Document:

Junior Subordinated Indenture

    Exhibit
      10.1

     

    JUNIOR
      SUBORDINATED INDENTURE

     

    between

     

    DESERT
      CAPITAL REIT, INC.

     

    and

     

    JPMORGAN
      CHASE BANK, NATIONAL ASSOCIATION,

     

    as
      Trustee

     

     

    ________________

     

    Dated
      as
      of June
      16,
      2006 

     

    ________________

     

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	 	 	
               Page

            
	 Article
              I.  Definitions and Other Provisions of General Application	 	
               1

            
	
              Section
                1.1    Definitions

            	 	
               1

            
	
              Section
                1.2   Compliance
                Certificate and Opinions

            	 	
               5

            
	
              Section
                1.3    Forms of
                Documents Delivered to Trustee

            	 	
               5

            
	
              Section
                1.4    Acts of
                Holders

            	 	
               6

            
	
              Section
                1.5    Notices, Etc.
                to Trustee and Company

            	 	
               6

            
	
              Section
                1.6    Notice to
                Holders; Waiver

            	 	
               6

            
	
              Section
                1.7    Effect of
                Headings and Table of Contents

            	 	
               6

            
	
              Section
                1.8    Successors and
                Assigns

            	 	
               7

            
	
              Section
                1.9    Separability
                Clause

            	 	
               7

            
	
              Section
                1.10          Benefits
                of
                Indenture

            	 	
               7

            
	
              Section
                1.11          Governing
                Law

            	 	
               7

            
	
              Section
                1.12          Submission to
                Jurisdiction

            	 	
               7

            
	
              Section
                1.13          Non-Business
                Days

            	 	
               7

            
	 Article
              II.  Security Forms	 	
               8

            
	
              Section
                2.1    Form of
                Security

            	 	
               8

            
	
              Section
                2.2    Restricted
                Legend

            	 	
               9

            
	
              Section
                2.3            Form of Trustee's
                Certificate of Authentication        

            	 	
               10

            
	
              Section
                2.4        Temporary
                Securities

            	 	
               10

            
	
              Section
                2.5    Definitive
                Securities

            	 	
               10

            
	 Article
              III.  The Securities	 	
               11

            
	
              Section
                3.1    Payment of
                Principal and Interest

            	 	
               11

            
	
              Section
                3.2    Denominations

            	 	
               11

            
	
              Section
                3.3    Execution,
                Authentication, Delivery and Dating

            	 	
               11

            
	
              Section
                3.4    Global
                Securities

            	 	
               12

            
	
              Section
                3.5    Registration,
                Transfer and Exchange Generally

            	 	
               12

            
	
              Section
                3.6    Mutilated,
                Destroyed, Lost and Stolen Securities

            	 	
               13

            
	
              Section
                3.7    Persons Deemed
                Owners

            	 	
               13

            
	
              Section
                3.8    Cancellation

            	 	
               13

            
	
              Section
                3.9    Reserved

            	 	
               14

            
	
              Section
                3.10        
                 Reserved

            	 	
               14

            
	
              Section
                3.11         Agreed Tax
                Treatment

            	 	
               14

            
	
              Section
                3.12         CUSIP
                Numbers

            	 	
               14

            
	 Article
              IV.  Satisfaction and Discharge	 	
               15

            
	
              Section
                4.1    Satisfaction
                and Discharge Indenture

            	 	
               15

            
	
              Section
                4.2    Application of
                Trust Money

            	 	
               15

            
	 Article
              V.  Remedies	 	
               16

            
	
              Section
                5.1    Events of
                Default

            	 	
               16

            
	
              Section
                5.2    Acceleration
                of
                Maturity; Rescission and Annulment

            	 	
               16

            
	
              Section
                5.3    Collection of
                Indebtedness and Suits for Enforcement by Trustee

            	 	
               17

            
	
              Section
                5.4    Trustee May
                File Proofs of Claim

            	 	
               17

            
	
              Section
                5.5    Trustee May
                Enforce Claim Without Possession of Securities

            	 	
               17

            
	
              Section
                5.6    Application of
                Money Collected

            	 	
               17

            
	
              Section
                5.7    Limitation on
                Suits

            	 	
               17

            
	
              Section
                5.8    Unconditional
                Right of Holders to Receive Principal, Premium, if any, and Interest;
                Direct Action by Holders of Preferred Securities

            	 	
               18

            
	
              Section
                5.9    Restoration of
                Rights and Remedies

            	 	
               18

            
	
              Section
                5.10          Rights and
                Remedies Cumulative

            	 	
               18

            
	
              Section
                5.11          Delay or
                Omission Not Waiver

            	 	
               18

            
	
              Section
                5.12          Control by
                Holders

            	 	
               18

            
	
              Section
                5.13          Waiver of Past
                Defaults

            	 	
               18

            
	
              Section
                5.14          Undertaking for
                Costs

            	 	
               18

            
	
              Section
                5.15          Waiver of
                Usury, Stay or Extension Laws

            	 	
               18

            
	 Article
              VI.  The Trustee	 	
               19

            
	
              Section
                6.1    Corporate
                Trustee Required

            	 	
               19

            
	
              Section
                6.2    Certain Duties
                and Responsibilites

            	 	
               19

            
	
              Section
                6.3    Notice of
                Defaults

            	 	
               19

            
	
              Section
                6.4    Certain Rights
                of Trustee

            	 	
               20

            
	
              Section
                6.5    May Hold
                Securities

            	 	
               20

            
	
              Section
                6.6    Compensation;
                Reimbursement; Indemnity

            	 	
               21

            
	
              Section
                6.7    Resignation and
                Removal; Appointment of Successor

            	 	
               21

            
	
              Section
                6.8    Acceptance of
                Appointment by Successor

            	 	
               21

            
	
              Section
                6.9    Merger,
                Conversion, Consolidation or Succession to Business

            	 	
               22

            
	
              Section
                6.10          Not Responsible
                for Recitals or Issuance of Securities

            	 	
               22

            
	
              Section
                6.11    Appointment of
                Authenticating Agent

            	 	
               22

            
	 Article
              VII.  Holder's Lists and Reports by Company	 	
               23

            
	
              Section
                7.1    Company to
                Furnish Trustee Names and Addresses of Holders

            	 	
               23

            
	
              Section
                7.2    Preservation
                of
                Information, Communications to Holders

            	 	
               23

            
	
              Section
                7.3    Reports by
                Company

            	 	
               23

            
	 Article
              VIII.  Consolidation, Merger, Conveyance, Transfer or Lease	 	
               24

            
	
              Section
                8.1    Company May Not
                Consolidate

            	 	
               24

            
	 Article
              IX.  Supplemental Indentures	 	
               25

            
	
              Section
                9.1    Supplemental
                Indentures without Consent of Holders

            	 	
               25

            
	
              Section
                9.2    Supplemental
                Indentures wiht Consent of Holders

            	 	
               25

            
	
              Section
                9.3    Execution of
                Supplemental Indentures

            	 	
               25

            
	
              Section
                9.4    Effect of
                Supplemental Indentures

            	 	
               25

            
	
              Section
                9.5    Reference in
                Securities to Supplemental Indentures

            	 	
               25

            
	 Article
              X.  Convenants	 	
               26

            
	
              Section
                10.1          Payment of
                Principal, Premium, if any, and Interest

            	 	
               26

            
	
              Section
                10.2          Money for
                Security Payments to be Held in Trust

            	 	
               26

            
	
              Section
                10.3          Statement as to
                Compliance

            	 	
               26

            
	
              Section
                10.4          Calculation
                Agent

            	 	
               26

            
	
              Section
                10.5          Additional Tax
                Sums

            	 	
               26

            
	
              Sectioin
                10.6         Additional
                Covenants

            	 	
               27

            
	
              Section
                10.7          Waiver of
                Covenants

            	 	
               27

            
	
              Section
                10.8          Treatment of
                Securities

            	 	
               27

            
	 Article
              XI.  Redemption of Securities	 	
               28

            
	
              Section
                11.1          Optional
                Redemption

            	 	
               28

            
	
              Section
                11.2          Special Event
                Redemption

            	 	
               28

            
	
              Section
                11.3          Election to
                Redeem; Notice to Trustee

            	 	
               28

            
	
              Section
                11.4          Selection of
                Securitiees to be Redeemed

            	 	
               28

            
	
              Section
                11.5          Notice of
                Redemption

            	 	
               28

            
	
              Section
                11.6          Deposit of
                Redemption Price

            	 	
               29

            
	
              Section
                11.7          Payment of
                Securities Called for Redemption

            	 	
               29

            
	 Article
              XII.  Subordination of Securities	 	
               30

            
	
              Section
                12.1          Securities
                Subordinate to Senior Debt

            	 	
               30

            
	
              Section
                12.2          No Payment When
                Senior Debt in Default; Payment Over of Proceeds Upon Dissolution,
                Etc.

            	 	
               30

            
	
              Section
                12.3          Payment
                Permitted If No Default

            	 	
               30

            
	
              Section
                12.4          Subrogation to
                Rights of Holders of Senior Debt

            	 	
               30

            
	
              Section
                12.5          Provisions
                Solely to Define Relative Rights

            	 	
               31

            
	
              Section
                12.6          Trustee to
                Effectuate Subordination

            	 	
               31

            
	
              Section
                12.7          No Waiver of
                Subordination Provisions

            	 	
               31

            
	
              Section
                12.8          Notice to
                Trustee

            	 	
               31

            
	
              Section
                12.9          Reliance on
                Judicial Order or Certificate of Liquidating Agent

            	 	
               31

            
	
              Section
                12.10        Trustee Not Fiduciary for
                Holders of Senior Debt

            	 	
               31

            
	
              Section
                12.11        Rights of Trustee as
                Holder of Senior Debt; Preservation of Trustee's Rights

            	 	
               32

            
	
              Section12.12        
                Article Applicable to Paying Agents

            	 	
               32

            
	 Schedules	 	 
	 Schedule
              A - Dertimination of LIBOR	 	
               33

               

            
	 Exhibit
              A - Form of Officer's Financial Certificate	 	
               34

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
    Junior
      Subordinated Indenture,
      dated
      as of June
      16,
      2006, between Desert Capital REIT, Inc. a Maryland corporation (the
“Company”),
      and
JPMorgan
      Chase Bank, National
      Association, a
      national banking association, as Trustee (in such capacity, the “Trustee”).

     

    Recitals
      of the Company

     

    Whereas,
      the
      Company has duly authorized the execution and delivery of this Indenture to
      provide for the issuance of its unsecured junior subordinated notes (the
“Securities”)
      issued
      to evidence loans made to the Company of the proceeds from the issuance by
      Desert
      Capital TRS Statutory Trust I,
      a
Delaware
      statutory
      trust (the “Trust”),
      of
      undivided preferred beneficial interests in the assets of the Trust (the
“Preferred
      Securities”)
      and
      undivided common beneficial interests in the assets of the Trust (the
“Common
      Securities” and,
      collectively with the Preferred Securities, the “Trust
      Securities”),
      and to
      provide the terms and conditions upon which the Securities are to be
      authenticated, issued and delivered; and

     

    Whereas,
      all
      things necessary to make this Indenture a valid agreement of the Company, in
      accordance with its terms, have been done.

     

    Now,
      Therefore,
      this
      Indenture Witnesseth:

     

    For
      and
      in consideration of the premises and the purchase of the Securities by the
      Holders thereof, it is mutually covenanted and agreed, for the equal and
      proportionate benefit of all Holders of the Securities, as follows:

     

    ARTICLE
      I

    Definitions
      and Other Provisions of General Application

     

    SECTION
      1.1.  
      Definitions.

     

    For
      all
      purposes of this Indenture, except as otherwise expressly provided or unless
      the
      context otherwise requires:

     

    (a)
      the
      terms defined in this Article
      I
      have the
      meanings assigned to them in this Article
      I;

     

    (b)
      the
      words “include”, “includes” and “including” shall be deemed to be followed by
      the phrase “without limitation”;

     

    (c)
      all
      accounting terms not otherwise defined herein have the meanings assigned to
      them
      in accordance with GAAP;

     

    (d)
      unless the context otherwise requires, any reference to an “Article” or a
“Section” refers to an Article or a Section, as the case may be, of this
      Indenture;

     

    (e)
      the
      words “hereby”, “herein”, “hereof” and “hereunder” and other words of similar
      import refer to this Indenture as a whole and not to any particular Article,
      Section or other subdivision;

     

    (f)
      a
      reference to the singular includes the plural and vice versa; and

     

    (g)
      the
      masculine, feminine or neuter genders used herein shall include the masculine,
      feminine and neuter genders.

     

    “Act” when
      used
      with respect to any Holder, has the meaning specified in Section
      1.4.

     

    “Administrative
      Trustee”
means,
      with respect to the Trust, each Person identified as an “Administrative Trustee”
in the Trust Agreement, solely in its capacity as Administrative Trustee of
      the
      Trust under the Trust Agreement and not in its individual capacity, or its
      successor in interest in such capacity, or any successor Administrative Trustee
      appointed as therein provided.

     

    “Additional
      Interest” means
      the
      interest, if any, that shall accrue on any amounts payable on the Securities,
      the payment of which has not been made on the applicable Interest Payment Date
      and which shall accrue at the rate per annum specified or determined as
      specified in such Security, in each case to the extent legally
      enforceable.

     

    “Additional
      Tax Sums” has
      the
      meaning specified in Section
      10.5.

     

    “Additional
      Taxes” means
      taxes, duties or other governmental charges imposed on the Trust as a result
      of
      a Tax Event (which, for the sake of clarity, does not include amounts required
      to be deducted or withheld by the Trust from payments made by the Trust to
      or
      for the benefit of the Holder of, or any Person that acquires a beneficial
      interest in, the Securities).

     

    “Affiliate” of
      any
      specified Person means any other Person directly or indirectly controlling
      or
      controlled by or under direct or indirect common control with such specified
      Person. For the purposes of this definition, “control,” when used with respect
      to any specified Person, means the power to direct the management and policies
      of such Person, directly or indirectly, whether through the ownership of voting
      securities, by contract or otherwise; and the terms “controlling” and
“controlled” have meanings correlative to the foregoing.

     

    “Applicable
      Depositary Procedures”
      means,
      with respect to any transfer or transaction involving a Global Security or
      beneficial interest therein, the rules and procedures of the Depositary for
      such
      Security, in each case to the extent applicable to such transaction and as
      in
      effect from time to time.

     

    “Authenticating
      Agent”
      means
      any Person authorized by the Trustee pursuant to Section
      6.11
      to act
      on behalf of the Trustee to authenticate the Securities.

     

    “Board
      of Directors” means
      the
      board of directors of the Company or any duly authorized committee of that
      board.

     

    “Board
      Resolution” means
      a
      copy of a resolution certified by the Secretary or an Assistant Secretary of
      the
      Company to have been duly adopted by the Board of Directors and to be in full
      force and effect on the date of such certification.

     

    “Business
      Day”
      means
      any day other than (i) a Saturday or Sunday, (ii) a day on which banking
      institutions in the City of New York are authorized or required by law or
      executive order to remain closed or (iii) a day on which the Corporate Trust
      Office of the Trustee is closed for business.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    “Calculation
      Agent”
has
      the
      meaning specified in Section
      10.4.

     

    “Code”
means
      the Internal Revenue Code of 1986, as amended. 

     

    “Common
      Securities”
has
      the
      meaning specified in the first recital of this Indenture.

     

    “Commission” has
      the
      meaning specified in Section
      7.3(c).

     

    “Company” means
      the
      Person named as the “Company”
      in the
      first paragraph of this Indenture until a successor Person shall have become
      such pursuant to the applicable provisions of this Indenture, and thereafter
      “Company”
      shall
      mean such successor Person.

     

    “Company
      Request” and
      “Company
      Order” mean,
      respectively, the written request or order signed in the name of the Company
      by
      its Chairman of the Board of Directors, its Vice Chairman of the Board of
      Directors, its Chief Executive Officer, President or a Vice President, and
      by
      its Chief Financial Officer, its Treasurer, an Assistant Treasurer, its
      Secretary or an Assistant Secretary, and delivered to the Trustee.

     

    “Corporate
      Trust Office” means
      the
      principal office of the Trustee at which at any particular time its corporate
      trust business shall be administered, which office at the date of this Indenture
      is located at
      600
      Travis, 50th
      Floor,
      Houston, Texas 77019, Attn: Worldwide
      Securities
      Services— Desert
      Capital TRS Statutory Trust I. Initially, all notices and correspondence shall
      be addressed to Mudassir Mohamed, telephone (713) 216-2826.

     

    “Debt”
      means,
      with respect to any Person, whether recourse is to all or a portion of the
      assets of such Person, whether currently existing or hereafter incurred and
      whether or not contingent and without duplication, (i) every obligation of
      such
      Person for money borrowed; (ii) every obligation of such Person evidenced by
      bonds, debentures, notes or other similar instruments, including obligations
      incurred in connection with the acquisition of property, assets or businesses;
      (iii) every reimbursement obligation of such Person with respect to letters
      of
      credit, bankers’ acceptances or similar facilities issued for the account of
      such Person; (iv) every obligation of such Person issued or assumed as the
      deferred purchase price of property or services (but excluding trade accounts
      payable or other accrued liabilities arising in the ordinary course of
      business); (v) every capital lease obligation of such Person; (vi) all
      indebtedness of such Person, whether incurred on or prior to the date of this
      Indenture or thereafter incurred, for claims in respect of derivative products,
      including interest rate, foreign exchange rate and commodity forward contracts,
      options and swaps and similar arrangements; (vii) every obligation of the type
      referred to in clauses (i) through (vi) of another Person and all dividends
      of
      another Person the payment of which, in either case, such Person has guaranteed
      or is responsible or liable for, directly or indirectly, as obligor or
      otherwise; and (viii) any renewals, extensions, refundings, amendments or
      modifications of any obligation of the type referred to in clauses (i) through
      (vii).

     

    “Defaulted
      Interest”
      has the
      meaning specified in Section
      3.1.

     

    “Delaware
      Trustee”
means,
      with respect to the Trust, the Person identified as the “Delaware Trustee” in
      the Trust Agreement, solely in its capacity as Delaware Trustee of the Trust
      under the Trust Agreement and not in its individual capacity, or its successor
      in interest in such capacity, or any successor Delaware Trustee appointed as
      therein provided.

     

    “Depositary” means
      an
      organization registered as a clearing agency under the Exchange Act that is
      designated as Depositary by the Company or any successor thereto. DTC will
      be
      the initial Depositary.

     

    “Depositary
      Participant”
      means a
      broker, dealer, bank, other financial institution or other Person for whom
      from
      time to time a Depositary effects book-entry transfers and pledges of securities
      deposited with the Depositary.

     

    “Distributions”
      means
      amounts payable in respect of the Trust Securities as provided in the Trust
      Agreement and referred to therein as “Distributions.”

     

    “Dollar”
      or “$” means
      the
      currency of the United States of America that, as at the time of payment, is
      legal tender for the payment of public and private debts.

     

    “DTC”
      means
      The Depository Trust Company, a New York corporation, or any successor
      thereto.

     

    "EBITDA"
      means,
      for any period, without duplication:

    

    (a) the
      sum
      of the following amounts attributable to such period: (i) Net Income,
plus
      (ii)
      interest expense, (iii) charges against income for all federal, state and local
      taxes, (iv) depreciation expense, (v) amortization expense, and (vi) any losses
      arising outside of the ordinary course of business which have been included
      in
      the determination of Net Income, all as determined in accordance with GAAP
      on a
      consolidated basis for the Company and its consolidated subsidiaries,
minus

     

    (b) any
      gains
      arising outside the ordinary course of business which have been included in
      the
      determination of Net Income, as determined on a consolidated basis for the
      Company and its consolidated subsidiaries.

     

    “EDGAR” has
      the
      meaning specified in Section
      7.3(c).

     

    “Equity
      Interests” means
      (a) the
      partnership interests (general or limited) in a partnership, (b) the membership
      interests in a limited liability company and (c) the shares or stock interests
      (both common stock and preferred stock) in a corporation.

     

    “Event
      of Default” has
      the
      meaning specified in Section
      5.1.

     

    “Exchange
      Act”
      means
      the Securities Exchange Act of 1934 or any statute successor thereto, in each
      case as amended from time to time.

     

    “Expiration
      Date”
      has the
      meaning specified in Section
      1.4(h).

     

    “GAAP”
means
      United States generally accepted accounting principles, consistently applied,
      from time to time in effect.

     

    “Global
      Security” means
      a
      Security that evidences all or part of the Securities, the ownership and
      transfers of which shall be made through book entries by a
      Depositary.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    “Government
      Obligation” means
      (a)
      any security that is (i) a direct obligation of the United States of America
      of
      which the full faith and credit of the United States of America is pledged
      or
      (ii) an obligation of a Person controlled or supervised by and acting as an
      agency or instrumentality of the United States of America or the payment of
      which is unconditionally guaranteed as a full faith and credit obligation by
      the
      United States of America, which, in either case (i) or (ii), is not callable
      or
      redeemable at the option of the issuer thereof, and (b) any depositary receipt
      issued by a bank (as defined in section 3(a)(2) of the Securities Act) as
      custodian with respect to any Government Obligation that is specified in clause
      (a) above and held by such bank for the account of the holder of such depositary
      receipt, or with respect to any specific payment of principal of or interest
      on
      any Government Obligation that is so specified and held, provided
      that
      (except as required by law) such custodian is not authorized to make any
      deduction from the amount payable to the holder of such depositary receipt
      from
      any amount received by the custodian in respect of the Government Obligation
      or
      the specific payment of principal or interest evidenced by such depositary
      receipt.

     

    “Holder” means
      a
      Person in whose name a Security is registered in the Securities
      Register.

     

    “Indenture” means
      this instrument as originally executed or as it may from time to time be amended
      or supplemented by one or more amendments or indentures supplemental hereto
      entered into pursuant to the applicable provisions hereof.

     

    “Interest
      Payment Date” means
      January 30, April 30, July 30 and October 30 of each year, commencing on July
      30, 2006, during the term of this Indenture.

     

    “Investment
      Company Act”
      means
      the Investment Company Act of 1940 or any successor statute thereto, in each
      case as amended from time to time.

     

    “Investment
      Company Event”
      means
      the receipt by the Company of an Opinion of Counsel experienced in such matters
      to the effect that, as a result of the occurrence of a change in law or
      regulation (including any announced prospective change) or a written change
      in
      interpretation or application of law or regulation by any legislative body,
      court, governmental agency or regulatory authority, there is more than an
      insubstantial risk that the Trust is or, within ninety (90) days of the date
      of
      such opinion will be, considered an “investment company” that is required to be
      registered under the Investment Company Act, which change or prospective change
      becomes effective or would become effective, as the case may be, on or after
      the
      date of the issuance of the Securities.

     

    “LIBOR”
      has the
      meaning specified in Schedule
      A.

     

    “LIBOR
      Business Day”
      has the
      meaning specified in Schedule
      A.

     

    “LIBOR
      Determination Date”
      has the
      meaning specified in Schedule
      A.

     

    “Liquidation
      Amount”
has
      the
      meaning specified in the Trust Agreement.

     

    “Maturity,” when
      used
      with respect to any Security, means the date on which the principal of such
      Security or any installment of principal becomes due and payable as therein
      or
      herein provided, whether at the Stated Maturity or by declaration of
      acceleration, call for redemption or otherwise.

     

    “Net
      Income”
      means,
      with reference to any period, the net income (or loss) of the Company and its
      consolidated subsidiaries for such period (taken as a cumulative whole), as
      determined in accordance with GAAP, after eliminating all offsetting debits
      and
      credits between the Company and its consolidated subsidiaries and all other
      items required to be eliminated in the course of the preparation of consolidated
      financial statements of the Company and its consolidated subsidiaries in
      accordance with GAAP.

     

    “Notice
      of Default” means
      a
      written notice of the kind specified in Section
      5.1(c).

     

    “Officers’
      Certificate” means
      a
      certificate signed by the Chairman of the Board, a Vice Chairman of the Board,
      the Chief Executive Officer, the President or a Vice President, and by the
      Chief
      Financial Officer, the Treasurer, an Assistant Treasurer, the Secretary or
      an
      Assistant Secretary, of the Company and delivered to the Trustee.

     

    “Operative
      Documents”
      means
      this Indenture, the Purchase Agreement, and the Trust Agreement.

     

    “Opinion
      of Counsel” means
      a
      written opinion of counsel, who may be counsel for or an employee of the Company
      or any Affiliate of the Company.

     

    “Optional
      Redemption Price”
has
      the
      meaning set forth in Section
      11.1.

     

    “Original
      Issue Date”
      means
      the
      date of original issuance of each Security.

     

    “Outstanding” means,
      when used in reference to any Securities, as of the date of determination,
      all
      Securities theretofore authenticated and delivered under this Indenture,
      except:

     

    (i)
      Securities theretofore canceled by the Trustee or delivered to the Trustee
      for
      cancellation;

     

    (ii)
      Securities for whose payment or redemption money in the necessary amount has
      been theretofore deposited with the Trustee or any Paying Agent in trust for
      the
      Holders of such Securities; provided
      that,
      if
      such Securities are to be redeemed, notice of such redemption has been duly
      given pursuant to this Indenture or provision therefor satisfactory to the
      Trustee has been made; and

     

    (iii)
      Securities that have been paid or in substitution for or in lieu of which other
      Securities have been authenticated and delivered pursuant to the provisions
      of
      this Indenture, unless proof satisfactory to the Trustee is presented that
      any
      such Securities are held by Holders in whose hands such Securities are valid,
      binding and legal obligations of the Company;

     

    provided
      that
      in
      determining whether the Holders of the requisite principal amount of Outstanding
      Securities have given any request, demand, authorization, direction, notice,
      consent or waiver hereunder, Securities owned by the Company or any other
      obligor upon the Securities or any Affiliate of the Company or such other
      obligor shall be disregarded and deemed not to be Outstanding unless the Company
      shall hold all Outstanding Securities, except that, in determining whether
      the
      Trustee shall be protected in relying upon any such request, demand,
      authorization, direction, notice, consent or waiver, only Securities that a
      Responsible Officer of the Trustee actually knows to be so owned shall be so
      disregarded. Securities so owned that have been pledged in good faith may be
      regarded as Outstanding if the pledgee establishes to the satisfaction of the
      Trustee the pledgee’s right so to act with respect to such Securities and that
      the pledgee is not the Company or any other obligor upon the Securities or
      any
      Affiliate of the Company or such other obligor. Notwithstanding anything herein
      to the contrary, Securities initially issued to the Trust that are owned by
      the
      Trust shall be deemed to be Outstanding notwithstanding the ownership by the
      Company or an Affiliate of any beneficial interest in the Trust.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    “Paying
      Agent” means
      the
      Trustee or any Person (other than the Company or any Affiliate of the Company)
      authorized by the Company to pay the principal of or any premium or interest
      on,
      or other amounts in respect of, any Securities on behalf of the
      Company.

     

    “Person” means
      a
      legal person, including any individual, corporation, estate, partnership, joint
      venture, association, joint stock company, company, limited liability company,
      trust, unincorporated association, or government, or any agency or political
      subdivision thereof, or any other entity of whatever nature.

     

    “Place
      of Payment” means,
      with respect to the Securities, the Corporate Trust Office of the
      Trustee.

     

    “Preferred
      Securities” has
      the
      meaning specified in the first recital of this Indenture.

     

    “Predecessor
      Security” of
      any
      particular Security means every previous Security evidencing all or a portion
      of
      the same debt as that evidenced by such particular Security. For the purposes
      of
      this definition, any security authenticated and delivered under Section
      3.6
      in lieu
      of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence
      the same debt as the mutilated, destroyed, lost or stolen Security.

     

    “Proceeding” has
      the
      meaning specified in Section
      12.2(b).

     

    “Property
      Trustee” means
      the
      Person identified as the “Property Trustee” in the Trust Agreement, solely in
      its capacity as Property Trustee of the Trust under the Trust Agreement and
      not
      in its individual capacity, or its successor in interest in such capacity,
      or
      any successor Property Trustee appointed as therein provided.

     

    “Purchase
      Agreement” means
      the
      Purchase Agreement or Purchase Agreements (whether one or more) executed and
      delivered contemporaneously with this Indenture by the Trust, the Company and
      the purchaser(s) named therein, as the same may be amended from time to
      time.

     

    “Redemption
      Date”
      means,
      when used with respect to any Security to be redeemed, the date fixed for such
      redemption by or pursuant to this Indenture.

     

    “Redemption
      Price”
      means,
      when used with respect to any Security to be redeemed, in whole or in part,
      the
      Special Redemption Price or the Optional Redemption Price, as applicable, at
      which such Security or portion thereof is to be redeemed as fixed by or pursuant
      to this Indenture.

     

    “Reference
      Banks”
has
      the
      meaning specified in Schedule
      A.

     

    “Regular
      Record Date” for
      the
      interest payable on any Interest Payment Date with respect to the Securities
      means the date that is fifteen (15) days preceding such Interest Payment Date
      (whether or not a Business Day).

     

    “Responsible
      Officer”
      means,
      when used with respect to the Trustee, the officer in the Worldwide Securities
      Services department of the Trustee having direct responsibility for the
      administration of this Indenture.

     

    “Securities” or
      “Security”
      means
      any
      debt securities or debt security, as the case may be, authenticated and
      delivered under this
      Indenture.

     

    “Securities
      Act”
      means
      the Securities Act of 1933 or any successor statute thereto, in each case as
      amended from time to time.

     

    “Securities
      Register” and
      “Securities
      Registrar” have
      the
      respective meanings specified in Section
      3.5.

     

    “Senior
      Debt” means
      the
      principal of and any premium and interest on (including interest accruing on
      or
      after the filing of any petition in bankruptcy or for reorganization relating
      to
      the Company, whether or not such claim for post-petition interest is allowed
      in
      such proceeding) all Debt of the Company, whether incurred on or prior to the
      date of this Indenture or thereafter incurred, unless
      it
      is provided in the instrument creating or evidencing the same or pursuant to
      which the same is outstanding, that such obligations are not superior in right
      of payment to the Securities issued under this Indenture; provided
      that
      Senior Debt shall not be deemed to include any
      (i)
      debt or (ii) other debt securities (and guarantees, if any, in respect of such
      debt securities) issued to any trust other than the Trust (or a trustee of
      any
      such trust), partnership or other entity affiliated with the Company that is
      a
      financing vehicle of the Company (a “financing entity”) in connection with the
      issuance by such financing entity of equity securities or other securities,
      in
      each case of (i) or (ii) pursuant to an instrument that ranks pari
      passu
      with or
      junior in right of payment to this Indenture.

     

    “Special
      Event” means
      the
      occurrence of an Investment Company Event or a Tax Event.

     

    “Special
      Record Date” for
      the
      payment of any Defaulted Interest means a date fixed by the Trustee pursuant
      to
Section
      3.1.

     

    “Special
      Redemption Price”
has
      the
      meaning set forth in Section
      11.2.

     

    “Stated
      Maturity”
      means
      July 30, 2036.

     

    “Subordinated
      Debt”
means
      any Debt that is subordinated in right of payment and security to the Securities
      in a manner reasonably acceptable to the holders of the Trust
      Securities.

    

    “Subsidiary”
      of a
      Person means (a) any corporation more than 50% of the outstanding securities
      having ordinary voting power of which shall at the time be owned or controlled,
      directly or indirectly, by such Person and/or by one or more of its
      Subsidiaries, (b) any partnership, limited liability company, association,
      joint
      venture or similar business organization more than 50% of the ownership
      interests having ordinary voting power of which shall at the time be owned
      or
      controlled, directly or indirectly, by such Person and/or by one or more of
      its
      Subsidiaries, or (c) any other entity required to be consolidated under GAAP.
      Unless otherwise expressly provided, all references herein to a “Subsidiary”
shall mean a Subsidiary of the Company.

    

    “Tangible
      Net Worth”
means,
      at any time,

    

    (a)
      the
      total
      assets of the Company and its Subsidiaries which would be shown as assets on
      a
      consolidated balance sheet of the Company and its Subsidiaries as of such time
      prepared in accordance with GAAP, after eliminating all amounts properly
      attributable to minority interests, if any, in the stock and surplus of
      Subsidiaries, minus

    

    (b)
      Total
      Liabilities, minus

    

    (c)
      the
      net book value of all assets, after deducting any reserves applicable thereto,
      which would be treated as intangible under GAAP, including, without limitation,
      good will, trademarks, trade names, service marks, brand names, copyrights,
      patents and unamortized debt discount and expense, organizational expenses
      and
      the excess of the equity in any Subsidiary over the cost of the investment
      in
      such Subsidiary.

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    “Tax
      Event”
      means
      the receipt by the Company of an Opinion of Counsel experienced in such matters
      to the effect that, as a result of (a) any amendment to or change (including
      any
      announced prospective change) in the laws or any regulations thereunder of
      the
      United States or any political subdivision or taxing authority thereof or
      therein or (b) any judicial decision or any official administrative
      pronouncement (including any private letter ruling, technical advice memorandum
      or field service advice) or regulatory procedure, including any notice or
      announcement of intent to adopt any such pronouncement or procedure (an
“Administrative
      Action”),
      regardless of whether such judicial decision or Administrative Action is issued
      to or in connection with a proceeding involving the Company or the Trust and
      whether or not subject to review or appeal, which amendment, change, judicial
      decision or Administrative Action is enacted, promulgated or announced, in
      each
      case, on or after the date of issuance of the Securities, there is more than
      an
      insubstantial risk that (i) the Trust is, or will be within ninety (90) days
      of
      the date of such opinion, subject to United States federal income tax with
      respect to income received or accrued on the Securities, (ii) interest payable
      by the Company on the Securities is not, or within ninety (90) days of the
      date
      of such opinion, will not be, deductible by the Company, in whole or in part,
      for United States federal income tax purposes, or (iii) the Trust is, or will
      be
      within ninety (90) days of the date of such opinion, subject to more than a
      de
      minimis
      amount
      of other taxes, duties or other governmental charges.

    

    “Total
      Liabilities”
means
      the
      total
      liabilities of the Company and its Subsidiaries which would be shown as
      liabilities on a consolidated balance sheet of the Company and its Subsidiaries
      as of such time prepared in accordance with GAAP.

    

    “Trust”
      has the
      meaning specified in the first recital of this Indenture.

     

    “Trust
      Agreement”
      means
      the Amended
      and Restated
      Trust
      Agreement executed and delivered by the Company, the Property Trustee, Chase
      Bank USA, National Association, as Delaware Trustee and the Administrative
      Trustees named therein, contemporaneously with the execution and delivery of
      this Indenture, for the benefit of the holders of the Trust Securities, as
      amended or supplemented from time to time.

     

    “Trustee” means
      the
      Person named as the “Trustee”
      in the
      first paragraph of this instrument, solely in its capacity as such and not
      in
      its individual capacity, until a successor Trustee shall have become such
      pursuant to the applicable provisions of this Indenture, and, thereafter,
“Trustee”
      shall
      mean or include each Person who is then a Trustee hereunder.

     

    “Trust
      Indenture Act” means
      the
      Trust Indenture Act of 1939, as amended and as in effect on the date as of
      this
      Indenture.

     

    “Trust
      Securities”
      has the
      meaning specified in the first recital of this Indenture.

     

    “Unsecured
      Debt”
means,
      with respect to any Person, any Debt of such Person that is not secured in
      any
      manner by any Liens on any property, including, without limitation, the
      Securities; provided,
      however,
      the
      term “Unsecured Debt” shall not include any unsecured revolving bank lines of
      credit.

    

    SECTION
      1.2.  
      Compliance Certificate and Opinions.

     

    (a)  Upon
      any
      application or request by the Company to the Trustee to take any action under
      any provision of this Indenture, the Company shall, if requested by the Trustee,
      furnish to the Trustee an Officers’ Certificate stating that all conditions
      precedent (including covenants compliance with which constitutes a condition
      precedent), if any, provided for in this Indenture relating to the proposed
      action have been complied with and an Opinion of Counsel stating that in the
      opinion of such counsel all such conditions precedent (including covenants
      compliance with which constitutes a condition precedent), if any, have been
      complied with.

     

    (b)  Every
      certificate or opinion with respect to compliance with a condition or covenant
      provided for in this Indenture (other than the certificate provided pursuant
      to
Section
      10.3)
      shall
      include:

     

    (i)  
      a
      statement by each individual signing such certificate or opinion that such
      individual has read such covenant or condition and the definitions herein
      relating thereto;

     

    (ii)  
      a brief
      statement as to the nature and scope of the examination or investigation upon
      which the statements or opinions of such individual contained in such
      certificate or opinion are based;

     

    (iii)  
      a
      statement that, in the opinion of such individual, he or she has made such
      examination or investigation as is necessary to enable him or her to express
      an
      informed opinion as to whether or not such covenant or condition has been
      complied with; and

     

    (iv)  
      a
      statement as to whether, in the opinion of such individual, such condition
      or
      covenant has been complied with.

     

    SECTION
      1.3.  
      Forms of Documents Delivered to Trustee.

     

    (a)  In
      any
      case where several matters are required to be certified by, or covered by an
      opinion of, any specified Person, it is not necessary that all such matters
      be
      certified by, or covered by the opinion of, only one such Person, or that they
      be so certified or covered by only one document, but one such Person may certify
      or give an opinion with respect to some matters and one or more other such
      Persons as to other matters, and any such Person may certify or give an opinion
      as to such matters in one or several documents.

     

    (b)  Any
      certificate or opinion of an officer of the Company may be based, insofar as
      it
      relates to legal matters, upon a certificate or opinion of, or representations
      by, counsel, unless such officer knows, or after reasonable inquiry should
      know,
      that the certificate or opinion or representations with respect to matters
      upon
      which his or her certificate or opinion is based are erroneous. Any such
      certificate or Opinion of Counsel may be based, insofar as it relates to factual
      matters, upon a certificate or opinion of, or representations by, an officer
      or
      officers of the Company stating that the information with respect to such
      factual matters is in the possession of the Company, unless such counsel knows,
      or after reasonable inquiry should know, that the certificate or opinion or
      representations with respect to such matters are erroneous.

     

    (c)  Where
      any
      Person is required to make, give or execute two or more applications, requests,
      consents, certificates, statements, opinions or other instruments under this
      Indenture, they may, but need not, be consolidated and form one
      instrument.

     

    (d)  Whenever,
      subsequent to the receipt by the Trustee of any Board Resolution, Officers’
Certificate, Opinion of Counsel or other document or instrument, a clerical,
      typographical or other inadvertent or unintentional error or omission shall
      be
      discovered therein, a new document or instrument may be substituted therefor
      in
      corrected form with the same force and effect as if originally received in
      the
      corrected form and, irrespective of the date or dates of the actual execution
      and/or delivery thereof, such substitute document or instrument shall be deemed
      to have been executed and/or delivered as of the date or dates required with
      respect to the document or instrument for which it is substituted. Without
      limiting the generality of the foregoing, any Securities issued under the
      authority of such defective document or instrument shall nevertheless be the
      valid obligations of the Company entitled to the benefits of this Indenture
      equally and ratably with all other Outstanding Securities.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    SECTION
      1.4.  
      Acts
      of Holders.

     

    (a)  Any
      request, demand, authorization, direction, notice, consent, waiver or other
      action provided by this Indenture to be given to or taken by Holders may be
      embodied in and evidenced by one or more instruments of substantially similar
      tenor signed by such Holders in person or by an agent thereof duly appointed
      in
      writing; and, except as herein otherwise expressly provided, such action shall
      become effective when such instrument or instruments (including any appointment
      of an agent) is or are delivered to the Trustee, and, where it is hereby
      expressly required, to the Company. Such instrument or instruments (and the
      action embodied therein and evidenced thereby) are herein sometimes referred
      to
      as the “Act” of
      the
      Holders signing such instrument or instruments. Proof of execution of any such
      instrument or of a writing appointing any such agent shall be sufficient for
      any
      purpose of this Indenture and conclusive in favor of the Trustee and the
      Company, if made in the manner provided in this Section
      1.4.

     

    (b)  The
      fact
      and date of the execution by any Person of any such instrument or writing may
      be
      proved by the affidavit of a witness of such execution or by the certificate
      of
      any notary public or other officer authorized by law to take acknowledgments
      of
      deeds, certifying that the individual signing such instrument or writing
      acknowledged to him or her the execution thereof. Where such execution is by
      a
      Person acting in other than his or her individual capacity, such certificate
      or
      affidavit shall also constitute sufficient proof of his or her authority. The
      fact and date of the execution by any Person of any such instrument or writing,
      or the authority of the Person executing the same, may also be proved in any
      other manner that the Trustee deems sufficient and in accordance with such
      reasonable rules as the Trustee may determine.

     

    (c)  The
      ownership of Securities shall be proved by the Securities Register.

     

    (d)  Any
      request, demand, authorization, direction, notice, consent, waiver or other
      action by the Holder of any Security shall bind every future Holder of the
      same
      Security and the Holder of every Security issued upon the registration of
      transfer thereof or in exchange therefor or in lieu thereof in respect of
      anything done or suffered to be done by the Trustee or the Company in reliance
      thereon, whether or not notation of such action is made upon such
      Security.

     

    (e)  Without
      limiting the foregoing, a Holder entitled to take any action hereunder with
      regard to any particular Security may do so with regard to all or any part
      of
      the principal amount of such Security or by one or more duly appointed agents
      each of which may do so pursuant to such appointment with regard to all or
      any
      part of such principal amount.

     

    (f)  Except
      as
      set forth in paragraph (g) of this Section
      1.4,
      the
      Company may set any day as a record date for the purpose of determining the
      Holders of Outstanding Securities entitled to give, make or take any request,
      demand, authorization, direction, notice, consent, waiver or other action
      provided or permitted by this Indenture to be given, made or taken by Holders
      of
      Securities. If any record date is set pursuant to this paragraph, the Holders
      of
      Outstanding Securities on such record date, and no other Holders, shall be
      entitled to take the relevant action, whether or not such Holders remain Holders
      after such record date; provided
      that no
      such action shall be effective hereunder unless taken on or prior to the
      applicable Expiration Date (as defined in Section
      1.4(h))
      by
      Holders of the requisite principal amount of Outstanding Securities on such
      record date. Nothing in this paragraph shall be construed to prevent the Company
      from setting a new record date for any action for which a record date has
      previously been set pursuant to this paragraph (whereupon the record date
      previously set shall automatically and with no action by any Person be canceled
      and of no effect). Promptly after any record date is set pursuant to this
      paragraph, the Company, at its own expense, shall cause notice of such record
      date, the proposed action by Holders and the applicable Expiration Date to
      be
      given to the Trustee in writing and to each Holder of Securities in the manner
      set forth in Section
      1.6.

     

    (g)  The
      Trustee may set any day as a record date for the purpose of determining the
      Holders of Outstanding Securities entitled to join in the giving or making
      of
      (i) any Notice of Default, (ii) any declaration of acceleration or rescission
      or
      annulment thereof referred to in Section
      5.2,
      (iii)
      any request to institute proceedings referred to in Section
      5.7(b)
      or (iv)
      any direction referred to in Section
      5.12.
      If any
      record date is set pursuant to this paragraph, the Holders of Outstanding
      Securities on such record date, and no other Holders, shall be entitled to
      join
      in such notice, declaration, request or direction, whether or not such Holders
      remain Holders after such record date; provided
      that no
      such action shall be effective hereunder unless taken on or prior to the
      applicable Expiration Date by Holders of the requisite principal amount of
      Outstanding Securities on such record date. Nothing in this paragraph shall
      be
      construed to prevent the Trustee from setting a new record date for any action
      for which a record date has previously been set pursuant to this paragraph
      (whereupon the record date previously set shall automatically and with no action
      by any Person be canceled and of no effect). Promptly after any record date
      is
      set pursuant to this paragraph, the Trustee, at the Company’s expense, shall
      cause notice of such record date, the proposed action by Holders and the
      applicable Expiration Date to be given to the Company in writing and to each
      Holder of Securities in the manner set forth in Section
      1.6.

     

    (h)  With
      respect to any record date set pursuant to paragraph (f) or (g) of this
Section
      1.4,
      the
      party hereto that sets such record date may designate any day as the
“Expiration
      Date” and
      from
      time to time may change the Expiration Date to any earlier or later day;
provided
      that no
      such change shall be effective unless notice of the proposed new Expiration
      Date
      is given to the other party hereto in writing, and to each Holder of Securities
      in the manner set forth in Section
      1.6,
      on or
      prior to the existing Expiration Date. If an Expiration Date is not designated
      with respect to any record date set pursuant to this Section
      1.4,
      the
      party hereto that set such record date shall be deemed to have initially
      designated the ninetieth (90th)
      day
      after such record date as the Expiration Date with respect thereto, subject
      to
      its right to change the Expiration Date as provided in this paragraph.
      Notwithstanding the foregoing, no Expiration Date shall be later than the one
      hundred eightieth (180th)
      day
      after the applicable record date.

     

    SECTION
      1.5.  
      Notices, Etc. to Trustee and Company.

     

    Any
      request, demand, authorization, direction, notice, consent, waiver, Act of
      Holders, or other document provided or permitted by this Indenture to be made
      upon, given or furnished to, or filed with:

     

    (a)  the
      Trustee by any Holder, any holder of Preferred Securities or the Company shall
      be sufficient for every purpose hereunder if made, given, furnished or filed
      in
      writing to or with and received by the Trustee at its Corporate Trust Office,
      or

     

    (b)  the
      Company by the Trustee, any Holder or any holder of Preferred Securities shall
      be sufficient for every purpose hereunder if in writing and mailed, first class,
      postage prepaid, to the Company addressed to it at 1291 Galleria Drive, Suite
      200, Henderson, NV 89014 or at any other address previously furnished in writing
      to the Trustee by the Company.

     

    SECTION
      1.6.  
      Notice to Holders; Waiver.

     

    Where
      this Indenture provides for notice to Holders of any event, such notice shall
      be
      sufficiently given (unless otherwise herein expressly provided) if in writing
      and mailed, first class, postage prepaid, to each Holder affected by such event
      to the address of such Holder as it appears in the Securities Register, not
      later than the latest date (if any), and not earlier than the earliest date
      (if
      any), prescribed for the giving of such notice. If, by reason of the suspension
      of or irregularities in regular mail service or for any other reason, it shall
      be impossible or impracticable to mail notice of any event to Holders when
      said
      notice is required to be given pursuant to any provision of this Indenture,
      then
      any manner of giving such notice as shall be satisfactory to the Trustee shall
      be deemed to be a sufficient giving of such notice. In any case where notice
      to
      Holders is given by mail, neither the failure to mail such notice, nor any
      defect in any notice so mailed, to any particular Holder shall affect the
      sufficiency of such notice with respect to other Holders. Where this Indenture
      provides for notice in any manner, such notice may be waived in writing by
      the
      Person entitled to receive such notice, either before or after the event, and
      such waiver shall be the equivalent of such notice. Waivers of notice by Holders
      shall be filed with the Trustee, but such filing shall not be a condition
      precedent to the validity of any action taken in reliance upon such
      waiver.

     

    SECTION
      1.7.  
      Effect of Headings and Table of Contents.

     

    The
      Article and Section headings herein and the Table of Contents are for
      convenience only and shall not affect the construction of this
      Indenture.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    SECTION
      1.8.  
      Successors and Assigns.

     

    This
      Indenture shall be binding upon and shall inure to the benefit of any successor
      to the Company and the Trustee, including any successor by operation of law.
      Except in connection with a transaction involving the Company that is permitted
      under Article
      VIII
      and
      pursuant to which the assignee agrees in writing to perform the Company’s
      obligations hereunder, the Company shall not assign its obligations
      hereunder.

     

    SECTION
      1.9.  
      Separability Clause.

     

    If
      any
      provision in this Indenture or in the Securities shall be invalid, illegal
      or
      unenforceable, the validity, legality and enforceability of the remaining
      provisions shall not in any way be affected or impaired thereby, and there
      shall
      be deemed substituted for the provision at issue a valid, legal and enforceable
      provision as similar as possible to the provision at issue.

     

    SECTION
      1.10.  
      Benefits of Indenture.

     

    Nothing
      in this Indenture or in the Securities, express or implied, shall give to any
      Person, other than the parties hereto and their successors and assigns, the
      holders of Senior Debt, the Holders of the Securities and, to the extent
      expressly provided in Section
      5.2,
      Section
      5.8,
      Section
      5.9,
      Section
      5.11,
      Section
      5.13,
      Section
      9.2
      and
Section
      10.7,
      the
      holders of Preferred Securities, any benefit or any legal or equitable right,
      remedy or claim under this Indenture.

     

    SECTION
      1.11.  
      Governing Law.

     

    This
      Indenture and the rights and obligations of each of the Holders, the Company
      and
      the Trustee shall be construed and enforced in accordance with and governed
      by
      the laws of the State of New York without reference to its conflict of laws
      provisions (other than section 5-1401 of the General Obligations
      Law).

     

    SECTION
      1.12.  
      Submission to Jurisdiction.

     

    ANY
      LEGAL
      ACTION OR PROCEEDING BY OR AGAINST ANY PARTY HERETO OR WITH RESPECT TO OR
      ARISING OUT OF THIS INDENTURE 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 INDENTURE, 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
      INDENTURE.

     

    SECTION
      1.13.  
      Non-Business Days.

     

    If
      any
      Interest Payment Date, Redemption Date or Stated Maturity of any Security shall
      not be a Business Day, then (notwithstanding any other provision of this
      Indenture or the Securities) payment of interest, premium, if any, or principal
      or other amounts in respect of such Security shall not be made on such date,
      but
      shall be made on the next succeeding Business Day (and no interest shall accrue
      in respect of the amounts whose payment is so delayed for the period from and
      after such Interest Payment Date, Redemption Date or Stated Maturity, as the
      case may be, until such next succeeding Business Day) except that, if such
      Business Day falls in the next succeeding calendar year, such payment shall
      be
      made on the immediately preceding Business Day, in each case with the same
      force
      and effect as if made on the Interest Payment Date or Redemption Date or at
      the
      Stated Maturity.

     

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    ARTICLE
      II

    Security
      Forms

     

    SECTION
      2.1.  
      Form
      of Security.

     

    Any
      Security issued hereunder shall be in substantially the following
      form:

     

    DESERT
      CAPITAL REIT, INC.

    Junior
      Subordinated Note due 2036

     

    No.
      _____________ $
      ____________

     

    Desert
      Capital REIT, Inc., a corporation organized and existing under the laws of
      Maryland (hereinafter called the “Company,”
      which
      term includes any successor Person under the Indenture hereinafter referred
      to),
      for value received, hereby promises to pay to JPMorgan Chase Bank, National
      Association, not in its individual capacity, but solely as Property Trustee
      for
      Desert Capital TRS Statutory Trust I, or registered assigns, the principal
      sum
      of Thirty Million Nine Hundred Twenty Eight Thousand Dollars ($30,928,000)
      [if
      the Security is a Global Security, then insert—
      or such other principal amount represented hereby as may be set forth in the
      records of the Securities Registrar hereinafter referred to in accordance with
      the Indenture]
      on July
      30, 2036. The Company further promises to pay interest on said principal sum
      from June 16, 2006, or from the most recent Interest Payment Date to which
      interest has been paid or duly provided for, quarterly in arrears on
January
      30, April 30, July 30 and October 30
      of each
      year, commencing July 30, 2006, or if any such day is not a Business Day, on
      the
      next succeeding Business Day (and no interest shall accrue in respect of the
      amounts whose payment is so delayed for the period from and after such Interest
      Payment Date until such next succeeding Business Day), except that, if such
      Business Day falls in the next succeeding calendar year, such payment shall
      be
      made on the immediately preceding Business Day, in each case, with the same
      force and effect as if made on the Interest Payment Date, at a variable rate
      equal to LIBOR plus 4.00% per annum, together with Additional Tax Sums, if
      any,
      as provided in Section
      10.5
      of the
      Indenture, until the principal hereof is paid or duly provided for or made
      available for payment; provided,
      further,
      that
      any overdue principal, premium, if any, or Additional Tax Sums and any overdue
      installment of interest shall bear Additional Interest at a variable rate equal
      to LIBOR plus 4.00% per annum (to the extent that the payment of such interest
      shall be legally enforceable), compounded quarterly, from the dates such amounts
      are due until they are paid or made available for payment, and such interest
      shall be payable on demand.

     

    The
      amount of interest payable for any period shall be computed on the basis of
      a
      360-day year and the actual number of days elapsed in the relevant Distribution
      period. The interest so payable, and punctually paid or duly provided for,
      on
      any Interest Payment Date shall, as provided in the Indenture, be paid to the
      Person in whose name this Security (or one or more Predecessor Securities)
      is
      registered at the close of business on the Regular Record Date for such interest
      installment. Any such interest not so punctually paid or duly provided for
      shall
      forthwith cease to be payable to the Holder on such Regular Record Date and
      may
      either be paid to the Person in whose name this Security (or one or more
      Predecessor Securities) is registered at the close of business on a Special
      Record Date for the payment of such Defaulted Interest to be fixed by the
      Trustee, notice whereof shall be given to Holders of Securities not less than
      ten (10) days prior to such Special Record Date, or be paid at any time in
      any
      other lawful manner not inconsistent with the requirements of any securities
      exchange on which the Securities may be listed, and upon such notice as may
      be
      required by such exchange, all as more fully provided in the
      Indenture.

     

    Payment
      of principal of, premium, if any, and interest on this Security shall be made
      in
      such coin or currency of the United States of America as at the time of payment
      is legal tender for payment of public and private debts. Payments of principal,
      premium, if any, and interest due at the Maturity of this Security shall be
      made
      at the Place
      of
      Payment
      upon
      surrender of such Securities to the Paying Agent, and payments of interest
      shall
      be made, subject to such surrender where applicable, by
      wire
      transfer at
      such
      place and to
      such
      account at
      a
      banking institution in the United States as may be designated in writing to
      the
      Paying Agent at least ten (10) Business Days prior to the date for payment
      by
      the Person entitled thereto
      unless
      proper written transfer instructions have not been received by the relevant
      record date, in which case such payments shall be made by check mailed to the
      address of such Person as such address shall appear in the Security Register.
      Notwithstanding the foregoing, so long as the Holder of this Security is the
      Property Trustee, the payment of the principal of (and premium, if any) and
      interest (including any overdue installment of interest and Additional Tax
      Sums,
      if any) on this Security will be made at such place and to such account as
      may
      be designated by the Property Trustee.

     

    The
      indebtedness evidenced by this Security is, to the extent provided in the
      Indenture, subordinate and junior in right of payment to the prior payment
      in
      full of all Senior Debt, and this Security is issued subject to the provisions
      of the Indenture with respect thereto. Each Holder of this Security, by
      accepting the same, (a) agrees to and shall be bound by such provisions, (b)
      authorizes and directs the Trustee on his or her behalf to take such actions
      as
      may be necessary or appropriate to effectuate the subordination so provided
      and
      (c) appoints the Trustee his or her attorney-in-fact for any and all such
      purposes. Each Holder hereof, by his or her acceptance hereof, waives all notice
      of the acceptance of the subordination provisions contained herein and in the
      Indenture by each holder of Senior Debt, whether now outstanding or hereafter
      incurred, and waives reliance by each such holder upon said
      provisions.

     

    Unless
      the certificate of authentication hereon has been executed by the Trustee by
      manual signature, this Security shall not be entitled to any benefit under
      the
      Indenture or be valid or obligatory for any purpose.

     

    [FORM
      OF REVERSE OF SECURITY]

     

    This
      Security is one of a duly authorized issue of securities of the Company (the
      “Securities”)
      issued
      under the Junior Subordinated Indenture, dated as of June 16, 2006 (the
“Indenture”),
      between the Company and JPMorgan Chase Bank, National Association, as Trustee
      (in such capacity, the “Trustee,”
which
      term includes any successor trustee under the Indenture), to which Indenture
      and
      all indentures supplemental thereto reference is hereby made for a statement
      of
      the respective rights, limitations of rights, duties and immunities thereunder
      of the Company, the Trustee, the holders of Senior Debt, the Holders of the
      Securities and the holders of the Preferred Securities, and of the terms upon
      which the Securities are, and are to be, authenticated and
      delivered.

     

    All
      terms
      used in this Security that are defined in the Indenture or in the Amended
      and Restated
      Trust
      Agreement, dated as of June 16, 2006 (as modified, amended or supplemented
      from
      time to time, the “Trust
      Agreement”),
      relating to the Desert
      Capital TRS Statutory Trust I
      (the
“Trust”)
      among
      the Company, as Depositor, the Trustees named therein and the Holders from
      time
      to time of the Trust Securities issued pursuant thereto, shall have the meanings
      assigned to them in the Indenture or the Trust Agreement, as the case may
      be.

     

    The
      Company may, on any Interest Payment Date, at its option, upon not less than
      thirty (30) days’ nor more than sixty (60) days’ written notice to the Holders
      of the Securities (unless a shorter notice period shall be satisfactory to
      the
      Trustee) on or after July 30, 2011 and subject to the terms and conditions
      of
Article
      XI
      of the
      Indenture, redeem this Security in whole at any time or in part from time to
      time at a Redemption Price equal to one hundred percent (100%) of the principal
      amount hereof, together, in the case of any such redemption, with accrued
      interest, including any Additional Interest, through but excluding the date
      fixed as the Redemption Date.

     

    In
      addition, upon the occurrence and during the continuation of a Special Event,
      the Company may, at its option, upon not less than thirty (30) days’ nor more
      than sixty (60) days’ written notice to the Holders of the Securities (unless a
      shorter notice period shall be satisfactory to the Trustee), redeem this
      Security, in whole but not in part, subject to the terms and conditions of
      Article
      XI
      of the
      Indenture at a Redemption Price equal to one hundred seven and one half percent
      (107.5%) of the principal amount hereof, together, in the case of any such
      redemption, with accrued interest, including any Additional Interest, through
      but excluding the date fixed as the Redemption Date.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    In
      the
      event of redemption of this Security in part only, a new Security or Securities
      for the unredeemed portion hereof will be issued in the name of the Holder
      hereof upon the cancellation hereof. If less than all the Securities are to
      be
      redeemed, the particular Securities to be redeemed shall be selected not more
      than sixty (60) days prior to the Redemption Date by the Trustee from the
      Outstanding Securities not previously called for redemption, by such method
      as
      the Trustee shall deem fair and appropriate and which may provide for the
      selection for redemption of a portion of the principal amount of any
      Security.

     

    The
      Indenture permits, with certain exceptions as therein provided, the Company
      and
      the Trustee at any time to enter into a supplemental indenture or indentures
      for
      the purpose of modifying in any manner the rights and obligations of the Company
      and of the Holders of the Securities, with the consent of the Holders of not
      less than a majority in principal amount of the Outstanding Securities. The
      Indenture also contains provisions permitting Holders of specified percentages
      in principal amount of the Securities, on behalf of the Holders of all
      Securities, to waive compliance by the Company with certain provisions of the
      Indenture and certain past defaults under the Indenture and their consequences.
      Any such consent or waiver by the Holder of this Security shall be conclusive
      and binding upon such Holder and upon all future Holders of this Security and
      of
      any Security issued upon the registration of transfer hereof or in exchange
      herefor or in lieu hereof, whether or not notation of such consent or waiver
      is
      made upon this Security.

     

    No
      reference herein to the Indenture and no provision of this Security or of the
      Indenture shall alter or impair the obligation of the Company, which is absolute
      and unconditional, to pay the principal of and any premium, if any, and
      interest, including any Additional Interest (to the extent legally enforceable),
      on this Security at the times, place and rate, and in the coin or currency,
      herein prescribed.

     

    As
      provided in the Indenture and subject to certain limitations therein set forth,
      the transfer of this Security is
      restricted to transfers to “Qualified Purchasers” (as such term is defined in
      the Investment Company Act of 1940, as amended), and
      is
      registrable in the Securities Register, upon surrender of this Security for
      registration of transfer at the office or agency of the Company maintained
      for
      such purpose, duly endorsed by, or accompanied by a written instrument of
      transfer in form satisfactory to the Company and the Securities Registrar and
      duly executed by, the Holder hereof or such Holder’s attorney duly authorized in
      writing, and thereupon one or more new Securities, of like tenor, of authorized
      denominations and for the same aggregate principal amount, will be issued to
      the
      designated transferee or transferees.

     

    The
      Securities are issuable only in registered form without coupons in minimum
      denominations of $100,000 and any integral multiple of $1,000 in excess thereof.
      As provided in the Indenture and subject to certain limitations therein set
      forth, Securities are exchangeable for a like aggregate principal amount of
      Securities and of like tenor of a different authorized denomination, as
      requested by the Holder surrendering the same.

     

    No
      service charge shall be made for any such registration of transfer or exchange,
      but the Company may require payment of a sum sufficient to cover any tax or
      other governmental charge payable in connection therewith.

     

    The
      Company, the Trustee and any agent of the Company or the Trustee may treat
      the
      Person in whose name this Security is registered as the owner hereof for all
      purposes, whether or not this Security be overdue, and neither the Company,
      the
      Trustee nor any such agent shall be affected by notice to the
      contrary.

     

    The
      Company and, by its acceptance of this Security or a beneficial interest herein,
      the Holder of, and any Person that acquires a beneficial interest in, this
      Security agree that, for United States federal, state and local tax purposes,
      it
      is intended that this Security constitute indebtedness.

     

    This
      Security shall be construed and enforced in accordance with and governed by
      the
      laws of the State of New York, without reference to its conflict of laws
      provisions (other than section 5-1401 of the General Obligations
      Law).

     

    IN
      WITNESS WHEREOF, the Company has caused this instrument to be duly executed
      on
      this ____ day of __________, 2006.

     

    Desert
      Capital REIT, Inc.

    

    

    By:

    Name:

     

    Title:

     

    SECTION
      2.2.  
      Restricted Legend.

     

    (a)  Any
      Security issued hereunder shall bear a legend in substantially the following
      form:

     

    “[IF
      THIS SECURITY IS A GLOBAL SECURITY INSERT: THIS
      SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
      REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY
      (“DTC”) OR A NOMINEE OF DTC. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES
      REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE
      LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS
      SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY DTC TO A NOMINEE
      OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC) MAY BE
      REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.

     

    UNLESS
      THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO THE ISSUER
      OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY
      ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS
      REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS
      MADE
      TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
      REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
      OR
      OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
      HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

     

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED IN A
      TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
      AMENDED (THE “SECURITIES ACT”), AND SUCH SECURITIES, AND ANY INTEREST THEREIN,
      MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
      REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF ANY
      SECURITIES IS HEREBY NOTIFIED THAT THE SELLER OF THE SECURITIES MAY BE RELYING
      ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED
      BY RULE 144A UNDER THE SECURITIES ACT.

     

    THE
      HOLDER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE AGREES FOR THE BENEFIT
      OF THE COMPANY THAT (A) SUCH SECURITIES MAY BE OFFERED, RESOLD OR OTHERWISE
      TRANSFERRED ONLY (I) TO THE COMPANY OR (II) TO A PERSON WHOM THE SELLER
      REASONABLY BELIEVES IS A “QUALIFIED PURCHASER” (AS DEFINED IN SECTION 2(a)(51)
      OF THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED), AND (B) THE HOLDER WILL
      NOTIFY ANY PURCHASER OF ANY SECURITIES FROM IT OF THE RESALE RESTRICTIONS
      REFERRED TO IN (A) ABOVE.

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    THE
      SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING AN
      AGGREGATE PRINCIPAL AMOUNT OF NOT LESS THAN $100,000. TO THE FULLEST EXTENT
      PERMITTED BY LAW, ANY ATTEMPTED TRANSFER OF SECURITIES, OR ANY INTEREST THEREIN,
      IN A BLOCK HAVING AN AGGREGATE PRINCIPAL AMOUNT OF LESS THAN $100,000 AND
      MULTIPLES OF $1,000 IN EXCESS THEREOF SHALL BE DEEMED TO BE VOID AND OF NO
      LEGAL
      EFFECT WHATSOEVER. TO THE FULLEST EXTENT PERMITTED BY LAW, ANY SUCH PURPORTED
      TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH SECURITIES FOR ANY
      PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF PRINCIPAL OF OR INTEREST
      ON SUCH SECURITIES, OR ANY INTEREST THEREIN, AND SUCH PURPORTED TRANSFEREE
      SHALL
      BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH SECURITIES.

     

    THE
      HOLDER OF THIS SECURITY, OR ANY INTEREST THEREIN, BY ITS ACCEPTANCE HEREOF
      OR
      THEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT
      PLAN, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO
      TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
      (“ERISA”),
      OR
      SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”)
      (EACH A
“PLAN”),
      OR AN
      ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF ANY PLAN’S
      INVESTMENT IN THE ENTITY, AND NO PERSON INVESTING “PLAN ASSETS” OF ANY PLAN MAY
      ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST THEREIN. ANY PURCHASER OR HOLDER
      OF THE SECURITIES OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED
      BY
      ITS PURCHASE AND HOLDING THEREOF THAT IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN
      THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE
      CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN EMPLOYEE
      BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF ANY
      EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE.”

     

    (b)  The
      above
      legends shall not be removed from any Security unless there is delivered to
      the
      Company satisfactory evidence, which may include an Opinion of Counsel, as
      may
      be reasonably required to ensure that any future transfers thereof may be made
      without restriction under or violation of the provisions of the Securities
      Act
      and other applicable law. Upon provision of such satisfactory evidence, the
      Company shall execute and deliver to the Trustee, and the Trustee shall deliver,
      upon receipt of a Company Order directing it to do so, a Security that does
      not
      bear the legend.

     

    SECTION
      2.3.  
      Form
      of Trustee’s Certificate of Authentication.

     

    The
      Trustee’s certificate of authentication shall be in substantially the following
      form:

     

    This
      is
      one of the Securities referred to in the within-mentioned
      Indenture.

     

    Dated:

     

    JPMorgan
      Chase Bank, National Association,

     

    not
      in
      its individual capacity, but solely as Trustee

     

    By:
      __________________________________

     

     Authenticating
      Agent

     

    By:
      __________________________________

     Authorized
      Signatory 

    

     

    SECTION
      2.4.  
      Temporary Securities.

     

    (a)  Pending
      the preparation of definitive Securities, the Company may execute, and upon
      Company Order the Trustee shall authenticate and deliver, temporary Securities
      that are printed, lithographed, typewritten, mimeographed or otherwise produced,
      in any denomination, substantially of the tenor of the definitive Securities
      in
      lieu of which they are issued and with such appropriate insertions, omissions,
      substitutions and other variations as the officers executing such Securities
      may
      determine, as evidenced by their execution of such Securities.

     

    (b)  If
      temporary Securities are issued, the Company will cause definitive Securities
      to
      be prepared without unreasonable delay. After the preparation of definitive
      Securities, the temporary Securities shall be exchangeable for definitive
      Securities upon surrender of the temporary Securities at the office or agency
      of
      the Company designated for that purpose without charge to the Holder. Upon
      surrender for cancellation of any one or more temporary Securities, the Company
      shall execute and the Trustee shall authenticate and deliver in exchange
      therefor one or more definitive Securities of any authorized denominations
      having the same Original Issue Date and Stated Maturity and having the same
      terms as such temporary Securities. Until so exchanged, the temporary Securities
      shall in all respects be entitled to the same benefits under this Indenture
      as
      definitive Securities.

     

    SECTION
      2.5.  
      Definitive Securities.

     

    The
      Securities issued on the Original Issue Date shall be in definitive form. The
      definitive Securities shall be printed, lithographed or engraved, or produced
      by
      any combination of these methods, if required by any securities exchange on
      which the Securities may be listed, on a steel engraved border or steel engraved
      borders or may be produced in any other manner permitted by the rules of any
      securities exchange on which the Securities may be listed, all as determined
      by
      the officers executing such Securities, as evidenced by their execution of
      such
      Securities.

     

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    ARTICLE
      III

    The
      Securities

     

    SECTION
      3.1.  
      Payment of Principal and Interest.

     

    (a)  The
      unpaid principal amount of the Securities shall bear interest at a variable
      rate
      of LIBOR plus 4.00% per annum until paid or duly provided for, such interest
      to
      accrue from the Original Issue Date or from the most recent Interest Payment
      Date to which interest has been paid or duly provided for, and any overdue
      principal, premium, if any, or Additional Tax Sums and any overdue installment
      of interest shall bear Additional Interest at the rate equal to a
      variable rate
      of
      LIBOR plus 4.00% per
      annum
      compounded quarterly from the dates such amounts are due until they are paid
      or
      funds for the payment thereof are made available for payment.

     

    (b)  Interest
      and Additional Interest on any Security that is payable, and is punctually
      paid
      or duly provided for, on any Interest Payment Date shall be paid to the Person
      in whose name that Security (or one or more Predecessor Securities) is
      registered at the close of business on the Regular Record Date for such
      interest, except that interest and any Additional Interest payable on the Stated
      Maturity (or any date of principal repayment upon early maturity) of the
      principal of a Security or on a Redemption Date shall be paid to the Person
      to
      whom principal is paid. The initial payment of interest on any Security that
      is
      issued between a Regular Record Date and the related Interest Payment Date
      shall
      be payable as provided in such Security.

     

    (c)  Any
      interest on any Security that is due and payable, but is not timely paid or
      duly
      provided for, on any Interest Payment Date for Securities (herein called
“Defaulted
      Interest”)
      shall
      forthwith cease to be payable to the registered Holder on the relevant Regular
      Record Date by virtue of having been such Holder, and such Defaulted Interest
      may be paid by the Company, at its election in each case, as provided in
      paragraph (i) or (ii) below:

     

    (i)  
      The
      Company may elect to make payment of any Defaulted Interest to the Persons
      in
      whose names the Securities (or their respective Predecessor Securities) are
      registered at the close of business on a Special Record Date for the payment
      of
      such Defaulted Interest (a “Special
      Record Date”),
      which
      shall be fixed in the following manner. At least thirty (30) days prior to
      the
      date of the proposed payment, the Company shall notify the Trustee in writing
      of
      the amount of Defaulted Interest proposed to be paid on each Security and the
      date of the proposed payment, and at the same time the Company shall deposit
      with the Trustee an amount of money equal to the aggregate amount proposed
      to be
      paid in respect of such Defaulted Interest or shall make arrangements
      satisfactory to the Trustee for such deposit prior to the date of the proposed
      payment, such money when deposited to be held in trust for the benefit of the
      Persons entitled to such Defaulted Interest. Thereupon the Trustee shall fix
      a
      Special Record Date for the payment of such Defaulted Interest, which shall
      be
      not more than fifteen (15) days and not less than ten (10) days prior to the
      date of the proposed payment and not less than ten (10) days after the receipt
      by the Trustee of the notice of the proposed payment. The Trustee shall promptly
      notify the Company of such Special Record Date and, in the name and at the
      expense of the Company, shall cause notice of the proposed payment of such
      Defaulted Interest and the Special Record Date therefor to be mailed, first
      class, postage prepaid, to each Holder of a Security at the address of such
      Holder as it appears in the Securities Register not less than ten (10) days
      prior to such Special Record Date. Notice of the proposed payment of such
      Defaulted Interest and the Special Record Date therefor having been so mailed,
      such Defaulted Interest shall be paid to the Persons in whose names the
      Securities (or their respective Predecessor Securities) are registered on such
      Special Record Date; or

     

    (ii)  
      The
      Company may make payment of any Defaulted Interest in any other lawful manner
      not inconsistent with the requirements of any securities exchange or automated
      quotation system on which the Securities may be listed, traded or quoted and,
      upon such notice as may be required by such exchange or automated quotation
      system (or by the Trustee if the Securities are not listed), if, after notice
      given by the Company to the Trustee of the proposed payment pursuant to this
      clause, such payment shall be deemed practicable by the Trustee.

     

    (d)  Payments
      of interest on the Securities shall include interest accrued to but excluding
      the respective Interest Payment Dates. Interest
      payments for the Securities shall be computed and paid on the basis of a 360-day
      year and the actual number of days elapsed in the relevant interest
      period.

     

    (e)  Payment
      of principal of, premium, if any, and interest on the Securities shall be made
      in such coin or currency of the United States of America as at the time of
      payment is legal tender for payment of public and private debts. Payments of
      principal, premium, if any, and interest due at the Maturity of such Securities
      shall be made at the Place of Payment upon surrender of such Securities to
      the
      Paying Agent and payments of interest shall be made subject to such surrender
      where applicable, by
      wire
      transfer at
      such
      place and to
      such
      account at
      a
      banking institution in the United States as may be designated in writing to
      the
      Paying Agent at least ten (10) Business Days prior to the date for payment
      by
      the Person entitled thereto
      unless
      proper written transfer instructions have not been received by the relevant
      record date, in which case such payments shall be made by check mailed to the
      address of such Person as such address shall appear in the Security Register.
      Notwithstanding the foregoing, so long as the holder of this Security is the
      Property Trustee, the payment of the principal of (and premium, if any) and
      interest (including any overdue installment of interest and Additional Tax
      Sums,
      if any) on this Security will be made at such place and to such account as
      may
      be designated by the Property Trustee.

     

    (f)  The
      parties hereto acknowledge and agree that the holders of the Preferred
      Securities have certain rights to direct the Company to modify the Interest
      Payment Dates and corresponding Redemption Date and Stated Maturity of the
      Securities or a portion of the Securities pursuant to the Purchase Agreement.
      In
      the event any such modifications are made to the Securities or a portion of
      the
      Securities, appropriate changes to the form of Security set forth in Article
      II
      hereof shall be made prior to the issuance and authentication of new or
      replacement Securities. Any such modification of the Interest Payment Date
      and
      corresponding Redemption Date and Stated Maturity with respect to any Securities
      or tranche of Securities shall not require or be subject to the consent of
      the
      Trustee.

     

    (g)  Subject
      to the foregoing provisions of this Section
      3.1,
      each
      Security delivered under this Indenture upon transfer of or in exchange for
      or
      in lieu of any other Security shall carry the rights to interest accrued and
      unpaid, and to accrue, that were carried by such other Security.

     

    SECTION
      3.2.  
      Denominations.

     

    The
      Securities shall be in registered form without coupons and shall be issuable
      in
      minimum denominations of $100,000 and any integral multiple of $1,000 in excess
      thereof.

     

    SECTION
      3.3.  
      Execution, Authentication, Delivery and Dating.

     

    (a)  At
      any
      time and from time to time after the execution and delivery of this Indenture,
      the Company may deliver Securities in an aggregate principal amount (including
      all then Outstanding Securities) not in excess of Thirty Million Nine Hundred
      Twenty Eight Thousand Dollars ($30,928,000) executed by the Company to the
      Trustee for authentication, together with a Company Order for the authentication
      and delivery of such Securities, and the Trustee in accordance with the Company
      Order shall authenticate and deliver such Securities. In authenticating such
      Securities, and accepting the additional responsibilities under this Indenture
      in relation to such Securities, the Trustee shall be entitled to receive, and
      shall be fully protected in relying upon:

     

    (i)  
      a copy
      of any Board Resolution relating thereto; and

     

    (ii)  
      an
      Opinion of Counsel stating that: (1) such Securities, when authenticated and
      delivered by the Trustee and issued by the Company in the manner and subject
      to
      any conditions specified in such Opinion of Counsel, will constitute, and the
      Indenture constitutes, valid and legally binding obligations of the Company,
      each enforceable in accordance with its terms, subject to bankruptcy,
      insolvency, fraudulent transfer, reorganization, moratorium and similar laws
      of
      general applicability relating to or affecting creditors’ rights and to general
      equity principles; (2) the Securities have been duly authorized and executed
      by
      the Company and have been delivered to the Trustee for authentication in
      accordance with this Indenture; (3) the Securities are not required to be
      registered under the Securities Act; and (4) the Indenture is not required
      to be
      qualified under the Trust Indenture Act.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    (b)  The
      Securities shall be executed on behalf of the Company by its Chairman of the
      Board, its Vice Chairman of the Board, its Chief Executive Officer, Chief
      Financial Officer, its President or one of its Vice Presidents. The signature
      of
      any of these officers on the Securities may be manual or facsimile. Securities
      bearing the manual or facsimile signatures of individuals who were at any time
      the proper officers of the Company shall bind the Company, notwithstanding
      that
      such individuals or any of them have ceased to hold such offices prior to the
      authentication and delivery of such Securities or did not hold such offices
      at
      the date of such Securities.

     

    (c)  No
      Security shall be entitled to any benefit under this Indenture or be valid
      or
      obligatory for any purpose, unless there appears on such Security a certificate
      of authentication substantially in the form provided for herein executed by
      the
      Trustee by the manual signature of one of its authorized signatories, and such
      certificate upon any Security shall be conclusive evidence, and the only
      evidence, that such Security has been duly authenticated and delivered
      hereunder. Notwithstanding the foregoing, if any Security shall have been
      authenticated and delivered hereunder but never issued and sold by the Company,
      and the Company shall deliver such Security to the Trustee for cancellation
      as
      provided in Section
      3.8,
      for all
      purposes of this Indenture such Security shall be deemed never to have been
      authenticated and delivered hereunder and shall never be entitled to the
      benefits of this Indenture.

     

    (d)  Each
      Security shall be dated the date of its authentication.

     

    SECTION
      3.4.  
      Global Securities.

     

    (a)  Upon
      the
      election of the Holder after the Original Issue Date, which election need not
      be
      in writing, the Securities owned by such Holder shall be issued in the form
      of
      one or more Global Securities registered in the name of the Depositary or its
      nominee. Each Global Security issued under this Indenture shall be registered
      in
      the name of the Depositary designated by the Company for such Global Security
      or
      a nominee thereof and delivered to such Depositary or a nominee thereof or
      custodian therefor, and each such Global Security shall constitute a single
      Security for all purposes of this Indenture.

     

    (b)  Notwithstanding
      any other provision in this Indenture, no Global Security may be exchanged
      in
      whole or in part for registered Securities, and no transfer of a Global Security
      in whole or in part may be registered, in the name of any Person other than
      the
      Depositary for such Global Security or a nominee thereof unless (i) such
      Depositary advises the Trustee and the Company in writing that such Depositary
      is no longer willing or able to properly discharge its responsibilities as
      Depositary with respect to such Global Security, and no qualified successor
      is
      appointed by the Company within ninety (90) days of receipt by the Company
      of
      such notice, (ii) such Depositary ceases to be a clearing agency registered
      under the Exchange Act and no successor is appointed by the Company within
      ninety (90) days after obtaining knowledge of such event, (iii) the Company
      executes and delivers to the Trustee a Company Order stating that the Company
      elects to terminate the book-entry system through the Depositary or (iv) an
      Event of Default shall have occurred and be continuing. Upon the occurrence
      of
      any event specified in clause (i), (ii), (iii) or (iv) above, the Trustee shall
      notify the Depositary and instruct the Depositary to notify all owners of
      beneficial interests in such Global Security of the occurrence of such event
      and
      of the availability of Securities to such owners of beneficial interests
      requesting the same. The Trustee may conclusively rely, and be protected in
      relying, upon the written identification of the owners of beneficial interests
      furnished by the Depositary, and shall not be liable for any delay resulting
      from a delay by the Depositary. Upon the issuance of such Securities and the
      registration in the Securities Register of such Securities in the names of
      the
      Holders of the beneficial interests therein, the Trustees shall recognize such
      holders of beneficial interests as Holders.

     

    (c)  If
      any
      Global Security is to be exchanged for other Securities or canceled in part,
      or
      if another Security is to be exchanged in whole or in part for a beneficial
      interest in any Global Security, then either (i) such Global Security shall
      be
      so surrendered for exchange or cancellation as provided in this Article
      III
      or (ii)
      the principal amount thereof shall be reduced or increased by an amount equal
      to
      (x) the portion thereof to be so exchanged or canceled, or (y) the principal
      amount of such other Security to be so exchanged for a beneficial interest
      therein, as the case may be, by means of an appropriate adjustment made on
      the
      records of the Securities Registrar, whereupon the Trustee, in accordance with
      the Applicable Depositary Procedures, shall instruct the Depositary or its
      authorized representative to make a corresponding adjustment to its records.
      Upon any such surrender or adjustment of a Global Security by the Depositary,
      accompanied by registration instructions, the Company shall execute and the
      Trustee shall authenticate and deliver any Securities issuable in exchange
      for
      such Global Security (or any portion thereof) in accordance with the
      instructions of the Depositary. The Trustee shall not be liable for any delay
      in
      delivery of such instructions and may conclusively rely on, and shall be fully
      protected in relying on, such instructions.

     

    (d)  Every
      Security authenticated and delivered upon registration of transfer of, or in
      exchange for or in lieu of, a Global Security or any portion thereof shall
      be
      authenticated and delivered in the form of, and shall be, a Global Security,
      unless such Security is registered in the name of a Person other than the
      Depositary for such Global Security or a nominee thereof.

     

    (e)  Securities
      distributed to holders of Book-Entry Preferred Securities (as defined in the
      applicable Trust Agreement) upon the dissolution of the Trust shall be
      distributed in the form of one or more Global Securities registered in the
      name
      of a Depositary or its nominee, and deposited with the Securities Registrar,
      as
      custodian for such Depositary, or with such Depositary, for credit by the
      Depositary to the respective accounts of the beneficial owners of the Securities
      represented thereby (or such other accounts as they may direct). Securities
      distributed to holders of Preferred Securities other than Book-Entry Preferred
      Securities upon the dissolution of the Trust shall not be issued in the form
      of
      a Global Security or any other form intended to facilitate book-entry trading
      in
      beneficial interests in such Securities.

     

    (f)  The
      Depositary or its nominee, as the registered owner of a Global Security, shall
      be the Holder of such Global Security for all purposes under this Indenture
      and
      the Securities, and owners of beneficial interests in a Global Security shall
      hold such interests pursuant to the Applicable Depositary Procedures.
      Accordingly, any such owner’s beneficial interest in a Global Security shall be
      shown only on, and the transfer of such interest shall be effected only through,
      records maintained by the Depositary or its nominee or its Depositary
      Participants. The Securities Registrar and the Trustee shall be entitled to
      deal
      with the Depositary for all purposes of this Indenture relating to a Global
      Security (including the payment of principal and interest thereon and the giving
      of instructions or directions by owners of beneficial interests therein and
      the
      giving of notices) as the sole Holder of the Security and shall have no
      obligations to the owners of beneficial interests therein. Neither the Trustee
      nor the Securities Registrar shall have any liability in respect of any
      transfers effected by the Depositary.

     

    (g)  The
      rights of owners of beneficial interests in a Global Security shall be exercised
      only through the Depositary and shall be limited to those established by law
      and
      agreements between such owners and the Depositary and/or its Depositary
      Participants.

     

    (h)  No
      holder
      of any beneficial interest in any Global Security held on its behalf by a
      Depositary shall have any rights under this Indenture with respect to such
      Global Security, and such Depositary may be treated by the Company, the Trustee
      and any agent of the Company or the Trustee as the owner of such Global Security
      for all purposes whatsoever. None of the Company, the Trustee nor any agent
      of
      the Company or the Trustee will have any responsibility or liability for any
      aspect of the records relating to or payments made on account of beneficial
      ownership interests of a Global Security or maintaining, supervising or
      reviewing any records relating to such beneficial ownership interests.
      Notwithstanding the foregoing, nothing herein shall prevent the Company, the
      Trustee or any agent of the Company or the Trustee from giving effect to any
      written certification, proxy or other authorization furnished by a Depositary
      or
      impair, as between a Depositary and such holders of beneficial interests, the
      operation of customary practices governing the exercise of the rights of the
      Depositary (or its nominee) as Holder of any Security.

     

    SECTION
      3.5.  
      Registration, Transfer and Exchange Generally.

     

    (a)  The
      Trustee shall cause to be kept at the Corporate Trust Office a register (the
      “Securities
      Register”)
      in
      which the registrar and transfer agent with respect to the Securities (the
      “Securities
      Registrar”),
      subject to such reasonable regulations as it may prescribe, shall provide for
      the registration of Securities and of transfers and exchanges of Securities.
      The
      Trustee shall at all times also be the Securities Registrar. The provisions
      of
Article
      VI
      shall
      apply to the Trustee in its role as Securities Registrar.

     

    (b)  Subject
      to compliance with Section
      2.2(b),
      upon
      surrender for registration of transfer of any Security at the offices or
      agencies of the Company designated for that purpose the Company shall execute,
      and the Trustee shall authenticate and deliver, in the name of the designated
      transferee or transferees, one or more new Securities of any authorized
      denominations of like tenor and aggregate principal amount.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    (c)  At
      the
      option of the Holder, Securities may be exchanged for other Securities of any
      authorized denominations, of like tenor and aggregate principal amount, upon
      surrender of the Securities to be exchanged at such office or agency. Whenever
      any Securities are so surrendered for exchange, the Company shall execute,
      and
      the Trustee shall authenticate and deliver, the Securities that the Holder
      making the exchange is entitled to receive.

     

    (d)  All
      Securities issued upon any transfer or exchange of Securities shall be the
      valid
      obligations of the Company, evidencing the same debt, and entitled to the same
      benefits under this Indenture, as the Securities surrendered upon such transfer
      or exchange.

     

    (e)  Every
      Security presented or surrendered for transfer or exchange shall (if so required
      by the Company or the Trustee) be duly endorsed, or be accompanied by a written
      instrument of transfer in form satisfactory to the Company and the Securities
      Registrar, duly executed by the Holder thereof or such Holder’s attorney duly
      authorized in writing.

     

    (f)  No
      service charge shall be made to a Holder for any transfer or exchange of
      Securities, but the Company may require payment of a sum sufficient to cover
      any
      tax or other governmental charge that may be imposed in connection with any
      transfer or exchange of Securities.

     

    (g)  Neither
      the Company nor the Trustee shall be required pursuant to the provisions of
      this
Section
      3.5 (g):
      (i) to
      issue, register the transfer of or exchange any Security during a period
      beginning at the opening of business fifteen (15) days before the day of
      selection for redemption of Securities pursuant to Article
      XI
      and
      ending at the close of business on the day of mailing of the notice of
      redemption or (ii) to register the transfer of or exchange any Security so
      selected for redemption in whole or in part, except, in the case of any such
      Security to be redeemed in part, any portion thereof not to be
      redeemed.

     

    (h)  The
      Company shall designate an office or offices or agency or agencies where
      Securities may be surrendered for registration or transfer or exchange. The
      Company initially designates the Corporate Trust Office as its office and agency
      for such purposes. The Company shall give prompt written notice to the Trustee
      and to the Holders of any change in the location of any such office or agency.
      

     

    (i)  The
      Securities may only be transferred to a “Qualified Purchaser” as such term is
      defined in section 2(a)(51) of the Investment Company Act.

     

    (j)  Neither
      the Trustee nor the Securities Registrar shall be responsible for ascertaining
      whether any transfer hereunder complies with the registration provisions of
      or
      any exemptions from the Securities Act, applicable state securities laws or
      the
      applicable laws of any other jurisdiction, ERISA, the Code, or the Investment
      Company Act; provided that if a certificate is specifically required by the
      express terms of this Section 3.5 to be delivered to the Trustee or the
      Securities Registrar by a Holder or transferee of a Security, the Trustee and
      the Securities Registrar shall be under a duty to receive and examine the same
      to determine whether or not the certificate substantially conforms on its face
      to the requirements of this Indenture and shall promptly notify the party
      delivering the same if such certificate does not comply with such
      terms.

     

    SECTION
      3.6.  
      Mutilated, Destroyed, Lost and Stolen Securities.

     

    (a)  If
      any
      mutilated Security is surrendered to the Trustee together with such security
      or
      indemnity as may be required by the Trustee to save the Company and the Trustee
      harmless, the Company shall execute and the Trustee shall authenticate and
      deliver in exchange therefor a new Security of like tenor and aggregate
      principal amount and bearing a number not contemporaneously
      outstanding.

     

    (b)  If
      there
      shall be delivered to the Trustee (i) evidence to its satisfaction of the
      destruction, loss or theft of any Security and (ii) such security or indemnity
      as may be required by it to save each of the Company and the Trustee harmless,
      then, in the absence of notice to the Company or the Trustee that such Security
      has been acquired by a bona
      fide
      purchaser, the Company shall execute and upon its written request the Trustee
      shall authenticate and deliver, in lieu of any such destroyed, lost or stolen
      Security, a new Security of like tenor and aggregate principal amount as such
      destroyed, lost or stolen Security, and bearing a number not contemporaneously
      outstanding.

     

    (c)  If
      any
      such mutilated, destroyed, lost or stolen Security has become or is about to
      become due and payable, the Company in its discretion may, instead of issuing
      a
      new Security, pay such Security.

     

    (d)  Upon
      the
      issuance of any new Security under this Section
      3.6,
      the
      Company may require the payment of a sum sufficient to cover any tax or other
      governmental charge that may be imposed in relation thereto and any other
      expenses (including the fees and expenses of the Trustee) connected
      therewith.

     

    (e)  Every
      new
      Security issued pursuant to this Section
      3.6
      in lieu
      of any mutilated, destroyed, lost or stolen Security shall constitute an
      original additional contractual obligation of the Company, whether or not the
      mutilated, destroyed, lost or stolen Security shall be at any time enforceable
      by anyone, and shall be entitled to all the benefits of this Indenture equally
      and proportionately with any and all other Securities duly issued
      hereunder.

     

    (f)  The
      provisions of this Section
      3.6
      are
      exclusive and shall preclude (to the extent lawful) all other rights and
      remedies with respect to the replacement or payment of mutilated, destroyed,
      lost or stolen Securities.

     

    SECTION
      3.7.  
      Persons Deemed Owners.

     

    The
      Company, the Trustee and any agent of the Company or the Trustee shall treat
      the
      Person in whose name any Security is registered as the owner of such Security
      for the purpose of receiving payment of principal of and any interest on such
      Security and for all other purposes whatsoever, and neither the Company, the
      Trustee nor any agent of the Company or the Trustee shall be affected by notice
      to the contrary.

     

    SECTION
      3.8.  
      Cancellation.

     

    All
      Securities surrendered for payment, redemption, transfer or exchange shall,
      if
      surrendered to any Person other than the Trustee, be delivered to the Trustee,
      and any such Securities and Securities surrendered directly to the Trustee
      for
      any such purpose shall be promptly canceled by it. The Company may at any time
      deliver to the Trustee for cancellation any Securities previously authenticated
      and delivered hereunder that the Company may have acquired in any manner
      whatsoever, and all Securities so delivered shall be promptly canceled by the
      Trustee. No Securities shall be authenticated in lieu of or in exchange for
      any
      Securities canceled as provided in this Section
      3.8,
      except
      as expressly permitted by this Indenture. All canceled Securities shall be
      retained or disposed of by the Trustee in accordance with its customary
      practices and the Trustee shall deliver to the Company a certificate of such
      disposition.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    SECTION
      3.9.  
      Reserved.

     

    SECTION
      3.10.  
      Reserved.

     

    SECTION
      3.11.  
      Agreed Tax Treatment.

     

    Each
      Security issued hereunder shall provide that the Company and, by its acceptance
      or acquisition of a Security or a beneficial interest therein, the Holder of,
      and any Person that acquires a direct or indirect beneficial interest in, such
      Security, intend and agree to treat such Security as indebtedness of the Company
      for U.S. Federal, state and local tax purposes and to treat the Preferred
      Securities (including but not limited to all payments and proceeds with respect
      to the Preferred Securities) as an undivided beneficial ownership interest
      in
      the Securities (and any other Trust property) (and payments and proceeds
      therefrom, respectively) for U.S. Federal, state and local tax purposes. The
      provisions of this Indenture shall be interpreted to further this intention
      and
      agreement of the parties.

     

    SECTION
      3.12.  
      CUSIP Numbers.

     

    The
      Company in issuing the Securities may use “CUSIP” numbers (if then generally in
      use), and, if so, the Trustee shall use “CUSIP” numbers in notices of redemption
      and other similar or related materials as a convenience to Holders; provided
      that any
      such notice or other materials may state that no representation is made as
      to
      the correctness of such numbers either as printed on the Securities or as
      contained in any notice of redemption or other materials and that reliance
      may
      be placed only on the other identification numbers printed on the Securities,
      and any such redemption shall not be affected by any defect in or omission
      of
      such numbers.

     

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    ARTICLE
      IV

    Satisfaction
      and Discharge

     

    SECTION
      4.1.  
      Satisfaction and Discharge of Indenture.

     

    This
      Indenture shall, upon Company Request, cease to be of further effect (except
      as
      to any surviving rights of registration of transfer or exchange of Securities
      herein expressly provided for and as otherwise provided in this Section
      4.1)
      and the
      Trustee, on demand of and at the expense of the Company, shall execute proper
      instruments acknowledging satisfaction and discharge of this Indenture,
      when

     

    (a)  either

     

    (i)
      all
      Securities theretofore authenticated and delivered (other than (A) Securities
      that have been mutilated, destroyed, lost or stolen and that have been replaced
      or paid as provided in Section
      3.6
      and (B)
      Securities for whose payment money has theretofore been deposited in trust
      or
      segregated and held in trust by the Company and thereafter repaid to the Company
      or discharged from such trust as provided in Section
      10.2)
      have
      been delivered to the Trustee for cancellation; or

     

    (ii)
      all
      such Securities not theretofore delivered to the Trustee for
      cancellation

     

    (A)  have
      become due and payable, or

     

    (B)  will
      become due and payable at their Stated Maturity within one year of the date
      of
      deposit, or

     

    (C)  are
      to be
      called for redemption within one year under arrangements satisfactory to the
      Trustee for the giving of notice of redemption by the Trustee in the name,
      and
      at the expense, of the Company,

     

    and
      the
      Company, in the case of subclause (ii)(A), (B) or (C) above, has deposited
      or
      caused to be deposited with the Trustee as trust funds in trust for such purpose
      (x) an amount in the currency or currencies in which the Securities are payable,
      (y) Government Obligations which through the scheduled payment of principal
      and
      interest in respect thereof in accordance with their terms will provide, not
      later than the due date of any payment, money in an amount or (z) a combination
      thereof, in each case sufficient, in the opinion of a nationally recognized
      firm
      of independent public accountants expressed in a written certification thereof
      delivered to the Trustee, to pay and discharge the entire indebtedness on such
      Securities not theretofore delivered to the Trustee for cancellation, for
      principal and any premium and interest (including any Additional Interest)
      to
      the date of such deposit (in the case of Securities that have become due and
      payable) or to the Stated Maturity (or any date of principal repayment upon
      early maturity) or Redemption Date, as the case may be;

     

    (b)  the
      Company has paid or caused to be paid all other sums payable hereunder by the
      Company; and

     

    (c)  the
      Company has delivered to the Trustee an Officers’ Certificate and an Opinion of
      Counsel each stating that all conditions precedent herein provided for relating
      to the satisfaction and discharge of this Indenture have been complied
      with.

     

    Notwithstanding
      the satisfaction and discharge of this Indenture, the obligations of the Company
      to the Trustee under Section
      6.6,
      the
      obligations of the Company to any Authenticating Agent under Section
      6.11
      and, if
      money shall have been deposited with the Trustee pursuant to subclause (a)(ii)
      of this Section
      4.1,
      the
      obligations of the Trustee under Section
      4.2
      and
Section
      10.2(d)
      shall
      survive.

     

    SECTION
      4.2.  
      Application of Trust Money.

     

    Subject
      to the provisions of Section
      10.2(e),
      all
      money deposited with the Trustee pursuant to Section
      4.1
      shall be
      held in trust and applied by the Trustee, in accordance with the provisions
      of
      the Securities and this Indenture, to the payment in accordance with
Section
      3.1,
      either
      directly or through any Paying Agent as the Trustee may determine, to the
      Persons entitled thereto, of the principal and any premium and interest
      (including any Additional Interest) for the payment of which such money or
      obligations have been deposited with or received by the Trustee. Moneys held
      by
      the Trustee under this Section
      4.2
      shall
      not be subject to the claims of holders of Senior Debt under Article
      XII.

     

    
      
        
        

      

      
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    ARTICLE
      V

    Remedies

     

    SECTION
      5.1.  
      Events of Default.

     

    “Event
      of Default”
      means,
      wherever used herein with respect to the Securities, any one of the following
      events (whatever the reason for such Event of Default and whether it shall
      be
      voluntary or involuntary or be effected by operation of law or pursuant to
      any
      judgment, decree or order of any court or any order, rule or regulation of
      any
      administrative or governmental body):

     

    (a)  default
      in the payment of any interest upon any Security, including any Additional
      Interest in respect thereof, when it becomes due and payable, and continuance
      of
      such default for a period of thirty (30) days; or

     

    (b)  default
      in the payment of the principal of or any premium on any Security at its
      Maturity; or

     

    (c)  default
      in the performance, or breach, of any covenant or warranty of the Company in
      this Indenture or the Purchase Agreement and continuance of such default or
      breach for a period of thirty (30) days after there has been given, by
      registered or certified mail, to the Company by the Trustee or to the Company
      and the Trustee by the Holders of at least twenty five percent (25%) in
      aggregate principal amount of the Outstanding Securities a written notice
      specifying such default or breach and requiring it to be remedied and stating
      that such notice is a “Notice of Default” hereunder;

     

    (d)  the
      entry
      by a court having jurisdiction in the premises of a decree or order adjudging
      the Company a bankrupt or insolvent, or approving as properly filed a petition
      seeking reorganization, arrangement, adjustment or composition of or in respect
      of the Company under any applicable Federal or state bankruptcy, insolvency,
      reorganization or other similar law, or appointing a custodian, receiver,
      liquidator, assignee, trustee, sequestrator or other similar official of the
      Company or of any substantial part of its property, or ordering the winding
      up
      or liquidation of its affairs, and the continuance of any such decree or order
      for relief or any such other decree or order unstayed and in effect for a period
      of sixty (60) consecutive days;

     

    (e)  the
      institution by the Company of proceedings to be adjudicated a bankrupt or
      insolvent, or the consent by the Company to the institution of bankruptcy or
      insolvency proceedings against it, or the filing by the Company of a petition
      or
      answer or consent seeking reorganization or relief under any applicable Federal
      or state bankruptcy, insolvency, reorganization or other similar law, or the
      consent by it to the filing of such petition or to the appointment of or taking
      possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator
      or other similar official of the Company or of any substantial part of its
      property, or the making by it of an assignment for the benefit of creditors,
      or
      the admission by it in writing of its inability to pay its debts generally
      as
      they become due and its willingness to be adjudicated a bankrupt or insolvent,
      or the taking of corporate action by the Company in furtherance of any such
      action; or

     

    (f)  the
      Trust
      shall have voluntarily or involuntarily liquidated, dissolved, wound-up its
      business or otherwise terminated its existence, except in connection with
      (1) the distribution of the Securities to holders of the Preferred
      Securities in liquidation of their interests in the Trust, (2) the
      redemption of all of the outstanding Preferred Securities or (3) certain
      mergers, consolidations or amalgamations, each as and to the extent permitted
      by
      the Trust Agreement.

     

    SECTION
      5.2.  
      Acceleration of Maturity; Rescission and Annulment.

     

    (a)  If
      an
      Event of Default occurs and is continuing, then and in every such case the
      Trustee or the Holders of not less than twenty five percent (25%) in aggregate
      principal amount of the Outstanding Securities may declare the principal amount
      of all the Securities to be due and payable immediately, by a notice in writing
      to the Company (and to the Trustee if given by Holders), provided that if,
      upon
      an Event of Default, the Trustee or the Holders of not less than twenty five
      percent (25%) in principal amount of the Outstanding Securities fail to declare
      the principal of all the Outstanding Securities to be immediately due and
      payable, the holders of at least twenty five percent (25%) in aggregate
      Liquidation Amount of the Preferred Securities then outstanding shall have
      the
      right to make such declaration by a notice in writing to the Property Trustee,
      the Company and the Trustee; and upon any such declaration the principal amount
      of and the accrued interest (including any Additional Interest) on all the
      Securities shall become immediately due and payable.

     

    (b)  At
      any
      time after such a declaration of acceleration with respect to Securities has
      been made and before a judgment or decree for payment of the money due has
      been
      obtained by the Trustee as hereinafter provided in this Article
      V,
      the
      Holders of a majority in aggregate principal amount of the Outstanding
      Securities, by written notice to the Indenture Trustee, or the holders of a
      majority in aggregate Liquidation Amount of the Preferred Securities, by written
      notice to the Property Trustee, the Company and the Trustee, may rescind and
      annul such declaration and its consequences if:

     

    (i)  
      the
      Company has paid or deposited with the Trustee a sum sufficient to
      pay:

     

    (A)  all
      overdue installments of interest on all Securities,

     

    (B)  any
      accrued Additional Interest on all Securities,

     

    (C)  the
      principal of and any premium on any Securities that have become due otherwise
      than by such declaration of acceleration and interest (including any Additional
      Interest) thereon at the rate borne by the Securities, and

     

    (D)  all
      sums
      paid or advanced by the Trustee hereunder and the reasonable compensation,
      expenses, disbursements and advances of the Trustee, the Property Trustee and
      their agents and counsel; and

     

    (ii)  
      all
      Events of Default with respect to Securities, other than the non-payment of
      the
      principal of Securities that has become due solely by such acceleration, have
      been cured or waived as provided in Section
      5.13;

     

    provided
      that if
      the Holders of such Securities fail to annul such declaration and waive such
      default, the holders of not less than a majority in aggregate Liquidation Amount
      of the Preferred Securities then outstanding shall also have the right to
      rescind and annul such declaration and its consequences by written notice to
      the
      Property Trustee, the Company and the Trustee, subject to the satisfaction
      of
      the conditions set forth in paragraph (b) of this Section
      5.2.
      No such
      rescission shall affect any subsequent default or impair any right consequent
      thereon.

     

    
      
        
        

      

      
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    SECTION
      5.3.  
      Collection of Indebtedness and Suits for Enforcement by Trustee.
      

     

    (a)  The
      Company covenants that if:

     

    (i)  
      default
      is made in the payment of any installment of interest (including any Additional
      Interest) on any Security when such interest becomes due and payable and such
      default continues for a period of thirty (30) days, or

     

    (ii)  
      default
      is made in the payment of the principal of and any premium on any Security
      at
      the Maturity thereof,

     

    the
      Company will, upon demand of the Trustee, pay to the Trustee, for the benefit
      of
      the Holders of such Securities, the whole amount then due and payable on such
      Securities for principal and any premium and interest (including any Additional
      Interest) and, in addition thereto, all amounts owing the Trustee under
Section
      6.6.

     

    (b)  If
      the
      Company fails to pay such amounts forthwith upon such demand, the Trustee,
      in
      its own name and as trustee of an express trust, may institute a judicial
      proceeding for the collection of the sums so due and unpaid, and may prosecute
      such proceeding to judgment or final decree, and may enforce the same against
      the Company or any other obligor upon such Securities and collect the moneys
      adjudged or decreed to be payable in the manner provided by law out of the
      property of the Company or any other obligor upon the Securities, wherever
      situated.

     

    (c)  If
      an
      Event of Default with respect to Securities occurs and is continuing, the
      Trustee may in its discretion proceed to protect and enforce its rights and
      the
      rights of the Holders of Securities by such appropriate judicial proceedings
      as
      the Trustee shall deem most effectual to protect and enforce any such rights,
      whether for the specific enforcement of any covenant or agreement in this
      Indenture or in aid of the exercise of any power granted herein, or to enforce
      any other proper remedy.

     

    SECTION
      5.4.  
      Trustee May File Proofs of Claim.

     

    In
      case
      of any receivership, insolvency, liquidation, bankruptcy, reorganization,
      arrangement, adjustment, composition or similar judicial proceeding relative
      to
      the Company (or any other obligor upon the Securities), its property or its
      creditors, the Trustee shall be entitled and empowered, by intervention in
      such
      proceeding or otherwise, to take any and all actions authorized hereunder in
      order to have claims of the Holders and the Trustee allowed in any such
      proceeding. In particular, the Trustee shall be authorized to collect and
      receive any moneys or other property payable or deliverable on any such claims
      and to distribute the same; and any custodian, receiver, assignee, trustee,
      liquidator, sequestrator or other similar official in any such judicial
      proceeding is hereby authorized by each Holder to make such payments to the
      Trustee and, in the event that the Trustee shall consent to the making of such
      payments directly to the Holders, to first pay to the Trustee any amount due
      it
      for the reasonable compensation, expenses, disbursements and advances of the
      Trustee, its agents and counsel, and any other amounts owing the Trustee, any
      predecessor Trustee and other Persons under Section
      6.6.

     

    SECTION
      5.5.  
      Trustee May Enforce Claim Without Possession of Securities.

     

    All
      rights of action and claims under this Indenture or the Securities may be
      prosecuted and enforced by the Trustee without the possession of any of the
      Securities or the production thereof in any proceeding relating thereto, and
      any
      such proceeding instituted by the Trustee shall be brought in its own name
      as
      trustee of an express trust, and any recovery of judgment shall, subject to
      Article
      XII
      and
      after provision for the payment of all the amounts owing the Trustee, any
      predecessor Trustee and other Persons under Section
      6.6,
      be for
      the ratable benefit of the Holders of the Securities in respect of which such
      judgment has been recovered.

     

    SECTION
      5.6.  
      Application of Money Collected.

     

    Any
      money
      or property collected or to be applied by the Trustee with respect to the
      Securities pursuant to this Article
      V
      shall be
      applied in the following order, at the date or dates fixed by the Trustee and,
      in case of the distribution of such money or property on account of principal or
      any premium or interest (including any Additional Interest), upon presentation
      of the Securities and the notation thereon of the payment if only partially
      paid
      and upon surrender thereof if fully paid:

     

    FIRST:
      To
      the payment of all amounts due the Trustee, any predecessor Trustee and other
      Persons under Section
      6.6;

     

    SECOND:
      To the payment of all Senior Debt of the Company if and to the extent required
      by Article
      XII;

     

    THIRD:
      Subject to Article
      XII,
      to the
      payment of the amounts then due and unpaid upon the Securities for principal
      and
      any premium and interest (including any Additional Interest) in respect of
      which
      or for the benefit of which such money has been collected, ratably, without
      preference or priority of any kind, according to the amounts due and payable
      on
      the Securities for principal and any premium and interest (including any
      Additional Interest), respectively; and

     

    FOURTH:
      The balance, if any, to the Person or Persons entitled thereto.

     

    SECTION
      5.7.  
      Limitation on Suits.

     

    Subject
      to Section
      5.8,
      no
      Holder of any Securities shall have any right to institute any proceeding,
      judicial or otherwise, with respect to this Indenture or for the appointment
      of
      a custodian, receiver, assignee, trustee, liquidator, sequestrator (or other
      similar official) or for any other remedy hereunder, unless:

     

    (a)  such
      Holder has previously given written notice to the Trustee of a continuing Event
      of Default with respect to the Securities;

     

    (b)  the
      Holders of not less than a majority in aggregate principal amount of the
      Outstanding Securities shall have made written request to the Trustee to
      institute proceedings in respect of such Event of Default in its own name as
      Trustee hereunder;

     

    (c)  such
      Holder or Holders have offered to the Trustee reasonable indemnity against
      the
      costs, expenses and liabilities to be incurred in compliance with such
      request;

     

    (d)  the
      Trustee after its receipt of such notice, request and offer of indemnity has
      failed to institute any such proceeding for sixty (60) days; and

     

    (e)  no
      direction inconsistent with such written request has been given to the Trustee
      during such sixty (60)-day period by the Holders of a majority in aggregate
      principal amount of the Outstanding Securities;

     

    it
      being
      understood and intended that no one or more of such Holders shall have any
      right
      in any manner whatever by virtue of, or by availing itself of, any provision
      of
      this Indenture to affect, disturb or prejudice the rights of any other Holders
      of Securities, or to obtain or to seek to obtain priority or preference over
      any
      other of such Holders or to enforce any right under this Indenture, except
      in
      the manner herein provided and for the equal and ratable benefit of all such
      Holders.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    SECTION
      5.8.  
      Unconditional Right of Holders to Receive Principal, Premium,
      if
      any,
      and
      Interest; Direct Action by Holders of Preferred Securities.

     

    Notwithstanding
      any other provision in this Indenture, the Holder of any Security shall have
      the
      right, which is absolute and unconditional, to receive payment of the principal
      of and any premium on such Security at its Maturity and payment of interest
      (including any Additional Interest) on such Security when due and payable and
      to
      institute suit for the enforcement of any such payment, and such right shall
      not
      be impaired without the consent of such Holder. Any registered holder of the
      Preferred Securities shall have the right, upon the occurrence of an Event
      of
      Default described in Section
      5.1(a)
      or
Section
      5.1(b),
      to
      institute a suit directly against the Company for enforcement of payment to
      such
      holder of principal of and any premium and interest (including any Additional
      Interest) on the Securities having a principal amount equal to the aggregate
      Liquidation Amount of the Preferred Securities held by such holder.

     

    SECTION
      5.9.  
      Restoration of Rights and Remedies.

     

    If
      the
      Trustee, any Holder or any holder of Preferred Securities has instituted any
      proceeding to enforce any right or remedy under this Indenture and such
      proceeding has been discontinued or abandoned for any reason, or has been
      determined adversely to the Trustee, such Holder or such holder of Preferred
      Securities, then and in every such case the Company, the Trustee, such Holders
      and such holder of Preferred Securities shall, subject to any determination
      in
      such proceeding, be restored severally and respectively to their former
      positions hereunder, and thereafter all rights and remedies of the Trustee,
      such
      Holder and such holder of Preferred Securities shall continue as though no
      such
      proceeding had been instituted.

     

    SECTION
      5.10.  
      Rights and Remedies Cumulative.

     

    Except
      as
      otherwise provided in Section
      3.6(f),
      no
      right or remedy herein conferred upon or reserved to the Trustee or the Holders
      is intended to be exclusive of any other right or remedy, and every right and
      remedy shall, to the extent permitted by law, be cumulative and in addition
      to
      every other right and remedy given hereunder or now or hereafter existing at
      law
      or in equity or otherwise. The assertion or employment of any right or remedy
      hereunder, or otherwise, shall not prevent the concurrent assertion or
      employment of any other appropriate right or remedy.

     

    SECTION
      5.11.  
      Delay or Omission Not Waiver.

     

    No
      delay
      or omission of the Trustee, any Holder of any Securities or any holder of any
      Preferred Security to exercise any right or remedy accruing upon any Event
      of
      Default shall impair any such right or remedy or constitute a waiver of any
      such
      Event of Default or an acquiescence therein. Every right and remedy given by
      this Article
      V
      or by
      law to the Trustee or to the Holders and the right and remedy given to the
      holders of Preferred Securities by Section
      5.8
      may be
      exercised from time to time, and as often as may be deemed expedient, by the
      Trustee, the Holders or the holders of Preferred Securities, as the case may
      be.

     

    SECTION
      5.12.  
      Control by Holders.

     

    The
      Holders of not less than a majority in aggregate principal amount of the
      Outstanding Securities (or, as the case may be, the holders of a majority in
      aggregate Liquidation Amount of Preferred Securities) shall have the right
      to
      direct the time, method and place of conducting any proceeding for any remedy
      available to the Trustee or exercising any trust or power conferred on the
      Trustee; provided
      that:

     

    (a)  such
      direction shall not be in conflict with any rule of law or with this
      Indenture,

     

    (b)  the
      Trustee may take any other action deemed proper by the Trustee that is not
      inconsistent with such direction, and

     

    (c)  subject
      to the provisions of Section
      6.2,
      the
      Trustee shall have the right to decline to follow such direction if a
      Responsible Officer or Officers of the Trustee shall, in good faith, reasonably
      determine that the proceeding so directed would be unjustly prejudicial to
      the
      Holders not joining in any such direction or would involve the Trustee in
      personal liability.

     

    SECTION
      5.13.  
      Waiver of Past Defaults.

     

    (a)  The
      Holders of not less than a majority in aggregate principal amount of the
      Outstanding Securities or the holders of not less than a majority in aggregate
      Liquidation Amount of the Preferred Securities may waive any past Event of
      Default hereunder and its consequences except an Event of Default:

     

    (i)  
      in the
      payment of the principal of or any premium or interest (including any Additional
      Interest) on any Outstanding Security (unless such Event of Default has been
      cured and the Company has paid to or deposited with the Trustee a sum sufficient
      to pay all installments of interest (including any Additional Interest) due
      and
      past due and all principal of and any premium on all Securities due otherwise
      than by acceleration), or

     

    (ii)  
      in
      respect of a covenant or provision hereof that under Article
      IX
      cannot
      be modified or amended without the consent of each Holder of any Outstanding
      Security.

     

    (b)  Any
      such
      waiver shall be deemed to be on behalf of the Holders of all the Outstanding
      Securities or, in the case of a waiver by holders of Preferred Securities issued
      by such Trust, by all holders of Preferred Securities.

     

    (c)  Upon
      any
      such waiver, such Event of Default shall cease to exist and any Event of Default
      arising therefrom shall be deemed to have been cured for every purpose of this
      Indenture; but no such waiver shall extend to any subsequent or other Event
      of
      Default or impair any right consequent thereon.

     

    SECTION
      5.14.  
      Undertaking for Costs.

     

    All
      parties to this Indenture agree, and each Holder of any Security by his or
      her
      acceptance thereof shall be deemed to have agreed, that any court may in its
      discretion require, in any suit for the enforcement of any right or remedy
      under
      this Indenture, or in any suit against the Trustee for any action taken or
      omitted by it as Trustee, the filing by any party litigant in such suit of
      an
      undertaking to pay the costs of such suit, and that such court may in its
      discretion assess reasonable costs, including reasonable attorneys’ fees and
      expenses, against any party litigant in such suit, having due regard to the
      merits and good faith of the claims or defenses made by such party litigant;
      but
      the provisions of this Section
      5.14
      shall
      not apply to any suit instituted by the Trustee, to any suit instituted by
      any
      Holder, or group of Holders, holding in the aggregate more than ten percent
      (10%) in aggregate principal amount of the Outstanding Securities, or to any
      suit instituted by any Holder for the enforcement of the payment of the
      principal of or any premium on the Security after the Stated Maturity or any
      interest (including any Additional Interest) on any Security after it is due
      and
      payable.

     

    SECTION
      5.15.  
      Waiver of Usury, Stay or Extension Laws.

     

    The
      Company covenants (to the extent that it may lawfully do so) that it will not
      at
      any time insist upon, or plead, or in any manner whatsoever claim or take the
      benefit or advantage of, any usury, stay or extension law wherever enacted,
      now
      or at any time hereafter in force, which may affect the covenants or the
      performance of this Indenture; and the Company (to the extent that it may
      lawfully do so) hereby expressly waives all benefit or advantage of any such
      law, and covenants that it will not hinder, delay or impede the execution of
      any
      power herein granted to the Trustee, but will suffer and permit the execution
      of
      every such power as though no such law had been enacted.

     

    
      
        
        

      

      
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    ARTICLE
      VI

    The
      Trustee

     

    SECTION
      6.1.  
      Corporate Trustee Required.

     

    There
      shall at all times be a Trustee hereunder with respect to the Securities. The
      Trustee shall be a corporation or national banking association organized and
      doing business under the laws of the United States or of any state thereof,
      authorized to exercise corporate trust powers, having a combined capital and
      surplus of at least $50,000,000, subject to supervision or examination by
      Federal or state authority and having an office within the United States. If
      such entity publishes reports of condition at least annually, pursuant to law
      or
      to the requirements of such supervising or examining authority, then, for the
      purposes of this Section
      6.1,
      the
      combined capital and surplus of such entity shall be deemed to be its combined
      capital and surplus as set forth in its most recent report of condition so
      published. If at any time the Trustee shall cease to be eligible in accordance
      with the provisions of this Section
      6.1,
      it
      shall resign immediately in the manner and with the effect hereinafter specified
      in this Article
      VI.

     

    SECTION
      6.2.  
      Certain Duties and Responsibilities.

     

    Except
      during the continuance of an Event of Default:

     

    (i)  
      the
      Trustee undertakes to perform such duties and only such duties as are
      specifically set forth in this Indenture, and no implied covenants or
      obligations shall be read into this Indenture against the Trustee;
      and

     

    (ii)  
      in the
      absence of bad faith on its part, the Trustee may conclusively rely, as to
      the
      truth of the statements and the correctness of the opinions expressed therein,
      upon certificates or opinions furnished to the Trustee and conforming to the
      requirements of this Indenture; provided
      that in
      the case of any such certificates or opinions that by any provision hereof
      are
      specifically required to be furnished to the Trustee, the Trustee shall be
      under
      a duty to examine the same to determine whether or not they substantially
      conform on their face to the requirements of this Indenture.

     

    (b)  If
      an
      Event of Default known to the Trustee has occurred and is continuing, the
      Trustee shall, prior to the receipt of directions, if any, from the Holders
      of
      at least a majority in aggregate principal amount of the Outstanding Securities
      (or, if applicable, from the holders of at least a majority in aggregate
      Liquidation Amount of Preferred Securities), exercise such of the rights and
      powers vested in it by this Indenture, and use the same degree of care and
      skill
      in its exercise, as a prudent person would exercise or use under the
      circumstances in the conduct of such person’s own affairs.

     

    (c)  Notwithstanding
      the foregoing, no provision of this Indenture shall require the Trustee to
      expend or risk its own funds or otherwise incur any financial liability in
      the
      performance of any of its duties hereunder, or in the exercise of any of its
      rights or powers, if it shall have reasonable grounds for believing that
      repayment of such funds or adequate indemnity against such risk or liability
      is
      not reasonably assured to it. Whether or not therein expressly so provided,
      every provision of this Indenture relating to the conduct or affecting the
      liability of or affording protection to the Trustee shall be subject to the
      provisions of this Section
      6.2.
      To the
      extent that, at law or in equity, the Trustee has duties and liabilities
      relating to the Holders, the Trustee shall not be liable to any Holder or any
      holder of Preferred Securities for the Trustee’s good faith reliance on the
      provisions of this Indenture. The provisions of this Indenture, to the extent
      that they restrict the duties and liabilities of the Trustee otherwise existing
      at law or in equity, are agreed by the Company and the Holders and the holders
      of Preferred Securities to replace such other duties and liabilities of the
      Trustee.

     

    (d)  No
      provisions of this Indenture shall be construed to relieve the Trustee from
      liability with respect to matters that are within the authority of the Trustee
      under this Indenture for its own negligent action, negligent failure to act
      or
      willful misconduct, except that:

     

    (i)  
      the
      Trustee shall not be liable for any error or judgment made in good faith by
      an
      authorized officer of the Trustee, unless it shall be proved that the Trustee
      was negligent in ascertaining the pertinent facts;

     

    (ii)  
      the
      Trustee shall not be liable with respect to any action taken or omitted to
      be
      taken by it in good faith in accordance with the direction of the Holders of
      at
      least a majority in aggregate principal amount of the Outstanding Securities
      (or, as the case may be, the holders of a majority in aggregate Liquidation
      Amount of Preferred Securities) relating to the time, method and place of
      conducting any proceeding for any remedy available to the Trustee under this
      Indenture; and

     

    (iii)  
      the
      Trustee shall be under no liability for interest on any money received by it
      hereunder except as otherwise agreed in writing with the Company and money
      held
      by the Trustee in trust hereunder need not be segregated from other funds except
      to the extent required by law.

     

    (e)  If
      at any
      time the Trustee hereunder is not the same Person as the Property Trustee under
      the Trust Agreement:

     

    (i)  
      whenever
      a reference is made herein to the dissolution, termination or liquidation of
      the
      Trust, the Trustee shall be entitled to assume that no such dissolution,
      termination, or liquidation has occurred so long as the Securities are or
      continue to be registered in the name of such Property Trustee, and the Trustee
      shall be charged with notice or knowledge of such dissolution, termination
      or
      liquidation only upon written notice thereof given to the Trustee by the
      Depositor under the Trust Agreement; and

     

    (ii)  
      the
      Trustee shall not be charged with notice or knowledge that any Person is a
      holder of Preferred Securities or Common Securities issued by the Trust or
      whether any group of holders of Preferred Securities constitutes any specified
      percentage of all outstanding Preferred Securities for any purpose under this
      Indenture, unless and until the Trustee is furnished with a list of holders
      by
      such Property Trustee and the aggregate Liquidation Amount of the Preferred
      Securities then outstanding. The Trustee may conclusively rely and shall be
      protected in relying on such list.

     

    (f)  Notwithstanding
      Section
      1.10,
      the
      Trustee shall not, and shall not be deemed to, owe any fiduciary duty to the
      holders of any of the Trust Securities issued by the Trust and shall not be
      liable to any such holder (other than for the willful misconduct or negligence
      of the Trustee) if the Trustee in good faith (i) pays over or distributes to
      a
      registered Holder of the Securities or to the Company or to any other Person,
      cash, property or securities to which such holders of such Trust Securities
      shall be entitled or (ii) takes any action or omits to take any action at the
      request of the Holder of such Securities. Nothing in this paragraph shall affect
      the obligation of any other such Person to hold such payment for the benefit
      of,
      and to pay such amount over to, such holders of Preferred Securities or Common
      Securities or their representatives.

     

    SECTION
      6.3.  
      Notice of Defaults.

     

    Within
      ninety (90) days after the occurrence of any default actually known to the
      Trustee, the Trustee shall give the Holders notice of such default unless such
      default shall have been cured or waived; provided
      that
      except in the case of a default in the payment of the principal of or any
      premium or interest on any Securities, the Trustee shall be fully protected
      in
      withholding the notice if and so long as the board of directors, the executive
      committee or a trust committee of directors and/or Responsible Officers of
      the
      Trustee in good faith determines that withholding the notice is in the interest
      of Holders of Securities; and provided,
      further, that
      in
      the case of any default of the character specified in Section
      5.1(c),
      no such
      notice to Holders shall be given until at least thirty (30) days after the
      occurrence thereof. For the purpose of this Section
      6.3,
      the
      term “default” means any event which is, or after notice or lapse of time or
      both would become, an Event of Default.

     

    
      
        
        

      

      
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    SECTION
      6.4.  
      Certain Rights of Trustee.

     

    Subject
      to the provisions of Section
      6.2:

     

    (a)  the
      Trustee may conclusively rely and shall be fully protected in acting or
      refraining from acting in good faith and in accordance with the terms hereof
      upon any resolution, certificate, statement, instrument, opinion, report,
      notice, request, direction, consent, order, bond, debenture, note or other
      paper
      or document believed by it to be genuine and to have been signed or presented
      by
      the proper party or parties;

     

    (b)  if
      (i) in
      performing its duties under this Indenture the Trustee is required to decide
      between alternative courses of action, (ii) in construing any of the provisions
      of this Indenture the Trustee finds ambiguous or inconsistent with any other
      provisions contained herein or (iii) the Trustee is unsure of the application
      of
      any provision of this Indenture, then, except as to any matter as to which
      the
      Holders are entitled to decide under the terms of this Indenture, the Trustee
      shall deliver a notice to the Company requesting the Company’s written
      instruction as to the course of action to be taken and the Trustee shall take
      such action, or refrain from taking such action, as the Trustee shall be
      instructed in writing to take, or to refrain from taking, by the Company;
provided
      that if
      the Trustee does not receive such instructions from the Company within ten
      (10)
      Business Days after it has delivered such notice or such reasonably shorter
      period of time set forth in such notice the Trustee may, but shall be under
      no
      duty to, take such action, or refrain from taking such action, as the Trustee
      shall deem advisable and in the best interests of the Holders, in which event
      the Trustee shall have no liability except for its own negligence, bad faith
      or
      willful misconduct;

     

    (c)  any
      request or direction of the Company shall be sufficiently evidenced by a Company
      Request or Company Order and any resolution of the Board of Directors may be
      sufficiently evidenced by a Board Resolution;

     

    (d)  the
      Trustee may consult with counsel (which counsel may be counsel to the Trustee,
      the Company or any of its Affiliates, and may include any of its employees)
      and
      the advice of such counsel or any Opinion of Counsel shall be full and complete
      authorization and protection in respect of any action taken, suffered or omitted
      by it hereunder in good faith and in reliance thereon;

     

    (e)  the
      Trustee shall be under no obligation to exercise any of the rights or powers
      vested in it by this Indenture at the request or direction of any of the Holders
      or any holder of Preferred Securities pursuant to this Indenture, unless such
      Holders (or such holders of Preferred Securities) shall have offered to the
      Trustee security or indemnity reasonably satisfactory to it against the costs,
      expenses (including reasonable attorneys’ fees and expenses) and liabilities
      that might be incurred by it in compliance with such request or direction,
      including reasonable advances as may be requested by the Trustee;

     

    (f)  the
      Trustee shall not be bound to make any investigation into the facts or matters
      stated in any resolution, certificate, statement, instrument, opinion, report,
      notice, request, direction, consent, order, bond, indenture, note or other
      paper
      or document, but the Trustee in its discretion may make such inquiry or
      investigation into such facts or matters as it may see fit, and, if the Trustee
      shall determine to make such inquiry or investigation, it shall be entitled
      to
      examine the books, records and premises of the Company, personally or by agent
      or attorney;

     

    (g)  the
      Trustee may execute any of the trusts or powers hereunder or perform any duties
      hereunder either directly or by or through agents, attorneys, custodians or
      nominees and the Trustee shall not be responsible for any misconduct or
      negligence on the part of any such agent, attorney, custodian or nominee
      appointed with due care by it hereunder;

     

    (h)  whenever
      in the administration of this Indenture the Trustee shall deem it desirable
      to
      receive instructions with respect to enforcing any remedy or right or taking
      any
      other action with respect to enforcing any remedy or right hereunder, the
      Trustees (i) may request instructions from the Holders (which instructions
      may
      only be given by the Holders of the same aggregate principal amount of
      Outstanding Securities as would be entitled to direct the Trustee under this
      Indenture in respect of such remedy, right or action), (ii) may refrain from
      enforcing such remedy or right or taking such action until such instructions
      are
      received and (iii) shall be protected in acting in accordance with such
      instructions;

     

    (i)  except
      as
      otherwise expressly provided by this Indenture, the Trustee shall not be under
      any obligation to take any action that is discretionary under the provisions
      of
      this Indenture;

     

    (j)  without
      prejudice to any other rights available to the Trustee under applicable law,
      when the Trustee incurs expenses or renders services in connection with any
      bankruptcy, insolvency or other proceeding referred to in clauses (d) or (e)
      of
      the definition of Event of Default, such expenses (including legal fees and
      expenses of its agents and counsel) and the compensation for such services
      are
      intended to constitute expenses of administration under any bankruptcy laws
      or
      law relating to creditors rights generally;

     

    (k)  whenever
      in the administration of this Indenture the Trustee shall deem it desirable
      that
      a matter be proved or established prior to taking, suffering or omitting any
      action hereunder, the Trustee (unless other evidence be herein specifically
      prescribed) may, in the absence of bad faith on its part, conclusively rely
      upon
      an Officers’ Certificate addressing such matter, which, upon receipt of such
      request, shall be promptly delivered by the Company;

     

    (l)  the
      Trustee shall not be charged with knowledge of any Event of Default unless
      either (i) a Responsible Officer of the Trustee shall have actual knowledge
      or
      (ii) the Trustee shall have received written notice thereof from the Company
      or
      a Holder; and

     

    (m)  in
      the
      event that the Trustee is also acting as Paying Agent, Authenticating Agent
      or
      Securities Registrar hereunder, the rights and protections afforded to the
      Trustee pursuant to this Article
      VI
      shall
      also be afforded such Paying Agent, Authenticating Agent, or Securities
      Registrar.

     

    SECTION
      6.5.  
      May
      Hold Securities.

     

    The
      Trustee, any Authenticating Agent, any Paying Agent, any Securities Registrar
      or
      any other agent of the Company, in its individual or any other capacity, may
      become the owner or pledgee of Securities and may otherwise deal with the
      Company with the same rights it would have if it were not Trustee,
      Authenticating Agent, Paying Agent, Securities Registrar or such other
      agent.

     

    
      
        
        

      

      
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    SECTION
      6.6.  
      Compensation; Reimbursement; Indemnity.

     

    (a)  The
      Company agrees:

     

    (i)  
      to pay
      to the Trustee from time to time reasonable compensation for all services
      rendered by it hereunder in such amounts as the Company and the Trustee shall
      agree from time to time (which compensation shall not be limited by any
      provision of law in regard to the compensation of a trustee of an express
      trust);

     

    (ii)  
      to
      reimburse the Trustee upon its request for all reasonable expenses,
      disbursements and advances incurred or made by the Trustee in accordance with
      any provision of this Indenture (including the reasonable compensation and
      the
      expenses and disbursements of its agents and counsel), except any such expense,
      disbursement or advance as may be attributable to its negligence, bad faith
      or
      willful misconduct; and

     

    (iii)  
      to the
      fullest extent permitted by applicable law, to indemnify the Trustee and its
      Affiliates, and their officers, directors, shareholders, agents, representatives
      and employees for, and to hold them harmless against, any loss, damage,
      liability, tax (other than income, franchise or other taxes imposed on amounts
      paid pursuant to (i) or (ii) hereof), penalty, expense or claim of any kind
      or
      nature whatsoever incurred without negligence, bad faith or willful misconduct
      on its part arising out of or in connection with the acceptance or
      administration of this Indenture or the performance of the Trustee’s duties
      hereunder, including the costs and expenses of defending itself against any
      claim or liability in connection with the exercise or performance of any of
      its
      powers or duties hereunder.

     

    (b)  To
      secure
      the Company’s payment obligations in this Section
      6.6,
      the
      Company hereby grants and pledges to the Trustee and the Trustee shall have
      a
      lien prior to the Securities on all money or property held or collected by
      the
      Trustee, other than money or property held in trust to pay principal and
      interest on particular Securities. Such lien shall survive the satisfaction
      and
      discharge of this Indenture or the resignation or removal of the
      Trustee.

     

    (c)  The
      obligations of the Company under this Section
      6.6
      shall
      survive the satisfaction and discharge of this Indenture and the earlier
      resignation or removal of the Trustee.

     

    (d)  In
      no
      event shall the Trustee be liable for any indirect, special, punitive or
      consequential loss or damage of any kind whatsoever, including, but not limited
      to, lost profits, even if the Trustee has been advised of the likelihood of
      such
      loss or damage and regardless of the form of action.

     

    (e)  In
      no
      event shall the Trustee be liable for any failure or delay in the performance
      of
      its obligations hereunder because of circumstances beyond its control,
      including, but not limited to, acts of God, flood, war (whether declared or
      undeclared), terrorism, fire, riot, embargo, government action, including any
      laws, ordinances, regulations, governmental action or the like which delay,
      restrict or prohibit the providing of the services contemplated by this
      Indenture.

     

    SECTION
      6.7.  
      Resignation and Removal; Appointment of Successor.

     

    (a)  No
      resignation or removal of the Trustee and no appointment of a successor Trustee
      pursuant to this Article
      VI
      shall
      become effective until the acceptance of appointment by the successor Trustee
      under Section
      6.8.

     

    (b)  The
      Trustee may resign at any time by giving written notice thereof to the
      Company.

     

    (c)  Unless
      an
      Event of Default shall have occurred and be continuing, the Trustee may be
      removed at any time by the Company by a Board Resolution. If an Event of Default
      shall have occurred and be continuing, the Trustee may be removed by Act of
      the
      Holders of a majority in aggregate principal amount of the Outstanding
      Securities, delivered to the Trustee and to the Company.

     

    (d)  If
      the
      Trustee shall resign, be removed or become incapable of acting, or if a vacancy
      shall occur in the office of Trustee for any reason, at a time when no Event
      of
      Default shall have occurred and be continuing, the Company, by a Board
      Resolution, shall promptly appoint a successor Trustee, and such successor
      Trustee and the retiring Trustee shall comply with the applicable requirements
      of Section
      6.8.
      If the
      Trustee shall resign, be removed or become incapable of acting, or if a vacancy
      shall occur in the office of Trustee for any reason, at a time when an Event
      of
      Default shall have occurred and be continuing, the Holders, by Act of the
      Holders of a majority in aggregate principal amount of the Outstanding
      Securities, shall promptly appoint a successor Trustee, and such successor
      Trustee and the retiring Trustee shall comply with the applicable requirements
      of Section
      6.8.
      If no
      successor Trustee shall have been so appointed by the Company or the Holders
      and
      accepted appointment within sixty (60) days after the giving of a notice of
      resignation by the Trustee or the removal of the Trustee in the manner required
      by Section
      6.8,
      any
      Holder who has been a bona fide Holder of a Security for at least six months
      (or, if the Securities have been Outstanding for less than six (6) months,
      the
      entire period of such lesser time) may, on behalf of such Holder and all others
      similarly situated, and any resigning Trustee may, at the expense of the
      Company, petition any court of competent jurisdiction for the appointment of
      a
      successor Trustee.

     

    (e)  The
      Company shall give notice to all Holders in the manner provided in Section
      1.6
      of each
      resignation and each removal of the Trustee and each appointment of a successor
      Trustee. Each notice shall include the name of the successor Trustee and the
      address of its Corporate Trust Office.

     

    SECTION
      6.8.  
      Acceptance of Appointment by Successor.

     

    (a)  In
      case
      of the appointment hereunder of a successor Trustee, each successor Trustee
      so
      appointed shall execute, acknowledge and deliver to the Company and to the
      retiring Trustee an instrument accepting such appointment, and thereupon the
      resignation or removal of the retiring Trustee shall become effective and such
      successor Trustee, without any further act, deed or conveyance, shall become
      vested with all the rights, powers, trusts and duties of the retiring Trustee;
      but, on the request of the Company or the successor Trustee, such retiring
      Trustee shall, upon payment of its charges, execute and deliver an instrument
      transferring to such successor Trustee all the rights, powers and trusts of
      the
      retiring Trustee and shall duly assign, transfer and deliver to such successor
      Trustee all property and money held by such retiring Trustee
      hereunder.

     

    (b)  Upon
      request of any such successor Trustee, the Company shall execute any and all
      instruments for more fully and certainly vesting in and confirming to such
      successor Trustee all rights, powers and trusts referred to in paragraph (a)
      of
      this Section
      6.8.

     

    (c)  No
      successor Trustee shall accept its appointment unless at the time of such
      acceptance such successor Trustee shall be qualified and eligible under this
      Article
      VI.

     

    
      
        
        

      

      
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    SECTION
      6.9.  
      Merger, Conversion, Consolidation or Succession to Business.

     

    Any
      Person into which the Trustee may be merged or converted or with which it may
      be
      consolidated, or any Person resulting from any merger, conversion or
      consolidation to which the Trustee shall be a party, or any Person succeeding
      to
      all or substantially all of the corporate trust business of the Trustee, shall
      be the successor of the Trustee hereunder, without the execution or filing
      of
      any paper or any further act on the part of any of the parties hereto,
provided
      that
      such Person shall be otherwise qualified and eligible under this Article
      VI.
      In case
      any Securities shall have been authenticated, but not delivered, by the Trustee
      then in office, any successor by merger, conversion or consolidation or as
      otherwise provided above in this Section
      6.9
      to such
      authenticating Trustee may adopt such authentication and deliver the Securities
      so authenticated, and in case any Securities shall not have been authenticated,
      any successor to the Trustee may authenticate such Securities either in the
      name
      of any predecessor Trustee or in the name of such successor Trustee, and in
      all
      cases the certificate of authentication shall have the full force which it
      is
      provided anywhere in the Securities or in this Indenture that the certificate
      of
      the Trustee shall have.

     

    SECTION
      6.10.  
      Not
      Responsible for Recitals or Issuance of Securities.

     

    The
      recitals contained herein and in the Securities, except the Trustee’s
      certificates of authentication, shall be taken as the statements of the Company,
      and neither the Trustee nor any Authenticating Agent assumes any responsibility
      for their correctness. The Trustee makes no representations as to the validity
      or sufficiency of this Indenture or of the Securities. Neither the Trustee
      nor
      any Authenticating Agent shall be accountable for the use or application by
      the
      Company of the Securities or the proceeds thereof.

     

    SECTION
      6.11.  
      Appointment of Authenticating Agent.

     

    (a)  The
      Trustee may appoint an Authenticating Agent or Agents with respect to the
      Securities, which shall be authorized to act on behalf of the Trustee to
      authenticate Securities issued upon original issue and upon exchange,
      registration of transfer or partial redemption thereof or pursuant to
Section
      3.6,
      and
      Securities so authenticated shall be entitled to the benefits of this Indenture
      and shall be valid and obligatory for all purposes as if authenticated by the
      Trustee hereunder. Wherever reference is made in this Indenture to the
      authentication and delivery of Securities by the Trustee or the Trustee’s
      certificate of authentication, such reference shall be deemed to include
      authentication and delivery on behalf of the Trustee by an Authenticating Agent.
      Each Authenticating Agent shall be acceptable to the Company and shall at all
      times be a corporation organized and doing business under the laws of the United
      States of America, or of any State or Territory thereof or the District of
      Columbia, authorized under such laws to act as Authenticating Agent, having
      a
      combined capital and surplus of not less than $50,000,000 and subject to
      supervision or examination by Federal or state authority. If such Authenticating
      Agent publishes reports of condition at least annually pursuant to law or to
      the
      requirements of said supervising or examining authority, then for the purposes
      of this Section
      6.11
      the
      combined capital and surplus of such Authenticating Agent shall be deemed to
      be
      its combined capital and surplus as set forth in its most recent report of
      condition so published. If at any time an Authenticating Agent shall cease
      to be
      eligible in accordance with the provisions of this Section
      6.11,
      such
      Authenticating Agent shall resign immediately in the manner and with the effect
      specified in this Section
      6.11.

     

    (b)  Any
      Person into which an Authenticating Agent may be merged or converted or with
      which it may be consolidated, or any Person resulting from any merger,
      conversion or consolidation to which such Authenticating Agent shall be a party,
      or any Person succeeding to all or substantially all of the corporate trust
      business of an Authenticating Agent shall be the successor Authenticating Agent
      hereunder, provided such Person shall be otherwise eligible under this
Section
      6.11,
      without
      the execution or filing of any paper or any further act on the part of the
      Trustee or the Authenticating Agent.

     

    (c)  An
      Authenticating Agent may resign at any time by giving written notice thereof
      to
      the Trustee and to the Company. The Trustee may at any time terminate the agency
      of an Authenticating Agent by giving written notice thereof to such
      Authenticating Agent and to the Company. Upon receiving such a notice of
      resignation or upon such a termination, or in case at any time such
      Authenticating Agent shall cease to be eligible in accordance with the
      provisions of this Section
      6.11,
      the
      Trustee may appoint a successor Authenticating Agent eligible under the
      provisions of this Section
      6.11,
      which
      shall be acceptable to the Company, and shall give notice of such appointment
      to
      all Holders. Any successor Authenticating Agent upon acceptance of its
      appointment hereunder shall become vested with all the rights, powers and duties
      of its predecessor hereunder, with like effect as if originally named as an
      Authenticating Agent.

     

    (d)  The
      Company agrees to pay to each Authenticating Agent from time to time reasonable
      compensation for its services under this Section
      6.11
      in such
      amounts as the Company and the Authenticating Agent shall agree from time to
      time.

     

    (e)  If
      an
      appointment of an Authenticating Agent is made pursuant to this Section
      6.11,
      the
      Securities may have endorsed thereon, in addition to the Trustee’s certificate
      of authentication, an alternative certificate of authentication in the following
      form:

     

    This
      is
      one of the Securities referred to in the within mentioned
      Indenture.

     

    Dated:

     

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

     

    

     

    

     

    By:
      __________________________________

     

     Authenticating
      Agent

     

    By:
      __________________________________

     

     Authorized
      Signatory

     

    

     

    

    
      
        
        

      

      
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    ARTICLE
      VII

    Holder’s
      Lists and Reports by Company

     

    SECTION
      7.1.  
      Company to Furnish Trustee Names and Addresses of Holders.

     

    The
      Company will furnish or cause to be furnished to the Trustee:

     

    (a)  semiannually,
      on or before June 30 and December 31 of each year, a list, in such form as
      the
      Trustee may reasonably require, of the names and addresses of the Holders as
      of
      a date not more than fifteen (15) days prior to the delivery thereof,
      and

     

    (b)  at
      such
      other times as the Trustee may request in writing, within thirty (30) days
      after
      the receipt by the Company of any such request, a list of similar form and
      content as of a date not more than fifteen (15) days prior to the time such
      list
      is furnished,

     

    in
      each
      case to the extent such information is in the possession or control of the
      Company and has not otherwise been received by the Trustee in its capacity
      as
      Securities Registrar.

     

    SECTION
      7.2.  
      Preservation of Information, Communications to Holders.

     

    (a)  The
      Trustee shall preserve, in as current a form as is reasonably practicable,
      the
      names and addresses of Holders contained in the most recent list furnished
      to
      the Trustee as provided in Section
      7.1
      and the
      names and addresses of Holders received by the Trustee in its capacity as
      Securities Registrar. The Trustee may destroy any list furnished to it as
      provided in Section
      7.1
      upon
      receipt of a new list so furnished.

     

    (b)  The
      rights of Holders to communicate with other Holders with respect to their rights
      under this Indenture or under the Securities, and the corresponding rights
      and
      privileges of the Trustee, shall be as provided in the Trust Indenture
      Act.

     

    (c)  Every
      Holder of Securities, by receiving and holding the same, agrees with the Company
      and the Trustee that neither the Company nor the Trustee nor any agent of either
      of them shall be held accountable by reason of the disclosure of information
      as
      to the names and addresses of the Holders made pursuant to the Trust Indenture
      Act.

     

    SECTION
      7.3.  
      Reports by Company.

     

    (a)  The
      Company shall furnish to the Holders and to prospective purchasers of
      Securities, upon their request, the information required to be furnished
      pursuant to Rule 144A(d)(4) under the Securities Act. The delivery requirement
      set forth in the preceding sentence may be satisfied by compliance with
Section
      7.3(b).

     

    (b)  The
      Company shall furnish to each of (i) the Trustee, (ii) the Holders and to
      subsequent holders of Securities, (iii) Taberna Capital Management, LLC,
      450 Park Avenue, New York, New York 10022, Attn: Thomas Bogal (or such
      other address as designated by Taberna Capital Management, LLC) and (iv) any
      beneficial owner of the Securities reasonably identified to the Company (which
      identification may be made either by such beneficial owner or by Taberna Capital
      Management, LLC), a duly completed and executed certificate substantially and
      substantively in the form attached hereto as Exhibit
      A,
      including the financial statements referenced in such Exhibit, which certificate
      and financial statements shall be so furnished by the Company not later than
      forty-five (45) days after the end of each of the first three fiscal quarters
      of
      each fiscal year of the Company
      and
      not
      later than ninety (90) days after the end of each fiscal year of the
Company.
      The
      delivery requirements under this Section 7.3(b) may be satisfied by compliance
      with Section 8.16(b) of the Trust Agreement.

     

    (c)  If
      the
Company
      intends
      to file its annual and quarterly information with the Securities and Exchange
      Commission (the “Commission”)
      in
      electronic form pursuant to Regulation S-T of the Commission using the
      Commission’s Electronic Data Gathering, Analysis and Retrieval (“EDGAR”)
      system, the Company shall notify the Trustee in the manner prescribed herein
      of
      each such annual and quarterly filing. The Trustee is hereby authorized and
      directed to access the EDGAR system for purposes of retrieving the financial
      information so filed. Compliance with the foregoing shall constitute delivery
      by
      the Company of its financial statements to the Trustee in compliance with the
      provisions of Section 314(a) of the Trust Indenture Act, if applicable. The
      Trustee shall have no duty to search for or obtain any electronic or other
      filings that the Company
      makes
      with the Commission, regardless of whether such filings are periodic,
      supplemental or otherwise. Delivery of reports, information and documents to
      the
      Trustee pursuant to this Section
      7.3(c)
      shall be
      solely for purposes of compliance with this Section
      7.3(c)
      and, if
      applicable, with section 314(a) of the Trust Indenture Act. The Trustee’s
      receipt of such reports, information and documents shall not constitute notice
      to it of the content thereof or any matter determinable from the content
      thereof, including the Company’s compliance with any of its covenants hereunder,
      as to which the Trustee is entitled to rely upon Officers’
Certificates.

     

    
      
        
        

      

      
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    ARTICLE
      VIII

    No
      Consolidation, Merger, Conveyance, Transfer or Lease

     

    SECTION
      8.1.  
      Company May Not Consolidate 

     

    The
      Company will not, and will not permit any of its subsidiaries to, enter into
      any
      transaction of merger, consolidation, amalgamation or reorganization, or
      liquidate, wind up or dissolve itself (or suffer any liquidation or
      dissolution), or convey, sell, lease, transfer or otherwise dispose of, in
      one
      transaction or a series of transactions, all or any part of such Person’s
      business or assets, whether now owned or hereafter acquired, or make any
      material change in the method by which such Person conducts business;
      provided, however, any subsidiary of the Company may be (i) merged, amalgamated
      or consolidated with or into the Company or any subsidiary of the Company,
      or
      (ii) liquidated, wound up or dissolved into, or all or substantially all of
      its business, property or assets may be conveyed, sold, leased, transferred
      or
      other disposed of, in one transaction or a series of transactions, to the
      Company or any subsidiary of the Company; provided, however, that in the case
      of
      such a merger, amalgamation, liquidation or consolidation, the Company or such
      subsidiary, as the case may be, shall be the continuing or surviving corporation
      or (iii) liquidated, dissolved or wound up upon the termination of such
      subsidiary’s business and sale of all or substantially all of its assets for
      fair market value and cash, provided that no Default or Event of Default exists
      or would arise as a result thereof.

     

    
      
        
        

      

      
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    ARTICLE
      IX

    Supplemental
      Indentures

     

    SECTION
      9.1.  
      Supplemental Indentures without Consent of Holders.

     

    Without
      the consent of any Holders, the Company, when authorized by a Board Resolution,
      and the Trustee, at any time and from time to time, may enter into one or more
      indentures supplemental hereto, in form reasonably satisfactory to the Trustee,
      for any of the following purposes:

     

    (a)  to
      evidence the succession of another Person to the Company, and the assumption
      by
      any such successor of the covenants of the Company herein and in the Securities;
      or

     

    (b)  to
      evidence and provide for the acceptance of appointment hereunder by a successor
      trustee; or

     

    (c)  to
      cure
      any ambiguity, to correct or supplement any provision herein that may be
      defective or inconsistent with any other provision herein, or to make or amend
      any other provisions with respect to matters or questions arising under this
      Indenture, which shall not be inconsistent with the other provisions of this
      Indenture, provided
      that
      such action pursuant to this clause (c) shall not adversely affect in any
      material respect the interests of any Holders or the holders of the Preferred
      Securities; or

     

    (d)  to
      comply
      with the rules and regulations of any securities exchange or automated quotation
      system on which any of the Securities may be listed, traded or quoted;
      or

     

    (e)  to
      add to
      the covenants, restrictions or obligations of the Company or to add to the
      Events of Default, provided
      that
      such action pursuant to this clause (c) shall not adversely affect in any
      material respect the interests of any Holders or the holders of the Preferred
      Securities; or

     

    (f)  to
      modify, eliminate or add to any provisions of the Indenture or the Securities
      to
      such extent as shall be necessary to ensure that the Securities are treated
      as
      indebtedness of the Company for United States Federal income tax purposes,
      provided
      that
      such action pursuant to this clause (d) shall not adversely affect in any
      material respect the interests of any Holders or the holders of the Preferred
      Securities.

     

    SECTION
      9.2.  
      Supplemental Indentures with Consent of Holders.

     

    (a)  Subject
      to Section 9.1, with the consent of the Holders of not less than a majority
      in aggregate principal amount of the Outstanding Securities, by Act of said
      Holders delivered to the Company and the Trustee, the Company, when authorized
      by a Board Resolution, and the Trustee may enter into an indenture or indentures
      supplemental hereto for the purpose of adding any provisions to or changing
      in
      any manner or eliminating any of the provisions of this Indenture or of
      modifying in any manner the rights of the Holders of Securities under this
      Indenture; provided that
      no
      such supplemental indenture shall, without the consent of the Holder of each
      Outstanding Security,

     

    (i)  
      change
      the Stated Maturity of the principal or any premium of any Security or change
      the date of payment of any installment of interest (including any Additional
      Interest) on any Security, or reduce the principal amount thereof or the rate
      of
      interest thereon or any premium payable upon the redemption thereof or change
      the place of payment where, or the coin or currency in which, any Security
      or
      interest thereon is payable, or restrict or impair the right to institute suit
      for the enforcement of any such payment on or after such date, or

     

    (ii)  
      reduce
      the percentage in aggregate principal amount of the Outstanding Securities,
      the
      consent of whose Holders is required for any such supplemental indenture, or
      the
      consent of whose Holders is required for any waiver of compliance with any
      provision of this Indenture or of defaults hereunder and their consequences
      provided for in this Indenture, or

     

    (iii)  
      modify
      any of the provisions of this Section
      9.2,
      Section
      5.13
      or
Section
      10.7,
      except
      to increase any percentage in aggregate principal amount of the Outstanding
      Securities, the consent of whose Holders is required for any reason, or to
      provide that certain other provisions of this Indenture cannot be modified
      or
      waived without the consent of the Holder of each Security;

     

    provided,
      further,
      that,
      so long as any Preferred Securities remain outstanding, no amendment under
      this
Section
      9.2
      shall be
      effective until the holders of a majority in Liquidation Amount of the Preferred
      Securities shall have consented to such amendment; provided,
      further,
      that if
      the consent of the Holder of each Outstanding Security is required for any
      amendment under this Indenture, such amendment shall not be effective until
      the
      holder of each Outstanding Preferred Security shall have consented to such
      amendment.

     

    (b)  It
      shall
      not be necessary for any Act of Holders under this Section
      9.2
      to
      approve the particular form of any proposed supplemental indenture, but it
      shall
      be sufficient if such Act shall approve the substance thereof.

     

    SECTION
      9.3.  
      Execution of Supplemental Indentures.

     

    In
      executing or accepting the additional trusts created by any supplemental
      indenture permitted by this Article
      IX
      or the
      modifications thereby of the trusts created by this Indenture, the Trustee
      shall
      be entitled to receive, and shall be fully protected in conclusively relying
      upon, an Officers’ Certificate and an Opinion of Counsel stating that the
      execution of such supplemental indenture is authorized or permitted by this
      Indenture, and that all conditions precedent herein provided for relating to
      such action have been complied with. The Trustee may, but shall not be obligated
      to, enter into any such supplemental indenture that affects the Trustee’s own
      rights, duties, indemnities or immunities under this Indenture or otherwise.
      Copies of the final form of each supplemental indenture shall be delivered
      by
      the Trustee at the expense of the Company to each Holder, and, if the Trustee
      is
      the Property Trustee, to each holder of Preferred Securities, promptly after
      the
      execution thereof.

     

    SECTION
      9.4.  
      Effect of Supplemental Indentures.

     

    Upon
      the
      execution of any supplemental indenture under this Article
      IX,
      this
      Indenture shall be modified in accordance therewith, and such supplemental
      indenture shall form a part of this Indenture for all purposes; and every Holder
      of Securities and every holder of Preferred Securities theretofore or thereafter
      authenticated and delivered hereunder or under the Trust Agreement, as
      applicable, shall be bound thereby.

     

    SECTION
      9.5.  
      Reference in Securities to Supplemental Indentures.

     

    Securities
      authenticated and delivered after the execution of any supplemental indenture
      pursuant to this Article
      IX
      may, and
      shall if required by the Company, bear a notation in form approved by the
      Company as to any matter provided for in such supplemental indenture. If the
      Company shall so determine, new Securities so modified as to conform, in the
      opinion of the Company, to any such supplemental indenture may be prepared
      and
      executed by the Company and authenticated and delivered by the Trustee in
      exchange for Outstanding Securities.

     

    
      
        
        

      

      
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    ARTICLE
      X

    Covenants

     

    SECTION
      10.1.  
      Payment of Principal, Premium,
      if
      any,
      and
      Interest.

     

    The
      Company covenants and agrees for the benefit of the Holders of the Securities
      that it will duly and punctually pay the principal of and any premium and
      interest (including any Additional Interest) on the Securities in accordance
      with the terms of the Securities and this Indenture.

     

    SECTION
      10.2.  
      Money for Security Payments to be Held in Trust.

     

    (a)  Whenever
      the Company shall have one or more Paying Agents, it will, prior to 11:00 a.m.,
      New York City time, on each due date of the principal of or any premium or
      interest (including any Additional Interest) on any Securities, deposit with
      such Paying Agent a sum sufficient to pay such amount, such sum to be held
      as
      provided in the Trust Indenture Act and (unless such Paying Agent is the
      Trustee) the Company will promptly notify the Trustee of its failure to so
      act.

     

    (b)  The
      Company will cause each Paying Agent for the Securities other than the Trustee
      to execute and deliver to the Trustee an instrument in which such Paying Agent
      shall agree with the Trustee, subject to the provisions of this Section
      10.2,
      that
      such Paying Agent will (i) comply with the provisions of this Indenture and
      the
      Trust Indenture Act applicable to it as a Paying Agent and (ii) during the
      continuance of any default by the Company (or any other obligor upon the
      Securities) in the making of any payment in respect of the Securities, upon
      the
      written request of the Trustee, forthwith pay to the Trustee all sums held
      in
      trust by such Paying Agent for payment in respect of the
      Securities.

     

    (c)  The
      Company may at any time, for the purpose of obtaining the satisfaction and
      discharge of this Indenture or for any other purpose, pay, or by Company Order
      direct any Paying Agent to pay, to the Trustee all sums held in trust by the
      Company or such Paying Agent, such sums to be held by the Trustee upon the
      same
      trusts as those upon which such sums were held by the Company or such Paying
      Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying
      Agent shall be released from all further liability with respect to such
      money.

     

    (d)  Any
      money
      deposited with the Trustee or any Paying Agent for the payment of the principal
      of and any premium or interest (including any Additional Interest) on any
      Security and remaining unclaimed for two years after such principal and any
      premium or interest has become due and payable shall (unless otherwise required
      by mandatory provision of applicable escheat or abandoned or unclaimed property
      law) be paid on Company Request to the Company, or (if then held by the Company)
      shall (unless otherwise required by mandatory provision of applicable escheat
      or
      abandoned or unclaimed property law) be discharged from such trust; and the
      Holder of such Security shall thereafter, as an unsecured general creditor,
      look
      only to the Company for payment thereof, and all liability of the Trustee or
      such Paying Agent with respect to such trust money, and all liability of the
      Company as trustee thereof, shall thereupon cease; provided
      that
      the
      Trustee or such Paying Agent, before being required to make any such repayment,
      may at the expense of the Company cause to be published once, in a newspaper
      published in the English language, customarily published on each Business Day
      and of general circulation in the Borough of Manhattan, The City of New York,
      notice that such money remains unclaimed and that, after a date specified
      therein, which shall not be less than thirty (30) days from the date of such
      publication, any unclaimed balance of such money then remaining will be repaid
      to the Company.

     

    SECTION
      10.3.  
      Statement as to Compliance.

     

    The
      Company shall deliver to the Trustee, within one hundred twenty (120) days
      after
      the end of each fiscal year of the Company ending after the date hereof, an
      Officers’ Certificate covering the preceding calendar year, stating whether or
      not to the knowledge of the signers thereof the Company is in default in the
      performance or observance of any of the terms, provisions and conditions of
      this
      Indenture (without regard to any period of grace or requirement of notice
      provided hereunder), and if the Company shall be in default, specifying all
      such
      defaults and the nature and status thereof of which they may have knowledge.
      The
      delivery requirements of this Section 10.3 may be satisfied by compliance with
      Section 8.16(a) of the Trust Agreement.

     

    SECTION
      10.4.  
      Calculation Agent.

     

    (a)  The
      Company hereby agrees that for so long as any of the Securities remain
      Outstanding, there will at all times be an agent appointed to calculate LIBOR
      in
      respect of each Interest Payment Date in accordance with the terms of
Schedule
      A
      (the
“Calculation
      Agent”).
      The
      Company has initially appointed the Property Trustee as Calculation Agent for
      purposes of determining LIBOR for each Interest Payment Date. The Calculation
      Agent may be removed by the Company at any time. Notwithstanding the foregoing,
      so long as the Property Trustee holds any of the Securities, the Calculation
      Agent shall be the Property Trustee. If the Calculation Agent is unable or
      unwilling to act as such or is removed by the Company, the Company will promptly
      appoint as a replacement Calculation Agent the London office of a leading bank
      which is engaged in transactions in Eurodollar deposits in the international
      Eurodollar market and which does not control or is not controlled by or under
      common control with the Company or its Affiliates. The Calculation Agent may
      not
      resign its duties without a successor having been duly appointed.

     

    (b)  The
      Calculation Agent shall be required to agree that, as soon as possible after
      11:00 a.m. (London time) on each LIBOR Determination Date (as defined in
Schedule
      A),
      but in
      no event later than 11:00 a.m. (London time) on the Business Day immediately
      following each LIBOR Determination Date, the Calculation Agent will calculate
      the interest rate (the Interest Payment shall be rounded to the nearest cent,
      with half a cent being rounded upwards) for the related Interest Payment Date,
      and will communicate such rate and amount to the Company, the Trustee, each
      Paying Agent and the Depositary. The Calculation Agent will also specify to
      the
      Company the quotations upon which the foregoing rates and amounts are based
      and,
      in any event, the Calculation Agent shall notify the Company before 5:00 p.m.
      (London time) on each LIBOR Determination Date that either: (i) it has
      determined or is in the process of determining the foregoing rates and amounts
      or (ii) it has not determined and is not in the process of determining the
      foregoing rates and amounts, together with its reasons therefor. The Calculation
      Agent’s determination of the foregoing rates and amounts for any Interest
      Payment Date will (in the absence of manifest error) be final and binding upon
      all parties. For the sole purpose of calculating the interest rate for the
      Securities, “Business Day” shall be defined as any day on which dealings in
      deposits in Dollars are transacted in the London interbank market.

     

    SECTION
      10.5.  
      Additional Tax Sums.

     

    So
      long
      as no Event of Default has occurred and is continuing, if (a) the Trust is
      the
      Holder of all of the Outstanding Securities and (b) a Tax Event described in
      clause (i) or (iii) in the definition of Tax Event in Section
      1.1
      hereof
      has occurred and is continuing, the Company shall pay to the Trust (and its
      permitted successors or assigns under the related Trust Agreement) for so long
      as the Trust (or its permitted successor or assignee) is the registered holder
      of the Outstanding Securities, such amounts as may be necessary in order that
      the amount of Distributions (including any Additional Interest Amount (as
      defined in the Trust Agreement)) then due and payable by the Trust on the
      Preferred Securities and Common Securities that at any time remain outstanding
      in accordance with the terms thereof shall not be reduced as a result of any
      Additional Taxes arising from such Tax Event (additional such amounts payable
      by
      the Company to the Trust, the “Additional
      Tax Sums”).
      Whenever
      in this Indenture or the Securities there is a reference in any context to
      the
      payment of principal of or interest on the Securities, such mention shall be
      deemed to include mention of the payments of the Additional Tax Sums provided
      for in this Section
      10.5
      to the
      extent that, in such context, Additional Tax Sums are, were or would be payable
      in respect thereof pursuant to the provisions of this Section
      10.5
      and
      express mention of the payment of Additional Tax Sums (if applicable) in any
      provisions hereof shall not be construed as excluding Additional Tax Sums in
      those provisions hereof where such express mention is not made.

     

    
      
        
        

      

      
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    SECTION
      10.6.  
      Additional Covenants.

     

    (a)  The
      Company covenants and agrees with each Holder of Securities that if an Event
      of
      Default shall have occurred and be continuing, it shall not (i) declare or
      pay
      any dividends or distributions on, or redeem, purchase, acquire or make a
      liquidation payment with respect to, any of the Company’s Equity Interests,
(ii)
      vote
      in favor of or permit or otherwise allow any of its Subsidiaries to declare
      or
      pay any dividends or distributions on, or redeem, purchase, acquire or make
      a
      liquidation payment with respect to or otherwise retire, any shares of any
      such
      Subsidiary’s preferred stock or other Equity Interests entitling the holders
      thereof to a stated rate of return (for the avoidance of doubt, whether such
      preferred stock or other Equity Interests are perpetual or
      otherwise),
      or
      (iii) make any payment of principal of or any interest or premium, if any,
      on or
      repay, repurchase or redeem any debt securities of the Company that rank
pari
      passu
      in all
      respects with or junior in interest to the Securities.

     

    (b)  The
      Company also covenants with each Holder of Securities (i) to hold, directly
      or
      indirectly, one hundred percent (100%) of the Common Securities of the Trust,
      provided
      that
      any
      permitted successor of the Company hereunder may succeed to the Company’s
      ownership of such Common Securities, (ii) as holder of such Common Securities,
      not to voluntarily dissolve, wind-up or liquidate the Trust other than (A)
      in
      connection with a distribution of the Securities to the holders of the Preferred
      Securities in liquidation of the Trust or (B) in connection with certain
      mergers, consolidations or amalgamations permitted by the Trust Agreement and
      (iii) to use its reasonable commercial efforts, consistent with the terms and
      provisions of the Trust Agreement, to cause the Trust to continue to be taxable
      as a grantor trust and not as a corporation for United States Federal income
      tax
      purposes.

     

    (c)  The
      Company also agrees to use its reasonable best efforts to meet the requirements
      to qualify, effective for the fiscal year ending December 31, 2005 and all
      future fiscal years, as a real estate investment trust under the Internal
      Revenue Code of 1986, as amended. 

     

    (d)  [Add
      any additional covenants] 

     

    SECTION
      10.7.  
      Waiver of Covenants.

     

    The
      Company may omit in any particular instance to comply with any covenant or
      condition contained in Section
      10.6
      if,
      before or after the time for such compliance, the Holders of at least a majority
      in aggregate principal amount of the Outstanding Securities shall, by Act of
      such Holders, and at least a majority of the aggregate Liquidation Amount of
      the
      Preferred Securities then outstanding, by consent of such holders, either waive
      such compliance in such instance or generally waive compliance with such
      covenant or condition, but no such waiver shall extend to or affect such
      covenant or condition except to the extent so expressly waived, and, until
      such
      waiver shall become effective, the obligations of the Company in respect of
      any
      such covenant or condition shall remain in full force and effect.

     

    SECTION
      10.8.  
      Treatment of Securities.

     

    The
      Company will treat the Securities as indebtedness, and the amounts, other than
      payments of principal, payable in respect of the principal amount of such
      Securities as interest, for all U.S. federal income tax purposes. All payments
      in respect of the Securities will be made free and clear of U.S. withholding
      tax
      to any beneficial owner thereof that has provided an Internal Revenue Service
      Form W-9 or W-8BEN (or any substitute or successor form) establishing its U.S.
      or non-U.S. status for U.S. federal income tax purposes, or any other applicable
      form establishing a complete exemption from U.S. withholding tax.

     

    SECTION
      10.9 Financial Covenants

    

    (a) The
      Company shall not permit Tangible Net Worth, at any time, to be less than the
      sum of (i) $100,000,000 plus (ii) 75% of all proceeds of Equity Interests issued
      by the Company after the date hereof.

    

    (b) The
      Company shall not permit, at any time, the ratio of (i) the Total Liabilities
      to
      (ii) the Tangible Net Worth to exceed 4 to 1.

    

    (c) The
      Company shall not permit, at any time, the ratio of (i) EBITDA to (ii) interest
      expense of the Company and its consolidated subsidiaries, in accordance with
      GAAP, for any period consisting of the preceding four (4) fiscal quarters,
      to be
      less than 2.25 to 1. Such ratio shall be tested quarterly.

    

    (d) From
      and
      after the date hereof, the Company shall not incur any Unsecured Debt, other
      than Subordinated Debt, if that Unsecured Debt, plus all of the Unsecured Debt
      of the Company and its consolidated subsidiaries, in the aggregate, would exceed
      20% of Tangible Net Worth.

     

    
      
        
        

      

      
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    ARTICLE
      XI

    Redemption
      of Securities

     

    SECTION
      11.1.  
      Optional Redemption.

     

    The
      Company may, at its option, on any Interest Payment Date, on or after July
      30,
      2011, redeem the Securities in whole at any time or in part from time to time,
      at a Redemption Price equal to one hundred percent (100%) of the principal
      amount thereof (or of the redeemed portion thereof, as applicable), together,
      in
      the case of any such redemption, with accrued and unpaid interest, including
      any
      Additional Interest, through but excluding the date fixed as the Redemption
      Date
      (the “Optional
      Redemption Price”).

     

    SECTION
      11.2.  
      Special Event Redemption.

     

    Prior
      to
      July 30, 2011, upon the occurrence and during the continuation of a Special
      Event, the Company may, at its option, redeem the Securities, in whole but
      not
      in part, at a Redemption Price equal to one hundred seven and one half percent
      (107.5%) of the principal amount thereof, together, in the case of any such
      redemption, with accrued interest, including any Additional Interest, through
      but excluding the date fixed as the Redemption Date (the “Special
      Redemption Price”).

     

    SECTION
      11.3.  
      Election to Redeem; Notice to Trustee.

     

    The
      election of the Company to redeem any Securities, in whole or in part, shall
      be
      evidenced by or pursuant to a Board Resolution. In case of any redemption at
      the
      election of the Company, the Company shall, not less than thirty (30) days
      and
      not more than seventy-five (75) days prior to the Redemption Date (unless a
      shorter notice shall be satisfactory to the Trustee), notify the Trustee and
      the
      Property Trustee under the Trust Agreement in writing of such date and of the
      principal amount of the Securities to be redeemed and provide the additional
      information required to be included in the notice or notices contemplated by
      Section
      11.5.
      In the
      case of any redemption of Securities, in whole or in part, (a) prior to the
      expiration of any restriction on such redemption provided in this Indenture
      or
      the Securities or (b) pursuant to an election of the Company which is subject
      to
      a condition specified in this Indenture or the Securities, the Company shall
      furnish the Trustee with an Officers’ Certificate and an Opinion of Counsel
      evidencing compliance with such restriction or condition.

     

    SECTION
      11.4.  
      Selection of Securities to be Redeemed.

     

    (a)  If
      less
      than all the Securities are to be redeemed, the particular Securities to be
      redeemed shall be selected and redeemed on a pro rata basis not more than sixty
      (60) days prior to the Redemption Date by the Trustee from the Outstanding
      Securities not previously called for redemption, provided
      that the
      unredeemed portion of the principal amount of any Security shall be in an
      authorized denomination (which shall not be less than the minimum authorized
      denomination) for such Security.

     

    (b)  The
      Trustee shall promptly notify the Company in writing of the Securities selected
      for redemption and, in the case of any Securities selected for partial
      redemption, the principal amount thereof to be redeemed. For all purposes of
      this Indenture, unless the context otherwise requires, all provisions relating
      to the redemption of Securities shall relate, in the case of any Security
      redeemed or to be redeemed only in part, to the portion of the principal amount
      of such Security that has been or is to be redeemed.

     

    (c)  The
      provisions of paragraphs (a) and (b) of this Section
      11.4
      shall
      not apply with respect to any redemption affecting only a single Security,
      whether such Security is to be redeemed in whole or in part. In the case of
      any
      such redemption in part, the unredeemed portion of the principal amount of
      the
      Security shall be in an authorized denomination (which shall not be less than
      the minimum authorized denomination) for such Security.

     

    SECTION
      11.5.  
      Notice of Redemption.

     

    (a)  Notice
      of
      redemption shall be given not later than the fifteen (15th)
      day,
      and not earlier than the sixtieth (60th)
      day,
      prior to the Redemption Date to each Holder of Securities to be redeemed, in
      whole or in part (unless a shorter notice shall be satisfactory to the Property
      Trustee under the related Trust Agreement).

     

    (b)  With
      respect to Securities to be redeemed, in whole or in part, each notice of
      redemption shall state:

     

    (i)  
      the
      Redemption Date;

     

    (ii)  
      the
      Redemption Price or, if the Redemption Price cannot be calculated prior to
      the
      time the notice is required to be sent, the estimate of the Redemption Price,
      as
      calculated by the Company, together with a statement that it is an estimate
      and
      that the actual Redemption Price will be calculated on the fifth Business Day
      prior to the Redemption Date (and if an estimate is provided, a further notice
      shall be sent of the actual Redemption Price on the date that such Redemption
      Price is calculated);

     

    (iii)  
      if less
      than all Outstanding Securities are to be redeemed, the identification (and,
      in
      the case of partial redemption, the respective principal amounts) of the amount
      of and particular Securities to be redeemed;

     

    (iv)  
      that on
      the Redemption Date, the Redemption Price will become due and payable upon
      each
      such Security or portion thereof, and that any interest (including any
      Additional Interest) on such Security or such portion, as the case may be,
      shall
      cease to accrue on and after said date; and

     

    (v)  
      the
      place or places where such Securities are to be surrendered for payment of
      the
      Redemption Price.

     

    (c)  Notice
      of
      redemption of Securities to be redeemed, in whole or in part, at the election
      of
      the Company shall be given by the Company or, at the Company’s request, by the
      Trustee in the name and at the expense of the Company and shall be irrevocable.
      The notice if mailed in the manner provided above shall be conclusively presumed
      to have been duly given, whether or not the Holder receives such notice. In
      any
      case, a failure to give such notice by mail or any defect in the notice to
      the
      Holder of any Security designated for redemption as a whole or in part shall
      not
      affect the validity of the proceedings for the redemption of any other
      Security.

     

    
      
        
        

      

      
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    SECTION
      11.6.  
      Deposit of Redemption Price.

     

    Prior
      to
      10:00 a.m., New York City time, on the Redemption Date specified in the notice
      of redemption given as provided in Section
      11.5,
      the
      Company will deposit with the Trustee or with one or more Paying Agents an
      amount of money sufficient to pay the Redemption Price of, and any accrued
      interest (including any Additional Interest) on, all the Securities (or portions
      thereof) that are to be redeemed on that date.

     

    SECTION
      11.7.  
      Payment of Securities Called for Redemption.

     

    (a)  If
      any
      notice of redemption has been given as provided in Section
      11.5,
      the
      Securities or portion of Securities with respect to which such notice has been
      given shall become due and payable on the date and at the place or places stated
      in such notice at the applicable Redemption Price, together with accrued
      interest (including any Additional Interest) to the Redemption Date. On
      presentation and surrender of such Securities at a Place of Payment specified
      in
      such notice, the Securities or the specified portions thereof shall be paid
      and
      redeemed by the Company at the applicable Redemption Price, together with
      accrued interest (including any Additional Interest) to the Redemption
      Date.

     

    (b)  Upon
      presentation of any Security redeemed in part only, the Company shall execute
      and the Trustee shall authenticate and deliver to the Holder thereof, at the
      expense of the Company, a new Security or Securities, of authorized
      denominations, in aggregate principal amount equal to the unredeemed portion
      of
      the Security so presented and having the same Original Issue Date, Stated
      Maturity and terms.

     

    (c)  If
      any
      Security called for redemption shall not be so paid upon surrender thereof
      for
      redemption, the principal of and any premium on such Security shall, until
      paid,
      bear interest from the Redemption Date at the rate prescribed therefor in the
      Security.

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    
       

    

    
      
        ARTICLE
          XII

      

    

    Subordination
      of Securities

     

    SECTION
      12.1.  
      Securities Subordinate to Senior Debt.

     

    The
      Company covenants and agrees, and each Holder of a Security, by its acceptance
      thereof, likewise covenants and agrees, that, to the extent and in the manner
      hereinafter set forth in this Article
      XII,
      the
      payment of the principal of and any premium and interest (including any
      Additional Interest) on each and all of the Securities are hereby expressly
      made
      subordinate and subject in right of payment to the prior payment in full of
      all
      Senior Debt.

     

    SECTION
      12.2.  
      No
      Payment When Senior Debt in Default; Payment Over of Proceeds Upon Dissolution,
      Etc. 

     

    (a)  In
      the
      event and during the continuation of any default by the Company in the payment
      of any principal of or any premium or interest on any Senior Debt (following
      any
      grace period, if applicable) when the same becomes due and payable, whether
      at
      maturity or at a date fixed for prepayment or by declaration of acceleration
      or
      otherwise, then, upon written notice of such default to the Company by the
      holders of such Senior Debt or any trustee therefor, unless and until such
      default shall have been cured or waived or shall have ceased to exist, no direct
      or indirect payment (in cash, property, securities, by set-off or otherwise)
      shall be made or agreed to be made on account of the principal of or any premium
      or interest (including any Additional Interest) on any of the Securities, or
      in
      respect of any redemption, repayment, retirement, purchase or other acquisition
      of any of the Securities.

     

    (b)  In
      the
      event of a bankruptcy, insolvency or other proceeding described in clause (d)
      or
      (e) of the definition of Event of Default (each such event, if any, herein
      sometimes referred to as a “Proceeding”),
      all
      Senior Debt (including any interest thereon accruing after the commencement
      of
      any such proceedings) shall first be paid in full before any payment or
      distribution, whether in cash, securities or other property, shall be made
      to
      any Holder of any of the Securities on account thereof. Any payment or
      distribution, whether in cash, securities or other property (other than
      securities of the Company or any other entity provided for by a plan of
      reorganization or readjustment the payment of which is subordinate, at least
      to
      the extent provided in these subordination provisions with respect to the
      indebtedness evidenced by the Securities, to the payment of all Senior Debt
      at
      the time outstanding and to any securities issued in respect thereof under
      any
      such plan of reorganization or readjustment), which would otherwise (but for
      these subordination provisions) be payable or deliverable in respect of the
      Securities shall be paid or delivered directly to the holders of Senior Debt
      in
      accordance with the priorities then existing among such holders until all Senior
      Debt (including any interest thereon accruing after the commencement of any
      Proceeding) shall have been paid in full.

     

    (c)  In
      the
      event of any Proceeding, after payment in full of all sums owing with respect
      to
      Senior Debt, the Holders of the Securities, together with the holders of any
      obligations of the Company ranking on a parity with the Securities, shall be
      entitled to be paid from the remaining assets of the Company the amounts at
      the
      time due and owing on account of unpaid principal of and any premium and
      interest (including any Additional Interest) on the Securities and such other
      obligations before any payment or other distribution, whether in cash, property
      or otherwise, shall be made on account of any Equity Interests or any
      obligations of the Company ranking junior to the Securities and such other
      obligations. If, notwithstanding the foregoing, any payment or distribution
      of
      any character on any security, whether in cash, securities or other property
      (other than securities of the Company or any other entity provided for by a
      plan
      of reorganization or readjustment the payment of which is subordinate, at least
      to the extent provided in these subordination provisions with respect to the
      indebtedness evidenced by the Securities, to the payment of all Senior Debt
      at
      the time outstanding and to any securities issued in respect thereof under
      any
      such plan of reorganization or readjustment) shall be received by the Trustee
      or
      any Holder in contravention of any of the terms hereof and before all Senior
      Debt shall have been paid in full, such payment or distribution or security
      shall be received in trust for the benefit of, and shall be paid over or
      delivered and transferred to, the holders of the Senior Debt at the time
      outstanding in accordance with the priorities then existing among such holders
      for application to the payment of all Senior Debt remaining unpaid, to the
      extent necessary to pay all such Senior Debt (including any interest thereon
      accruing after the commencement of any Proceeding) in full. In the event of
      the
      failure of the Trustee or any Holder to endorse or assign any such payment,
      distribution or security, each holder of Senior Debt is hereby irrevocably
      authorized to endorse or assign the same.

     

    (d)  The
      Trustee and the Holders, at the expense of the Company, shall take such
      reasonable action (including the delivery of this Indenture to an agent for
      any
      holders of Senior Debt or consent to the filing of a financing statement with
      respect hereto) as may, in the opinion of counsel designated by the holders
      of a
      majority in principal amount of the Senior Debt at the time outstanding, be
      necessary or appropriate to assure the effectiveness of the subordination
      effected by these provisions.

     

    (e)  The
      provisions of this Section
      12.2
      shall
      not impair any rights, interests, remedies or powers of any secured creditor
      of
      the Company in respect of any security interest the creation of which is not
      prohibited by the provisions of this Indenture.

     

    (f)  The
      securing of any obligations of the Company, otherwise ranking on a parity with
      the Securities or ranking junior to the Securities, shall not be deemed to
      prevent such obligations from constituting, respectively, obligations ranking
      on
      a parity with the Securities or ranking junior to the Securities.

     

    SECTION
      12.3.  
      Payment Permitted If No Default.

     

    Nothing
      contained in this Article
      XII
      or
      elsewhere in this Indenture or in any of the Securities shall prevent (a) the
      Company, at any time, except during the pendency of the conditions described
      in
      paragraph (a) of Section
      12.2
      or of
      any Proceeding referred to in Section
      12.2,
      from
      making payments at any time of principal of and any premium or interest
      (including any Additional Interest) on the Securities or (b) the application
      by
      the Trustee of any moneys deposited with it hereunder to the payment of or
      on
      account of the principal of and any premium or interest (including any
      Additional Interest) on the Securities or the retention of such payment by
      the
      Holders, if, at the time of such application by the Trustee, it did not have
      knowledge (in accordance with Section
      12.8)
      that
      such payment would have been prohibited by the provisions of this Article
      XII,
      except
      as provided in Section
      12.8.

     

    SECTION
      12.4.  
      Subrogation to Rights of Holders of Senior Debt.

     

    Subject
      to the payment in full of all amounts due or to become due on all Senior Debt,
      or the provision for such payment in cash or cash equivalents or otherwise
      in a
      manner satisfactory to the holders of Senior Debt, the Holders of the Securities
      shall be subrogated to the extent of the payments or distributions made to
      the
      holders of such Senior Debt pursuant to the provisions of this Article
      XII
      (equally
      and ratably with the holders of all indebtedness of the Company that by its
      express terms is subordinated to Senior Debt of the Company to substantially
      the
      same extent as the Securities are subordinated to the Senior Debt and is
      entitled to like rights of subrogation by reason of any payments or
      distributions made to holders of such Senior Debt) to the rights of the holders
      of such Senior Debt to receive payments and distributions of cash, property
      and
      securities applicable to the Senior Debt until the principal of and any premium
      and interest (including any Additional Interest) on the Securities shall be
      paid
      in full. For purposes of such subrogation, no payments or distributions to
      the
      holders of the Senior Debt of any cash, property or securities to which the
      Holders of the Securities or the Trustee would be entitled except for the
      provisions of this Article
      XII,
      and no
      payments made pursuant to the provisions of this Article
      XII
      to the
      holders of Senior Debt by Holders of the Securities or the Trustee, shall,
      as
      among the Company, its creditors other than holders of Senior Debt, and the
      Holders of the Securities, be deemed to be a payment or distribution by the
      Company to or on account of the Senior Debt.

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

    SECTION
      12.5.  
      Provisions Solely to Define Relative Rights.

     

    The
      provisions of this Article
      XII
      are and
      are intended solely for the purpose of defining the relative rights of the
      Holders of the Securities on the one hand and the holders of Senior Debt on
      the
      other hand. Nothing contained in this Article
      XII
      or
      elsewhere in this Indenture or in the Securities is intended to or shall (a)
      impair, as between the Company and the Holders of the Securities, the
      obligations of the Company, which are absolute and unconditional, to pay to
      the
      Holders of the Securities the principal of and any premium and interest
      (including any Additional Interest) on the Securities as and when the same
      shall
      become due and payable in accordance with their terms, (b) affect the relative
      rights against the Company of the Holders of the Securities and creditors of
      the
      Company other than their rights in relation to the holders of Senior Debt or
      (c)
      prevent the Trustee or the Holder of any Security (or to the extent expressly
      provided herein, the holder of any Preferred Security) from exercising all
      remedies otherwise permitted by applicable law upon default under this
      Indenture, including filing and voting claims in any Proceeding, subject to
      the
      rights, if any, under this Article
      XII
      of the
      holders of Senior Debt to receive cash, property and securities otherwise
      payable or deliverable to the Trustee or such Holder.

     

    SECTION
      12.6.  
      Trustee to Effectuate Subordination.

     

    Each
      Holder of a Security by his or her acceptance thereof authorizes and directs
      the
      Trustee on his or her behalf to take such action as may be necessary or
      appropriate to acknowledge or effectuate the subordination provided in this
      Article
      XII
      and
      appoints the Trustee his or her attorney-in-fact for any and all such
      purposes.

     

    SECTION
      12.7.  
      No
      Waiver of Subordination Provisions.

     

    (a)  No
      right
      of any present or future holder of any Senior Debt to enforce subordination
      as
      herein provided shall at any time in any way be prejudiced or impaired by any
      act or failure to act on the part of the Company or by any act or failure to
      act, in good faith, by any such holder, or by any noncompliance by the Company
      with the terms, provisions and covenants of this Indenture, regardless of any
      knowledge thereof that any such holder may have or be otherwise charged
      with.

     

    (b)  Without
      in any way limiting the generality of paragraph (a) of this Section
      12.7,
      the
      holders of Senior Debt may, at any time and from to time, without the consent
      of
      or notice to the Trustee or the Holders of the Securities, without incurring
      responsibility to such Holders of the Securities and without impairing or
      releasing the subordination provided in this Article
      XII
      or the
      obligations hereunder of such Holders of the Securities to the holders of Senior
      Debt, do any one or more of the following: (i) change the manner, place or
      terms
      of payment or extend the time of payment of, or renew or alter, Senior Debt,
      or
      otherwise amend or supplement in any manner Senior Debt or any instrument
      evidencing the same or any agreement under which Senior Debt is outstanding,
      (ii) sell, exchange, release or otherwise deal with any property pledged,
      mortgaged or otherwise securing Senior Debt, (iii) release any Person liable
      in
      any manner for the payment of Senior Debt and (iv) exercise or refrain from
      exercising any rights against the Company and any other Person.

     

    SECTION
      12.8.  
      Notice to Trustee.

     

    (a)  The
      Company shall give prompt written notice to a Responsible Officer of the Trustee
      of any fact known to the Company that would prohibit the making of any payment
      to or by the Trustee in respect of the Securities. Notwithstanding the
      provisions of this Article
      XII
      or any
      other provision of this Indenture, the Trustee shall not be charged with
      knowledge of the existence of any facts that would prohibit the making of any
      payment to or by the Trustee in respect of the Securities, unless and until
      a
      Responsible Officer of the Trustee shall have received written notice thereof
      from the Company or a holder of Senior Debt or from any trustee, agent or
      representative therefor; provided
      that
      if
      the Trustee shall not have received the notice provided for in this Section
      12.8
      at least
      two Business Days prior to the date upon which by the terms hereof any monies
      may become payable for any purpose (including, the payment of the principal
      of
      and any premium on or interest (including any Additional Interest) on any
      Security), then, anything herein contained to the contrary notwithstanding,
      the
      Trustee shall have full power and authority to receive such monies and to apply
      the same to the purpose for which they were received and shall not be affected
      by any notice to the contrary that may be received by it within two Business
      Days prior to such date.

     

    (b)  The
      Trustee shall be entitled to rely on the delivery to it of a written notice
      by a
      Person representing himself or herself to be a holder of Senior Debt (or a
      trustee, agent, representative or attorney-in-fact therefor) to establish that
      such notice has been given by a holder of Senior Debt (or a trustee, agent,
      representative or attorney-in-fact therefor). In the event that the Trustee
      determines in good faith that further evidence is required with respect to
      the
      right of any Person as a holder of Senior Debt to participate in any payment
      or
      distribution pursuant to this Article
      XII,
      the
      Trustee may request such Person to furnish evidence to the reasonable
      satisfaction of the Trustee as to the amount of Senior Debt held by such Person,
      the extent to which such Person is entitled to participate in such payment
      or
      distribution and any other facts pertinent to the rights of such Person under
      this Article
      XII,
      and if
      such evidence is not furnished, the Trustee may defer any payment to such Person
      pending judicial determination as to the right of such Person to receive such
      payment.

     

    SECTION
      12.9.  
      Reliance on Judicial Order or Certificate of Liquidating Agent.

     

    Upon
      any
      payment or distribution of assets of the Company referred to in this
Article
      XII,
      the
      Trustee and the Holders of the Securities shall be entitled to conclusively
      rely
      upon any order or decree entered by any court of competent jurisdiction in
      which
      such Proceeding is pending, or a certificate of the trustee in bankruptcy,
      receiver, liquidating trustee, custodian, assignee for the benefit of creditors,
      agent or other Person making such payment or distribution, delivered to the
      Trustee or to the Holders of Securities, for the purpose of ascertaining the
      Persons entitled to participate in such payment or distribution, the holders
      of
      the Senior Debt and other indebtedness of the Company, the amount thereof or
      payable thereon, the amount or amounts paid or distributed thereon and all
      other
      facts pertinent thereto or to this Article
      XII.

     

    SECTION
      12.10.  
      Trustee Not Fiduciary for Holders of Senior Debt.

     

    The
      Trustee, in its capacity as trustee under this Indenture, shall not be deemed
      to
      owe any fiduciary duty to the holders of Senior Debt and shall not be liable
      to
      any such holders if it shall in good faith mistakenly pay over or distribute
      to
      Holders of Securities or to the Company or to any other Person cash, property
      or
      securities to which any holders of Senior Debt shall be entitled by virtue
      of
      this Article
      XII
      or
      otherwise.

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    SECTION
      12.11.  
      Rights of Trustee as Holder of Senior Debt; Preservation of Trustee’s
      Rights.

     

    The
      Trustee in its individual capacity shall be entitled to all the rights set
      forth
      in this Article
      XII
      with
      respect to any Senior Debt that may at any time be held by it, to the same
      extent as any other holder of Senior Debt, and nothing in this Indenture shall
      deprive the Trustee of any of its rights as such holder.

     

    SECTION
      12.12.   Article
      Applicable to Paying Agents

     

    If
      at any
      time any Paying Agent other than the Trustee shall have been appointed by the
      Company and be then acting hereunder, the term “Trustee”
      as used
      in this Article
      XII
      shall in
      such case (unless the context otherwise requires) be construed as extending
      to
      and including such Paying Agent within its meaning as fully for all intents
      and
      purposes as if such Paying Agent were named in this Article
      XII
      in
      addition to or in place of the Trustee. For the avoidance of doubt, the Company
      shall not be permitted to appoint itself or any Affiliate as a Paying Agent
      hereunder.

     

    *
      * *
      *

     

    This
      instrument may be executed in any number of counterparts, each of which so
      executed shall be deemed to be an original, but all such counterparts shall
      together constitute but one and the same instrument.

     

    *
      * *
      *

     

    IN
      WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly
      executed as of the day and year first above written.

     

    Desert
      Capital REIT, Inc.

    

    

    By:

    Name:

     

    Title:

     

    JPMorgan
      Chase Bank,
      National
      Association,
      as
      Trustee

    

    

    By:

    Name:

     

    Title:

     

    

 

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

    DETERMINATION
      OF LIBOR

     

    With
      respect to the Securities, the London interbank offered rate (“LIBOR”)
      shall
      be determined by the Calculation Agent in accordance with the following
      provisions (in each case rounded to the nearest .000001%):

     

    (1) On
      the second LIBOR Business Day (as defined below) prior to a Distribution Date
      (except with respect to the first interest payment period, such date shall
      be
      June 14, 2006) (each such day, a “LIBOR Determination
      Date”), LIBOR for any given security shall for the following interest
      payment period equal the rate (expressed as a percentage per annum) for U.S.
      dollar deposits in Europe, for a three (3) month period, that appears on Dow
      Jones Telerate (as defined in the International Swaps and Derivatives
      Association, Inc. 2000 Interest Rate and Currency Exchange
      Definitions), Page 3750, or such other page as may replace such
      Page 3750, as of 11:00 a.m. (London time) on such LIBOR Determination Date,
      as
      reported by Bloomberg Financial Market Commodities News or any successor
      service. If such rate is superseded on Telerate Page 3750 by a corrected rate
      before 12:00 noon (London time) on such LIBOR Determination Date, the corrected
      rate as so substituted will be LIBOR for such LIBOR Determination
      Date.

     

    (2) If
      on any LIBOR Determination Date such rate does not appear on Dow Jones Telerate
      Page 3750 or such other page as may replace such Page 3750, the Calculation
      Agent shall determine the arithmetic mean of the offered quotations (expressed
      as a percentage per annum) of the Reference Banks (as defined below) to leading
      banks in the London interbank market for U.S. dollar deposits in Europe, for
      a
      three (3) month period, for an amount determined by the Calculation Agent (but
      not less than U.S. $1,000,000) by reference to requests for quotations as of
      approximately 11:00 A.M. (London time) on the LIBOR Determination Date made
      by
      the Calculation Agent to the Reference Banks. If on any LIBOR Determination
      Date
      at least two of the Reference Banks provide such quotations, LIBOR shall equal
      such arithmetic mean of such quotations. If on any LIBOR Determination Date
      only
      one or none of the Reference Banks provide such quotations, LIBOR shall be
      deemed to be the arithmetic mean of the offered quotations (expressed as a
      percentage per annum) that two (2) leading banks in the City of New York
      selected by the Calculation Agent are quoting on the relevant LIBOR
      Determination Date for U.S. dollar deposits in Europe, for a three (3) month
      period, for an amount determined by the Calculation Agent (but not less than
      U.S. $1,000,000); provided, that if the Calculation Agent is required
      but is unable to determine a rate in accordance with at least one of the
      procedures provided above, LIBOR shall be LIBOR as determined on the previous
      LIBOR Determination Date.

     

    (3) As
      used herein: “Reference Banks” means four major banks in the London
      interbank market selected by the Calculation Agent; and “LIBOR Business
      Day” means a day (a) on which commercial banks are open for business
      (including dealings in foreign exchange and foreign currency deposits) in London
      and (b) is not a Saturday, Sunday or other day on which commercial banking
      institutions in New York, New York or Wilmington, Delaware are authorized or
      obligated by law or executive order to be closed.

     

    

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

    Form
      of 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 7.3(b) of the Junior Subordinated Indenture (the “Indenture”), dated as
      of June 14, 2006, among Desert Capital REIT, Inc. (the “Company”) and JPMorgan
      Chase Bank, National Association, as trustee, that, as of [date], [20__], the
      Company and its subsidiaries had the following ratios and balances (unless
      otherwise indicated, capitalized terms used herein have the meaning set forth
      in
      the Indenture):

     

    

    As
      of
[Quarterly/Annual
      Financial Date],
      20__

    

    
      	 	 
	
               

              Senior
                secured indebtedness for borrowed money (“Debt”)

               

            	
               

              $_____

               

            
	
               

              Senior
                unsecured Debt

               

            	
               

              $_____

               

            
	
               

              Subordinated
                Debt

               

            	
               

              $_____

               

            
	
               

              Total
                Debt

               

            	
               

              $
                _____

               

            
	
               

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

               

            	
               

              _____%

               

            

    

     

    

     

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

     

    [FOR
      FISCAL YEAR END:
      Attached hereto 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__.]
      

     

    [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 Financial Statements (as defined
      in the Purchase Agreement) 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:].

    

    [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 [___] 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 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, 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.]

    

    Page
      ___
      attached hereto sets forth the financial data and computations 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__.

     

    

     

    DESERT
      CAPITAL REIT, INC.

     

    

    By:

    Name:

    

    Desert
      Capital REIT, Inc.

    1291
      Galleria Drive, Suite 200

    Henderson,
      NV 89014

    (702)
      795-7930

    

     

    
      
        
        

      

      
        34Exhibit 10.1

                               PURCHASE AGREEMENT

                                 by and between

                          LCP-WB CHICAGO OPERATOR, LLC,

                a Delaware limited liability company ("Seller"),

                                       and

                  DIAMONDROCK HOSPITALITY LIMITED PARTNERSHIP,

                    a Delaware limited partnership ("Buyer")

                             Dated: July ____, 2006

<PAGE>

                                TABLE OF CONTENTS

1.     Certain Defined Terms...................................................1

2.     Purchase and Sale.......................................................1

3.     Payment of Purchase Price...............................................1
       3.1      Escrow Deposit.................................................1
       3.2      Closing Payment................................................2

4.     Conditions Precedent....................................................2
       4.1      Title Matters..................................................2
       4.2      Due Diligence Reviews..........................................3
       4.3      Performance by Seller..........................................4
       4.4      Performance by Buyer...........................................5
       4.5      Hotel Management Agreement.....................................5
       4.6      Liquor Licenses................................................5
       4.7      Audit..........................................................5
       4.8      Estoppels......................................................6

5.     Closing Procedure.......................................................6
       5.1      Closing Deliveries.............................................6
       5.2      Closing Costs..................................................8
       5.3      Prorations.....................................................8

6.     Condemnation or Destruction of Property................................13
       6.1      Condemnation..................................................13
       6.2      Fire or Other Casualty........................................13

7.     Representations, Warranties and Covenants..............................14
       7.1      Representations, Warranties and Covenants of Seller...........14
       7.2      Representations and Warranties of Buyer.......................18
       7.3      Survival......................................................19
       7.4      Interim Covenants of Seller...................................19
       7.5      Seller's Environmental Inquiry................................20
       7.6      Hotel Management Agreement Indemnity..........................20
       7.7      Budget........................................................20
       7.8      Reservations and Bookings.....................................20
       7.9      Notice of Proceedings.........................................20
       7.10     Removal of Property...........................................20
       7.11     Existing Loans................................................21
       7.12     Insurance.....................................................21
       7.13     Material Alteration...........................................21
       7.14     Transfer of Permits...........................................21
       7.15     No Further Marketing..........................................21
       7.16     Management Agreement Consents.................................21
       7.17     Baggage Inventory.............................................21
       7.18     Safe Deposit Boxes............................................22

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8.     DISCLAIMER, RELEASE AND ASSUMPTION.....................................22
       8.1      DISCLAIMER....................................................22
       8.2      RELEASE.......................................................23
       8.3      SURVIVAL......................................................23

9.     Disposition Of Escrow Deposit..........................................23
       9.1      Default by Seller.............................................23
       9.2      Default By Buyer..............................................24
       9.3      Closing.......................................................24

10.    Miscellaneous..........................................................24
       10.1     Brokers.......................................................24
       10.2     Limitation of Liability.......................................24
       10.3     Exhibits; Entire Agreement; Modification......................25
       10.4     Time of the Essence...........................................25
       10.5     Interpretation................................................25
       10.6     Governing Law.................................................26
       10.7     Successors and Assigns........................................26
       10.8     Notices.......................................................26
       10.9     Third Parties.................................................27
       10.10    ARBITRATION OF DISPUTES.......................................28
       10.11    Legal Costs...................................................28
       10.12    No Recordation................................................28
       10.13    Counterparts..................................................28
       10.14    Effectiveness.................................................28
       10.15    Press Releases................................................28
       10.16    Indemnities...................................................29
       10.17    Holdback Escrow...............................................30

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                               PURCHASE AGREEMENT

        THIS AGREEMENT (this "Agreement") is made and entered into as of the __
day of July, 2006, by and between LCP-WB CHICAGO OPERATOR, LLC, a Delaware
limited liability company ("Seller"), and DIAMONDROCK HOSPITALITY LIMITED
PARTNERSHIP, a Delaware limited partnership ("Buyer").

                                    RECITALS
                                    --------

        A.      Seller is the owner of that certain hotel commonly known as the
Conrad Hotel (the "Hotel"), located at 520 N. Michigan Avenue, Chicago in Cook
County, Illinois.

        B.      Buyer desires to purchase the Hotel on the terms and conditions
hereinafter documented.

        NOW, THEREFORE, in consideration of the mutual undertakings of the
parties hereto, it is hereby agreed as follows:

        1.      Certain Defined Terms. As used herein:
                ---------------------

                a.      "Purchase Price" shall mean $117,500,000.

                b.      "Initial Deposit" shall mean Five Million Dollars
                        ($5,000,000).

                c.      "Additional Deposit" shall mean Five Million Dollars
                        ($5,000,000).

        2.      Purchase and Sale. Upon the terms and conditions hereinafter set
                -----------------
forth, Seller shall sell to Buyer, and Buyer shall purchase from Seller, the
"Property" (as hereinafter defined). As used herein, the "Property" means all
right, title and interest of Seller in and to (a) the land (the "Land")
described in Exhibit "A", together with all easements, interests in roadways,
strips and other rights appurtenant to the Land including, without limitation,
the agreements listed in Schedule 1 attached hereto (the "Property Agreements"),
(b) all improvements, structures and fixtures located upon the Land
(collectively, the "Improvements"), (c) all furniture, fixtures, equipment,
machinery, and appliances, linens, supplies, food and beverage inventories, and
other items of tangible personal property located on the Land or used or held in
storage for future use in connection with the Hotel (collectively, the "Tangible
Personal Property"), (d) all "Leases" (as hereinafter defined) and (e) to the
extent assignable, all "Service Agreements" (as hereinafter defined),
governmental permits, licenses and approvals, warranties and guarantees that
Seller has received in connection with any work or services performed with
respect to, or equipment installed in, the Improvements directly relating to the
Hotel (collectively, the "Intangible Property").

        3.      Payment of Purchase Price. The Purchase Price shall be paid to
                -------------------------
Seller by Buyer as follows:

                3.1     Escrow Deposit. Concurrently with the execution and
                        --------------
delivery of this Agreement by both Seller and Buyer, Buyer shall deliver the
Initial Deposit to First American Title Insurance Company, at its offices at 30
N. LaSalle Street, Suite 310, Chicago, IL 60602 (which company, in its capacity
as escrow holder hereunder, is called "Escrow Holder"). If this Agreement is not
terminated under Section 4.2.2, then Buyer shall deliver the Additional Deposit
to Escrow Holder on July 28, 2006. If such Additional Deposit is not timely
delivered, then Seller may terminate this Agreement, in which event the Initial
Deposit and all interest thereon shall be immediately delivered to Seller as
liquidated damages in accordance with Section 9.2. The Initial Deposit and, if
delivered, the Additional Deposit together with all interest earned thereon, are
collectively herein called the "Escrow Deposit". The Escrow Deposit shall be
delivered to Escrow Holder by wire transfer of immediately available federal
funds or by bank or cashier's check drawn on a national bank reasonably
satisfactory to Seller. The Escrow Deposit shall be held by Escrow Holder as a
deposit against the Purchase Price in accordance with the terms and provisions
of this Agreement. At all times that the Escrow Deposit is being held by the
Escrow Holder, the Escrow Deposit shall be invested by Escrow Holder in the
following investments ("Approved Investments"): (i) United States Treasury
obligations, (ii) United States Treasury backed repurchase agreements issued by
a major money center banking institution reasonably acceptable to Seller and
Buyer, (iii) the Bank of America money market fund that invests in U.S. Treasury
securities known as "Nations Treasury Reserves - Daily Shares (symbol NTRDX)" or
(iv) such other manner as may be reasonably agreed to by Seller and Buyer. The
Escrow Deposit shall be disposed of by Escrow Holder only as provided in this
Agreement. All accrued interest on the Escrow Deposit shall become part of the
Escrow Deposit.

                                        1
<PAGE>

                3.2     Closing Payment. The Purchase Price, as adjusted by the
                        ---------------
application of the Escrow Deposit, a credit in the amount of the
then-outstanding principal balance as of Closing of any mortgage indebtedness
Buyer may elect to assume as described below, and by the prorations and credits
specified herein, shall be paid by wire transfer of immediately available
federal funds (through the escrow described in Section 5) on the "Closing Date"
(as hereinafter defined). The amount to be paid under this Section 3.2 being
herein called the "Closing Payment". It is hereby understood and agreed that
Buyer may elect to assume Seller's existing mortgage loan and mezzanine loan
debt on the Property in which event Seller shall cooperate with Buyer in
connection with such assumption. In no event shall such assumption be a
condition precedent to Buyer's obligations hereunder. If Buyer does not assume
such existing debt, Seller shall pay off and discharge such debt at Closing.
Buyer shall pay all costs and fees associated with such assumption.

        4.      Conditions Precedent. The obligation of Buyer to acquire, and
                --------------------
Seller to transfer, the Property as contemplated by this Agreement is subject to
satisfaction of each of the following conditions precedent (any of which may be
waived in writing by the party in whose favor such condition exists) on or
before the applicable date specified for satisfaction of the applicable
condition. If any of such conditions is not fulfilled (or waived) pursuant to
the terms of this Agreement, then this Agreement shall terminate and, in
connection with any such termination made in accordance with this Section 4,
Seller and Buyer shall be released from further obligation or liability
hereunder (except for those obligations and liabilities which, pursuant to the
terms of this Agreement, survive such termination), and the Escrow Deposit shall
be disposed of in accordance with Section 9. The "Closing" (as hereinafter
defined) shall constitute approval by each party of all matters to which such
party has a right of approval and a waiver of all conditions precedent; except
that there shall be no waiver for a breach of the representations and warranties
contained herein or for any covenants expressly surviving Closing as set forth
herein.

                4.1     Title Matters.
                        -------------

                        4.1.1   Title Report/Survey. Buyer has received the
                                -------------------
title insurance commitment dated July 5, 2006 (the "Commitment") for the Hotel
from First American Title Insurance Company (which company, in its capacity as
title insurer hereunder, is herein called the "Title Company"). In addition,
Seller has delivered and Buyer has received the survey of the Property in
Seller's possession (the "Survey"). If Buyer shall fail to deliver the
"Termination Notice" as hereinafter defined on or before the end of the "Due
Diligence Period" (as hereinafter defined), Buyer shall be deemed to have
approved the exceptions to title shown on the Commitment and the matters
disclosed on the Survey and such other title or survey matters as are disclosed
to Buyer during the Due Diligence Period.

                        4.1.2   Additional Post Due Diligence Title Matters.
                                -------------------------------------------
Approval by Buyer of any, in Buyer's reasonable opinion, material additional
exceptions to title or survey matters disclosed after the end of the Due
Diligence Period ("Additional Title Matters") shall be a condition precedent to
Buyer's obligations to purchase the Property (Buyer hereby agreeing that its
approval of Additional Title Matters shall not be unreasonably withheld). Unless
Buyer gives written notice ("Title Disapproval Notice") that it disapproves any
Additional Title Matters, stating the Additional Title Matters so disapproved,
before the sooner to occur of the Closing or ten (10) days after receipt of
written notice of such Additional Title Matters, Buyer shall be deemed to have
approved such Additional Title Matters. Seller shall have up to a thirty (30)
day period after its receipt of any Title Disapproval Notice within which to
remove the disapproved Additional Title Matters set forth therein from title or
obtain from Title Company a commitment to issue an endorsement affirmatively
insuring against such items in a form reasonably acceptable to Buyer at no cost
or expense to Buyer (Seller having the right but not the obligation to do so),
and the Closing Date shall be extended, at Seller's option, to allow for such
thirty (30) day period. In the event Seller determines at any time that it is
unable or unwilling to remove any one or more of such disapproved Additional
Title Matters, Seller may give written notice to Buyer to such effect; in such
event, Buyer may, at its option, terminate this Agreement upon written notice to
Seller but only if given prior to the sooner to occur of the Closing or ten (10)
days after Buyer receives Seller's notice. If Buyer fails to give such
termination notice by such date, Buyer shall be deemed to have waived its
objection to, and approved, the matters set forth in Seller's notice.

                                        2
<PAGE>

                        4.1.3   Seller Mortgage Liens. Notwithstanding the
                                ---------------------
foregoing provisions of this Section 4.1, Seller shall be obligated to take such
actions as may be required by the Title Company so that the Title Company is
willing to issue title insurance to Buyer without exception for any "Seller
Mortgage Liens" (which, as used herein, means any mortgage or deed of trust
liens, construction or mechanics' liens, tax liens or other liens or charges in
a fixed sum created or arising by, through or under Seller or capable of
computation as a fixed sum that encumber the Real Property). Such actions shall
include obtaining a pay-off letter and leaving a portion of the Purchase Price
in escrow to satisfy the Seller Mortgage Liens.

                        4.1.4   Exceptions to Title. Buyer shall be obligated to
                                -------------------
accept title to the Property, subject to the following exceptions to title (the
"Permitted Exceptions"):

                                (a)     Liens for real estate taxes and
assessments not yet due and payable;

                                (b)     The Leases;

                                (c)     Actions caused by or through Buyer; and

                                (d)     Such other exceptions to title or survey
exceptions as may be approved (or deemed approved) by Buyer pursuant to the
above provisions of this Section 4.1 or otherwise expressly permitted under this
Agreement.

Conclusive evidence of the availability of such title shall be the willingness
of Title Company to issue to Buyer on the Closing Date an owner's title
insurance policy in the standard form issued in the State of Illinois (the
"Owner's Policy"), in the face amount of the Purchase Price, which policy shall
show (i) title to the Land and Improvements to be vested of record in Buyer and
insure Buyer's interest in the Property Agreements, and (ii) the Permitted
Exceptions to be the only exceptions to title, and (iii) contain the
endorsements issued to Seller by the Title Company to its owner's policy dated
November 7, 2005 (except for the mezzanine loan endorsement) and a comprehensive
endorsement.

                        4.1.5   Endorsements to Owner's Policy. It is understood
                                ------------------------------
that Buyer may request a number of additional endorsements to the Owner's
Policy. Buyer shall satisfy itself during the Due Diligence Period that the
Title Company will issue such additional endorsements in connection with the
Owner's Policy at Closing. However, the issuance of such additional endorsements
(other than the endorsements issued to Seller by the Title Company to its
owner's policy dated November 7, 2005 (except for the mezzanine loan
endorsements) and a comprehensive endorsement shall not be a condition to
Closing and in no event shall Seller be obligated to provide any indemnity or
other document in order to issue such additional endorsements.

                4.2     Due Diligence Reviews. Except for title and
                        ---------------------
survey matters (which shall be governed by the provisions of Section 4.1 above),
and subject to the provisions hereinafter set forth, Buyer shall have until 5:00
p.m. (Chicago time) Friday, July 28, 2006 (the period beginning on the date
hereof and ending on such date being herein called the "Due Diligence Period")
within which to perform and complete all of Buyer's due diligence examinations,
reviews and inspections of all matters pertaining to the purchase of the
Property, including all permits, licenses, management agreements, leases,
service contracts, and all physical, environmental and compliance matters and
conditions respecting the Property. During the Due Diligence Period, Seller
shall provide Buyer with reasonable access to the Property (subject to this
Section 4.2.1) upon reasonable advance notice and shall also make available to
Buyer (to the extent in Seller's possession or control) and shall instruct its
Manager to make available to Buyer such leases, service contracts and other
information relating to the operation of the Property as Buyer shall reasonably
request, all upon reasonable advance notice. In no event, however, shall Seller
be obligated to make available any attorney-client work product or privileged
documents or documents in breach of confidentiality agreements or any internal
memoranda, correspondence, analyses, documents or reports prepared by or for
Seller for its internal use in connection with this Agreement, the transaction
contemplated by this Agreement, the acquisition of the Property by Seller (other
than any property condition, compliance, engineering, third party inspection or
environmental reports pertaining to the Property), and appraisals or other
valuations of the Property in the possession or control of Seller. Buyer shall
promptly commence, and shall diligently and in good faith pursue, its due
diligence review hereunder.

                                        3
<PAGE>

                        4.2.1   Review Standards. Buyer shall at all times
                                ----------------
conduct its review, inspections and examinations in a manner so as to not cause
liability, damage, lien, loss, cost or expense to Seller or the Property and so
as to not unreasonably interfere with or disturb the Manager, any guest or any
tenant at the Property, and Buyer will indemnify, defend, and hold Seller and
the Property harmless from and against any such liability, damage, lien, loss,
cost or expense (the foregoing obligation surviving any termination of this
Agreement). Prior to entry upon the Property, Buyer shall provide Seller with
copies of certificates of insurance evidencing comprehensive general liability
insurance policies (naming Seller as an additional insured) which shall be
maintained by Buyer in connection with its investigations upon the Property
prior to the date of entry upon the Property, with limits, coverages and
insurers under such policies reasonably satisfactory to Seller. Without
limitation on the foregoing, in no event shall Buyer: (a) make any intrusive
physical testing (environmental, structural or otherwise) at the Property (such
as soil borings, water samplings or the like) without Seller's express written
consent which shall not be unreasonably withheld or delayed (and Buyer shall in
all events promptly return the Property to its prior condition and repair
thereafter) and which may be further conditioned upon, among other things,
Seller's reasonable approval of the following: (i) the insurance coverage of the
contractor who will be conducting such testing; and (ii) the scope and nature of
such testing to be performed by such contractor; (b) contact the Manager or any
tenant of the Property without Seller's express written consent (which shall not
be unreasonably withheld or delayed); (c) contact any governmental authority
having jurisdiction over the Property without Seller's express written consent
(which shall not be unreasonably withheld or delayed); provided, Buyer may in
the course of its due diligence contact governmental authorities with respect to
determining Seller's and the Hotel's compliance with applicable zoning or
building code requirements and regulations and other applicable laws and
regulations, and to cause the transfer or issuance of all applicable licenses
and permits (including liquor licenses) necessary for the continued normal
operation of the Hotel following the Closing. Seller shall have the right, at
its option, to cause a representative of Seller to be present at all
inspections, reviews and examinations conducted hereunder. At Seller's written
request, at no expense to and without representation, warranty by or liability
to Buyer, and provided Buyer has the right to do so, Buyer shall promptly
deliver to Seller true and complete copies of any written reports relating to
the Property prepared for or on behalf of Buyer by any third party. In the event
of any termination of this Agreement, Buyer shall return all documents and other
materials furnished by Seller. Prior to Closing and subject to Section 10.15
hereof, Buyer shall keep all non-public information or data received or
discovered in connection with any of Buyer's inspections, reviews or
examinations strictly confidential, except for disclosures required to comply
with applicable law and disclosures to representatives, investors, lenders,
counsel and agents, provided such disclosures are on an as needed basis for
Buyer's acquisition of the Property, and such persons are instructed to keep the
information strictly confidential. The provisions of this Section 4.2.1 shall
survive any termination of this Agreement.

                        4.2.2   Termination Right. If, on or before the
                                -----------------
expiration of the Due Diligence Period, Buyer shall determine in its sole
discretion that it no longer intends to acquire the Property, then Buyer shall
promptly (but in all events prior to the expiration of the Due Diligence Period)
notify Seller of such determination in writing (such notice being herein called
the "Termination Notice"), whereupon this Agreement, and the obligations of the
parties hereunder, shall terminate (and no party hereto shall have any further
obligation in connection herewith except under those provisions that expressly
survive a termination of this Agreement). In such event, the Escrow Deposit
shall be released to Buyer by Escrow Holder. In the event that Buyer shall fail
to have delivered the Termination Notice to Seller before the expiration of the
Due Diligence Period, Buyer shall have no further right to terminate this
Agreement pursuant to this Section 4.2.

                4.3     Performance by Seller. The accuracy of Seller's
                        ---------------------
representations and warranties in all material respects and the performance and
observance, in all material respects, by Seller of all covenants and agreements
of this Agreement to be performed or observed by Seller prior to or on the
Closing Date shall be a condition precedent to Buyer's obligation to purchase
the Property. Without limitation on the foregoing, in the event that the "Seller
Closing Certificate" (as hereinafter defined) shall disclose any material
inaccuracies or material adverse changes in the representations and warranties
of Seller which are not otherwise permitted or contemplated by the terms of this
Agreement or known to Buyer (as defined in Section 7.2.5 hereof) during the Due
Diligence Period, then Buyer shall have the right to terminate this Agreement.

                                        4
<PAGE>

                4.4     Performance by Buyer. The accuracy of Buyer's
                        --------------------
representations and warranties in all material respects and the performance and
observance, in all material respects, by Buyer of all covenants and agreements
of this Agreement to be performed or observed by it prior to or on the Closing
Date shall be a condition precedent to Seller's obligation to sell the Property.
Without limitation on the foregoing, in the event that the "Buyer Closing
Certificate" (as hereinafter defined) shall disclose any material inaccuracies
or material adverse changes in the representations and warranties of Buyer
contained in Section 7.2 which are not permitted or contemplated by the terms of
this Agreement, then Seller shall have the right to terminate this Agreement.

                4.5     Hotel Management Agreement. The Property is subject to a
                        --------------------------
hotel management agreement captioned "AMENDED AND RESTATED MANAGEMENT
AGREEMENT", dated as of November 7, 2005, by and between Seller and Conrad
Hotels USA, Inc., a Delaware corporation ("Manager") (the "Hotel Management
Agreement"). The obligations of Seller to close the sale contemplated hereby
shall be conditioned upon Buyer satisfying the requirements of Section 9.3.1
(iii) (a) and of Section 9.3.1(iii)(b) of the Management Agreement (i.e., Buyer
will be able to make the representation made by Owner (as therein defined) in
Section 9.3.1(iii)(b) and comply with the covenants in Section 9.3.1(iii)(b).
Buyer represents and warrants that Buyer has reviewed the Management Agreement
and will be able to satisfy the requirements of Section 9.3.1(iii) of the
Management Agreement. If Manager will not permit an assignment of the Management
Agreement to Buyer solely as a result of Buyer's failure to satisfy the
requirements of Section 9.3.1 (iii) of the Management Agreement, then Buyer will
be deemed to be in default hereunder and Seller may terminate this Agreement and
retain the Earnest Money as liquidated damages.

                4.6     Liquor Licenses. Buyer acknowledges that there may be
                        ---------------
various liquor licenses associated with the operation of the Hotel. As soon as
is reasonably practicable after the full execution and delivery of this
Agreement, Buyer shall file an application with the required state and local
agencies for the issuance of such licenses (the "Required Liquor Licenses") as
are necessary for the continued operation of the Hotel. Buyer shall diligently
pursue the obtaining of the Required Liquor Licenses at Buyer's sole cost and
expense. Seller shall cooperate and instruct Manager to cooperate reasonably
with Buyer in its efforts to obtain the Required Liquor Licenses and shall cause
any violation of liquor laws or regulations which would affect the ability of
Buyer to obtain the Required Liquor Licenses by Closing to be cured to the
satisfaction of the liquor license authorities and any fines to be paid, all
prior to the Closing Date and at Seller's sole cost and expense. The issuance of
the Required Liquor Licenses shall not be a condition to Buyer's obligations to
close the sale contemplated hereby. However, if applicable and as permitted by
applicable law, Seller shall enter into a customary post-closing interim
agreement for use of Seller's liquor licenses with customary indemnities whereby
such alcoholic beverage operations are continued or managed by the existing
holder of the liquor licenses until the Required Liquor Licenses can be obtained
by Buyer following the Closing.

                4.7     Audit. Buyer shall have the right to obtain from a
                        -----
third-party certified public accountant (at Buyer's sole cost and expense)
audits with respect to the Property providing all disclosures required by
generally accepted accounting principles and Securities and Exchange Commission
("SEC") regulations, specifically in accordance with Section 3.05 of Regulation
S-X and all related rules and regulations thereof. Seller, at no cost or expense
to Seller, shall, and shall use reasonable efforts to cause its Manager and the
predecessor owner(s) and manager(s) of the Property to, cooperate in a
commercially reasonable manner in connection with the performance of such audits
and to provide information reasonably requested by such accountants. In
connection with such audits, Seller, at no cost or expense to Seller, shall and
shall use reasonable efforts to cause Manager and the predecessor owner(s) and
manager(s) to provide the accountants performing such audits with representation
letters conforming to American Institute of Certified Public Accountants
professional standards. Buyer recognizes that, as a result of Seller owning the
Hotel for less than one (1) year, obtaining audited financials for the previous
two (2) years from Seller is impossible. It is Buyer's understanding that
Section 3.05 of Regulation S-X requires two (2) years of audited financials but
that the SEC may waive such requirement. The parties hereby agree that Buyer
shall have ten (10) business days from and after the date of this Agreement to
either (i) obtain a letter from Buyer's auditors (which Buyer shall use
commercially reasonable efforts to obtain) confirming that they will be able to
provide an audit in compliance with Section 3.05 of Regulation S-X or (ii)
obtain a waiver from the SEC. Within the ten (10) business days, Seller shall
use commercially reasonable efforts to assist in all material respects Buyer in
its effort to obtain reasonable assurances that it will receive audited
financial statements complying with Regulation S-X. Within such ten (10)
business day period, if Buyer has not become reasonably comfortable as described
in (i) above, Buyer shall use commercially reasonable

                                        5
<PAGE>

efforts to obtain a waiver of the applicable provisions of Regulation S-X within
such same ten (10) business day period and Seller shall be included in all
correspondence and invited to participate in all conversations with the SEC to
the extent permitted by the SEC in connection with procuring such waiver. If the
conditions set forth in (i) or (ii) above are not satisfied within such ten (10)
business days period, Buyer may terminate this Agreement within such period, in
which case the Escrow Deposit shall be released to Buyer by Escrow Holder and no
party shall have any further obligation in connection with this Agreement except
under those provisions that expressly survive a termination. In the event such
waiver is not obtained from the SEC and Buyer does not terminate this Agreement
as provided in the immediately preceding sentence by the expiration of said
10-business day period, Seller shall obtain the books and records from the
predecessor owner and/or manager relating to the last year of ownership by such
predecessor and shall deliver at Closing an accounting representation letter
("ARL") to be executed by both Seller and an appropriate party who will sign the
ARL with respect to the books and records of the prior ownership. In addition,
Seller shall make available to Buyer an appropriate representative to answer any
questions concerning such books and records. Buyer's satisfaction of (i) or (ii)
above shall not be a condition to Closing and the failure to satisfy same will
not permit Buyer to terminate this Agreement. unless Buyer does so within the 10
business day period provided above.

                4.8     Estoppels. Seller shall have obtained and delivered to
                        ----------
Buyer (and Seller agrees to use commercial reasonable efforts to so obtain)
estoppel letters addressed to Buyer dated within forty-five (45) days of the
Closing with respect to the Hotel Management Agreement, the Block 119 Parking
Easement Agreement and the Reciprocal Easement and Operating Agreement
substantially in the form required under each such agreement, which estoppels
shall, among other things, certify that there are no material defaults under any
such agreement. Seller shall not be in default under this Agreement or have any
liability to Buyer if Seller is unable to obtain any of the foregoing estoppel
letters, provided Seller uses commercially reasonable efforts to do so. Seller
shall also use commercially reasonable efforts to obtain and deliver to Buyer
such an estoppel certificate with respect to the Public Way Easement, but
receipt of such estoppel certificate shall not be a condition to Buyer's
obligation to close the sale contemplated hereby. If required by the Title
Company, Seller shall also have obtained (and Seller shall use commercially
reasonable efforts to obtain) and deliver to the Title Company such lien waiver
from Manager with respect to the period prior to Closing sufficient to cause the
Title Company not to make an exception in the Owner's Policy for any lien of
right to a lien in favor of Manager.

        5.      Closing Procedure. The closing (the "Closing") of the sale and
                -----------------
purchase herein provided shall occur on the Closing Date. As used herein,
"Closing Date" means November 8, 2006, or such other date as may be agreed upon
by Buyer and Seller. The Closing Date is subject to extension under Section
4.1.2. Buyer shall deliver its funds to the Escrow Holder no later than 11:00
a.m. central time on the Closing Date. The Closing shall be accomplished
pursuant to escrow instructions (the "Escrow Instructions") among Buyer, Seller
and the Escrow Holder.

                5.1     Closing Deliveries. Prior to the Closing Date, the
                        ------------------
parties shall deliver to the Escrow Holder the following:

                        5.1.1   Seller Deliveries. Seller shall deliver to
                                -----------------
Escrow Holder the following:

                                (a)     A duly executed and acknowledged
original special warranty deed (the "Deed") in the form of Exhibit "E";

                                (b)     A duly executed and acknowledged
original assignment and assumption of Hotel Management Agreement (the "Hotel
Management Agreement Assignment and Assumption") in the form of Exhibit "F";

                                        6
<PAGE>

                                (c)     A duly executed bill of sale in the form
of Exhibit "G";

                                (d)     A duly executed original certificate of
Seller (the "Seller Closing Certificate") in the form of Exhibit "H" updating
the representations and warranties contained in Section 7.1 to the Closing Date
and noting any changes thereto;

                                (e)     A duly executed original certificate of
"non-foreign" status in the form of Exhibit "I" and any required state
certificate that is sufficient to exempt Seller from any state withholding
requirement with respect to the sale contemplated by this Agreement;

                                (f)     Evidence reasonably satisfactory to
Buyer and Title Company respecting the due organization, good standing and
qualification to do business of Seller and the due authorization and execution
of this Agreement and the documents required to be delivered hereunder;

                                (g)     To the extent they are then in Seller's
possession, and have not theretofore been delivered to Buyer: (i) any plans and
specifications for the Improvements; (ii) all unexpired warranties and
guarantees which Seller has received in connection with any work or services
performed with respect to, or equipment installed in, the Improvements; (iii)
all keys for the Improvements; (iv) originals of all Leases, all correspondence
to or from any tenants, relating to the Leases; (v) originals of all Service
Agreements that will remain in effect after the Closing; (vi) a set of guest
registration cards; (vii) a list of advance room reservations and functions;
(viii) a list of Seller's outstanding accounts receivable as of midnight on the
date prior to the Closing; (ix) all permits and licenses for the Property; and
(x) all books and records relating solely to the operation of the Property
(which materials under this clause (h) may be either delivered at Closing or
left at the management office at the Property);

                                (h)     A duly executed Seller's title
affidavit;

                                (i)     Such documents as are required from
Seller and its affiliates by the holders of the existing mortgage and mezzanine
loans for the assumption by Buyer of such loans and an assignment of the
existing interest rate cap agreements with respect to such loans to Buyer (as
part of the purchase consideration);

                                (j)     Evidence reasonably satisfactory to
Buyer of Manager's waiver of its right to purchase the Property with respect to
the sale and purchase under this Agreement, whether by failure by Manager to
respond to Seller's notice of sale within the time period provided in the
Management Agreement or by express written waiver by Manager, which waiver shall
be in force and effect as of the Closing Date;

                                (k)     Duly executed and acknowledged resale
certificates or other exemption certificates which are applicable to sales taxes
on the transfer of personal property; and

                                (l)     Such additional documents as may be
reasonably required by Buyer and Title Company in order to consummate the
transactions hereunder (provided the same do not increase in any material
respect the costs to, or liability or obligations of, Seller in a manner not
otherwise provided for herein).

                                        7
<PAGE>

                        5.1.2   Buyer Deliveries. Buyer shall deliver to the
                                ----------------
Escrow Holder the following:

                                (a)     The Closing Payment in immediately
available federal funds;

                                (b)     An original Hotel Management Agreement
Assignment and Assumption;

                                (c)     A duly executed original certificate of
Buyer ("Buyer Closing Certificate") in the form of Exhibit "J" updating the
representations and warranties contained in Section 7.2 to the Closing Date and
noting any changes thereto;

                                (d)     Evidence reasonably satisfactory to
Seller and Title Company respecting the due organization of Buyer and the due
authorization and execution of this Agreement and the documents required to be
delivered hereunder; and

                                (e)     Such additional documents as may be
reasonably required by Seller and Title Company in or to consummate the
transactions hereunder (provided the same do not increase in any material
respect the costs to, or liability or obligations of, Buyer in a manner not
otherwise provided for herein).

                        5.1.3   Mutual Deliveries. Buyer and Seller shall
                                -----------------
mutually execute and deliver to the Escrow Holder, the following:

                                (a)     A Closing Statement reflecting the
Purchase Price, and the adjustments and prorations required hereunder and the
allocation of income and expenses required hereby;

                                (b)     Such transfer tax forms as required by
state and local authorities;

                                (c)     An Assignment and Assumption of Leases
and Service Agreements in the form of Exhibit "K"; and

                                (d)     A General Assignment and Assumption
Agreement in the form of Exhibit "L".

        5.2     Closing Costs. Seller shall pay (1) the State and County
                -------------
transfer tax of $1.50 per $1,000 of consideration in connection with the
transfer contemplated hereby, (2) 50% of all escrow charges, and (3) the basic
title premium for the Owner's Policy in accordance with this Agreement. Buyer
shall pay (A) the City transfer tax of $7.50 per $1000 of consideration in
connection with the transfer contemplated hereby and all clerk's fees in
connection with the recordation of the Deed, (B) the retail sales and use taxes,
if any, on the transfer of the Tangible Personal Property pursuant to this
Agreement, (C) 50% of all escrow charges, (D) the cost of any endorsements to
the Owner's Policy, (E) the cost to update the Survey, (F) all fees, costs or
expenses in connection with Buyer's due diligence reviews hereunder and (G) all
fees, costs or expenses in connection with any financing obtained by Buyer in
connection with the transaction contemplated hereby. Any other Closing costs
shall be allocated in accordance with local custom. Seller and Buyer shall pay
their respective shares of prorations as hereinafter provided.

        5.3     Prorations Items to be Prorated. The following provisions shall
                -------------------------------
govern the adjustments and prorations that shall be made at Closing and
the allocation of income and expenses from the Property between Seller and
Buyer. Except as expressly provided in this Section 5.3.1, all items of
operating revenue and operating expense of the Property, with respect to the
period prior to 12:00:01 a.m. (the "Cut-Off Time") local time at the Hotel on
the Closing Date, shall be for the account of and paid by Seller and all items
of operating revenue and operating expense of the Property with respect to the
period after the Cut-Off Time, shall be for the account of and paid by Buyer.

                                        8
<PAGE>

                                (a)     Taxes. (i) All unpaid real estate taxes,
                                        -----
personal property taxes and other assessments on the Property shall be prorated
at Closing. Seller shall be responsible for all real property taxes and personal
property taxes and other assessments for the tax periods prior to the Closing
Date, and Buyer shall be responsible for all real property taxes and personal
property taxes and other assessments for the tax periods from and after the
Closing Date; however if any special improvement assessments on the Property are
payable in installments, then the installments (including the current
installment) shall be prorated as of the Cut-Off Time (with Buyer assuming the
obligation to pay any installments payable after the Closing). If the real
property tax rate, personal property tax rate or any assessment has not been set
for the tax year in which the Closing occurs, then the proration of such real
property tax, personal property tax or assessment shall be based on the previous
tax bill for the preceding tax year for such tax or assessment which has not
been set for the tax year in which the Closing occurs, and such proration shall
be adjusted between Seller and Buyer upon presentation of written evidence that
the actual taxes or assessment paid (determined as of the date such taxes or
assessment are actually paid) for the tax year in which the Closing occurs
differ from the amounts used at Closing and in accordance with Section 5.3.2.
Seller shall consult with Buyer regarding any assessment for real property taxes
for the 2006 tax year. Seller and Buyer acknowledge that Seller has retained
counsel to seek a reduction in real estate taxes for the fiscal period in which
the Closing occurs and the parties shall reasonably cooperate with each other in
connection with any such proceedings so as to maximize the benefits of such
proceedings for both. The amount of any tax refunds (net of attorneys' fees and
other costs incurred by Seller in seeking such a reduction) with respect to any
portion of the Property for the tax year in which the Cut-Off Time occurs shall
be apportioned between Seller and Buyer based on their relative tax payments for
such tax year.

        (ii)    The parties acknowledge that certain taxes accrue and are
payable to the various local governments by any business entity operating a
hotel and its related facilities. Included in those taxes may be business and
occupation taxes, retail sales and use taxes, gross receipts taxes, and other
special lodging or hotel taxes. For purpose of this Agreement, all of such taxes
(expressly excluding taxes and assessments covered by Section 5.3.1(a)(i) above,
corporate franchise taxes, and federal, state, and local income taxes)
(hereinafter referred to as "Operational Taxes") shall be allocated between
Seller and Buyer such that those attributable to the period prior to the Cut-Off
Time shall be allocable to Seller and those attributable to the period from and
after the Cut-Off Time shall be to Buyer (with the attribution of such taxes
hereunder to be done in a manner consistent with the attribution under this
Agreement of the applicable revenues on which such taxes may be based). Buyer
shall receive a credit for any Operational Taxes attributable to the period
prior to the Cut-Off Time which Seller has not paid. Except for the Operational
Taxes for which (and in the amount for which) Buyer has received a credit under
this Section 5.3.1(a)(ii), Seller shall be solely responsible for payment of the
Operational Taxes with respect to the period prior to the Cut-Off Time, and
Buyer shall be solely responsible for payment of such Operational Taxes with
respect to the period after the Cut-Off Time (and those for which and in the
amount for which it receives a credit).

                                (b)     Lease and Rental Expenses. Collected
                                        -------------------------
rents and other payments from the tenants under the Leases (the "Tenants"),
shall be prorated between Seller and Buyer as of 11:59 P.M. on the day prior to
the Closing Date. If on the Closing Date there are past due rents or charges
owed by Tenants, collection of such amounts shall be prorated when received. If
any payments of rent or other fixed charges received by Seller or Buyer on or
after the Closing Date are payable to the other party by reason of this
allocation, the appropriate sum shall be promptly paid to the other party.
Seller is responsible, at its cost, to direct Manager to collect all past due
amounts prior to Closing. If any Lease contains obligations on the part of the
Tenant for tax, escalation, percentage, or overage payments ("additional rent")
and such additional rent is not yet payable as of the Closing Date, then if
Seller's portion of such additional rent is collected by Buyer from the Tenant,
Buyer shall remit such amounts to Seller. Buyer will make reasonable efforts to
collect all past due rents, if any, for Seller's account, but Buyer shall not be
obligated to commence dispossession or other legal proceedings.

                                        9
<PAGE>

                                (c)     Hotel Reservations and Revenues.
                                        -------------------------------

                                        (i)     Reservations. On the Closing
                                                ------------
Date, Seller shall request that Manager provide Buyer with its schedule of
confirmed reservations for dates subsequent to the Closing Date, which schedule
shall list the party for whose benefit the reservation was made, the amount of
deposit thereunder, the amount of any room rental deposits, and the amount of
any other deposits made for advance reservations, banquets or future services to
be provided after the Closing Date. Buyer will honor (or cause its manager to
honor), for its account, all pre-Closing Date reservations as so confirmed by
Seller for dates subsequent to the Closing Date at the rate or price previously
agreed to by Seller (so long as such rates conform to customary rates charged by
Seller). Seller shall pay or credit to Buyer the amount of all prepayments or
deposits disclosed in such schedule.

                                        (ii)    Guest Revenues. Seller shall
                                                --------------
receive a credit for, and Buyer shall purchase from Seller, the Guest Ledger.
Such credit shall equal the amount of the accounts receivable (or 50% thereof in
the case of the final night's room revenue, including any sales taxes, room
taxes and other taxes charged to guests in such rooms, all parking charges,
sales from mini-bars, in-room food and beverage, telephone, facsimile and data
communications, in-room movie, laundry, and other service charges allocated to
such rooms with respect to the night), less credit card charges, travel company
charges and similar commissions. Revenues from guest rooms in the Hotel occupied
on the night containing the Cut-Off Time, including any sales taxes, room taxes
and other taxes charged to guests in such rooms, all parking charges, sales from
mini bars, in room food and beverage, telephone, facsimile and data
communications, in room movie, laundry, and other service charges allocated to
such rooms with respect to the night containing the Cut-Off Time shall be
divided equally between Seller and Buyer; provided, however, that to the extent
the times at which food and beverage sales, telephone, facsimile or data
communication, in room movie, laundry, and other services are ordered by guests
can be determined, the same shall be allocated between Seller and Buyer based on
when orders for the same were received, with orders originating prior to Cut-Off
Time being allocable to Seller, and orders originating from and after the
Cut-Off Time being allocable to Buyer. All other revenues from restaurants,
lounges, and other service operations conducted at the Property shall be
allocated based on whether the same accrued before or from and after the Cut-Off
Time as described in the preceding sentence, and Seller shall instruct the
Manager, and Buyer shall instruct its manager, to separately record sales
occurring before and from and after the Cut-Off Time. The foregoing amounts are
referred to collectively as "Guest Revenues".

                                       10
<PAGE>

                                        (iii)   Banquet and Meeting Room
                                                ------------------------
Revenues. Revenues from conferences, receptions, meetings, and other functions
--------
occurring in any conference, banquet or meeting rooms in the Hotel, including
usage charges and related taxes, food and beverage sales, valet parking charges,
equipment rentals, and telecommunications charges, shall be allocated between
Seller and Buyer, based on when the function therein commenced, with (i) one-day
functions commencing prior to the Cut-Off Time being allocable to Seller; (ii)
one day functions commencing from and after the Cut-Off Time being allocable to
Buyer; and (iii) multi day functions that include periods both before and after
the Cut-Off Time being prorated between Seller and Buyer according to the period
of time before and from and after the Cut-Off Time. The foregoing amounts are
referred to collectively as "Conference Revenues".

                                        (iv)    Unredeemed Gift Certificates and
                                                --------------------------------
Vouchers. Buyer shall receive a credit against the Purchase Price at Closing the
--------
face value of all paid for vouchers, gift certificates and other promotional
materials (together, the "Vouchers") which may be used as full or partial
payment for any Hotel service including, room rentals, food and beverage
service, or any other item either borne directly by the owner of the Hotel or
which is reimbursable by the owner of the Hotel (i.e., if a gift certificate can
be used to pay for items in the Hotel gift shop). The parties also agree that no
credit shall be given for any complimentary Vouchers. Seller shall request that
Manager deliver to Buyer one (1) business day prior to the Closing Date a list
of all such Vouchers.

                                (d)     Utilities and Insurance. Buyer shall be
                                        -----------------------
responsible for all dealings with utility service providers with respect to any
actions to change over accounts to Buyer as of the Closing Date. All charges for
utilities shall be prorated as of the Closing Date. In the event the actual
amounts for such charges for utilities or telephone calls are not known as of
the Closing Date or cannot be billed separately to the responsible party, such
charges shall be prorated between the parties as of the Closing Date once the
actual amounts thereof become known. If necessary, at the request of Buyer,
Seller shall complete the customary forms required by any telephone company or
telephone company service provider to assign the Property's existing telephone
numbers to Buyer. Any fees payable by the owner of the Hotel in respect of the
insurance policies maintained by Manager for the Property shall be prorated as
of the Closing Date. The parties shall request that Manager add Buyer as an
additional named insured on any such insurance policies as of the Closing Date.

                                (e)     Permits. Permit and license fees of
                                        -------
assignable permits and licenses, if any, shall be prorated as of the Closing
Date.

                                (f)     Service Agreements. Fees and other
                                        ------------------
amounts, including accrued employee expenses, payable and/or accrued under the
Hotel Management Agreement and payments due under the other Service Agreements
in the name of Seller shall be prorated as of the Closing Date. Seller shall be
required to pay or cause to be paid (or reimbursed to Manager) or credit to
Buyer at the Closing any accrued or earned wages, vacation pay, sick pay,
bonuses, pension, profit-sharing and welfare benefits and other compensation and
fringe benefits of all persons employed at the Property on or before the Closing
Date, including any employment taxes or other fees or assessments attributable
thereto; it being understood, however, that Seller shall not be required to pay
any withdrawal liability with respect to any union employees. The parties
further agree that with respect to sick pay, at the end of the calendar year in
which the Closing occurs, Buyer shall reimburse Seller for all unused sick pay
credited to Buyer at Closing which did not carry over to the following calendar
year.

                                       11
<PAGE>

                        5.3.2   Calculation. The representatives of the parties
                                -----------
shall jointly prepare and deliver to each party a preliminary closing statement
(the "Preliminary Closing Statement") which shall show the net amount due either
to Seller or Buyer as a result thereof, and such net amount will be added to, or
subtracted from the payment of the Purchase Price to be paid to Seller pursuant
to Section 5.3 hereof. Within one hundred and twenty (120) days following the
Closing Date, Seller and Buyer shall agree on an updated closing statement (the
"Updated Closing Statement") setting forth the updated determination of all
items to be included on the Updated Closing Statement. The net amount due Seller
or Buyer, if any, by reason of adjustments to the Preliminary Closing Statement
as shown in the Final Closing Statement, shall be paid in cash by the party
obligated therefor within ten (10) days following the date of the Updated
Closing Statement. In the event any prorations or apportionments made under this
Section 5.3 shall prove to be incorrect for any reason, then any party shall be
entitled to an adjustment to correct the same. The party who is entitled to any
such adjustment shall be paid within ten (10) days following the date notice of
such adjustment is received. Any item which cannot be finally prorated because
of the unavailability of information shall be tentatively prorated on the basis
of the best data then available and reprorated when the information is
available, such as property taxes.

                        5.3.3   Accounts Receivable. Accounts Receivable shall
                                -------------------
be identified as of the Cut-Off Time. Seller shall receive a credit for, and
Buyer shall purchase from Seller, all accounts receivable (other than the Guest
Ledger) that are less than ninety (90) days past due. Such credit shall equal
the amount of the accounts receivable, less (i) credit card charges, travel
company charges and similar commissions and (ii) on all accounts receivable
other than credit card receivables, a 3% discount for uncollectible amounts for
receivables that are less than ninety (90) days past due. Subject to the
following sentence, all accounts receivable and credit card claims for goods and
services furnished prior to the Cut-Off Time that are not so purchased by
Purchaser shall remain the property of Seller and, to the extent Purchaser
receives any payments on account thereof after Closing (A) if the applicable
account debtor who makes such payment then owes payment on one of Seller's
accounts receivable and no accounts receivable of Purchaser, then Purchaser
shall immediately remit such amount (net of travel agent commissions or credit
card company charges for payment of such claims) to Seller, and (B) if the
applicable account debtor who makes such payment then owes payment on accounts
receivable owing to Purchaser and to Seller, such payments (net of travel agent
commissions or credit card company charges for payment of such claims) shall be
applied to pay accounts receivable in order of priority from the least-aged to
the most-aged. The following shall apply to past due or accruing room rents and
other customary Hotel charges including the guest and city ledgers.

                        5.3.4   Bank Accounts, Inventory and Seller's Deposits.
                                ----------------------------------------------
Buyer and Seller shall mutually agree upon the aggregate amount of cash in the
house bank accounts, house banks and cash on hand as of the Closing Date (the
"Aggregate Cash Amount"). At the Closing, Seller shall be credited with the
Aggregate Cash Amount, including without limitation any management account
(excluding the FF&E reserve account which will transfer to Buyer as part of the
purchase consideration and either be assigned or credited, as applicable, to
Buyer), to the Cut-Off Time. All transferable deposits of Seller made for
utilities, maintenance or service contracts, licenses, or otherwise, shall be
credited to Seller at Closing. In this regard, the parties shall arrange to have
all such accounts and deposits transferred to Buyer at Closing.

                        5.3.5   Health Club and Other Dues. Prepaid health club
                                --------------------------
and other revenues shall be prorated between Buyer and Seller as of the Cut-Off
Time, with Buyer receiving a credit for the unearned health club and other
revenue as of the Cut-Off Time.

                        5.3.6   Prepaids. Seller shall receive a credit for
                                --------
prepaid expenses as of the Cut-Off Time, including prepaid expenses under
contracts, advertising expenses, trade association dues and trade subscriptions,
and fees for permits. Prepaid advertising expenses shall only include
advertising which has not been published, mailed or aired as of the Cut-Off
Time.

                        5.3.7   Payables. Seller shall use reasonable commercial
                                --------
efforts to pay off all trade accounts payable as of the Cut-Off Time. To the
extent unpaid, Buyer shall receive a credit for all accounts payable and accrued
liabilities owing for goods and services furnished prior to the Cut-Off Time.
Buyer shall pay all accounts payable relating to goods and services for which
orders have been placed but, as of the Cut-off Time, such goods and services
have not yet been delivered or provided. All fees, reimbursements and other
amounts payable to the Manager under the Hotel Management Agreement shall be
apportioned between Seller and Purchaser as of the Cut-off Time.

                                       12
<PAGE>

                        5.3.8   Surviving Obligations. The provisions of this
                                ---------------------
Section 5.3 shall survive the Closing and shall not be subject to the
limitations set forth in Section 10.2.1 hereof.

        6.      Condemnation or Destruction of Property.
                ---------------------------------------

                6.1     Condemnation. Seller agrees to give Buyer prompt notice
                        ------------
of any notice it receives (or knowledge it otherwise obtains) of any taking by
condemnation (actual, pending or threatened) of any part of or rights
appurtenant to the Property. Buyer shall have the right to terminate this
Agreement in the event of an actual, pending or threatened condemnation or
temporary condemnation of longer than six (6) months that has or reasonably
would be expected to have a material adverse impact on the operations of the
Property, in which event Escrow Deposit shall be returned to Buyer. If Buyer
does not so elect to terminate this Agreement, then the Closing shall take place
as provided herein, and Seller shall assign to Seller at the Closing all of
Seller's interest in any condemnation award which may be payable to Buyer on
account of any such condemnation and, at Closing, Seller shall credit to the
amount of the Purchase Price payable by Buyer the amount, if any, of
condemnation proceeds received by Seller between the Date of this Agreement and
Closing less any amounts which are reasonably allocated to lost earnings
reasonably allocated or attributed to the period of time prior to Closing or
which are used to repair or restore the Property prior to Closing. Provided
Buyer has not exercised its right to terminate this Agreement, Seller shall
notify Buyer in advance regarding any proceeding or negotiation with respect to
the condemnation and Buyer shall have the right, at its own cost and expense, to
appear and participate in any such proceeding or negotiation.

                6.2     Fire or Other Casualty. Seller shall give Buyer prompt
                        ----------------------
notice of any fire or other casualty to the Property costing more than
$100,000.00 to repair and occurring between the Date of this Agreement and the
Closing. If, prior to Closing, the Property is damaged by fire or other casualty
which is insured (without regard to deductibles) to an extent as would not cost
more than $5,000,000.00 and would not take longer than six (6) months to repair,
and if the holders of the existing Mortgage and Mezzanine Loans will permit
insurance proceeds to be used to repair and restore the Property, then the
Closing shall take place without abatement of the purchase price, but Seller
shall assign to Buyer at Closing all of Seller's interest in any insurance
proceeds (except only, rent loss and business interruption insurance, and any
similar insurance attributable to the period preceding the Closing Date) that
may be payable to Seller on account of any such fire or other casualty, plus
Seller shall credit the amount of any deductibles under any policies related to
such proceeds to the purchase price, to the extent such deductibles or insurance
proceeds have not been previously expended or are otherwise required to
reimburse Owner for actual expenditures of restoration. If any such damage due
to fire or other casualty is insured and is to such an extent as would cost more
than $5,000,000.00 or would take longer than six (6) months to repair, or if
such holders will not permit insurance proceeds to be used to repair and restore
the Property then, at Buyer's option, Buyer may terminate this Agreement and the
Escrow Deposit shall be returned to Buyer. Should Buyer nevertheless elect to
proceed to Closing, the Closing shall take place without abatement of the
Purchase Price and at Closing Seller shall assign to Buyer all of Seller's
interest in any insurance proceeds (except only, rent loss and business
interruption insurance, and any similar insurance, in each case, attributable to
the period preceding the Closing Date) that may be payable

                                       13
<PAGE>

to Seller on account of any such fire or other casualty, and Seller shall grant
to Buyer a credit against the Purchase Price equal to the amount of the
applicable deductible, to the extent such deductibles or insurance proceeds have
not been previously expended or are otherwise required to reimburse Owner for
actual expenditures of restoration. If, prior to Closing, the Property is
damaged by fire or other casualty which is uninsured and would cost more than
$5,000,000.00 to repair or would take longer than six (6) months to repair,
then, at Buyer's option, Buyer may terminate this Agreement and the Escrow
Deposit shall be returned to Buyer. If Buyer does not elect to terminate this
Agreement with respect to an uninsured casualty as aforesaid, or if any
uninsured casualty would not cost more than $5,000,000.00 to repair and would
not take longer than six (6) months to repair, then the Closing shall take place
as provided herein, and the Purchase Price shall be reduced by the estimated
amount to repair casualty not to exceed such $5,000,000.00. If Buyer does not or
is not entitled to terminate this Agreement with respect to a casualty or
condemnation, Seller shall diligently commence and pursue restoration of the
Property so as to minimize the loss of business and good will of the Property.

        7.      Representations, Warranties and Covenants.
                -----------------------------------------

                7.1     Representations, Warranties and Covenants of Seller.
                        ---------------------------------------------------

                        7.1.1   General Disclaimer. Except as specifically set
                                ------------------
forth in Section 7.1.2 below or elsewhere in this Agreement or in the Deed or
other closing documents, the sale of the Property hereunder is and will be made
on an "as is" basis, without representations and warranties of any kind or
nature, express, implied or otherwise, including any representation or warranty
concerning title to the Property, the physical condition of the Property
(including the condition of the soil or the Improvements), the environmental
condition of the Property (including the presence or absence of hazardous
substances on or respecting the Property), the compliance of the Property with
applicable laws and regulations (including zoning and building codes or the
status of development or use rights respecting the Property), the financial
condition of the Property or any other representation or warranty respecting any
income, expenses, charges, liens or encumbrances, rights or claims on, affecting
or pertaining to the Property or any part thereof. Buyer acknowledges that,
during the Due Diligence Period, Buyer will examine, review and inspect all
matters which in Buyer's judgment bear upon the Property and its value and
suitability for Buyer's purposes. Except as to matters specifically set forth in
Section 7.1.2 below or elsewhere in this Agreement or in the Deed or other
closing documents, Buyer will acquire the Property solely on the basis of its
own physical and financial examinations, reviews and inspections and the title
insurance protection afforded by the Owner's Policy.

                        7.1.2   Limited Representations and Warranties of
                                -----------------------------------------
Seller. Seller hereby represents and warrants to Buyer (and, for this purpose,
------
"Seller's knowledge" (or any similar phrase) shall mean the present actual
knowledge, without taking into account any constructive or imputed knowledge, of
Steve Kisielica, Brad Falk, David Sims and John Merrill, but such individuals
shall not have any liability in connection herewith):

                                (a)     Leases. There are no leases of or
                                        ------
licenses or concessions for space in the Property which will be in force after
the Closing and under which Seller is the landlord (whether by it or its agent
entering into the leases or acquiring the Property subject to the leases) other
than the Leases. As used herein, "Leases" means, collectively, (a) the leases,
licenses and concessions agreements listed on Exhibit "N" (the "Lease Exhibit")
and (b) the leases, licenses and concessions agreements entered into in
accordance with this Agreement. All of the Leases are in full force and effect
and none of them has been amended except as set forth in the Lease Exhibit.
Except as set forth on Schedule 2, there are no security deposits under the
Leases. There are no construction allowances, brokerage commissions, or fees or
similar inducements due now or payable in the future in connection with the
Leases.

                                       14
<PAGE>

To Seller's knowledge, Seller has performed all material work required to be
performed by Seller under the Leases. To Seller's knowledge Seller has delivered
to Buyer true, correct and complete copies of the Leases. To Seller's knowledge,
Seller is not in default in any material respect under the Leases and there is
no existing condition that, with notice or passage of time or both, would
constitute a material default by Seller under any of the Leases. To Seller's
knowledge, no other party to a Lease is in default in any material respect under
such lease and there is not existing condition that, with notice or passage of
time or both, would constitute a material default by such party under any Lease.

                                (b)     Litigation. Except as set forth in
                                        ----------
Exhibit "P", there is no pending (nor has Seller or to Seller's knowledge, its
Manager, received any written notice of any threatened) action, litigation,
condemnation or other proceeding against the Property or against Seller or to
Seller's knowledge Manager with respect to the Property, other than personal
injury matters covered by Seller's insurance and routine workers compensation
claims.

                                (c)     Service Agreements. Seller has not
                                        ------------------
entered into and, to Seller's knowledge, there are not any service, supply,
maintenance, capital improvement, equipment leasing, employment, collective
bargaining, union or similar contracts relating to the Property which will be in
force after the Closing, except for the Service Agreements and "Excluded
Contracts" (as hereinafter defined). As used herein, the "Service Agreements"
means, collectively, (a) the contracts described in Exhibit "Q", (b) contracts
(other than Excluded Contracts) which are cancelable on thirty 30 days' or less
notice, without penalty, and (c) contracts entered into in accordance with this
Agreement. As used herein, "Excluded Contracts" means Seller's contracts for (i)
insurance and (ii) the engagement of attorneys, accountants and consultants. The
Excluded Contracts are not being assigned to or assumed by Buyer hereunder.
Buyer shall assume (and execute such documentation as Seller may reasonably
request to reflect its assumption of) the brokerage commission obligations
identified in Section 7.4.3. To Seller's knowledge, Seller has provided Buyer
with access to true, correct and complete copies of the Service Agreements. To
Seller's knowledge, all of the Service Agreements are in full force and effect,
Seller is not in default in any material respect under the Service Agreements
and there is no existing condition that, with notice or the passage of time
would constitute a material default by Seller under any Service Agreement. To
Seller's knowledge, no other party to a service agreement is in default in any
material respect under any of the Service Agreements.

                                (d)     Due Authority. This Agreement and all
                                        -------------
agreements, instruments and documents herein provided to be executed or to be
caused to be executed by Seller are and on the Closing Date will be duly
authorized, executed and delivered by and are binding upon Seller. Seller is a
limited liability company, duly organized and validly existing and in good
standing under the laws of the State of Delaware, and is duly authorized and
qualified to do all things required of it under this Agreement. Seller has the
capacity and authority to enter into this Agreement and consummate the
transactions herein provided without the consent or joinder of any other party
(except as otherwise may be set forth in this Agreement). The foregoing
statement shall not be subject to the "knowledge qualification" set forth above.

                                (e)     Environmental Matters. The reports
                                        ---------------------
described in Exhibit "R" (the "Environmental Reports") represent all of the
environmental reports with respect to the Property in the possession or control
of Seller. Except for any and all matters that are disclosed in the
Environmental Reports, Seller has not received written notice of and to Seller's
knowledge there are no violations of environmental laws, ordinances or
regulations with respect to the Property. To Seller's knowledge, there is no
presence of any hazardous materials, hazardous substances, toxic substances or
wastes (as defined in or regulated by any federal, state or local laws,
ordinances or regulations) on, under, in, at or emanating from the Property
except in compliance with such laws, ordinances and regulations.

                                       15
<PAGE>

                                (f)     Condemnations and Assessments. There is
                                        -----------------------------
no condemnation either instituted or, to Seller's knowledge, threatened, which
would affect the Property, and neither Seller nor, to Seller's knowledge,
Manager has received written notice of any special assessment affecting any of
the Property.

                                (g)     Insurance. Neither Seller nor, to
                                        ---------
Seller's knowledge, Manager has received written notice from any insurance
company of any defects or inadequacies in the Property that would affect
adversely its insurability or increase the cost of insurance.

                                (h)     Anti-Terrorism Laws. Neither Seller nor
                                        -------------------
to Seller's knowledge, any of its respective constituent owners or affiliates
are in violation of any laws relating to terrorism or money laundering
(collectively, the "Anti-Terrorism Laws"), including without limitation
Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001
and relating to Blocking Property and Prohibiting Transactions With Persons Who
Commit, Threaten to Commit, or Support Terrorism (the "Executive Order") and/or
the Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56) (the "USA
Patriot Act").

                                (i)     Solvency. Seller is not the subject
                                        --------
debtor under any federal, state or local bankruptcy or insolvency proceeding, or
any other proceeding for dissolution, liquidation or winding up of its assets.
Seller is not insolvent, and the consummation of the transactions contemplated
by this Agreement shall not render Seller insolvent.

                                (j)     Legal Requirements. Seller and, to
                                        ------------------
Seller's knowledge, Manager, have not received written notice from any
governmental authority alleging a violation of any legal requirement or absence,
suspension, revocation or non-renewal of any license or permit that has not been
corrected, cured or otherwise resolved or seeking to audit or investigate
compliance of the Hotel with any applicable legal requirement, which audit or
investigation has not been completed or otherwise resolved and, to Seller's
knowledge, all material permits and licenses necessary for the normal operation
of the Property are in full force and effect.

                                (k)     Financial Information. To Seller's
                                        ---------------------
knowledge, all of Seller's financial information provided to Buyer, including,
without limitation, all books and records and financial statements ("Financial
Information") is correct and complete in all material respects and presents
accurately the results of the operations of the Property for the periods
indicated.

                                (l)     No Options. Seller has not granted any
                                        ----------
option, right of first offer or refusal or similar right in favor of any person
to purchase or otherwise acquire the Hotel, any portion thereof or any interest
therein, except to Manager. Manager has irrevocably waived any such right with
respect to the sale contemplated by this Agreement, and such waiver shall be in
full force and effect on the Closing.

                                       16
<PAGE>

                                (m)     Audits. Seller and, to Seller's
                                        ------
knowledge, Manager, has not received any written notice of any audit of any
taxes payable or tax delinquency with respect to the Property which has not been
resolved or completed.

                                (n)     Unrecorded Commitments. Seller has not
                                        ----------------------
entered into any unrecorded commitment or agreement with any governmental
authority affecting the Hotel which could reasonably be expected to have a
material adverse effect on the ownership, value or operation of the Hotel.
Neither Seller, nor to Seller's knowledge, Manager, has entered into any
unrecorded commitment or agreement with any governmental authority, association
or other organization or group affecting all or any portion of the Property
which would impose any obligation to make any contribution or dedication of
money or land or to construct, install or maintain any improvements of a public
or private nature on or off the Property.

                                (o)     Parties with Knowledge. Steve Kisielica,
                                        ----------------------
Brad Falk, David Sims and John Merrill are familiar with the business and
affairs of Seller and with the Property and the transactions contemplated under
this Agreement and are the individuals responsible for Seller and its operations
in the best position to have knowledge concerning the scope of the
representations made by Seller in this Agreement.

                                (p)     Property and Chilled Water Agreements.
                                        -------------------------------------
The Property Agreements and the Chilled Water Agreement are in full force and
effect. Seller has delivered true, correct and complete copies of such
agreements to Buyer. To Seller's knowledge, all of such agreements are free from
material default and there is no existing condition that, with notice or the
passage of time or both, would constitute a material default under any of such
agreements.

                                (q)     Loan Documents. Attached hereto as
                                        --------------
Schedule 3 is a list of all loan documents relating to the existing mortgage and
mezzanine loans affecting the Property, including all amendments thereto
(collectively the "Loan Documents"). Seller has delivered true, correct and
complete copies of the Loan Documents to Buyer. All of the Loan Documents are in
full force and effect. To Seller's knowledge, the Loan Documents are free from
material default and there is no existing condition that, with notice of the
passage of time or both, would constitute a material default under any of the
Loan Documents. Seller has received no written notice of a default under the
Loan Documents which has not been fully cured.

                                (r)     Title to Personal Property. Seller has
                                        --------------------------
good and marketable title to or a valid leasehold interest in all Tangible
Personal Property and, subject to any equipment leases listed in the schedule of
Service Agreements, all Tangible Personal Property shall be free and clear of
all encumbrances at Closing; provided, however, if Buyer assumes the existing
mortgage and mezzanine loans, the Tangible Personal Property shall also be
subject to the Loan Documents.

                                (s)     Employees. Seller has no employees
                                        ---------
working at the Property, and all employees working at the Property on behalf of
Seller are employees of Manager. Seller has not itself established any
retirement, health insurance, vacation, pension, profit sharing or other benefit
plans relating to the operation or maintenance of the Property. To Seller's
knowledge as of the date of this Agreement, Seller has not received any written
notice nor has Manager informed Seller of any actual or threatened union
strikes, work stoppages or slow downs or any other labor disputes concerning
individuals employed at the Property. To Seller's knowledge, no benefit plans
maintained by Manager for Manager's employees working at the Property are in
violation of applicable laws or the terms of such plans.

                                       17
<PAGE>

                7.2     Representations and Warranties of Buyer. Buyer hereby
                        ---------------------------------------
represents and warrants to Seller that:

                        7.2.1   This Agreement and all agreements, instruments
and documents herein provided to be executed or to be caused to be executed by
Buyer are and on the Closing Date will be duly authorized, executed and
delivered by and are binding upon Buyer; Buyer is a limited partnership, duly
organized and validly existing and in good standing under the laws of the State
of Delaware, and is duly authorized and qualified to do all things required of
it under this Agreement; and Buyer has the capacity and authority to enter into
this Agreement and consummate the transactions herein provided without the
consent or joinder of any other party (except as otherwise may be set forth in
this Agreement).

                        7.2.2   Buyer and, to Buyer's knowledge, its constituent
owners and affiliates, are in compliance with the requirements of Executive
Order No. 13224, 66 Fed. Reg. 49079 (Sept. 25, 2001) (the "Order") and other
similar requirements contained in the rules and regulations of the Office of
Foreign Asset Control, Department of the Treasury ("OFAC") and in any enabling
legislation or other Executive Orders in respect thereof (the Order and such
other rules, regulations, legislation, or orders are collectively called the
"Orders").

                        7.2.3   Neither Buyer nor, to Buyer's knowledge, its
constituent owners and affiliates:

                                (a)     is listed on the Specially Designated
Nationals and Blocked Persons List maintained by OFAC pursuant to the Order
and/or on any other list of terrorists or terrorist organizations maintained
pursuant to any of the rules and regulations of OFAC or pursuant to any other
applicable Orders (such lists are collectively referred to as the "Lists");

                                (b) has been arrested for money laundering or
for predicate crimes to money laundering, convicted or pled nolo contendere to
charges involving money laundering or predicate crimes to money laundering;

                                (c)     has been determined by competent
authority to be subject to the prohibitions contained in the Orders;

                                (d)     is owned or controlled by, nor acts for
or on behalf of, any Person on the Lists or any other Person who has been
determined by competent authority to be subject to the prohibitions contained in
the Orders;

                                (e)     shall transfer any interest in Buyer or
such parties to any Person who is, or whose beneficial owners are, listed on the
Lists; or

                                (f)     shall assign this Agreement or any
interest herein, to any Person who is listed on the Lists or who is engaged in
illegal money laundering.

                                       18
<PAGE>

If Buyer or any constituent owner or affiliate of Buyer becomes listed on the
Lists or is indicted, arraigned, or custodially detained on charges involving
money laundering or predicate crimes to money laundering, Buyer shall
immediately notify Seller upon Buyer's obtaining knowledge thereof. Buyer shall
have ten (10) business days to remove such party from any interest in Buyer or
Seller may terminate this Agreement upon written notice to Buyer, whereupon the
Escrow Deposit shall be returned to Buyer and neither party shall have any
further obligation hereunder except for those obligations which expressly
survive a termination of this Agreement.

                        7.2.4   Buyer understands that, among the requirements
of the State of Illinois and City of Chicago that govern the issuance of the
liquor licenses with which it will be required to comply, are the following:
Buyer will be required to submit personal background information, including
social security numbers and driving records, on Buyer's managers and Buyer will
further be required to submit such information on the owners and managers of any
company which directly or indirectly controls Buyer. Buyer shall comply with
these requirements. Buyer has no reason to believe that it will not be able to
obtain the issuance of the Required Liquor Licenses in accordance with the
timing contemplated by this Agreement.

                        7.2.5   "Buyer's knowledge" (or any similar phrase used
in this Agreement) shall mean the present actual knowledge, without taking into
account any constructive or imputed knowledge of Michael D. Schecter, John
Williams and Mark Brugger, but such individuals shall not have any liability in
connection herewith. Buyer represents that such persons are familiar with the
business and affairs of Buyer and the transactions contemplated under this
Agreement and are the executive officers responsible for Buyer and its
operations in the best position to have knowledge concerning the scope of the
representations made by Buyer in this Agreement and to have knowledge of the
results of Buyer's diligence investigations of the Property.

                7.3     Survival. The foregoing representations and warranties
                        --------
(including any cause of action by reason of a breach thereof), except those
pertaining to a party's authority or to Seller's title, which shall survive
indefinitely, shall survive until the date that is nine (9) months after the
Closing Date (the period beginning on the date hereof and ending on such date
being herein called the "Survival Period"), at which time such representations
and warranties (and any cause of action for a breach thereof not then in
litigation) shall terminate. Notwithstanding the foregoing, Seller shall have no
liability and Buyer shall make no claim against Seller, for (and Buyer shall be
deemed to have waived any failure of a condition hereunder by reason of) a
breach of any representation or warranty of Seller under this Agreement or any
document executed by Seller in connection with this Agreement (including for
this purpose any matter that would have constituted a breach of Seller's
representations and warranties had they been made on the Closing Date) (a) if
the breach in question was known to Buyer prior to the end of the Due Diligence
Period, or (b) the breach in question was known to Buyer prior to Closing and
Buyer proceeds with the Closing.

                7.4     Interim Covenants of Seller. Until the Closing Date or
                        ---------------------------
the sooner termination of this Agreement:

                        7.4.1   Maintenance/Operation. Seller shall cause the
                                ---------------------
Property to be maintained, repaired and operated in the same manner as prior
hereto pursuant to its normal course of business (including making capital
expenditures and expenditures of FF&E reserves in such normal course of
business). Such continuing operation shall include delivering Property to Buyer
at Closing with customary levels of inventories and supplies.

                        7.4.2   Service Contracts. Seller shall not enter into
                                -----------------
any additional Service Agreements or other similar agreements without the prior
consent of Buyer, which shall not be unreasonably withheld, except for (1) those
deemed reasonably necessary by Seller which are cancelable on 30 days' notice
without penalty and (2) those entered into by Manager which do not require
Seller's consent.

                                       19
<PAGE>

                        7.4.3   Leases. Except to the extent required under the
                                ------
Management Agreement without Seller's consent, Seller shall not enter into any
new Leases or material modifications of Leases or terminate any Leases without
Buyer's express written consent which shall not be unreasonably withheld or
delayed and shall be deemed given if Buyer, within seven (7) business days after
Seller requests Buyer's approval to a proposed new lease or material
modification or termination of a Lease and provides Buyer with such information
as is reasonable and appropriate for Buyer to determine whether to grant or
withhold approval, fails to give Seller written notice of its disapproval
thereof and the reasons therefor. Notwithstanding anything herein to the
contrary, if the Closing occurs, Buyer shall bear all costs and expenses related
to any new Leases or modifications, extensions, expansions, options or renewals
of existing Leases entered into after the date hereof pursuant to this
subsection (including tenant improvement costs and leasing commissions, but
excluding free rent allocable to any period prior to the Closing Date) and,
without limitation on the foregoing, the prorations at Closing shall include an
appropriate credit to Seller consistent with the foregoing.

                7.5     Seller's Environmental Inquiry. Buyer acknowledges and
                        ------------------------------
agrees that the sole inquiry and investigation Seller has conducted in
connection with the environmental condition of the Property is to obtain the
Environmental Reports, and that, for purposes of this Agreement, Seller has
acted reasonably in solely relying upon said inquiry and investigation.

                7.6     Hotel Management Agreement Indemnity. Buyer shall
                        ------------------------------------
indemnify, defend and hold harmless Seller from and against any claim by Manager
(and all obligations, claims, liabilities, damages, losses, cost or expenses,
including reasonable attorneys' fees and court costs, resulting therefrom) by
reason of a default by the owner under the Hotel Management Agreement occurring
and attributable to the period on or after the Closing Date. Seller shall
indemnify, defend and hold harmless Buyer from and against any claim by Manager
(and all obligations, claims, liabilities, damages, losses, cost or expenses,
including reasonable attorneys' fees and court costs, resulting therefrom) by
reason of a default by the owner under the Hotel Management Agreement occurring
or attributable to the period prior to the Closing Date. The indemnity
obligations set forth in this Section 7.6 shall survive the Closing.

                7.7     Budget. Seller shall give Buyer a credit against the
                        ------
Purchase Price at Closing in an amount equal to any amount of the $4,000,000
conversion budget referenced in Section 3.1 of the Management Agreement which
has not been expended on items contemplated by such conversion budget.

                7.8     Reservations and Bookings. Seller shall cause Manager to
                        -------------------------
continue to take guest room reservations and to book functions and meetings and
otherwise to market and promote the business of the Hotel in generally the same
manner as it did prior to the execution of this Agreement; and all advance room
bookings and reservations and all meetings and function bookings shall be booked
at rates, prices and charges charged by Seller and Manager for such purposes in
the ordinary course of business consistent with past practices.

                7.9     Notice of Proceedings. Seller shall promptly advise
                        ---------------------
Buyer of any litigation, arbitration or administrative hearing, or any written
threat to commence any of the foregoing, concerning or relating to the Property
or the operation thereof, of which Seller obtains knowledge.

                7.10    Removal of Property. Seller shall refrain and cause
                        -------------------
Manager to refrain from removing any portion of the Property without the prior
written consent of Buyer, except in the normal course of business as to personal
property that is no longer needed or useful or is replaced, prior to Closing,
with similar items of at least equal suitability, quality and value, free and
clear of any liens or security interests other than that of the existing
mortgage loan which Buyer intends to assume.

                                       20
<PAGE>

                7.11    Existing Loans. Seller shall make all payments of
                        --------------
principal, interest and other sums under the existing mortgage loan, mezzanine
loan, Management Agreement, Chilled Water Service Agreement, Block 119 Parking
Easement Agreement and Reciprocal Easement and Operating Agreement and perform
all of its respective obligations thereunder which accrue to the period prior to
the Closing and shall use commercially reasonable efforts not to permit any
default to exist thereunder. Seller shall not enter into any new loan documents
or modify any existing loan documents or any other of the aforementioned
agreements which would be binding on Seller or the Property upon an assumption
of such loans or the purchase of the Property and which would materially
increase Buyer or its affiliates' liabilities or obligations or materially
decrease Buyer's or its affiliates' rights thereunder.

                7.12    Insurance. Seller shall maintain or, to the extent
                        ---------
Manager maintains the insurance, cause Manager to maintain all existing
insurance carried on the Property by Seller or Manager.

                7.13    Material Alteration. Without Buyer's consent, which
                        -------------------
shall not be unreasonably withheld, delayed or conditioned, Seller shall not
make or obligate itself to make, and Seller shall request Manager not to make,
or obligate itself to make, any material alterations or modifications to the
Property except in the case of emergencies and except those contemplated in the
capital expenditure and FF&E budgets provided to Buyer during the Due Diligence
Period.

                7.14    Transfer of Permits. Seller shall cooperate with Buyer
                        -------------------
(with no out-of-pocket cost to Seller) in all reasonable respects in connection
with the transfer (if any) of any permits, licenses, certificates and approvals
issued with respect to the Property to Buyer or the issuance of any new permits,
licenses, certificates or approvals (if any) to Buyer, each to be effective no
earlier than Closing, and Seller shall and shall cause Manager to use
commercially reasonable efforts to (i) preserve and keep in force existing
permits, licenses, certificates and approvals issued with respect to the
Property, and (ii) cause all those expiring during the period between the date
of this Agreement and the Closing to be renewed prior to the Closing Date.

                7.15    No Further Marketing. Seller shall not market, sell,
                        --------------------
convey or offer to sell any portion of the Property (nor permit Manager to do
any of the same), except for items of Tangible Personal Property sold or
consumed in the ordinary course of business. Notwithstanding the preceding
sentence, the parties understand and agree that Seller may still solicit offers
for the Property but shall not accept any such offer while this agreement is in
full force and effect.

                7.16    Management Agreement Consents. Seller shall not grant
                        -----------------------------
any material consent requested by Manager pursuant to the Management Agreement
without first consulting with Buyer and obtaining Buyer's consent, which shall
not be unreasonably withheld, delayed or conditioned.

                7.17    Baggage Inventory. The representatives of Seller and
                        -----------------
Buyer shall prepare the inventory as of day immediately preceding the Closing
Date (which inventory shall be binding on all parties thereto) of (a) all
luggage, valises and trunks checked or left in the care of the Hotel by guests
then or formerly in the Hotel, (b) parcels, laundry, valet packages and other
property of guests checked or left in the care of the Hotel by guests then or
formerly in the Hotel (excluding, however, property in the Hotel safe deposit
boxes), (c) all luggage or other property of guests retained by Buyer, and (d)
all items contained in the Hotel lost and found. Buyer shall be responsible from
and after the Closing Date for all baggage, and other items listed in such
inventory. Seller hereby agrees to indemnify and hold Buyer harmless from and
against any and all liability for claims arising prior to the Closing Date
relating to such items not listed on the inventory. The provisions of this
Section 7.17 shall survive the Closing.

                                       21
<PAGE>

                7.18    Safe Deposit Boxes. Prior to the Closing Date, Seller
                        ------------------
shall endeavor to send written notice to guests or tenants or other persons who
to Seller's or its Manager's knowledge have possessions locked in safe-deposit
boxes at the Hotel advising them of the sale of the Hotel (excluding in-room
safes) to Buyer and requesting removal of the contents thereof or the removal
thereof and concurrent re-deposit of such contents pursuant to new safe deposit
agreements with Buyer. Seller and Buyer shall have representatives present when
the boxes are opened and the contents thereof shall be inventoried. If the guest
does not timely respond to Seller's notice, the safe deposit box may, if Seller,
in its sole discretion, so agrees, be broken open in the presence of Seller and
Buyer and the contents inventoried and re-deposited in a new "safe deposit" box.
Buyer shall be solely responsible for all items in the Hotel's safe deposit
boxes which had been so inventoried, removed and re-deposited and Buyer hereby
agrees to indemnify, defend and hold Seller harmless from and against any and
all liability therefor. Seller hereby agrees to indemnify and hold Buyer
harmless from and against any and all liability for claims arising prior to the
Closing Date relating to such items not listed on the inventory. The provisions
of this Section 7.18 shall survive the Closing.

        8.      DISCLAIMER, RELEASE AND ASSUMPTION. AS AN ESSENTIAL INDUCEMENT
                ----------------------------------
TO SELLER TO ENTER INTO THIS AGREEMENT, AND AS PART OF THE DETERMINATION OF THE
PURCHASE PRICE, BUYER ACKNOWLEDGES, UNDERSTANDS AND AGREES AS OF THE DATE HEREOF
AND AS OF THE CLOSING DATE AS FOLLOWS:

                8.1     DISCLAIMER.
                        ----------

                        8.1.1   AS-IS, WHERE-IS. EXCEPT AS OTHERWISE EXPRESSLY
                                ---------------
PROVIDED IN SECTION 7.1 OR ELSEWHERE IN THIS AGREEMENT OR IN THE DEED OR OTHER
CLOSING DOCUMENTS, THE SALE OF THE PROPERTY HEREUNDER IS AND WILL BE MADE ON AN
"AS IS, WHERE IS" BASIS AND SELLER HAS NOT MADE, DOES NOT MAKE AND SPECIFICALLY
NEGATES AND DISCLAIMS ANY REPRESENTATIONS, WARRANTIES OR GUARANTIES OF ANY KIND
OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST,
PRESENT OR FUTURE OF, AS TO, CONCERNING OR WITH RESPECT TO THE PROPERTY OR ANY
OTHER MATTER WHATSOEVER.

                        8.1.2   SOPHISTICATION OF BUYER. BUYER IS A
                                -----------------------
SOPHISTICATED BUYER WHO IS FAMILIAR WITH THE OWNERSHIP AND OPERATION OF REAL
ESTATE PROJECTS SIMILAR TO THE PROPERTY AND THAT BUYER HAS OR WILL HAVE ADEQUATE
OPPORTUNITY TO COMPLETE ALL PHYSICAL AND FINANCIAL EXAMINATIONS (INCLUDING ALL
OF THE EXAMINATIONS, REVIEWS AND INVESTIGATIONS REFERRED TO IN SECTION 4)
RELATING TO THE ACQUISITION OF THE PROPERTY HEREUNDER IT DEEMS NECESSARY, AND
WILL ACQUIRE THE SAME SOLELY ON THE BASIS OF AND IN RELIANCE UPON SUCH
EXAMINATIONS AND THE TITLE INSURANCE PROTECTION AFFORDED BY THE OWNER'S POLICY
AND NOT ON ANY INFORMATION PROVIDED OR TO BE PROVIDED BY SELLER (OTHER THAN AS
EXPRESSLY PROVIDED IN SECTION 7.1 OR ELSEWHERE IN THIS AGREEMENT OR IN THE DEED
OR OTHER CLOSING DOCUMENTS).

                        8.1.3   PASSIVE OWNER. SELLER (A) DID NOT DEVELOP OR
                                -------------
CONSTRUCT THE PROPERTY; AND (B) HAS DELEGATED THE DAY-TO-DAY MANAGEMENT OF THE
PROPERTY TO A THIRD PARTY MANAGER.

                                       22
<PAGE>

                        8.1.4   DUE DILIGENCE MATERIALS. ANY INFORMATION
                                -----------------------
PROVIDED OR TO BE PROVIDED WITH RESPECT TO THE PROPERTY IS SOLELY FOR BUYER'S
CONVENIENCE AND WAS OR WILL BE OBTAINED FROM A VARIETY OF SOURCES AND THAT
SELLER HAS NOT MADE ANY INDEPENDENT INVESTIGATION OR VERIFICATION OF SUCH
INFORMATION AND MAKES NO (AND EXPRESSLY DISCLAIMS ALL) REPRESENTATIONS AS TO THE
ACCURACY OR COMPLETENESS OF SUCH INFORMATION (EXCEPT TO THE EXTENT PROVIDED IN
SECTION 7.1 OR ELSEWHERE IN THIS AGREEMENT AND IN THE DEED OR OTHER CLOSING
DOCUMENTS). EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN SECTION 7.1 OR ELSEWHERE
IN THIS AGREEMENT OR IN THE DEED OR OTHER CLOSING DOCUMENTS, SELLER SHALL NOT BE
LIABLE FOR ANY MISTAKES, OMISSIONS, MISREPRESENTATION OR ANY FAILURE TO
INVESTIGATE THE PROPERTY NOR EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN SECTION
7.1 OR ELSEWHERE IN THIS AGREEMENT OR IN THE DEED OR OTHER CLOSING DOCUMENTS
SHALL SELLER BE BOUND IN ANY MANNER BY ANY VERBAL OR WRITTEN STATEMENTS,
REPRESENTATIONS, APPRAISALS, ENVIRONMENTAL ASSESSMENT REPORTS, OR OTHER
INFORMATION PERTAINING TO THE PROPERTY OR THE OPERATION THEREOF, FURNISHED BY
SELLER, ITS MANAGER, OR BY ANY REAL ESTATE BROKER, AGENT, REPRESENTATIVE,
AFFILIATE, DIRECTOR, OFFICER, SHAREHOLDER, EMPLOYEE, SERVANT OR OTHER PERSON OR
ENTITY ACTING ON SELLER'S BEHALF (COLLECTIVELY, "SELLER RELATED PARTIES").

                8.2     RELEASE. BUYER RELEASES SELLER AND ALL SELLER RELATED
                        -------
PARTIES FROM ALL CLAIMS WHICH ANY BUYER OR ANY PARTY RELATED TO OR AFFILIATED
WITH BUYER (A "BUYER RELATED PARTY") HAS OR MAY HAVE ARISING FROM OR RELATED TO
ANY MATTER OR THING RELATED TO OR IN CONNECTION WITH THE PROPERTY INCLUDING THE
DOCUMENTS AND INFORMATION REFERRED TO HEREIN, THE HOTEL MANAGEMENT AGREEMENT,
THE TENANT LEASES AND THE TENANTS THEREUNDER, ANY CONSTRUCTION DEFECTS, ERRORS
OR OMISSIONS IN THE DESIGN OR CONSTRUCTION AND ANY ENVIRONMENTAL CONDITIONS, AND
BUYER SHALL NOT LOOK TO ANY SELLER RELATED PARTIES IN CONNECTION WITH THE
FOREGOING FOR ANY REDRESS OR RELIEF. THIS RELEASE SHALL BE GIVEN FULL FORCE AND
EFFECT ACCORDING TO EACH OF ITS EXPRESSED TERMS AND PROVISIONS, INCLUDING THOSE
RELATING TO UNKNOWN AND UNSUSPECTED CLAIMS, DAMAGES AND CAUSES OF ACTION.
HOWEVER, THE FOREGOING PROVISIONS OF THIS SECTION 8.2 SHALL NOT AFFECT, APPLY OR
LIMIT SELLER'S EXPRESS OBLIGATIONS UNDER THIS AGREEMENT AND THE DOCUMENTS
EXECUTED IN CONNECTION HEREWITH.

                8.3     SURVIVAL. THIS SECTION SHALL SURVIVE ANY TERMINATION OF
                        --------
THIS AGREEMENT AND THE CLOSING.

        9.      Disposition Of Escrow Deposit.
                -----------------------------

                9.1     Default by Seller. If the transaction herein provided
                        -----------------
shall not be closed by reason of Seller's default under this Agreement in a
material respect or the failure of satisfaction of conditions benefiting Buyer
under Section 4, which is not cured or satisfied within ten (10) days after
written notice thereof by Buyer to Seller or the termination of this Agreement
in accordance with Section 6, then the Escrow Deposit shall be returned to
Buyer, and neither party shall have any further obligation or liability to the
other (other than those obligations that expressly survive a termination of this
Agreement); provided, however, if the transactions hereunder shall fail to close
solely by reason of Seller's default, in a material respect, and Buyer is not in
default in any material respect, then Buyer shall be entitled to (i)
specifically enforce this Agreement as its sole and exclusive remedy (and Buyer
shall not be entitled to bring any other action, for damages or otherwise, by
reason of a default by Seller prior to Closing except as provided in (iii)
below), but specific performance may not be granted or awarded except pursuant
to an arbitration proceeding commenced under Section 10.10, within ninety (90)
days after the Closing Date, or (ii) terminate this Agreement, in which event
the Escrow Deposit shall be returned to Buyer and neither party shall have any
further rights or obligations hereunder. Notwithstanding the foregoing, if Buyer
elects to terminate this Agreement as a result of Seller's default in a material
respect or as a result of a representation and warranty that was not true in a
material respect as of the date when made and was not known by Buyer prior to
the expiration of the Due Diligence Period to be untrue in a material respect,
or which became materially untrue after the date when made as a result of
Seller's actions or omissions, Seller shall reimburse Buyer up to $150,000 of
Buyer's documented, reasonable out-of-pocket expenses incurred by Buyer in
connection with this transaction.

                                       23
<PAGE>

                9.2     Default By Buyer. In the event the transaction herein
                        ----------------
provided shall not close solely by reason of Buyer's default under this
Agreement in a material respect which is not cured within ten (10) days after
written notice thereof by Seller to Buyer, then the Escrow Deposit shall be
delivered to Seller as its sole remedy and as full compensation and liquidated
damages under this Agreement for such failure to close. In connection with the
foregoing, the parties recognize that Seller will incur expense in connection
with the transaction contemplated by this Agreement and that the Property will
be removed from the market; further, that it is extremely difficult and
impracticable to ascertain the extent of detriment to Seller caused by the
breach by Buyer under this Agreement and the failure of the consummation of the
transaction contemplated by this Agreement or the amount of compensation Seller
should receive as a result of Buyer's breach or default. In the event the sale
of the Property shall not be consummated on account of Buyer's default, then the
retention of the Escrow Deposit shall be Seller's sole and exclusive remedy
under this Agreement by reason of such default, subject to the provisions of
this Agreement that expressly survive a termination of this Agreement.

                9.3     Closing. In the event the transaction herein provided
                        -------
shall close, the Escrow Deposit shall be applied as a partial payment of the
Purchase Price.

        10.     Miscellaneous.
                -------------

                10.1    Brokers.
                        -------

                        10.1.1  Except as provided in Section 10.1.2 below,
Seller represents and warrants to Buyer, and Buyer represents and warrants to
Seller, that no broker or finder has been engaged by it, respectively, in
connection with the sale contemplated by this Agreement. In the event of a claim
for broker's or finder's fee or commissions in connection with the sale
contemplated by this Agreement, then Seller shall indemnify, defend and hold
harmless Buyer from the same if it shall be based upon any statement or
agreement alleged to have been made by Seller, and Buyer shall indemnify, defend
and hold harmless Seller from the same if it shall be based upon any statement
or agreement alleged to have been made by Buyer. The provisions of this Section
10.1 shall survive the Closing and shall not be subject to the limitations on
survival in Section 7.3 or the limitations on liability in Section 10.2.

                        10.1.2  If and only if the sale contemplated herein
closes, Seller has agreed to pay a brokerage commission to Sonnenblick Goldman
("Broker") pursuant to a separate written agreement between Seller and Broker.

                10.2    Limitation of Liability.
                        -----------------------

                        10.2.1  Notwithstanding anything to the contrary
contained herein, if the Closing of the transactions hereunder shall have
occurred: (1) Seller shall have no liability (and Buyer shall make no claim
against Seller) for a breach of any representation or warranty under this
Agreement unless the valid claims for all such breaches collectively aggregate
to more than $100,000, (2) the liability of Seller under this Agreement for all
breaches of representations and warranties under this Agreement shall not
exceed, in the aggregate, to the extent not covered by insurance, an amount (the
"Maximum Liability Amount") equal to $2,500,000, and (3) in no event shall
Seller be liable for any consequential or punitive damages for breach of such
representations and warranties except in the case of fraud.

                                       24
<PAGE>

                        10.2.2  No constituent member or partner in or agent of
Seller, nor any advisor, trustee, director, officer, employee, beneficiary,
shareholder, member, partner, participant, representative or agent of any
partnership, limited liability company, corporation, trust or other entity that
has or acquires a direct or indirect interest in Seller, shall have any personal
liability, directly or indirectly, under or in connection with this Agreement or
any agreement made or entered into under or pursuant to the provisions of this
Agreement, or any amendment or amendments to any of the foregoing made at any
time or times, heretofore or hereafter, and Buyer and its successors and assigns
and, without limitation, all other persons and entities, shall look solely to
Seller's assets for the payment of any claim or for any performance, and Buyer,
on behalf of itself and its successors and assigns, hereby waives any and all
such personal liability. Notwithstanding anything to the contrary contained in
this Agreement, neither the negative capital account of any constituent member
or partner in Seller (or in any other constituent member or partner of Seller),
nor any obligation of any constituent member or partner in Seller (or in any
other constituent member or partner of Seller) to restore a negative capital
account or to contribute capital to Seller (or to any other constituent member
or partner of Seller), shall at any time be deemed to be the property or an
asset of Seller or any such other constituent member or partner (and neither
Buyer nor any of its successors or assigns shall have any right to collect,
enforce or proceed against or with respect to any such negative capital account
or a member's or partner's obligation to restore or contribute).

                        10.2.3  The foregoing shall be in addition to, and not
in limitation of, any further limitation of liability that might otherwise apply
(whether by reason of Buyer's waiver, relinquishment or release of any
applicable rights or otherwise).

                        10.2.4  Notwithstanding anything herein to the contrary,
except in the case of fraud by either party, the liability of each party hereto
resulting from the breach or default by either party shall be limited to actual
damages incurred by the injured party and except in the case of fraud by either
party, the parties hereto hereby waive their rights to recover from the other
party consequential, punitive, exemplary, and speculative damages.

                        10.2.5  The provisions of this Section 10.2 shall
survive the Closing.

                10.3    Exhibits; Entire Agreement; Modification. All exhibits
                        ----------------------------------------
attached and referred to in this Agreement are hereby incorporated herein as if
fully set forth in (and shall be deemed to be a part of) this Agreement. This
Agreement contains the entire agreement between the parties respecting the
matters herein set forth and supersedes all prior agreements between the parties
hereto respecting such matters. This Agreement may not be modified or amended
except by written agreement signed by both parties.

                10.4    Time of the Essence. Time is of the essence of this
                        -------------------
Agreement. However, whenever action must be taken (including the giving of
notice or the delivery of documents) under this Agreement during a certain
period of time (or by a particular date) that ends (or occurs) on a non business
day, then such period (or date) shall be extended until the immediately
following business day. As used herein, "business day" means any day other than
a Saturday, Sunday or federal or Illinois state holiday.

                10.5    Interpretation. Section headings shall not be used in
                        --------------
construing this Agreement. Each party acknowledges that such party and its
counsel, after negotiation and consultation, have reviewed and revised this
Agreement. As such, the terms of this Agreement shall be fairly construed and
the usual rule of construction, to the effect that any ambiguities herein should
be resolved against the drafting party, shall not be employed in the
interpretation of this Agreement or any amendments, modifications or exhibits
hereto or thereto. The words "herein", "hereof", "hereunder", "hereby", "this
Agreement" and other similar references shall be construed to mean and include
this Agreement and all amendments and supplements hereto unless the context
shall clearly indicate or require otherwise. Whenever the words "including",
"include" or "includes" are used in this Agreement, they shall be interpreted in
a non-exclusive manner. Except as otherwise indicated, all Exhibit and Section
references in this Agreement shall be deemed to refer to the Exhibits and
Sections in this Agreement.

                                       25
<PAGE>

                10.6    Governing Law. This Agreement shall be construed and
                        -------------
enforced in accordance with the laws of the State of Illinois.

                10.7    Successors and Assigns. Buyer may not assign or transfer
                        ----------------------
its rights or obligations under this Agreement without the prior written consent
of Seller either directly or indirectly (whether by outright transfer, transfer
of ownership interests or otherwise); provided, however, Buyer may assign its
interest in this Agreement on or before the Closing Date to an entity in which
Buyer has direct or indirect control and has more than a 50% direct or indirect
ownership interest so long as Buyer gives Seller at least three (3) business
days advance written notice thereof and Buyer and the assignee execute and
deliver an assignment and assumption agreement in form reasonably satisfactory
to Seller. In the event of a transfer, the transferee shall assume in writing
all of the transferor's obligations hereunder, but such transferor shall not be
released from its obligations hereunder unless and until the Closing occurs. No
consent given by Seller to any transfer or assignment of Buyer's rights or
obligations hereunder shall be construed as a consent to any other transfer or
assignment of Buyer's rights or obligations hereunder. No transfer or assignment
in violation of the provisions hereof shall be valid or enforceable. Subject to
the foregoing, this Agreement and the terms and provisions hereof shall inure to
the benefit of and be binding upon the successors and assigns of the parties.
Seller acknowledges that certain items of tangible and/or intangible personal
property may need to be assigned to Buyer's operating lessee and the applicable
closing documents shall be modified accordingly as requested by Buyer including
through the use of separate bills of sale and assignments or otherwise as
reasonably requested by Buyer.

                10.8    Notices. Any notice which a party is required or may
                        -------
desire to give the other shall be in writing and may be sent by personal
delivery, by mail (either [i] by United States registered or certified mail,
return receipt requested, postage prepaid, or [ii] by Federal Express or similar
generally recognized overnight carrier regularly providing proof of delivery or
by telecopy (with a copy by mail), addressed as follows (subject to the right of
a party to designate a different address for itself by notice similarly given):

                        To Seller:
                        ---------

                        c/o Lodging Capital Partners, LLC
                        430 W. Erie Street
                        Suite 501
                        Chicago, IL  60610
                        Attention:       Bradley Falk
                        Telecopier:      (312) 229-1611
                        Telephone:       (312) 229-1600

                        With Copy To:
                        ------------

                        Greenberg Traurig, LLP
                        77 West Wacker Drive
                        Suite 2400
                        Chicago, IL 60601
                        Attention:       Laurence B. Dobkin
                        Telecopier:      (312) 456-8435
                        Telephone:       (312) 476-5036

                                       26
<PAGE>

                        And a copy to:

                        Westbrook Partners
                        1370 Avenue of the Americas
                        Suite 2800
                        New York, NY 10019
                        Attention:       Avi Banyasz
                        Telecopier:      (212) 849-8801
                        Telephone:       (212) 849-8800

                        And a copy to:

                        Walton Street Real Estate Fund IV, L.P.
                        c/o Walton Street Capital, L.L.C.
                        900 N. Michigan Avenue
                        Chicago, IL 60611
                        Attention:       Justin I. Leonard
                        Telecopier:      (312) 915-2881
                        Telephone:       (312) 915-2800

                        To Buyer:
                        --------

                        DiamondRock Hospitality Limited Partnership
                        6903 Rockledge Drive
                        Suite 800
                        Bethesda, Maryland  20817
                        Attention:  Michael D. Schecter
                        Telecopier:      (240) 744-1199
                        Telephone:       (240) 744-1170

                        With a copy to:
                        Akin Gump Strauss Hauer & Feld LLP
                        1700 Pacific Avenue
                        Suite 4100
                        Dallas, TX  75301
                        Attention:  Carl B. Lee, PC
                        Telecopier:      (214) 969-4343
                        Telephone:       (214) 969-2726

Any notice so given by mail shall be deemed to have been given as of the date of
delivery (whether accepted or refused) established by U.S. Post Office return
receipt or the overnight carrier's proof of delivery, as the case may be. Any
such notice not so given shall be deemed given upon receipt of the same by the
party to whom the same is to be given.

                10.9    Third Parties. Nothing in this Agreement, whether
                        -------------
expressed or implied, is intended to confer any rights or remedies under or by
reason of this Agreement on any person other than the parties hereto and their
respective successors and assigns, nor is anything in this Agreement intended to
relieve or discharge the obligation or liability of any third persons to any
party to this Agreement, nor shall any provision give any third parties any
right of subrogation or action over or against any party to this Agreement. This
Agreement is not intended to and does not create any third party beneficiary
rights whatsoever.

                                       27
<PAGE>

                10.10   ARBITRATION OF DISPUTES. ANY CONTROVERSY OR CLAIM
                        -----------------------
ARISING UNDER OR RELATING TO THE TERMS OF THIS AGREEMENT OR ANY OF THE EXHIBITS
ATTACHED TO IT, AND ANY PROCEEDINGS TO ENFORCE THIS AGREEMENT OR RIGHTS UNDER
THIS AGREEMENT AND ITS EXHIBITS OTHER THAN THE "EXCLUDED MATTERS" (AS
HEREINAFTER DEFINED) SHALL BE SETTLED BY ARBITRATION IN THE CITY OF CHICAGO,
ILLINOIS, IN ACCORDANCE WITH THE THEN EXISTING RULES ("RULES") OF PRACTICE AND
PROCEDURE OF THE JUDICIAL ARBITRATION & MEDIATION SERVICES ("JAMS"). ARBITRATION
SHALL BE INITIATED BY A WRITTEN DEMAND FOR ARBITRATION BY EITHER PARTY. THE
PARTIES SHALL USE GOOD FAITH EFFORTS TO SELECT A SINGLE ARBITRATOR WITHIN TEN
(10) DAYS OF SUCH REQUEST. IF THE PARTIES FAIL TO AGREE ON A SINGLE ARBITRATOR
DURING SUCH 10-DAY PERIOD, THEN EITHER PARTY MAY REQUEST THAT JAMS APPOINT AN
ARBITRATOR. AT THE TIME OF HIS OR HER APPOINTMENT, THE ARBITRATOR WILL BE
REQUESTED TO HOLD AN ARBITRATION HEARING WITHIN THIRTY (30) DAYS. AS SOON AS
PRACTICABLE AFTER SELECTION OF THE ARBITRATOR, THE ARBITRATOR SHALL DETERMINE A
REASONABLE ESTIMATE OF THE ANTICIPATED FEES AND COSTS OF THE ARBITRATOR, AND
SHALL RENDER A STATEMENT TO EACH PARTY SETTING FORTH SAID FEES AND COSTS.
THEREAFTER EACH PARTY SHALL, WITHIN TEN (10) DAYS OF RECEIPT OF SAID STATEMENT,
DEPOSIT ONE HALF OF SAID SUM WITH THE ARBITRATOR(S) TO BE APPLIED AGAINST SUCH
FEES AND COSTS (SUBJECT TO THE PROVISIONS OF THIS AGREEMENT). THE ARBITRATOR
SHALL HAVE THE RIGHT TO DETERMINE THE SCOPE OF HIS OR HER JURISDICTION (PROVIDED
THE ARBITRATOR IS BOUND TO THE PROVISIONS OF THIS AGREEMENT), THE EXTENT OF
DISCOVERY AND TO GRANT EQUITABLE RELIEF, INCLUDING, THE RIGHT TO INCLUDE IN ANY
AWARD AN ORDER TO A PARTY TO EXPUNGE ANY LIS PENDENS WHICH THE ARBITRATOR DEEMS
IMPROPER OR TO MAKE ANY CHANGES AS ARE NECESSARY TO AN IMPROPER LIS PENDENS
FILING. THE PREVAILING PARTY SHALL BE ENTITLED TO REASONABLE ATTORNEYS' FEES AND
OTHER REASONABLE COSTS INCURRED IN CONNECTION WITH THE ARBITRATION OR ANY OTHER
LITIGATION PLUS INTEREST ON THE AMOUNT OF ANY AWARD. JUDGMENT UPON THE AWARD
RENDERED BY THE ARBITRATOR MAY BE ENTERED IN ANY COURT HAVING JURISDICTION
THEREOF. AS USED HEREIN, "EXCLUDED MATTERS" MEANS ANY CONTROVERSY, CLAIM OR
PROCEEDING WHICH ARISES OR IS MADE OR FILED AFTER THE CLOSING OCCURS.

                10.11   Legal Costs. The parties hereto agree that they shall
                        -----------
pay directly any and all legal costs which they have incurred on their own
behalf in the preparation of this Agreement, all deeds and other agreements
pertaining to this transaction and that such legal costs shall not be part of
the Closing costs. In addition, if either Buyer or Seller brings any suit or
other proceeding, including an arbitration proceeding, with respect to the
subject matter or the enforcement of this Agreement, the prevailing party (as
determined by the court, agency, arbitrator or other authority before which such
suit or proceeding is commenced), in addition to such other relief as may be
awarded, shall be entitled to recover reasonable attorneys' fees, expenses and
costs of investigation actually incurred. The foregoing includes attorneys'
fees, expenses and costs of investigation (including those incurred in appellate
proceedings), costs incurred in establishing the right to indemnification, or in
any action or participation in, or in connection with, any case or proceeding
under Chapter 7, 11 or 13 of the Bankruptcy Code (11 United States Code Sections
101 et seq.), or any successor statutes. The provisions of this Section 10.11
shall survive the Closing and any termination of this Agreement.

                10.12   No Recordation. In no event shall this Agreement or any
                        --------------
document or other memorandum related to the subject matter of this Agreement
(other than a lis pendens giving notice of an arbitration or legal proceeding to
specifically enforce Seller's obligations under this Agreement) be recorded
without the consent of Seller.

                10.13   Counterparts. This Agreement may be executed in one or
                        ------------
more counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same document.

                10.14   Effectiveness. In no event shall any draft of this
                        -------------
Agreement create any obligation or liability, it being understood that this
Agreement shall be effective and binding only when a counterpart hereof has been
executed and delivered by each party hereto.

                10.15   Press Releases. Except for any disclosures required by
                        --------------
law or the Securities and Exchange Commission, including, without limitation,
Regulation FD, Seller and Buyer agree not to disclose or make any public
announcements with respect to the subject matter of this Agreement or the
existence of this Agreement without the consent of the other party. If either
party desires to issue a press release or other public announcement regarding
this Agreement or the transaction set forth herein, subject to the immediately
preceding sentence, such party shall obtain the approval of the other party,
which approval shall not be unreasonably withheld or delayed. The provisions of
this Section 10.15 shall survive the closing and any termination of this
Agreement.

                                       28
<PAGE>

                10.16   Indemnities.
                        -----------

                        10.16.1 Agreement to Indemnify. (i) Seller shall
                                ----------------------
indemnify and hold harmless Buyer and any partner, member, manager officer,
director, trustee, beneficiary, employee or agent of Buyer (collectively, the
"Buyer Indemnitees") from and against any and all obligations, claims, losses,
damages, liabilities, and expenses (including, without limitation, reasonable
attorneys' and accountants' fees and disbursements (collectively, "Damages") to
the extent arising out of (A) any loss or damage to property or injury to or
death of any person occurring on or about or in connection with the Property or
any portion thereof at any time or times prior to the Closing Date (other than
as to and excluding Damages of or to a Governmental Authority arising out of the
physical or environmental condition of the Property prior to the Closing Date
and other than as to Damages for remediation pertaining to the physical or
environmental condition of the Property prior to the Closing Date), or (B)
subject to the limitations set forth herein, a breach of any representation or
warranty made by Seller hereunder or in any certificate delivered by Seller
hereunder, and (ii) Purchaser shall indemnify and hold harmless Seller and any
partner, member, manager, officer, director, trustee, beneficiary, employee or
agent of Seller (collectively, the "Seller Indemnities") from and against any
and all Damages to the extent arising out of (A) any loss or damage to property
or injury to or death of any person occurring on or about the Property or any
portion thereof on or at any time or times after the Closing Date (other than as
to and excluding Damages of or to a Governmental Authority arising out of or
resulting from or relating to the physical or environmental condition of the
Property prior to the Closing Date and other than as to Damages for remediation
pertaining to the physical or environmental condition of the Property prior to
the Closing Date), or (B) subject to the limitations set forth herein, a breach
of any representation or warranty made by Purchaser hereunder or in any
certificate delivered by Purchaser hereunder. The provisions of this Section
10.16.1 shall survive the Closing and the termination of this Agreement.
Seller's liabilities under this Section 10.16 shall not extend the Survival
Period stated in Section 7.3 hereof or exceed the Maximum Liability Amount
provided in Section 10.2.1 hereof, to the extent not covered by insurance.

                        10.16.2 Indemnification Procedure for Third Party
                                -----------------------------------------
Claims. In the case of any claim asserted by a third party which claim is
------
subject to indemnification by either party hereunder, ( a "Third-Party Claim"),
the party seeking indemnification (the "Indemnitee") shall notify the other
party (the "Indemnitor") promptly after has actual knowledge of any such
Third-Party Claim as to which indemnity may be sought (provided that failure to
so notify shall not affect the Indemnitor's obligations hereunder except to the
extent materially prejudiced by such failure), and Indemnitee shall permit the
Indemnitor, at its sole expense, to assume the defense of any such Third-Party
Claim, provided that Indemnitee may participate in such defense or
administration at Indemnitee's sole expense (provided, however, that if a
conflict of interest exists such that separate counsel must be engaged by
Indemnitee and the Indemnitor, the Indemnitor shall be responsible for the
reasonable fees and costs for such counsel for Indemnitee bug only for one
separate counsel for all Indemnitees).

                                       29
<PAGE>

The Indemnitor, in the defense of any such Third-Party Claim, shall not, except
with the consent of Indemnitee, which Indemnitee agrees will not be unreasonably
withheld, conditioned or delayed with respect to a monetary settlement, judgment
or relief, (a) consent to entry of any judgment or enter into any settlement
that provides for injunctive or other non-monetary relief against Indemnitee or
(b) pursue any course of defense of any such Third-Party Claim subject to
indemnification hereunder if Indemnitee shall reasonably and in good faith
determine that the conduct of such defense could be expected to adversely affect
in any material respect Indemnitee, its direct or indirect owners, the use of
the Property or Interest to which the Third-Party Claim relates. In addition, if
the Indemnitor obtains and desires to accept from a party to any such
Third-Party Claim an offer to settle the Third-Party Claim solely for an amount
certain, then Indemnitee agrees that if requested by the Indemnitor, Indemnitee
will, at its sole expense, assume defense of such Third-Party Claim and
thereafter the Indemnitor's obligation with respect to such Third-Party Claim
shall not exceed the costs of defense then incurred and the dollar amount of the
settlement the Indemnitor proposed to accept immediately prior to such
assumption by Indemnitee, it being agreed between Indemnitee and the Indemnitor
that Indemnitee will pay any greater amounts owing and bear any other
impositions in excess of those contemplated in the proposed settlement
arrangement. In the event that the Indemnitor does not accept the defense of any
matter as above provided, Indemnitee shall have the full right to defend against
any such Third-Party Claim or demand and shall be entitled to settle or agree to
pay in full such Third-Party Claim or demand, in its sole discretion. In any
event, the Indemnitor and Indemnitee shall cooperate in the defense of any
action or claim subject to this Agreement and each agrees to make its records
available to the other with respect to such defense as reasonably requested and
to the extent doing so does not compromise any claim of privilege or any other
defense available to it. Acceptance of the defense of any Third-Party Claim or
of the administration of any Third-Party Claim by the Indemnitor shall be
without prejudice to the Indemnitor's right to assert at any time before or
after accepting such defense or administration that it is not obligated to
provide an indemnity, either in whole or in part, with respect to such
Third-Party Claim. In the event that the Indemnitor asserts that it is not
obligated to provide an indemnity to Indemnitee with respect to a Third-Party
Claim, Indemnitee shall have the right to defend such Third-Party Claim, and if
the Indemnitor is adjudicated liable for indemnifying Indemnitee, the Indemnitor
shall reimburse Indemnitee for its out-of-pocket expenses in defending such
Third-Party Claim and all settlements and judgments reasonably incurred as a
result of such Third-Party Claim.

                        10.17   Holdback Escrow. At Closing, Seller hereby
                                ---------------
agrees that Escrow Holder shall holdback from Seller's proceeds an amount
("Holdback Amount") equal to Two Million Five Hundred Thousand Dollars
($2,500,000), which Holdback Amount shall be held in an interest bearing escrow
account ("Post-Closing Escrow") during the Survival Period. Upon the expiration
of the Survival Period, provided written notice has not been given to Escrow
Holder of a claim in connection with this Agreement or of the commencement of a
legal action relating to such claim by Buyer, Escrow Holder shall promptly
release the Holdback Amount to Seller. If however, any such claim has been
brought, the Holdback Amount shall remain with Escrow Holder until such time as
all such claims have been resolved; and the Holdback Amount, or portions
thereof, shall be paid as directed by Seller and Buyer or a final,
non-appealable court order and Escrow Holder shall make demand for payment of
any letter of credit substituted for cash as the Holdback Amount in order to
make such payment. The parties hereby agree that Seller may elect, at any time
during the Survival Period, to substitute a letter of credit payable in multiple
drafts at a bank or branch located in Chicago, Illinois, having a term of at
least one year, payable only on condition that Escrow Agent sends a sight draft,
the form and issuer of which letter of credit shall be reasonably acceptable to
Buyer. Unless and until the letter of credit is released to Seller in accordance
with this Section 10.17, if the letter of credit has not been renewed or
replaced by a substitute letter of credit satisfying the requirements of this
Section 10.17 at least sixty (60) days prior to its stated expiration, the
Escrow Agent shall immediately demand full payment of the letter of credit, and
the proceeds thereof then shall be held pursuant to this Section 10.17. The
parties acknowledge and agree that Escrow Agent's obligations to demand and
collect payment of the letter of credit shall be absolute and unconditional and
shall remain unaffected by any written notice, contrary instruction or other
protest by Seller. If such an election to substitute a letter of credit is made
by Seller subsequent to the Closing, Seller shall deposit the letter of credit
with Escrow Holder, Escrow Holder shall obtain written confirmation from Seller
that the letter of credit satisfies the requirements of this Section 10.17, and
thereafter, Escrow Holder shall promptly release the cash proceeds from the
Post-Closing Escrow to Seller.

                                       30
<PAGE>

        IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.

                                            SELLER:

                                            LCP-WB OPERATOR, LLC,
                                            a Delaware limited liability company

                                            By:
                                                  ------------------------------
                                            Name:
                                            Title:

                                            BUYER:

                                            DIAMONDROCK HOSPITALITY LIMITED
                                            PARTNERSHIP,
                                            a Delaware limited partnership

                                            By:
                                                  ------------------------------
                                            Name:
                                            Title:

                                       31

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