Exhibit 10.12


 


Execution
Copy




 


 





PURCHASE AGREEMENT


among


Bresler & Reiner,
Inc.


Bresler
& Reiner Statutory Trust II


and


Bear, Stearns & Co.
Inc.


 






 


Dated as of May 31, 2006


 








 



















PURCHASE AGREEMENT


($25,000,000 Trust
Preferred Securities)


THIS PURCHASE AGREEMENT, dated as of May 31, 2006
(this “Purchase Agreement”), is
entered into among Bresler & Reiner, Inc., a Delaware corporation (the “Company”), Bresler & Reiner Statutory
Trust II, a Delaware statutory trust (the “Trust”,
and together with the Company, the “Sellers”),
and Bear, Stearns & Co. Inc. or its assignee (the “Purchaser”).


WITNESSETH:


WHEREAS, the Trust proposes to issue and sell 25,000
Preferred Securities of the Trust, having a stated liquidation amount of $1,000
per security (the “Preferred Securities”);


WHEREAS, the entire proceeds from the sale of the
Preferred Securities will be combined with the entire proceeds from the sale by
the Trust to the Company of its common securities (the “Common Securities”), and will be used by
the Trust to purchase Twenty-Five Million Seven Hundred Seventy-Seven Thousand
Dollars ($25,775,000) in principal amount of the unsecured junior subordinated
notes of the Company (the “Junior Subordinated
Notes”);


WHEREAS, the Preferred Securities and the Common
Securities for the Trust will be issued pursuant to the Amended and Restated
Trust Agreement (the “Trust Agreement”),
dated as of the Closing Date, among the Company, as depositor, JPMorgan Chase
Bank, National Association, a national banking association, as property trustee
(in such capacity, the “Property Trustee”),
Chase Bank USA, National Association, a national banking association, as
Delaware trustee (in such capacity, the “Delaware
Trustee”), the Administrative Trustees named therein (in such
capacities, the “Administrative Trustees”)
and the holders from time to time of undivided beneficial interests in the
assets of the Trust; and


WHEREAS, the Junior Subordinated Notes will be issued
pursuant to a Junior Subordinated Indenture, dated as of the Closing Date (the “Indenture”), between the Company and
JPMorgan Chase Bank, National Association, 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 and conditions herein set forth, the
parties hereto agree as follows:


1.             Definitions.
The Preferred Securities, the Common Securities and the Junior Subordinated
Notes are collectively referred to herein as the “Securities.” This Purchase Agreement, the Indenture, the
Trust Agreement and the Securities are collectively referred to herein as the “Operative Documents.” All other capitalized terms used but
not defined in this Purchase Agreement shall have the respective meanings
ascribed thereto in the Indenture.









 



2.             Purchase and Sale of the Preferred Securities.


(a)           The Sellers agree to
sell to the Purchaser, and the Purchaser agrees to purchase from the Sellers
the Preferred Securities for an amount (the “Purchase Price”) equal to Twenty-Five Million Dollars
($25,000,000). The Purchaser shall be responsible for the rating agency costs
and expenses. The Sellers shall use the Purchase Price, together with the
proceeds from the sale of the Common Securities, to purchase the Junior
Subordinated Notes.


(b)           Delivery or transfer
of, and payment for, the Preferred Securities shall be made at 11:00 A.M. New
York time on May 31, 2006 (such date and time of delivery and payment for the Preferred
Securities being herein called the “Closing Date”).
The Preferred Securities shall be transferred and delivered to the Purchaser
against the payment of the Purchase Price to the Sellers made by wire transfer
in immediately available funds on the Closing Date to a U.S. account designated
in writing by the Company at least two business days prior to the Closing Date.


(c)           Delivery of the
Preferred Securities shall be made at such location, and in such names and
denominations, as the Purchaser shall designate at least two business days in
advance of the Closing Date. The Company and the Trust agree to have the
Preferred Securities available for inspection and checking by the Purchaser in
New York, New York, not later than 2:00 P.M., New York time, on the business
day prior to the Closing Date. The closing for the purchase and sale of the
Preferred Securities shall occur at the offices of Brown Raysman Millstein
Felder & Steiner LLP, 900 Third Avenue, New York, New York 10022, or such
other place as the parties hereto shall agree.


3.             Conditions.
The obligations of the parties under this Purchase Agreement are subject to the
following conditions:


(a)           The representations
and warranties contained herein shall be accurate as of the date of delivery of
the Preferred Securities.


(b)           The Purchaser shall
have sold securities issued by it in such an amount that the net proceeds
therefrom shall be available on the Closing Date and shall be sufficient to
purchase the Preferred Securities and all other preferred securities
contemplated in agreements similar to this Agreement.


(c)           Counsel for the
Company and the Trust (the “Company
Counsel”), shall have delivered an opinion, dated the Closing Date,
addressed to the Purchaser, Taberna Capital Management, LLC and its successors
and assigns and JPMorgan Chase Bank, National Association, in substantially the
form set out in Annex A-I hereto and (ii) the Company shall have
furnished to the Purchaser the opinion of the Company’s General Counsel or a
certificate signed by the Company’s Chief Executive Officer, President, an
Executive Vice President, Chief Financial Officer, Treasurer or Assistant
Treasurer, dated the Closing Date, addressed to the Purchaser, in substantially
the form set out in Annex A-II hereto. In rendering their opinion, the
Company Counsel may rely as to factual matters upon certificates or other
documents furnished by officers, directors and trustees of the Company and the
Trust and by government officials (provided, however, that copies of any such
certificates or documents are delivered to the Purchaser) and by and upon such
other documents as such counsel may, in their reasonable opinion, deem
appropriate as a basis for the Company Counsel’s opinion. The Company Counsel 



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may specify
the jurisdictions in which they are admitted to practice and that they are not
admitted to practice in any other jurisdiction and are not experts in the law
of any other jurisdiction. If the Company Counsel is not admitted to practice
in the State of New York, the opinion of the Company Counsel may assume, for
purposes of the opinion, that the laws of the State of New York are
substantively identical, in all respects material to the opinion, to the
internal laws of the state in which such counsel is admitted to practice. Such Company
Counsel Opinion shall not state that they are to be governed or qualified by,
or that they are otherwise subject to, any treatise, written policy or other
document relating to legal opinions, including, without limitation, the Legal
Opinion Accord of the ABA Section of Business Law (1991).


(d)           The Purchaser shall
have been furnished the opinion of Brown Raysman Millstein Felder & Steiner
LLP, special tax counsel for the Purchaser, dated the Closing Date, addressed
to the Purchaser and its successors and assigns and JPMorgan Chase Bank,
National Association, in substantially the form set out in Annex B
hereto.


(e)           The Purchaser shall
have received the opinion of Richards, Layton & Finger, P.A., special
Delaware counsel for the Delaware Trustee, dated the Closing Date, addressed to
the Purchaser and its successors and assigns, JPMorgan Chase Bank, National
Association, the Delaware Trustee and the Company, in substantially the form
set out in Annex C hereto.


(f)            The Purchaser shall
have received the opinion of Gardere Wynne Sewell LLP, special counsel for the
Property Trustee and the Indenture Trustee, dated the Closing Date, addressed
to the Purchaser and its successors and assigns, in substantially the form set
out in Annex D hereto.


(g)           The Purchaser shall
have received the opinion of Richards, Layton & Finger, P.A., special
Delaware counsel for the Delaware Trustee, dated the Closing Date, addressed to
the Purchaser and its successors and assigns and JPMorgan Chase Bank, National
Association, in substantially the form set out in Annex E hereto.


(h)           The Company shall
have furnished to the Purchaser a certificate of the Company, signed by the
Chief Executive Officer, President or an Executive Vice President, and Chief
Financial Officer, Treasurer or Assistant Treasurer of the Company, and the
Trust shall have furnished to the Purchaser a certificate of the Trust, signed
by an Administrative Trustee of the Trust, in each case dated the Closing Date,
and, in the case of the Company, as to (i) and (ii) below and, in the case of
the Trust, as to (i) below.


(i)            the representations and warranties
in this Purchase Agreement are true and correct on and as of the Closing Date
with the same effect as if made on the Closing Date, and the Company and the
Trust have complied with all the agreements and satisfied all the conditions on
either of their part to be performed or satisfied at or prior to the Closing
Date; and


(ii)           since March 31, 2006 (the date of the
latest Financial Statements), there has been no material adverse change in the
condition (financial or other), earnings, 



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business or assets of the Company and its
subsidiaries, whether or not arising from transactions occurring in the
ordinary course of business (a “Material
Adverse Change”).


(i)            Subsequent to the
execution of this Purchase Agreement, there shall not have been any change, or
any development involving a prospective change, in or affecting the condition
(financial or other), earnings, business or assets of the Company and its
subsidiaries, whether or not occurring in the ordinary course of business, the
effect of which is, in the Purchaser’s judgment, so material and adverse as to
make it impractical or inadvisable to proceed with the purchase of the
Preferred Securities.


(j)            Prior to the
Closing Date, the Company and the Trust shall have furnished to the Purchaser
and its counsel such further information, certificates and documents as the
Purchaser or its counsel may reasonably request.


If any of the conditions specified in this Section
3 shall not have been fulfilled when and as provided in this Purchase
Agreement, or if any of the opinions, certificates and documents mentioned
above or elsewhere in this Purchase Agreement shall not be reasonably
satisfactory in form and substance to the Purchaser or its counsel, this
Purchase Agreement and all the Purchaser’s obligations hereunder may be
canceled at, or at any time prior to, the Closing Date by the Purchaser. Notice
of such cancellation shall be given to the Company and the Trust in writing or
by telephone or facsimile confirmed in writing.


Each certificate signed by any trustee of the Trust or
any officer of the Company and delivered to the Purchaser or the Purchaser’s
counsel in connection with the Operative Documents and the transactions
contemplated hereby and thereby shall be deemed to be a representation and
warranty of the Trust 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 the Trust jointly and
severally represent and warrant to, and agree with the Purchaser, as follows:


(a)           Neither the Company
nor the Trust, nor any of their “Affiliates”
(as defined in Rule 501(b) of Regulation D (“Regulation D”)
under the Securities Act (as defined below)), nor any person acting on its or
their behalf, has, directly or indirectly, made offers or sales of any
security, or solicited offers to buy any security, under circumstances that
would require the registration of any of the Securities under the Securities
Act of 1933, as amended (the “Securities Act”).


(b)           Neither the Company
nor the Trust, nor any of their Affiliates, nor any person acting on its or
their behalf, has engaged in any form of general solicitation or general advertising
(within the meaning of Regulation D) in connection with any offer or sale of
any of the Securities.


(c)           The Securities (i)
are not and have not been listed on a national securities exchange registered
under section 6 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or quoted on a U.S. automated inter-dealer
quotation system and (ii) are not of an open-end investment company, unit
investment trust or face-amount certificate company that 



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are, or are
required to be, registered under section 8 of the Investment Company Act of
1940, as amended (the “Investment Company Act”),
and the Securities otherwise satisfy the eligibility requirements of Rule
144A(d)(3) promulgated pursuant to the Securities Act (“Rule
144A(d)(3)”).


(d)           Neither the Company
nor the Trust, nor any of their Affiliates, nor any person acting on its or
their behalf, has engaged, or will engage, in any “directed selling efforts”
within the meaning of Regulation S under the Securities Act with respect to the
Securities.


(e)           Neither the Company
nor the Trust is, and, immediately following consummation of the transactions
contemplated hereby and the application of the net proceeds therefrom, will not
be, an “investment company” or an entity “controlled” by an “investment
company,” in each case within the meaning of section 3(a) of the Investment
Company Act.


(f)            Neither the Company
nor the Trust has paid or agreed to pay to any person any compensation for
soliciting another to purchase any of the Securities, except for the preferred
securities commission and/or the sales commission the Company has agreed to pay
to Taberna Securities, LLC (or to the Company’s introducing agent on behalf of
Taberna Securities, LLC) pursuant to the letter agreement between the Company
and Taberna Securities, LLC.


(g)           The Trust has been
duly created and is validly existing in good standing as a statutory trust
under the Delaware Statutory Trust Act, 12 Del. C. §3801, et  seq.
(the “Statutory Trust Act”)
with all requisite power and authority to own property and to conduct the
business it transacts and proposes to transact and to enter into and perform
its obligations under the Operative Documents to which it is a party. The Trust
is duly qualified to transact business as a foreign entity and is in good
standing in each jurisdiction in which such qualification is necessary, except
where the failure to so qualify or be in good standing would not have a
material adverse effect on the condition (financial or otherwise), earnings,
business, liabilities or assets (taken as a whole) or business prospects of the
Company and its subsidiaries taken as a whole, whether or not occurring in the
ordinary course of business (a “Material Adverse Effect”).
The Trust is not a party to or otherwise bound by any agreement other than the
Operative Documents. The Trust is and will be, under current law, classified
for federal income tax purposes as a grantor trust and not as an association or
publicly traded partnership taxable as a corporation.


(h)           The Trust Agreement
has been duly authorized by the Company and, on the Closing Date specified in Section
2(b) hereof, will have been duly executed and delivered by the Company and
the Administrative Trustees of the Trust, and, assuming due authorization,
execution and delivery by the Property Trustee and the Delaware Trustee, will
be a legal, valid and binding obligation of the Company and the Administrative
Trustees, enforceable against them in accordance with its terms, subject to
applicable bankruptcy, insolvency and similar laws affecting creditors’ rights
generally and to general principles of equity. 
Each of the Administrative Trustees of the Trust is an employee of the
Company and has been duly authorized by the Company to execute and deliver the
Trust Agreement.


(i)            The Indenture has
been duly authorized by the Company and, on the Closing Date, will have been
duly executed and delivered by the Company, and, assuming due 



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authorization,
execution and delivery by the Indenture Trustee, will be a legal, valid and
binding obligation of the Company enforceable against it in accordance with its
terms, subject to applicable bankruptcy, insolvency and similar laws affecting
creditors’ rights generally and to general principles of equity.


(j)            The Preferred
Securities and the Common Securities have been duly authorized by the Trust
and, when issued and delivered against payment therefor on the Closing Date in
accordance with this Purchase Agreement, in the case of the Preferred
Securities, and in accordance with the Common Securities Subscription
Agreement, in the case of the Common Securities, will be validly issued, fully
paid and non-assessable and will represent undivided beneficial interests in
the assets of the Trust entitled to the benefits of the Trust Agreement, enforceable
against the Trust in accordance with their terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors’ rights generally
and to general principles of equity. The issuance of the Securities is not
subject to any preemptive or other similar rights. On the Closing Date, all of
the issued and outstanding Common Securities will be directly owned by the
Company free and clear of any pledge, security interest, claim, lien or other
encumbrance of any kind (each, a “Lien”).


(k)           The Junior
Subordinated Notes have been duly authorized by the Company and, on the Closing
Date, will have been duly executed and delivered to the Indenture Trustee for
authentication in accordance with the Indenture and, when authenticated in the
manner provided for in the Indenture and delivered to the Trust against payment
therefor in accordance with the certain Junior Subordinated Note Purchase
Agreement, of even date herewith between the Company and the Trust (the “Junior Subordinated Note Purchase Agreement”), will
constitute legal, valid and binding obligations of the Company entitled to the
benefits of the Indenture, enforceable against the Company in accordance with
their terms, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors’ rights generally and to general principles of equity.


(l)            This Purchase
Agreement has been duly authorized, executed and delivered by the Company and
the Trust.


(m)          Neither the issue and
sale of the Common Securities, the Preferred Securities or the Junior
Subordinated Notes, nor the purchase of the Junior Subordinated Notes by the
Trust, nor the execution and delivery of and compliance with the Operative
Documents by the Company or the Trust, nor the consummation of the transactions
contemplated herein or therein, (i) will conflict with or constitute a
violation or breach of the Trust Agreement or the charter or bylaws or similar
organizational documents of the Company or any subsidiary of the Company or to
the Company’s knowledge any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, governmental authority,
agency or instrumentality or court, domestic or foreign, having jurisdiction
over the Trust or the Company or any of its subsidiaries or their respective
properties or assets (collectively, the “Governmental Entities”), (ii) will conflict with or
constitute a violation or breach of, or a default or Repayment Event (as
defined below) under, or result in the creation or imposition of any Lien upon
any property or assets of the Trust, the 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) the Trust, the
Company or any of its subsidiaries is a party or by which it or any of them may
be 



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bound, or (B)
to which any of the property or assets of any of them is subject, or any
judgment, order or decree of any court, Governmental Entity or arbitrator,
except, in the case of this clause (ii), for such conflicts, breaches,
violations, defaults, Repayment Events (as defined below) or Liens which (X)
would not, singly or in the aggregate, adversely affect the consummation of the
transactions contemplated by the Operative Documents and (Y) would not, singly
or in the aggregate, have a Material Adverse Effect or (iii) require the
consent, approval, authorization or order of any court or Governmental Entity.
As used herein, a “Repayment Event”
means any event or condition which gives the holder of any note, debenture or
other evidence of indebtedness (or any person acting on such holder’s behalf)
the right to require the repurchase, redemption or repayment of all or a
portion of such indebtedness by the Trust or the Company or any of its
subsidiaries prior to its scheduled maturity.


(n)           The Company has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of Delaware, with all requisite corporate power and authority to
own, lease and operate its properties and conduct the business it transacts and
proposes to transact, and is duly qualified to transact business and is in good
standing as a foreign corporation in each jurisdiction where the nature of its
activities requires such qualification, except where the failure of the Company
to be so qualified would not, singly or in the aggregate, have a Material
Adverse Effect.


(o)           The Company has no
subsidiaries that are material to its business, financial condition or earnings
other than those subsidiaries listed in Schedule 1 attached hereto
(collectively, the “Significant Subsidiaries”).
Each Significant Subsidiary is a corporation, partnership or limited liability
company duly and properly incorporated or organized or formed, as the case may
be validly existing and in good standing under the laws of the jurisdiction in
which it is chartered or organized or formed, with all requisite corporate
power and authority to own, lease and operate its properties and conduct the
business it transacts and proposes to transact. Each Significant Subsidiary is
duly qualified to transact business as a foreign corporation, partnership or
limited liability company, as applicable, and is in good standing in each
jurisdiction where the nature of its activities requires such qualification,
except where the failure to be so qualified would not, singly or in the
aggregate, have a Material Adverse Effect. No Significant Subsidiary of the
Company is currently prohibited, directly or indirectly, under any agreement or
other instrument, other than as required by applicable law, to which it is a
party or is subject, from paying any dividends to the Company, from making any
other distribution on such Significant Subsidiary’s capital stock or other
equity interests, from the Company or from transferring any of such Significant
Subsidiary’s properties or assets to the Company or any other subsidiary of the
Company.


(p)           Each of the Trust,
the Company and each of the Company’s subsidiaries hold all necessary
approvals, authorizations, orders, licenses, consents, registrations,
qualifications, certificates and permits (collectively, the “Governmental Licenses”) of and from Governmental Entities
necessary to conduct their respective businesses as now being conducted, and
neither the Trust, the Company nor any of the Company’s subsidiaries has
received any notice of proceedings relating to the revocation or modification
of any such Government License, except where the failure to be so licensed or
approved or the receipt of an unfavorable decision, ruling or finding, would
not, singly or in the aggregate, have a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except where the 



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invalidity or
the failure of such Governmental Licenses to be in full force and effect, would
not, singly or in the aggregate, have a Material Adverse Effect; and the
Company and its subsidiaries are in compliance with all applicable laws, rules,
regulations, judgments, orders, decrees and consents, except where the failure
to be in compliance would not, singly or in the aggregate, have a Material
Adverse Effect.


(q)           All of the issued
and outstanding shares of capital stock of the Company and each of its
subsidiaries are validly issued, fully paid and non-assessable; all of the
issued and outstanding capital stock of each subsidiary of the Company is owned
by the Company, directly or through subsidiaries, free and clear of any Lien,
claim or equitable right; and none of the issued and outstanding capital stock
of the Company or any subsidiary was issued in violation of any preemptive or
similar rights arising by operation of law, under the charter or by-laws of
such entity or under any agreement to which the Company or any of its
subsidiaries is a party.


(r)            Neither the Company
nor any of its subsidiaries is (i) in violation of its respective charter or
by-laws or similar organizational documents or (ii) in default in the
performance or observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note, lease or
other agreement or instrument to which the Company or any such subsidiary is a
party or by which it or any of them may be bound or to which any of the
property or assets of any of them is subject, except, in the case of clause (ii),
where such violation or default would not, singly or in the aggregate, have a
Material Adverse Effect.


(s)           There is no action,
suit or proceeding before or by any Governmental Entity, arbitrator or court,
domestic or foreign, now pending or, to the knowledge of the Company or the
Trust after due inquiry, threatened against or affecting 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, singly or in the aggregate,
adversely affect the consummation of the transactions contemplated by the
Operative Documents or have a Material Adverse Effect; and the aggregate of all
pending legal or governmental proceedings to which the Trust or the Company or
any of its subsidiaries is a party or of which any of their respective
properties or assets is subject, including ordinary routine litigation
incidental to the business, are not expected to result in a Material Adverse
Effect.


(t)            The accountants of
the Company who certified the Financial Statements (as defined below) are
independent public accountants of the Company and its subsidiaries within the
meaning 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 schedules
of the Company and its consolidated subsidiaries for the fiscal year ended
December 31, 2005 (the “Financial
Statements”) and the interim unaudited consolidated financial
statements of the Company and its consolidated subsidiaries for the quarter
ended March 31, 2006 (the “Interim Financial
Statements”) provided to the Purchaser are the most recent available
audited and unaudited consolidated financial statements of the Company and its
consolidated subsidiaries, respectively, and fairly present in all material
respects, in accordance with U.S. generally accepted accounting principles (“GAAP”), the financial position of the 



 8
 






 



Company and
its consolidated subsidiaries, and the results of operations and changes in
financial condition as of the dates and for the periods therein specified,
subject, in the case of Interim Financial Statements, to year-end adjustments
(which are expected to consist solely of normal recurring adjustments). Such
consolidated financial statements and schedules have been prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as otherwise noted therein).


(v)           None of the Trust,
the Company nor any of its subsidiaries has any material liability, whether
known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due, including any liability for taxes (and there
is no past or present fact, situation, circumstance, condition or other basis
for any present or future action, suit, proceeding, hearing, charge, complaint,
claim or demand against the Company or its subsidiaries that could give rise to
any such liability), except for (i) liabilities set forth in the Financial
Statements or the Interim Financial Statements and (ii) normal fluctuations in
the amount of the liabilities referred to in clause (i) above occurring in the
ordinary course of business of the Trust, the Company and all of its
subsidiaries since the date of the most recent balance sheet included in such
Financial Statements.


(w)          Since the respective
dates of the Financial Statements and the Interim Financial Statements, there
has not been (A) any Material Adverse Change or (B) any dividend or
distribution of any kind declared, paid or made by the Company on any class of
its capital stock other than regular quarterly dividends on the Company’s
common stock.


(x)            The documents of the
Company filed with the Commission in accordance with the Exchange Act, from and
including the commencement of the fiscal year covered by the Company’s most
recent Annual Report on Form 10-K, at the time they were or hereafter are filed
by the Company with the Commission (collectively, the “1934 Act Reports”), complied and will comply in all material
respects with the requirements of the Exchange Act and the rules and
regulations of the Commission thereunder (the “1934 Act
Regulations”), and, at the date of this Purchase Agreement and on
the Closing Date, do not and will not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and other than such instruments,
agreements, contracts and other documents as are filed as exhibits to the
Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q or Current
Reports on Form 8-K, there are no instruments, agreements, contracts or
documents of a character described in Item 601 of Regulation S-K promulgated by
the Commission to which the Company or any of its subsidiaries is a party. The
Company is in compliance with all currently applicable requirements of the
Exchange Act that were added by the Sarbanes-Oxley Act of 2002.


(y)           No labor dispute
with the employees of the Trust, the Company or any of its subsidiaries exists
or, to the knowledge of the executive officers of the Trust or the Company, is
imminent, except those which would not, singly or in the aggregate, have a
Material Adverse Effect.



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(z)            No filing with, or
authorization, approval, consent, license, order, registration, qualification
or decree of, any Governmental Entity, other than those that have been made or
obtained, is necessary or required for the performance by the Trust or the
Company of their respective obligations under the Operative Documents, as
applicable, or the consummation by the Trust and the Company of the
transactions contemplated by the Operative Documents.


(aa)         Each of the Trust,
the Company and each subsidiary of the Company has good and marketable title to
all of its respective real and personal properties, in each case free and clear
of all Liens and defects, except for those that would not, singly or in the
aggregate, have a Material Adverse Effect; and all of the leases and subleases
under which the Trust, the Company or any subsidiary of the Company holds
properties are in full force and effect, except where the failure of such
leases and subleases to be in full force and effect would not, singly or in the
aggregate, have a Material Adverse Effect, and none of the Trust, the Company
or any subsidiary of the Company has any notice of any claim of any sort that
has been asserted by anyone adverse to the rights of the Trust, the Company or
any subsidiary of the Company under any such leases or subleases, or affecting
or questioning the rights of such entity to the continued possession of the
leased or subleased premises under any such lease or sublease, except for such
claims that would not, singly or in the aggregate, have a Material Adverse
Effect.


(bb)         The Company and each
of the Significant Subsidiaries have timely and duly filed all Tax Returns (as defined
below) required to be filed by them, and all such Tax Returns are true, correct
and complete in all material respects. The Company and each of the Significant
Subsidiaries have timely and duly paid in full all material Taxes (as defined
below) required to be paid by them (whether or not such amounts are shown as
due on any Tax Return). There are no federal, state, or other Tax audits or
deficiency assessments proposed or pending with respect to the Company or any
of the Significant Subsidiaries, and no such audits or assessments are
threatened. As used herein, the terms “Tax” or “Taxes” mean (i)
all federal, state, local, and foreign taxes, and other assessments of a
similar nature (whether imposed directly or through withholding), including any
interest, additions to tax, or penalties applicable thereto, imposed by any
Governmental Entity, and (ii) all liabilities in respect of such amounts
arising as a result of being a member of any affiliated, consolidated,
combined, unitary or similar group, as a successor to another person or by
contract. As used herein, the term “Tax Returns”
means all federal, state, local, and foreign Tax returns, declarations,
statements, reports, schedules, forms, and information returns and any
amendments thereto filed or required to be filed with any Governmental Entity.


(cc)         The Trust is not
subject to United States federal income tax with respect to income received or
accrued on the Junior Subordinated Notes, interest payable by the Company on
the Junior Subordinated Notes is deductible by the Company, in whole or in
part, for United States federal income tax purposes, and the Trust is not, or
will not be within ninety (90) days of the date hereof, subject to more than a de minimis amount of other taxes, duties or other governmental
charges. There are no rulemaking or similar proceedings before the United
States Internal Revenue Service or comparable federal, state, local or foreign
government bodies which involve or affect the Company or any subsidiary, which,
if the subject of an action unfavorable to the Company or any subsidiary, could
result in a material adverse effect on the Company and the Significant
Subsidiaries, taken as a whole.



 10














 


(dd)         The books, records
and accounts of the Company and its subsidiaries accurately and fairly reflect,
in reasonable detail, the transactions in, and dispositions of, the assets of,
and the results of operations of, the Company and its subsidiaries. The Company
and each of its subsidiaries maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management’s general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in accordance with GAAP and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with management’s general or
specific authorization and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.


(ee)         The Company and the
Significant Subsidiaries are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts in all material respects as
are customary in the businesses in which they are engaged or propose to engage
after giving effect to the transactions contemplated hereby including but not
limited to, real or personal property owned or leased against theft, damage,
destruction, act of vandalism and all other risks customarily insured against.
All policies of insurance and fidelity or surety bonds insuring the Company or
any of the Significant Subsidiaries or the Company’s or Significant
Subsidiaries’ respective businesses, assets, employees, officers and directors
are in full force and effect. The Company and each of the subsidiaries are in
compliance with the terms of such policies and instruments in all material
respects. Neither the Company nor any Significant Subsidiary has reason to
believe that it will not be able to renew its existing insurance coverage as
and when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business at a cost that would not
have a Material Adverse Effect. Within the past twelve months, neither the
Company nor any Significant Subsidiary has been denied any insurance coverage
which it has sought or for which it has applied.


(ff)           The Company and its
subsidiaries or any person acting on behalf of the Company and its subsidiaries
including, without limitation, any director, officer, agent or employee of the
Company or its subsidiaries has not, directly or indirectly, while acting on
behalf of the Company and its subsidiaries (i) used any corporate funds for
unlawful contributions, gifts, entertainment or other unlawful expenses
relating to political activity; (ii) made any unlawful payment to foreign or
domestic government officials or employees or to foreign or domestic political
parties or campaigns from corporate funds; (iii) violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any other
unlawful payment.


(gg)         The information provided
by the Company and the Trust pursuant to this Purchase Agreement and the
transactions contemplated hereby does not, as of the date hereof, and will not
as of the Closing Date, contain any untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading.


(hh)         Except as would not,
individually or in the aggregate, result in a Material Adverse Effect, (i) the
Company and its subsidiaries have been and are in compliance with applicable
Environmental Laws (as defined below), (ii) none of the Company, any of its 



 11
 






 



subsidiaries
or, to the best of the Company’s knowledge, any other owners of any of the real
properties currently or previously owned, leased or operated by the Company or
any of its subsidiaries (collectively, the “Properties”) at any time or any other party, has at any time
released (as such term is defined in CERCLA (as defined below)) or otherwise
disposed of Hazardous Materials (as defined below) on, to, in, under or from
the Properties, (iii) neither the Company nor any of its subsidiaries has used
nor intends to use the Properties or any subsequently acquired properties,
other than in compliance with applicable Environmental Laws, (iv) neither the
Company nor any of its subsidiaries has received any notice of, or has any
knowledge of any occurrence or circumstance which, with notice or passage of
time or both, would give rise to a claim under or pursuant to any Environmental
Law with respect to the Properties, or their respective assets or arising out
of the conduct of the Company or its subsidiaries (v) none of the Properties
are included or, to the best of the Company’s knowledge, proposed for inclusion
on the National Priorities List issued pursuant to CERCLA by the United States
Environmental Protection Agency or, to the best of the Company’s knowledge,
proposed for inclusion on any similar list or inventory issued pursuant to any
other Environmental Law or issued by any other Governmental Entity, (vi) none
of the Company, any of its subsidiaries or agents or, to the best of the
Company’s knowledge, any other person or entity for whose conduct any of them
is or may be held responsible, has generated, manufactured, refined,
transported, treated, stored, handled, disposed, transferred, produced or
processed any Hazardous Material at any of the Properties, except in compliance
with all applicable Environmental Laws, and has not transported or arranged for
the transport of any Hazardous Material from the Properties to another
property, except in compliance with all applicable Environmental Laws, (vii) no
lien has been imposed on the Properties by any Governmental Entity in
connection with the presence on or off such Property of any Hazardous Material
or with respect to an Environmental Law, and (viii) none of the Company, any of
its subsidiaries or, to the best of the Company’s knowledge, any other person
or entity for whose conduct any of them is or may be held responsible, has
entered into or been subject to any consent decree, compliance order, or
administrative order in connection with an Environmental Law with respect to
the Properties or any facilities or improvements or any operations or
activities thereon.


(i)            As used herein, “Hazardous Materials” shall include,
without limitation, any flammable materials, explosives, radioactive materials,
hazardous materials, hazardous substances, hazardous wastes, toxic substances
or related materials, asbestos, petroleum, petroleum products and any hazardous
material as defined by any federal, state or local environmental law, statute,
ordinance, rule or regulation, including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended, 42
U.S.C. §§ 9601-9675 (“CERCLA”),
the Hazardous Materials Transportation Act, as amended, 49 U.S.C. §§ 5101 5127,
the Resource Conservation and Recovery Act, as amended, 42 U.S.C. §§
6901-6992k, the Emergency Planning and Community Right-to-Know Act of 1986, 42
U.S.C. §§ 11001-11050, the Toxic Substances Control Act, 15 U.S.C. §§
2601-2692, the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. §§
136-136y, the Clean Air Act, 42 U.S.C. §§ 7401-7642, the Clean Water Act
(Federal Water Pollution Control Act), 33 U.S.C. §§ 1251-1387, the Safe
Drinking Water Act, 42 U.S.C. §§ 300f-300j-26, and the Occupational Safety and
Health Act, 29 U.S.C. §§ 651-678, and any analogous state laws, as any of the
above may be amended from time to time and in the regulations promulgated
pursuant to each of the foregoing (including environmental statutes and laws 



 12
 






 



not specifically defined herein)
(individually, an “Environmental Law”
and collectively, the “Environmental Laws”)
or by any Governmental Entity.


(ii)           In the ordinary course of its
business, the Company periodically reviews the effect of Environmental Laws on
the business, operations and properties of the Company and its subsidiaries,
and periodically identifies and evaluates associated costs and liabilities
(including, without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with Environmental Laws or
any permit, license or approval, any related constraints on operating
activities and any potential liabilities to third parties).  On the basis of such reviews and the amount
of its established reserves, the Company has reasonably concluded that such
associated costs and liabilities would not, individually or in the aggregate,
result in a Material Adverse Change.


5.             Representations and
Warranties of the Purchaser. The Purchaser represents and
`warrants 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 be registered
under the Securities Act and may not be offered or sold within the United
States or to “U.S. persons” (as defined in Regulation S under the Securities
Act) except in accordance with Rule 903 of Regulation S under the Securities
Act or pursuant to an exemption from the registration requirements of the
Securities Act.


(b)           The Purchaser is an “accredited
investor,” as such term is defined in Rule 501(a) of Regulation D under the
Securities Act.


(c)           Neither the
Purchaser, nor any of the Purchaser’s affiliates, nor any person acting on the
Purchaser’s or the Purchaser’s Affiliate’s behalf has engaged, or will engage,
in any form of “general solicitation or general advertising” (within the
meaning of Regulation D under the Securities Act) in connection with any offer
or sale of the Preferred Securities.


(d)           The Purchaser
understands and acknowledges that (i) no public market exists for any of the
Preferred Securities and that it is unlikely that a public market will ever
exist for the Preferred Securities, (ii) the Purchaser is purchasing the
Preferred Securities for its own account, for investment and not with a view
to, or for offer or sale in connection with, any distribution thereof in
violation of the Securities Act or other applicable securities laws, subject to
any requirement of law that the disposition of its property be at all times
within its control and subject to its ability to resell such Preferred
Securities pursuant to an effective registration statement under the Securities
Act or pursuant to an exemption therefrom or in a transaction not subject
thereto, and the Purchaser agrees to the legends and transfer restrictions
applicable to the Preferred Securities contained in the Indenture, 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 may
be required to bear the economic risk of an investment in the Preferred
Securities.


(e)           The Purchaser is a
company with limited liability duly incorporated, validly existing and in good
standing under the laws of the jurisdiction in which it is organized 



 13
 






 



with all
requisite (i) power and authority to execute, deliver and perform the Operative
Documents to which it is a party, to make the representations and warranties
specified herein and therein and to consummate the transactions contemplated
herein and (ii) right and power to purchase the Preferred Securities.


(f)            This Purchase
Agreement has been duly authorized, executed and delivered by the Purchaser and
no filing with, or authorization, approval, consent, license, order
registration, qualification or decree of, any governmental body, agency or
court having jurisdiction over the Purchaser, other than those that have been
made or obtained, is necessary or required for the performance by the Purchaser
of its obligations under this Purchase Agreement-or to consummate the
transactions contemplated herein. This Purchase Agreement does not conflict
with any other agreement to which the Purchaser is a party.


(g)           The Purchaser is a “Qualified
Purchaser” as such term is defined in Section 2(a)(51) of the Investment
Company Act.


6.             Covenants and
Agreements of the Company and the Trust.  The Company and the Trust jointly and
severally agree with the Purchaser as follows:


(a)           During the period
from the date of this Agreement to the Closing Date, the Company and the Trust
shall use their best efforts and take all action necessary or appropriate to
cause their representations and warranties contained in Section 4 hereof
to be true as of the Closing Date, after giving effect to the transactions
contemplated by this Purchase Agreement, as if made on and as of the Closing
Date.


(b)           Neither the Company
nor the Trust will, nor will either of them permit any of its Affiliates to,
nor will either of them permit any person acting on its or their behalf (other
than the Purchaser) to, resell any Preferred Securities that have been acquired
by any of them.


(c)           Neither the Company
nor the Trust will, nor will either of them permit any of their Affiliates or
any person acting on their behalf to, engage in any “directed selling efforts”
within the meaning of Regulation S under the Securities Act with respect to the
Preferred Securities.


(d)           Neither the Company
nor the Trust will, nor will either of them permit any of their Affiliates or
any person acting on their behalf to, directly or indirectly, make offers or
sales of any security, or solicit offers to buy any security, under
circumstances that would require the registration of any of the Preferred
Securities under the Securities Act.


(e)           Neither the Company
nor the Trust will, nor will either of them permit any of its Affiliates or any
person acting on their behalf to, engage in any form of “general solicitation
or general advertising” (within the meaning of Regulation D) in connection with
any offer or sale of the any of the Preferred Securities.


(f)            So long as any of
the Preferred Securities are outstanding, (i) the Preferred Securities shall
not be listed on a national securities exchange registered under section 6 of
the Exchange Act or quoted in a U.S. automated inter-dealer quotation system
and (ii) neither the Company nor the Trust shall be an open-end investment
company, unit investment trust or 



 14
 






 



face-amount
certificate company that is, or is required to be, registered under section 8
of the Investment Company Act, and, the Preferred Securities shall otherwise
satisfy the eligibility requirements of Rule I44A(d)(3).


(g)           Each of the Company
and the Trust shall furnish to (i) the holders, and subsequent holders of the
Preferred Securities, (ii) Taberna Capital Management, LLC (at 450 Park Avenue,
23rd Floor, New York, New York 10022, or such other address as designated by
Taberna Capital Management, LLC) and (iii) any beneficial owner of the
Preferred Securities reasonably identified to the Company and the Trust (which
identification may be made by either such beneficial owner or by Taberna
Capital Management, LLC), a duly completed and executed certificate in the form
attached hereto as Annex F, including the financial statements
referenced in such Annex, which certificate and financial statements shall be
so furnished by the Company and the Trust not later than forty five (45) days
after the end of each of the first three fiscal quarters of each fiscal year of
the Company and not later than ninety (90) days after the end of each fiscal
year of the Company, provided however that such financial statements may be
made available via Electronic Data Gathering Analysis and Retrieval (“EDGAR”).


(h)           Each of the Company
and the Trust will, during any period in which it is not subject to and in
compliance with section 13 or 15(d) of the Exchange Act, or it is not exempt
from such reporting requirements pursuant to and in compliance with Rule
12g3-2(b) under the Exchange Act, shall provide to each holder of the Preferred
Securities and to each prospective purchaser (as designated by such holder) of
the Preferred Securities, upon the request of such holder or prospective
purchaser, any information required to be provided by Rule 144A(d)(4) under the
Securities Act. If the Company and the Trust are required to register under the
Exchange Act, such reports filed in compliance with Rule 12g3-2(b) shall be
sufficient information as required above. This covenant is intended to be for
the benefit of the Purchaser, the holders of the Preferred Securities, and the
prospective purchasers designated by the Purchaser and such holders, from time
to time, of the Preferred Securities.


(i)            Neither the Company
nor the Trust will, until one hundred eighty (180) days following the Closing
Date, without the Purchaser’s prior written consent, offer, sell, contract to
sell, grant any option to purchase or otherwise dispose of, directly or
indirectly, (i) any Preferred Securities or other securities substantially
similar to the Preferred Securities other than as contemplated by this Purchase
Agreement or (ii) any other securities convertible into, or exercisable or
exchangeable for, any Preferred Securities or other securities substantially
similar to the Preferred Securities.


(j)            Neither the Company
nor the Trust will identify any of the Indemnified Parties (as defined below)
in a press release or any other public statement without the consent of such
Indemnified Party. For purposes of clarification, none of the Company’s or
Trust’s financial statements, press releases or other statements may disclose
the identity of the Indemnified Parties, but may identify the Trustee.


(k)           Purchaser and each
successor to Purchaser’s interest in the Preferred Securities is granted the
right under the Indenture and Amended and Restated Trust Agreement to request
the substitution of new notes for all or a portion of the Junior Subordinated
Notes held by the Trust. The Trust is required under the terms of the Indenture
and Amended and Restated 



 15
 






 



Trust
Agreement to accept such newly issued notes (the “Replacement Notes”) and surrender a like amount of Junior
Subordinated Notes to Depositor. The Replacement Notes shall bear terms
identical to the Junior Subordinated Notes with the sole exception of interest
payment dates (and corresponding redemption date and maturity date), which will
be specified by Purchaser or applicable successor. In no event will the
interest payment dates (and corresponding redemption date and maturity date) on
the Replacement Notes vary by more than sixty (60) calendar days from the
original interest payment dates (and corresponding redemption date and maturity
date) under the Junior Subordinated Notes.


Each of the Company and the Trust acknowledges and
agrees that, to the extent of the principal amount of the Replacement Notes
issued to the Trust under the Indenture, Purchaser (and each successor to
Purchaser’s interest in the Preferred Securities) will require the Trust to
issue a new series of Preferred Securities having a principal amount related to
the principal amount of the Replacement Notes (the “Replacement Securities”) to designated holders of Preferred
Securities, provided that any such Replacement Securities, and any
distributions from the Trust to the holders of Replacement Securities, must
relate solely to the Trust’s interest in the Replacement Notes and in no event
will the Preferred Securities other than the Replacement Securities share in
the returns from any Replacement Notes. The Replacement Securities shall have
payment dates (and corresponding redemption date and maturity date) that relate
to the Replacement Notes.


Each of the Company and the Trust agrees to cooperate
with all reasonable requests of Purchaser in connection with any of the
foregoing, provided that no action requested of the Company or the Trust in
connection with such cooperation shall materially increase the obligations or
materially decrease the rights of the Company pursuant to such documents.


7.             Payment of Expenses.  The Company, as depositor of the Trust,
agrees to pay all costs and expenses incident to the performance of the
obligations of the Company and the Trust under this Purchase Agreement, whether
or not the transactions contemplated herein are consummated or this Purchase
Agreement is terminated, including all costs and expenses incident to (i) the
authorization, issuance, sale and delivery of the Preferred Securities and any
taxes payable in connection therewith; (ii) the fees and expenses of the
counsel, the accountants and any other experts or advisors retained by the
Company or the Trust; (iii) the fees and all reasonable expenses of the
Property Trustee, the Delaware Trustee, the Indenture Trustee and any other
trustee or paying agent appointed under the Operative Documents, including the
fees and disbursements of counsel for such trustees, which fees shall not
exceed a $2,000 acceptance fee, $3,500 for the fees and expenses of Richards,
Layton & Finger, P.A., special Delaware counsel retained by the Delaware
Trustee in connection with the Closing, and $4,000 in administrative fees
annually; and (iv) $50,000 for the fees and expenses of Brown Raysman Millstein
Felder & Steiner LLP, special counsel retained by Taberna Capital
Management, LLC.


If the sale of the Preferred Securities provided for
in this Purchase Agreement is not consummated because any condition set forth
in Section 3 hereof to be satisfied by either the Company or the Trust
is not satisfied, because this Purchase Agreement is terminated pursuant to Section
9 or because of any failure, refusal or inability on the part of the
Company or the Trust to perform all obligations and satisfy all conditions on
its part to be performed or satisfied hereunder other than by reason of a
default by the Purchaser, the Company will reimburse the



 16














 


Purchaser upon demand for all reasonable out-of-pocket
expenses (including the fees and expenses of each of the Purchaser’s counsel
specified in subparagraphs (v) and (vi) of the immediately preceding paragraph)
that shall have been incurred by the Purchaser in connection with the proposed
purchase and sale of the Preferred Securities. The Company shall not in any
event be liable to the Purchaser for the loss of anticipated profits from the
transactions contemplated by this Purchase Agreement.


8.             Indemnification.  (a)  The
Sellers agree, jointly and severally, to indemnify and hold harmless the
Purchaser, the Purchaser’s affiliates, Taberna Capital Management, LLC, Taberna
Securities, LLC, and their respective affiliates, and Bear, Stearns Securities
Corp. (collectively, the “Indemnified Parties”)
each person, if any, who controls any of the Indemnified Parties within the
meaning of the Securities Act or the Exchange Act, and the Indemnified Parties’
respective directors, officers, employees and agents and each person, if any,
who controls the Indemnified Parties within the meaning of the Securities Act,
or the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”) against any losses, claims, damages or
liabilities, joint or several, to which the Indemnified Parties may become
subject, under the Securities Act, the Exchange Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon (i) any untrue statement or alleged untrue statement
of a material fact contained in any information or documents furnished or made
available to the Purchaser by or on behalf of the Company, (ii) the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, (iii) the breach or
alleged breach of any representation, warranty, or agreement of either Seller
contained herein, or (iv) the execution and delivery by the Company and/or the
Trust of this Purchase Agreement or any of the other Operative Documents and/or
the consummation by the Company and/or the Trust of the transactions
contemplated hereby and thereby, and agrees to reimburse each such Indemnified
Party, as incurred, for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action. This indemnity agreement will be in addition to any liability
which the Company or the Trust may otherwise have.


(b)           The Company agrees
to indemnify the Trust against all loss, liability, claim, damage and expense
whatsoever due from the Trust under paragraph (a) above.


(c)           Promptly after
receipt by an Indemnified Party under this Section 8 of notice of the
commencement of any action, such Indemnified Party will, if a claim in respect
thereof is to be made against the indemnifying party under this Section 8,
promptly notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve the
indemnifying party from liability under paragraph (a) above unless and to the
extent that such failure results in the forfeiture by the indemnifying party of
material rights and defenses and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any Indemnified Party other than the
indemnification obligation provided in paragraph (a) above. Purchaser shall be
entitled to appoint counsel to represent the Indemnified Party in any action
for which indemnification is sought. An indemnifying party may participate at
its own expense in the defense of any such action; provided, that counsel to the indemnifying party shall not
(except with the consent of the Indemnified Party) also be counsel to the
Indemnified Party. In no event shall the indemnifying parties be liable for
fees and expenses of 



 17
 






 



more than one
counsel (in addition to any local counsel) separate from their own counsel for
all Indemnified Parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, unless an Indemnified Party believes that
its interests are not aligned with the interests of another Indemnified Party
or that a conflict of interest might result. An indemnifying party will not,
without the prior written consent of the Indemnified Parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not the Indemnified Parties
are actual or potential parties to such claim, action, suit or proceeding)
unless such settlement, compromise or consent includes an unconditional release
of each Indemnified Party from all liability arising out of such claim, action,
suit or proceeding.


9.             Termination;
Representations and Indemnities to Survive.  This Purchase Agreement shall be subject to
termination in the absolute discretion of the Purchaser, by notice given to the
Company and the Trust prior to delivery of and payment for the Preferred
Securities, if prior to such time (i) a downgrading shall have occurred in the
rating accorded the Company’s debt securities or preferred stock by any “nationally
recognized statistical rating organization,” as that term is used by the
Commission in Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act, or such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of the Company’s debt
securities or preferred stock, (ii) the Trust shall be unable to sell and
deliver to the Purchaser at least $25,000,000 stated liquidation value of
Preferred Securities, (iii) a suspension or material limitation in trading in
securities generally shall have occurred on the New York Stock Exchange, (iv) a
suspension or material limitation in trading in any of the Company’s securities
shall have occurred on the exchange or quotation system upon which the Company’
securities are traded, if any, (v) a general moratorium on commercial business
activities shall have been declared either by federal or applicable state
authorities or (vi) there shall have occurred any outbreak or escalation of
hostilities, or declaration by the United States of a national emergency or war
or other calamity or crisis the effect of which on financial markets is such as
to make it, in the Purchaser’s judgment, impracticable or inadvisable to
proceed with the offering or delivery of the Preferred Securities. The
respective agreements, representations, warranties, indemnities and other
statements of the Company and the Trust or their respective officers or
trustees and of the Purchaser set forth in or made pursuant to this Purchase
Agreement will remain in full force and effect, regardless of any investigation
made by or on behalf of the Purchaser, the Company or the Trust or any of the
their respective officers, directors, trustees or controlling persons, and will
survive delivery of and payment for the Preferred Securities. The provisions of
Sections 7 and 8 shall survive the termination or cancellation of
this Purchase Agreement.


10.           Amendments.  This Purchase Agreement may not be modified,
amended, altered or supplemented, except upon the execution and delivery of a
written agreement by each of the parties hereto.


11.           Notices.


(a)           Any communication
shall be given by letter or facsimile, in the case of notices to the Trust, to
it at:



 18
 






 



Bresler & Reiner
Statutory Trust II


c/o Bresler & Reiner,
Inc.


11200 Rockville Pike,
Suite 502


Rockville, MD 20852


Facsimile: (301) 945-4301


Attention: Darryl M.
Edelstein


in the case of notices to the Company, to it at:


Bresler & Reiner,
Inc.


11200 Rockville Pike,
Suite 502


Rockville, MD 20852


Facsimile: (301) 945-4301


Attention: Sidney M.
Bresler


,or other address as the Trust or Company shall
designate for such purpose in a notice to the Purchaser,


and in the case of notices to the Purchaser, all
communications hereunder shall be in writing and effective only on receipt,
and, if sent to the Purchaser, shall be mailed, delivered by hand or courier or
sent by facsimile and confirmed to the Purchaser at:


Bear, Stearns & Co.
Inc.


c/o Taberna Capital
Management, LLC


450 Park Avenue, 23rd
Floor


New York, New York 10022


Facsimile: (215) 735-1499


Attention: Thomas Bogal


,or other address as the Purchaser shall designate for
such purpose in a notice to the Company and the Trust,


with a copy to:


Brown Raysman Millstein
Felder & Steiner LLP


900 Third Avenue


New York, New York 10022


Facsimile: (212) 895-2900


Attention: Dino Fazlibegu


(b)                                 Any
such communication shall take effect, in the case of a letter, at the time of
delivery and in the case of facsimile, at the time of dispatch.


(c)                                  Any
communication not by facsimile shall be confirmed by letter but failure to send
or receive the letter of confirmation shall not invalidate the original
communication. 



 19
 






 



12.           Successors
and Assigns.  This
Purchase Agreement will inure to the benefit of and be binding upon the parties
hereto and their respective successors and permitted assigns. Nothing expressed
or mentioned in this Purchase Agreement is intended or shall be construed to
give any person other than the parties hereto and the affiliates, directors,
officers, employees, agents and controlling persons referred to in Section 8
hereof and their successors, assigns, heirs and legal representatives, any
right or obligation hereunder. None of the rights or obligations of the Company
or the Trust under this Purchase Agreement may be assigned, whether by
operation of law or otherwise, without the Purchaser’s prior written consent; however, the Company may consolidate with
or merge into another Person or convey, transfer, or lease its properties and
assets substantially as an entirety to any Person without the Purchaser’s prior
written consent, provided that the entity formed by such consolidation or into
which the Company is merged or the Person that acquired by conveyance or
transfer, or that leases, the properties, and assets of the Company
substantially as an entirety shall (i) be an entity organized and existing
under the laws of the United States of America or any State or Territory
thereof or the District of Columbia and (ii) expressly assume the due and
punctual payment of the principal of and any premium and interest on the Junior
Subordinated Notes and the performance of every covenant of this Purchase
Agreement on the part of the Company to be performed or observed. The rights
and obligations of the Purchaser under this Purchase Agreement may be assigned
by the Purchaser without the Company’s or the Trust’s consent; provided that
the assignee assumes the obligations of the Purchaser under this Purchase
Agreement.


 


13.           Applicable
Law.  THIS PURCHASE
AGREEMENT WILL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
LAW OF THE STATE OF NEW YORK WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF
LAW (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW).


14.           Submission
To Jurisdiction.  ANY
LEGAL ACTION OR PROCEEDING BY OR AGAINST ANY PARTY HERETO OR WITH RESPECT TO OR
ARISING OUT OF THIS PURCHASE AGREEMENT MAY BE BROUGHT IN OR REMOVED TO THE
COURTS OF THE STATE OF NEW YORK, IN AND FOR THE COUNTY OF NEW YORK, OR OF THE
UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK (IN EACH CASE
SITTING IN THE BOROUGH OF MANHATTAN). BY EXECUTION AND DELIVERY OF THIS
PURCHASE AGREEMENT, EACH PARTY ACCEPTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS (AND COURTS OF APPEALS THEREFROM) FOR LEGAL PROCEEDINGS ARISING OUT OF
OR IN CONNECTION WITH THIS PURCHASE AGREEMENT.


15.           Counterparts
and Facsimile.  This
Purchase Agreement may be executed by any one or more of the parties hereto in
any number of counterparts, each of which shall be deemed to be an original,
but all such counterparts shall together constitute one and the same
instrument. This Purchase Agreement may be executed by any one or more of the
parties hereto by facsimile.



 20
 






 



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


	
  

  	
  BRESLER & REINER, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ SIDNEY M. BRESLER

  	
   

  
	
   

  	
   

  	
  Name: Sidney M. Bresler

  
	
   

  	
   

  	
  Title: CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BRESLER & REINER STATUTORY TRUST II

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Bresler & Reiner, Inc., as Depositor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ SIDNEY M.
  BRESLER

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Sidney M.
  Bresler

  
	
   

  	
   

  	
   

  	
  Title: CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BEAR, STEARNS & CO. INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ THOMAS S. DUNSTAN

  	
   

  
	
   

  	
   

  	
  Name: Thomas S.
  Dunstan

  
	
   

  	
   

  	
  Title: Senior
  Managing Director

  
						



 



 21














 


SCHEDULE 1


List of Significant
Subsidiaries



 1














 


ANNEX A-I


Pursuant to Section 3(c)(i) of the Purchase Agreement,
counsel for the Company, shall deliver an opinion to the effect that:


(i)            the Company and each Significant
Subsidiary is validly existing as a corporation or other organization in good
standing under the laws of the jurisdiction in which it is chartered or
organized; each of the Company and the Significant Subsidiaries has full
corporate power and authority to own or lease its properties and to conduct its
business as such business is currently conducted in all material respects; all
outstanding shares of capital stock of the Significant Subsidiaries have been
duly authorized and validly issued, and are fully paid and nonassessable and
owned of record and beneficially, directly or indirectly by the Company; the
Company has corporate power and authority to (i) execute and deliver, and to
perform its obligations under, the Operative Documents to which it is a party
and (iii) issue and perform its obligations under the Notes;


(ii)           neither the issue and sale of the
Common Securities, the Preferred Securities or the Junior Subordinated Notes,
nor the purchase by the Trust of the Junior Subordinated Notes, nor the
execution and delivery of and compliance with the Operative Documents by the
Company or the Trust nor the consummation of the transactions contemplated
thereby will constitute a breach or violation of the Trust Agreement or the
charter or by-laws or similar organizational documents of the Company;


(iii)          the Trust Agreement has been duly
authorized, executed and delivered by the Company and duly executed and
delivered by the Administrative Trustees;


(iv)          the Indenture has been duly
authorized, executed and delivered by the Company and, assuming it has been
duly authorized, executed and delivered by the Indenture Trustee, constitutes a
legal, valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors’ rights generally and to
general principles of equity;


(v)           the Junior Subordinated Notes have
been duly authorized and executed by the Company and delivered to the Indenture
Trustee for authentication in accordance with the Indenture and, when
authenticated in accordance with the provisions of the Indenture and delivered
to the Trust against payment therefor, will constitute legal, valid and binding
obligations of the Company entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their terms, subject to
applicable bankruptcy, insolvency and similar laws affecting creditors’ rights
generally and to general principles of equity;


(vi)          the Trust is not, and, following the
issuance of the Preferred Securities and the consummation of the transactions
contemplated by the Operative Documents and the application of the proceeds
therefrom, the Trust will not be, an 



 A-I-1
 






 



“investment company” or an entity “controlled”
by an “investment company,” in each case within the meaning of Section 3(a) of
the Investment Company Act;


(vii)         assuming the truth and accuracy of the
representations and warranties of the Purchaser in the Purchase Agreement, it
is not necessary in connection with the offer, sale and delivery of the Common
Securities, the Preferred Securities and the Junior Subordinated Notes to
register the same under the Securities Act of 1933, as amended, under the
circumstances contemplated in the Purchase Agreement and the Trust Agreement,
or to require qualification of the Indenture under the Trust Indenture Act of
1939, as amended;


(viii)        the Purchase Agreement has been duly
authorized, executed and delivered by each of the Company and the Trust and
constitutes a legal, valid and binding obligation of the Company and the Trust
enforceable against the Company and the Trust in accordance with its terms,
subject to applicable bankruptcy, insolvency and similar laws affecting
creditors’ rights generally and to general principles of equity;


(ix)           neither the Company nor any of its “Affiliates”
(as defined in Rule 501(b) of Regulation D under the Securities Act (“Regulation
D”) has directly or indirectly, made offers or sales of any security, or
solicited offers to buy any security, under circumstances that would require
the registration of any of the Notes, the Preferred Securities or the Common
Securities being issued pursuant to this transaction under the Securities Act,
engaged in any form of general solicitation or general advertising (within the
meaning of Regulation D) in connection with any offer or sale of any of the
Securities, or engaged, nor will engage, in any “directed selling efforts”
within the meaning of Regulation S under the Securities Act with respect to the
Securities;


(x)            neither the Company, the Trust, nor
any Significant Subsidiaries of the Company is in breach or violation of, or
default under, with or without notice or lapse of time or both, its articles of
incorporation or charter, by-laws or other governing documents (including
without limitation, the Trust Agreement); the execution, delivery and
performance of the Operative Documents and the consummation of the transactions
contemplated by the Purchase Agreement and the Operative Documents do not and
will not (A) result in the creation or imposition of any material lien, claim,
charge, encumbrance or restriction upon any property or assets of the Company
or the Significant Subsidiaries, or (B) conflict with, constitute a material
breach or violation of, or constitute a material default under, with or without
notice or lapse of time or both, any of the terms, provisions or conditions of
(x) the Articles of Incorporation or Charter, By-Laws or other governing
documents of the Company or its Significant Subsidiaries, or (y) to the best of
our knowledge, any material contract, indenture, mortgage, deed of trust, loan
or credit agreement, note, lease, franchise, license or any other agreement or
instrument to which the Company or its Significant Subsidiaries is a party or
by which any of them or any of their respective properties may be bound or (z)
any order, decree, judgment, franchise, license, permit, rule or regulation of
any court, arbitrator, government, or governmental agency or instrumentality,
domestic or foreign, known to us having jurisdiction over the Company or its
Significant Subsidiaries or any of their 



 A-I-2
 






 



respective properties which, in the case of
each of (A) or (B) above, is material to the Company and the Significant
Subsidiaries on a consolidated basis;


(xi)           except for filings, registrations or
qualifications that may be required by applicable securities laws, no
authorization, approval, consent or order of, or filing, registration or
qualification with, any person (including, without limitation, any court,
governmental body or authority) is required under the laws of the State of
Delaware in connection with the transactions contemplated by the Operative
Documents in connection with the offer and sale of the Securities as
contemplated by the Operative Documents;


(xii)          (A) no action, suit or proceeding at
law or in equity is pending or threatened to which the Company, the Trust or
the Significant Subsidiaries are or may be a party, and (B) no action, suit or
proceeding is pending or threatened against or affecting the Company, the Trust
or the Significant Subsidiaries or any of their properties, before or by any
court or governmental official, commission, board or other administrative
agency, authority or body, or any arbitrator, wherein an unfavorable decision,
ruling or finding could reasonably be expected to have a material adverse
effect on the consummation of the transactions contemplated by the Operative
Documents or the issuance and sale of the Common Securities, or the Preferred
Securities as contemplated therein or the condition (financial or otherwise),
earnings, affairs, business, or results of operations of the Company, the Trust
and the Significant Subsidiaries on a consolidated basis; and


 



 A-I-3














 


ANNEX A-II


Pursuant to Section 3(c)(ii) of the Purchase
Agreement, General Counsel for the Company shall deliver an opinion, or the
Company shall provide an Officers’ Certificate, to the effect that:


(i)            all of the issued and outstanding
shares of capital stock of each Significant Subsidiary are owned of record by
the Company, and the issuance of the Preferred Securities and the Common
Securities is not subject to any contractual preemptive rights known to such [counsel/officer];


(ii)           no consent, approval, authorization
or order of any court or Governmental Entity is required for the issue and sale
of the Common Securities, the Preferred Securities or the Junior Subordinated
Notes, the purchase by the Trust of the Junior Subordinated Notes, the
execution and delivery of and compliance with the Operative Documents by the
Company or the Trust or the consummation of the transactions contemplated in
the Operative Documents, except such approvals (specified in such [opinion/certificate]) as have been obtained;


(iii)          to the knowledge of such [counsel/officer], there is no action, suit or proceeding
before or by any government, governmental instrumentality, arbitrator or court,
domestic or foreign, now pending or threatened against or affecting the Trust
or the Company or any Significant Subsidiary that could adversely affect the
consummation of the transactions contemplated by the Operative Documents or
could have a Material Adverse Effect;


(iv)          The execution, delivery and
performance of the Operative Documents, as applicable, by the Company and the
Trust and the consummation by the Company and the Trust of the transactions
contemplated by the Operative Documents, as applicable, (i) will not result in
any violation of the charter or bylaws or similar organizational documents of
the Company, the charter or bylaws or similar organizational documents of the
Company’s subsidiaries, the Trust Agreement or the Certificate of Trust of the
Trust, and (ii) will not conflict with, or result in a breach of any of the
terms or provisions of, or constitute a default (or an event which, with notice
or lapse of time or both, would constitute a default) under, or result in the
creation or imposition of any lien, charge and encumbrance upon any assets or
properties of the Company or any Significant Subsidiary under, (a) any
agreement, indenture, mortgage or instrument that the Company or any
Significant Subsidiary of the Company is a party to or by which it may be bound
or to which any of its assets or properties may be subject, or (b) any existing
applicable law, rule or administrative regulation of any court or governmental
agency or authority having jurisdiction over the Company or any Significant
Subsidiary of the Company or any of their respective assets or properties,
except in case of (ii), where any such violation, conflict, breach, default,
lien, charge or encumbrance, would not have a material adverse effect on the
assets, properties, business, results of operations or financial condition of
the Company and its subsidiaries, taken as whole.



 A-II-1














 


ANNEX B


Pursuant to Section 3(d) of the Purchase Agreement,
special tax counsel for the Purchaser, shall deliver an opinion to the effect
that:


It is our opinion that,
under current law and assuming the performance of the Operative Documents in
accordance with the terms described therein, the Subordinated Debt Securities
will be treated for United States federal income tax purposes as indebtedness
of the Company. It is our opinion that the Trust will be classified as a
grantor trust and not as an association or publicly traded partnership taxable
as a corporation.


In rendering such opinions, such counsel may (A) state
that its opinion is limited to the federal laws of the United States and (B)
rely as to matters of fact, to the extent deemed proper, on certificates of
responsible officers of the Company and public officials.



 B-1














 


ANNEX C


Pursuant to Section 3(e) of the Purchase Agreement,
Richards, Layton & Finger, P.A., special Delaware counsel for the Delaware
Trustee, shall deliver an opinion to the effect that:


(i)            the Trust has been duly created and
is validly existing in good standing as a statutory trust under the Delaware
Statutory Trust Act, and all filings required under the laws of the State of
Delaware with respect to the creation and valid existence of the Trust as a
statutory trust have been made;


(ii)           under the Delaware Statutory Trust
Act and the Trust Agreement, the Trust has the trust power and authority (A) to
own property and conduct its business, all as described in the Trust Agreement,
(B) to execute and deliver, and to perform its obligations under, each of the
Purchase Agreement, the Common Securities Subscription Agreement, the Junior
Subordinated Note Purchase Agreement and the Preferred Securities and the
Common Securities and (C) to purchase and hold the Junior Subordinated Notes;


(iii)          under the Delaware Statutory Trust
Act, the certificate attached to the Trust Agreement as Exhibit C is an
appropriate form of certificate to evidence ownership of the Preferred
Securities; the Preferred Securities have been duly authorized by the Trust
Agreement and, when issued and delivered against payment of the consideration
as set forth in the Purchase Agreement, the Preferred Securities will be
validly issued and (subject to the qualifications set forth in this paragraph)
fully paid and nonassessable and will represent undivided beneficial interests
in the assets of the Trust; the holders of the Preferred Securities will be
entitled to the benefits of the Trust Agreement and, as beneficial owners of
the Trust, will be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware; and such counsel may note
that the holders of the Preferred Securities may be obligated, pursuant to the
Trust Agreement, to (A) provide indemnity and/or security in connection with
and pay taxes or governmental charges arising from transfers or exchanges of
Preferred Securities certificates and the issuance of replacement Preferred
Securities certificates and (B) provide security or indemnity in connection
with requests of or directions to the Property Trustee to exercise its rights
and remedies under the Trust Agreement;


(iv)          the Common Securities have been duly
authorized by the Trust Agreement and, when issued and delivered by the Trust
to the Company against payment therefor as described in the Trust Agreement and
the Common Securities Subscription Agreement, will be validly issued and fully
paid and will represent undivided beneficial interests in the assets of the
Trust entitled to the benefits of the Trust Agreement;


(v)           under the Delaware Statutory Trust
Act and the Trust Agreement, the issuance of the Preferred Securities and the
Common Securities is not subject to preemptive or other similar rights;



 C-1
 






 



(vi)          under the Delaware Statutory Trust Act
and the Trust Agreement, the execution and delivery by the Trust of the
Purchase Agreement, the Common Securities Subscription Agreement and the Junior
Subordinated Note Purchase Agreement, and the performance by the Trust of its obligations
thereunder, have been duly authorized by all necessary trust action on the part
of the Trust;


(vii)         the Trust Agreement constitutes a
legal, valid and binding obligation of the Company and the Trustees, and is
enforceable against the Company and the Trustees, in accordance with its terms
subject, as to enforcement, to the effect upon the Trust Agreement of (i)
bankruptcy, insolvency, moratorium, receivership, reorganization, liquidation,
fraudulent conveyance or transfer and other similar laws relating to or
affecting the rights and remedies of creditors generally, (ii) principles of
equity, including applicable law relating to fiduciary duties (regardless of
whether considered and applied in a proceeding in equity or at law), and (iii)
the effect of applicable public policy on the enforceability of provisions
relating to indemnification or contribution;


(viii)        the issuance and sale by the Trust of
the Preferred Securities and the Common Securities, the purchase by the Trust
of the Junior Subordinated Notes, the execution, delivery and performance by
the Trust of the Purchase Agreement, the Common Securities Subscription
Agreement and the Junior Subordinated Note Purchase Agreement, the consummation
by the Trust of the transactions contemplated by the Purchase Agreement and
compliance by the Trust with its obligations thereunder do not violate (i) any
of the provisions of the Certificate of Trust or the Amended and Restated Trust
Agreement or (ii) any applicable Delaware law, rule or regulation;


(ix)           no filing with, or authorization,
approval, consent, license, order, registration, qualification or decree of,
any Delaware court or Delaware Governmental Entity or Delaware agency is
necessary or required solely in connection with the issuance and sale by the
Trust of the Common Securities or the Preferred Securities, the purchase by the
Trust of the Junior Subordinated Notes, the execution, delivery and performance
by the Trust of the Purchase Agreement, the Common Securities Subscription
Agreement and the Junior Subordinated Note Purchase Agreement, the consummation
by the Trust of the transactions contemplated by the Purchase Agreement and
compliance by the Trust with its obligations thereunder; and


(x)            the holders of the Preferred
Securities (other than those holders who reside or are domiciled in the State
of Delaware) will have no liability for income taxes imposed by the State of
Delaware solely as a result of their participation in the Trust and the Trust
will not be liable for any income tax imposed by the State of Delaware.


In rendering such opinions, such counsel may (A) state
that its opinion is limited to the laws of the State of Delaware, (B) rely as
to matters of fact, to the extent deemed proper, on certificates of responsible
officers of the Company and public officials and (C) take customary assumptions
and exceptions as to enforceability and other matters.



 C-2














 


ANNEX D


Pursuant to Section 3(f) of the Purchase Agreement,
Gardere Wynne Sewell LLP, special counsel for the Property Trustee and the
Indenture Trustee, shall deliver an opinion to the effect that:


(i)            JPMorgan Chase Bank, National
Association (the “Bank”) is a national banking association with trust powers,
duly and validly existing under the laws of the United States of America, with
corporate power and authority to execute, deliver and perform its obligations
under the Indenture and to authenticate and deliver the Securities, and is duly
eligible and qualified to act as Trustee under the Indenture pursuant to
Section 6.1 thereof and as Property Trustee under the Trust Agreement pursuant
to Section 8.2 thereof. (The Indenture and the Trust Agreement are each, an “Agreement”
and together, the “Agreements”).


(ii)           Each Agreement has been duly
authorized, executed and delivered by the Bank and constitutes the valid and
binding obligation of the Bank, enforceable against it in accordance with its
terms except (A) as may be limited by bankruptcy, fraudulent conveyance,
fraudulent transfer, insolvency, reorganization, liquidation, receivership,
moratorium or other similar laws now or hereafter in effect relating to
creditors’ rights generally, and by general equitable principles, regardless of
whether considered in a proceeding in equity or at law and (B) that the remedy
of specific performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought;


(iii)          Neither the execution or delivery by
the Bank of the Agreements, the authentication and delivery of the Preferred
Securities (as defined in the Trust Agreement) and junior subordinated notes
(issued under the Indenture, and together with the Preferred Securities, the “Securities”)
by the Trustee pursuant to the terms of the Agreements, respectively, nor the
performance by the Bank of its obligations under the Agreements (A) requires
the consent or approval of, the giving of notice to or the registration or
filing with, any governmental authority or agency under any existing law of the
United States of America governing the banking or trust powers of the Bank or
(B) violates or conflicts with the Articles of Association or By-laws of the
Bank or any law or regulation of the State of New York or the United States of
America governing the banking or trust powers of the Bank;


(iv)          The Securities have been authenticated
and delivered by a duly authorized officer of the Bank.


In rendering such opinions, such counsel may (A) state
that its opinion is limited to the laws of the State of New York and the laws
of the United States of America, (B) rely as to matters of fact, to the extent
deemed proper, on certificates of responsible officers of JPMorgan Chase Bank,
National Association, the Company and public officials, and (C) make customary
assumptions and exceptions as to enforceability and other matters.



 D-1














 


ANNEX E


Pursuant to Section 3(g) of the Purchase Agreement,
Richards, Layton & Finger, PA., counsel for the Delaware Trustee, shall
deliver an opinion to the effect that:


(i)            Chase Bank USA, National Association
is duly formed and validly existing as a national banking association under the
federal laws of the United States of America with trust powers and with its
principal place of business in the State of Delaware;


(ii)           Chase Bank USA, National Association
has the corporate power and authority to execute, deliver and perform its
obligations under, and has taken all necessary corporate action to authorize
the execution, delivery and performance of, the Trust Agreement and to
consummate the transactions contemplated thereby;


(iii)          The Trust Agreement has been duly
authorized, executed and delivered by Chase Bank USA, National Association and
constitutes a legal, valid and binding obligation of Chase Bank USA, National
Association, and is enforceable against Chase Bank USA, National Association,
in accordance with its terms subject as to enforcement, to the effect upon the
Trust Agreement of (i) applicable bankruptcy, insolvency, reorganization,
moratorium, receivership, fraudulent conveyance or transfer and similar laws
relating to or affecting the rights and remedies of creditors generally, (ii)
principles of equity, including applicable law relating to fiduciary duties
(regardless of whether considered and applied in a proceeding in equity or at
law), and (iii) the effect of applicable public policy on the enforceability of
provisions relating to indemnification or contribution;


(iv)          The execution, delivery and
performance by Chase Bank USA, National Association of the Trust Agreement do
not conflict with or result in a violation of (A) articles of association or
by-laws of Chase Bank USA, National Association or (B) any law or regulation of
the State of Delaware or the United States of America governing the trust
powers of Chase Bank USA, National Association or, to our knowledge, without
independent investigation, of any indenture, mortgage, bank credit agreement,
note or bond purchase agreement, long-term lease, license or other agreement or
instrument to which Chase Bank USA, National Association is a party or by which
it is bound or, to our knowledge, without independent investigation, of any
judgment or order applicable to Chase Bank USA, National Association; and


(v)           No approval, authorization or other
action by, or filing with, any Governmental Entity of the State of Delaware or
the United States of America governing the trust powers of Chase Bank USA,
National Association is required in connection with the execution and delivery
by Chase Bank USA, National Association of the Trust Agreement or the
performance by Chase Bank USA, National Association of its obligations
thereunder, except for the filing of the Certificate of Trust with the
Secretary of State of the State of Delaware, which Certificate of Trust has
been filed with the Secretary of State of the State of Delaware.



 E-1
 






 



 


In rendering such opinions, such counsel may (A) state
that its opinion is limited to the laws of the State of Delaware and the
federal laws of the United States governing the trust powers of Chase Bank USA,
National Association, (B) rely as to matters of fact, to the extent deemed proper,
on certificates of responsible officers of the Company and public officials and
(C) take customary assumptions and exceptions.



 E-2














 


ANNEX F


Officer’s Financial
Certificate


The undersigned, the [Chairman/Vice Chairman/Chief
Executive Officer/President/Vice President/Chief Financial
Officer/Treasurer/Assistant Treasurer], hereby certifies, pursuant to Section
6(h) of the Purchase Agreement, dated as of May 31, 2006, among Bresler &
Reiner, Inc. (the “Company”), Bresler & Reiner Statutory Trust II (the “Trust”)
and Bear, Stearns & Co. Inc., that, as of [date], [20     ],
the Company, if applicable, and its Subsidiary had the following ratios and
balances:


As of [Quarterly/Annual
Financial Date], 20      


	
  Senior secured indebtedness for borrowed money (“Debt”)

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Senior unsecured Debt

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Subordinated Debt

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Debt

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Ratio of (x) senior secured and unsecured Debt to (y) total Debt

  	
   

  	
   

  	
  %

  



 


[FOR FISCAL YEAR END:
Attached hereto are the audited consolidated financial statements (including
the balance sheet, income statement and statement of cash flows, and notes
thereto, together with the report of the independent accountants thereon) of
the Company and its consolidated subsidiaries for the three years ended [date],
20     and all required Statutory Financial Statements (as
defined in the Purchase Agreement) for the year ended [date], 20    .]


[FOR FISCAL QUARTER
END: Attached hereto are the unaudited consolidated and
consolidating financial statements (including the balance sheet and income
statement) of the Company and its consolidated subsidiaries and all required
Statutory Financial Statements (as defined in the Purchase Agreement) for the
year ended [date], 20    ] for the fiscal quarter ended
[date], 20    .]


The financial statements fairly present in all
material respects, in accordance with U.S. generally accepted accounting
principles (“GAAP”), the financial position of the Company and its consolidated
subsidiaries, and the results of operations and changes in financial condition
as of the date, and for the [     quarter interim] [annual]
period ended [date], 20    , and such financial statements
have been prepared in accordance with GAAP consistently applied throughout the
period involved (expect as otherwise noted therein).


There has been no monetary default with respect to any
indebtedness owed by the Company and/or its subsidiaries (other than those defaults
cured within 30 days of the occurrence of the same) [, except as set forth
below;].



 F-1
 






 



[Insert any exceptions by listing, in detail, the
nature of the condition or event causing such noncompliance, the period during
which such condition or event has existed and the action(s) the Company has
taken, is taking, or proposes to take with respect to each such condition or
event.]


I, the undersigned, the [Chairman/Vice Chairman/Chief
Executive Officer/President/Vice President/ Chief Financial Officer/Treasurer/Assistant
Treasurer], hereby certify that I have reviewed the terms of the Indenture and
I have made, or have caused to be made under my supervision, a detailed review
of (i) the covenants of the Company set forth therein, in particular, Section
10.9 of the Indenture (the “Financial Covenants”) and (ii) the transactions and
conditions of the Company and its subsidiaries during the accounting period
ended as of [           ]
(the “Accounting Period”), which Accounting Period is covered by the financial
statements attached hereto. The examinations described in the preceding
sentence did not disclose, and I have no knowledge of, the existence of any
condition or event which constitutes a Default or an Event of Default (each as
defined in the Indenture) during or at the end of the Accounting Period or as
of the date of this certificate [, except as set forth below:],


[Insert any exceptions by listing, I detail, the
nature of the condition or event causing such noncompliance, the period during
which such condition or event has existed and the action(s) the Company has
taken, is taking, or proposes to take with respect to each such condition or
event.]


Page          
attached hereto sets forth the financial data and computation evidencing the
Company’s compliance with the Financial Covenants, all of which data and
computations are true, complete and correct.


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


	
   

  	
  Bresler & Reiner, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Bresler &
  Reiner, Inc.

  
	
   

  	
  11200 Rockville
  Pike, Suite 502

  
	
   

  	
  Rockville, MD
  20852

  



 



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