities, or declaration by the United States of anational emergency or war or other calamity or crisis the effect of which on financial markets issuch as to make it, in the Purchaser’s judgment, impracticable or inadvisable to proceed with theoffering or purchase of the Preferred Securities. The respective agreements, representations,warranties, indemnities and other statements of the Company and the Trust or their respectiveofficers or trustees and of the Purchaser set forth in or made pursuant to this Purchase Agreementwill remain in full force and effect, regardless of any investigation made by or on behalf of thePurchaser, the Company or the Trust or any of the their respective officers, directors, trustees orcontrolling persons, and will survive delivery of and payment for the Preferred Securities. Theprovisions of Sections 7 and 8 shall survive the termination or cancellation ofthis Purchase Agreement.          10. Amendments. This Purchase Agreement may not be modified, amended, altered orsupplemented, except upon the execution and delivery of a written agreement by each of the partieshereto.          11. Notices. All communications hereunder shall be in writing and effective only onreceipt, and shall be mailed, delivered by hand or courier or sent by facsimile and confirmed:If to the Purchaser, to:c/o Kodiak Capital Management Company, LLC