Document:

Exhibit
4.1

EXECUTION
COPY

JUNIOR SUBORDINATED
INDENTURE

between

MORGANS HOTEL GROUP CO.

MORGANS GROUP LLC

and

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,

as Trustee

Dated as of August 4, 2006

 

TABLE OF CONTENTS

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  Definitions and Other Provisions of General
  Application

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1.1.

  	
   

  	
  Definitions

  	
   

  	
  1

  
	
  SECTION 1.2.

  	
   

  	
  Compliance Certificate and Opinions

  	
   

  	
  11

  
	
  SECTION 1.3.

  	
   

  	
  Forms of Documents Delivered to Trustee

  	
   

  	
  11

  
	
  SECTION 1.4.

  	
   

  	
  Acts of Holders

  	
   

  	
  12

  
	
  SECTION 1.5.

  	
   

  	
  Notices, Etc. to Trustee and Company

  	
   

  	
  14

  
	
  SECTION 1.6.

  	
   

  	
  Notice to Holders; Waiver

  	
   

  	
  14

  
	
  SECTION 1.7.

  	
   

  	
  Effect of Headings and Table of Contents

  	
   

  	
  15

  
	
  SECTION 1.8.

  	
   

  	
  Successors and Assigns

  	
   

  	
  15

  
	
  SECTION 1.9.

  	
   

  	
  Separability Clause

  	
   

  	
  15

  
	
  SECTION 1.10.

  	
   

  	
  Benefits of Indenture

  	
   

  	
  15

  
	
  SECTION 1.11.

  	
   

  	
  Governing Law

  	
   

  	
  15

  
	
  SECTION 1.12.

  	
   

  	
  Submission to Jurisdiction

  	
   

  	
  15

  
	
  SECTION 1.13.

  	
   

  	
  Non-Business Days

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  Security Forms

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.1.

  	
   

  	
  Form of Security

  	
   

  	
  16

  
	
  SECTION 2.2.

  	
   

  	
  Restricted Legend

  	
   

  	
  20

  
	
  SECTION 2.3.

  	
   

  	
  Form of Trustee’s Certificate of Authentication

  	
   

  	
  22

  
	
  SECTION 2.4.

  	
   

  	
  Temporary Securities

  	
   

  	
  22

  
	
  SECTION 2.5.

  	
   

  	
  Definitive Securities

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  The Securities

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.1.

  	
   

  	
  Payment of Principal and Interest

  	
   

  	
  23

  
	
  SECTION 3.2.

  	
   

  	
  Denominations

  	
   

  	
  25

  
	
  SECTION 3.3.

  	
   

  	
  Execution, Authentication, Delivery and Dating

  	
   

  	
  25

  
	
  SECTION 3.4.

  	
   

  	
  Global Securities

  	
   

  	
  26

  
	
  SECTION 3.5.

  	
   

  	
  Registration, Transfer and Exchange Generally

  	
   

  	
  28

  
	
  SECTION 3.6.

  	
   

  	
  Mutilated, Destroyed, Lost and Stolen Securities

  	
   

  	
  30

  
	
  SECTION 3.7.

  	
   

  	
  Persons Deemed Owners

  	
   

  	
  31

  
	
  SECTION 3.8.

  	
   

  	
  Cancellation

  	
   

  	
  31

  
	
  SECTION 3.9.

  	
   

  	
  Reserved

  	
   

  	
  31

  
	
  SECTION 3.10.

  	
   

  	
  Reserved

  	
   

  	
  31

  
	
  SECTION 3.11.

  	
   

  	
  Agreed Tax Treatment

  	
   

  	
  31

  
	
  SECTION 3.12.

  	
   

  	
  CUSIP Numbers

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  Satisfaction and Discharge

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.1.

  	
   

  	
  Satisfaction and Discharge of Indenture

  	
   

  	
  32

  
	
  SECTION 4.2.

  	
   

  	
  Application of Trust Money

  	
   

  	
  33

  
						

 i
 

 

 

	
  ARTICLE V

  	
  Remedies

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.1.

  	
   

  	
  Events of Default

  	
   

  	
  33

  
	
  SECTION 5.2.

  	
   

  	
  Acceleration of Maturity; Rescission and Annulment

  	
   

  	
  34

  
	
  SECTION 5.3.

  	
   

  	
  Collection of Indebtedness and Suits for Enforcement
  by Trustee

  	
   

  	
  35

  
	
  SECTION 5.4.

  	
   

  	
  Trustee May File Proofs of Claim

  	
   

  	
  36

  
	
  SECTION 5.5.

  	
   

  	
  Trustee May Enforce Claim Without Possession of
  Securities

  	
   

  	
  36

  
	
  SECTION 5.6.

  	
   

  	
  Application of Money Collected

  	
   

  	
  36

  
	
  SECTION 5.7.

  	
   

  	
  Limitation on Suits

  	
   

  	
  37

  
	
  SECTION 5.8.

  	
   

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

  	
   

  	
  38

  
	
  SECTION 5.9.

  	
   

  	
  Restoration of Rights and Remedies

  	
   

  	
  38

  
	
  SECTION 5.10.

  	
   

  	
  Rights and Remedies Cumulative

  	
   

  	
  38

  
	
  SECTION 5.11.

  	
   

  	
  Delay or Omission Not Waiver

  	
   

  	
  38

  
	
  SECTION 5.12.

  	
   

  	
  Control by Holders

  	
   

  	
  39

  
	
  SECTION 5.13.

  	
   

  	
  Waiver of Past Defaults

  	
   

  	
  39

  
	
  SECTION 5.14.

  	
   

  	
  Undertaking for Costs

  	
   

  	
  39

  
	
  SECTION 5.15.

  	
   

  	
  Waiver of Usury, Stay or Extension Laws

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  The Trustee

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.1.

  	
   

  	
  Corporate Trustee Required

  	
   

  	
  40

  
	
  SECTION 6.2.

  	
   

  	
  Certain Duties and Responsibilities

  	
   

  	
  40

  
	
  SECTION 6.3.

  	
   

  	
  Notice of Defaults

  	
   

  	
  42

  
	
  SECTION 6.4.

  	
   

  	
  Certain Rights of Trustee

  	
   

  	
  43

  
	
  SECTION 6.5.

  	
   

  	
  May Hold Securities

  	
   

  	
  44

  
	
  SECTION 6.6.

  	
   

  	
  Compensation; Reimbursement; Indemnity

  	
   

  	
  45

  
	
  SECTION 6.7.

  	
   

  	
  Resignation and Removal; Appointment of Successor

  	
   

  	
  46

  
	
  SECTION 6.8.

  	
   

  	
  Acceptance of Appointment by Successor

  	
   

  	
  46

  
	
  SECTION 6.9.

  	
   

  	
  Merger, Conversion, Consolidation or Succession to
  Business

  	
   

  	
  47

  
	
  SECTION 6.10.

  	
   

  	
  Not Responsible for Recitals or Issuance of
  Securities

  	
   

  	
  47

  
	
  SECTION 6.11.

  	
   

  	
  Appointment of Authenticating Agent

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  Holder’s Lists and Reports by Company

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.1.

  	
   

  	
  Company to Furnish Trustee Names and Addresses of
  Holders

  	
   

  	
  49

  
	
  SECTION 7.2.

  	
   

  	
  Preservation of Information, Communications to
  Holders

  	
   

  	
  49

  
	
  SECTION 7.3.

  	
   

  	
  Reports by Company

  	
   

  	
  50

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  Consolidation, Merger, Conveyance, Transfer or Lease

  	
   

  	
  50

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8.1.

  	
   

  	
  Company May Consolidate, Etc., Only on Certain Terms

  	
   

  	
  50

  
	
  SECTION 8.2.

  	
   

  	
  Successor Company Substituted

  	
   

  	
  51

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  Supplemental Indentures

  	
   

  	
  52

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9.1.

  	
   

  	
  Supplemental Indentures without Consent of Holders

  	
   

  	
  52

  
	
  SECTION 9.2.

  	
   

  	
  Supplemental Indentures with Consent of Holders

  	
   

  	
  52

  
						

 ii
 

 

 

	
  SECTION 9.3.

  	
   

  	
  Execution of Supplemental Indentures

  	
   

  	
  53

  
	
  SECTION 9.4.

  	
   

  	
  Effect of Supplemental Indentures

  	
   

  	
  54

  
	
  SECTION 9.5.

  	
   

  	
  Reference in Securities to Supplemental Indentures

  	
   

  	
  54

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
  Covenants

  	
   

  	
  54

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10.1.

  	
   

  	
  Payment of Principal, Premium, if any, and Interest

  	
   

  	
  54

  
	
  SECTION 10.2.

  	
   

  	
  Money for Security Payments to be Held in Trust

  	
   

  	
  54

  
	
  SECTION 10.3.

  	
   

  	
  Statement as to Compliance

  	
   

  	
  55

  
	
  SECTION 10.4.

  	
   

  	
  Calculation Agent

  	
   

  	
  55

  
	
  SECTION 10.5.

  	
   

  	
  Additional Tax Sums

  	
   

  	
  56

  
	
  SECTION 10.6.

  	
   

  	
  Additional Covenants

  	
   

  	
  57

  
	
  SECTION 10.7.

  	
   

  	
  Waiver of Covenants

  	
   

  	
  57

  
	
  SECTION 10.8.

  	
   

  	
  Treatment of Securities

  	
   

  	
  58

  
	
  SECTION 10.9.

  	
   

  	
  Financial Covenants

  	
   

  	
  58

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
  Redemption of Securities

  	
   

  	
  58

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 11.1.

  	
   

  	
  Optional Redemption

  	
   

  	
  58

  
	
  SECTION 11.2.

  	
   

  	
  Special Event Redemption

  	
   

  	
  58

  
	
  SECTION 11.3.

  	
   

  	
  Election to Redeem; Notice to Trustee

  	
   

  	
  59

  
	
  SECTION 11.4.

  	
   

  	
  Selection of Securities to be Redeemed

  	
   

  	
  59

  
	
  SECTION 11.5.

  	
   

  	
  Notice of Redemption

  	
   

  	
  59

  
	
  SECTION 11.6.

  	
   

  	
  Deposit of Redemption Price

  	
   

  	
  60

  
	
  SECTION 11.7.

  	
   

  	
  Payment of Securities Called for Redemption

  	
   

  	
  60

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XII

  	
  Subordination of Securities

  	
   

  	
  61

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 12.1.

  	
   

  	
  Securities Subordinate to Senior Debt

  	
   

  	
  61

  
	
  SECTION 12.2.

  	
   

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

  	
   

  	
  61

  
	
  SECTION 12.3.

  	
   

  	
  Payment Permitted If No Default

  	
   

  	
  63

  
	
  SECTION 12.4.

  	
   

  	
  Subrogation to Rights of Holders of Senior Debt

  	
   

  	
  63

  
	
  SECTION 12.5.

  	
   

  	
  Provisions Solely to Define Relative Rights

  	
   

  	
  63

  
	
  SECTION 12.6.

  	
   

  	
  Trustee to Effectuate Subordination

  	
   

  	
  64

  
	
  SECTION 12.7.

  	
   

  	
  No Waiver of Subordination Provisions

  	
   

  	
  64

  
	
  SECTION 12.8.

  	
   

  	
  Notice to Trustee

  	
   

  	
  64

  
	
  SECTION 12.9.

  	
   

  	
  Reliance on Judicial Order or Certificate of
  Liquidating Agent

  	
   

  	
  65

  
	
  SECTION 12.10.

  	
   

  	
  Trustee Not Fiduciary for Holders of Senior Debt

  	
   

  	
  65

  
	
  SECTION 12.11.

  	
   

  	
  Rights of Trustee as Holder of Senior Debt;
  Preservation of Trustee’s Rights

  	
   

  	
  65

  
	
  SECTION 12.12.

  	
   

  	
  Article Applicable to Paying Agents

  	
   

  	
  66

  
						

 iii
 

 

SCHEDULES

Schedule A–Determination of LIBOR

Exhibit A–Form of Officer’s Financial Certificate

 iv

 

JUNIOR SUBORDINATED
INDENTURE, dated as of August 4, 2006, between MORGANS  HOTEL GROUP CO., a Delaware corporation (the
“Guarantor”), MORGANS  GROUP LLC, a Delaware limited liability
company (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 Guarantor, on behalf of the Company, has
duly authorized the execution and delivery of this Indenture to provide for the
issuance of the Company’s unsecured junior subordinated notes (the “Securities”) issued to evidence loans made to the Company of
the proceeds from the issuance by MHG Capital 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:

PFor 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.

 2
 

 

“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.

“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, its President, its Chief Financial
Officer, its Treasurer, a Vice President, 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—MHG Capital Trust I.  Initially,
all notices and correspondence shall be addressed to Mudassir Mohamed,
telephone number (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

 3
 

 

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 (except as provided in clause
(b)(iii) below), the sum of the following amounts attributable to such period:

(a)           Net Income,
plus

(b)           the sum of
(i) Interest Charges, (ii) charges and expenses for taxes, (iii) depreciation
and amortization expense (including amortization of financing costs and debt
discounts regardless of whether such amounts are included in Interest Charges),
(iv) other non-cash charges and expenses (including non-cash charges resulting
from accounting changes), (v) any losses arising outside of the ordinary course
of business which have been included in the determination of Net Income, (vi)
other non-operating expenses, (vii) all amounts attributable to equity in
income/loss of unconsolidated subsidiaries, and (viii) the amount of cash
dividends or cash distributions actually paid to the Guarantor or a subsidiary
of the Guarantor from a Person in which the Guarantor owns an Equity Interest, minus

(c)           the sum of
(i) the income of Clift Holdings LLC, a Delaware limited liability company,
(ii) any gains arising outside of the ordinary course of business which have
been included in the determination of Net Income, and (iii) other non-operating
income,

 4
 

 

all as determined on a consolidated basis for the
Guarantor and its consolidated subsidiaries.

“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).

“Fixed Charge
Coverage” means the ratio of (i) EBITDA to (ii) Interest Charges for
the period of four consecutive fiscal quarters of the Guarantor ended on the
last day of the fiscal quarter of the Guarantor most recently ended prior to
such date; provided that for purposes of calculating Fixed Charge Coverage for
(1) the four consecutive fiscal quarters of the Guarantor ended June 30, 2006,
EBITDA and Fixed Charges for the period from April 1, 2006 to and including
June 30, 2006 shall be used, (2) the four consecutive fiscal quarters of the
Guarantor ended September 30, 2006, EBITDA and Fixed Charges for the period
from April 1, 2006 to and including September 30, 2006 shall be used, and (3)
the four consecutive fiscal quarters ended December 31, 2006, EBITDA and Fixed
Charges for the period from April 1, 2006 to and including December 31, 2006
shall be used.

“Fixed Rate Period”
shall have the meaning in the form of Security set forth in Section 2.1.

“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.

“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

 5
 

 

received by the custodian in respect of the Government
Obligation or the specific payment of principal or interest evidenced by such
depositary receipt.

“Guarantor” means Morgans Hotel Group Co., a Delaware
corporation.

“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 Charges” means, for any period,
the excess of (a) the sum of interest expense (including imputed interest
expense in respect of capital lease obligations) which, in accordance with
GAAP, would be included on a consolidated income statement for the Guarantor
and its consolidated subsidiaries as interest expense incurred for such period,
including, without duplication, any fixed financing charges for preferred
distributions and capital leases of the Guarantor and its consolidated
subsidiaries, as determined in accordance with GAAP, over (b) the sum of (i) to
the extent included in clause (a) above, interest expense (including imputed
interest expense in respect of capital lease obligations) for Clift Holdings
LLC, a Delaware limited liability company, (ii) to the extent included in
clause (a) above, accrued interest payable in kind, and (iii) the minority interest
share of the amounts included in clause (a) above.

“Interest Payment Date” means
January 30, April 30, July 30 and
October 30 of each year, commencing on October 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.

 6
 

 

“Maturity” means,
when used with respect to any Security, 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) before preferred
distributions of the Guarantor and its consolidated subsidiaries for such
period, as determined in accordance with GAAP.

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

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

“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

 7
 

 

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.

“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.

 8
 

 

“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.

“Rights Plan” means
a plan of the Company providing for the issuance by the Company to all holders
of its Equity Interests of rights entitling the holders thereof to subscribe
for or purchase Equity Interests or any class or series of Equity Interests in
the Company which rights (i) are deemed to be transferred with such Equity
Interests and (ii) are also issued in respect of future issuances of such
Equity Interests, in each case until the occurrence of a specified event or events.

“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 October 30, 2036.

 9
 

 

“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 or (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.  Unless otherwise expressly
provided, all references herein to a “Subsidiary” shall mean a Subsidiary of
the Company.

“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.

“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.

 10
 

 

“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. It is agreed that for purposes of this definition and Section
10.9(b), Unsecured Debt shall not include 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 Officer’s 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

 11
 

 

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, Officer’s
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.

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.

 12
 

 

(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.

 13

 

(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 475 Tenth Avenue, New York, NY 10018 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.

 14
 

 

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.

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 Sections 5.2, 5.8,
5.9, 5.11, 5.13, 9.2 and 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 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.

 15
 

 

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.

ARTICLE II

SECURITY FORMS

SECTION 2.1.                Form of Security.

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

MORGANS GROUP LLC

Junior Subordinated Note
due 2036

	
  No.                  

  	
   

  	
  $                   

  

 

Morgans Group LLC, a limited liability company
organized and existing under the laws of Delaware (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 MHG Capital
Trust I, or registered assigns, the principal sum of Fifty Million One Hundred
Thousand Dollars ($50,100,000) 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 October 30,
2036.  The Company further promises to
pay interest on said principal sum from August 4, 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 October 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 fixed rate equal to 8.676% per annum through
the interest payment date on October 30, 2016 (“Fixed Rate Period”) and
thereafter at a variable rate
equal to LIBOR plus 3.25% 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

 16
 

 

overdue principal, premium, if any, or Additional Tax
Sums and any overdue installment of interest shall bear Additional Interest at
a fixed rate equal to 8.676% through the interest payment date on October 30,
2016 and thereafter at a variable rate equal to LIBOR plus 3.25% 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.

During the Fixed Rate
Period, the amount of interest payable shall be computed on the basis of a
360-day year of twelve 30-day months and the amount payable for any partial
period shall be computed on the basis of the number of days elapsed in a
360-day year of twelve 30-day months. 
Upon expiration of the Fixed Rate Period, the amount of interest payable
for any interest payment period will be computed on the basis of a 360-day year
and the actual number of days elapsed in the relevant interest period.  The interest so payable, and
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

 17
 

 

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 August 4, 2006 (the
“Indenture”), between Morgans
Hotel Group Co., 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
August 4, 2006 (as modified, amended or supplemented from time to time, the “Trust Agreement”), relating to MHG Capital
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 October 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 three percent (103%) of the principal amount hereof,
together, in the case of any such redemption, with accrued interest, including
any Additional Interest, through but excluding the date fixed as the Redemption
Date.

In the event of redemption of this Security in part
only, a new Security or Securities for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.  If less than all the Securities are to be
redeemed, the particular Securities to

 18
 

 

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

 19
 

 

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 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                    ,
20   .

	
   

  	
  MORGANS GROUP LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Morgans Hotel
  Group Co., its managing

  member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					

 

SECTION 2.2.                Restricted Legend.

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

“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

 20
 

 

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, (II) TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER”
(AS DEFINED IN RULE 144A OF THE SECURITIES ACT) AND A “QUALIFIED PURCHASER” (AS
DEFINED IN SECTION 2(a)(51) OF THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED),
(III) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
REGULATION S UNDER THE SECURITIES ACT, (IV) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR (V) PURSUANT TO ANOTHER
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, AND (B) THE HOLDER WILL
NOTIFY ANY PURCHASER OF ANY SECURITIES FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE.

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.

 21
 

 

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:

  	
  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

 22
 

 

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.

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 fixed rate equal to 8.676% per annum
through the interest payment date on October 30, 2016 and thereafter at a
variable rate of LIBOR plus 3.25% 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
fixed rate equal to 8.676% per annum through the interest payment date on
October 30, 2016 and thereafter at a variable rate
of LIBOR plus 3.25% 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

 23
 

 

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.  During the Fixed
Rate Period, the amount of interest payable shall be computed on the basis of a
360-day year of twelve 30-day months and the amount payable for any partial
period shall be computed on the basis of the number of days elapsed in a
360-day year of twelve 30-day months. 
Upon expiration of the Fixed Rate Period,

 24
 

 

the amount of interest payable for any interest
payment period will be computed 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 Fifty Million One Hundred Thousand Dollars
($50,100,000) 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

 25
 

 

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.

(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, 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

 26
 

 

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.

 27

 

(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

 28
 

 

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.

(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.

 29
 

 

(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.

 30
 

 

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.

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 United States 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.

 31
 

 

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

 32
 

 

(c)           the
Company has delivered to the Trustee an Officer’s 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(e) shall survive.

SECTION 4.2.                Application of Trust Money.

Subject to the provisions of Section 10.2(d),
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.

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 thirty three and a third percent
(33-1/3%) 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;

 33
 

 

(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 thirty three and a third percent
(33-1/3%) 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 thirty three and a third percent (33-1/3%) 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 thirty three and a third percent (33-1/3%) 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

 34
 

 

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.

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

 35
 

 

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:

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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.

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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.

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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 made 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

 39
 

 

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.

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

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(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); 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

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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 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,

 43
 

 

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 Officer’s 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

 44
 

 

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.

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 trust 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,

 45
 

 

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
its 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

 46
 

 

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.

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

 47
 

 

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:

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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:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Authorized Signatory

  

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.

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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) hereof.

(b)           If
the Guarantor is no longer subject to the reporting requirements of the
Exchange Act, the Guarantor shall furnish to each of (i) the Trustee and (ii)
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 upon written notice to
the Company) 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 Guarantor not later than
forty-five (45) days after the end of each of the first three fiscal quarters
of each fiscal year of the Guarantor and not later than ninety (90) days after
the end of each fiscal year of the Guarantor.

(c)           If
the Guarantor 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 Guarantor 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 Guarantor 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 Guarantor 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.

ARTICLE VIII

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

SECTION 8.1.                Company May Consolidate, Etc., Only on
Certain Terms.

The Company shall not consolidate with or merge into
any other Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, and no Person shall consolidate
with or merge into the Company or convey, transfer or lease its properties and
assets substantially as an entirety to the Company, unless:

 50
 

 

(a)           if
the Company shall consolidate with or merge into another Person or convey,
transfer or lease its properties and assets substantially as an entirety to any
Person, the entity formed by such consolidation or into which the Company is
merged or the Person that acquires by conveyance or transfer, or that leases, the
properties and assets of the Company substantially as an entirety shall be an
entity organized and existing under the laws of the United States of America or
any State or Territory thereof or the District of Columbia and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Trustee, in form reasonably satisfactory to the Trustee, the due and punctual
payment of the principal of and any premium and interest (including any
Additional Interest) on all the Securities and the performance of every
covenant of this Indenture on the part of the Company to be performed or
observed;

(b)           immediately
after giving effect to such transaction, no Event of Default, and no event
that, after notice or lapse of time, or both, would constitute an Event of
Default, shall have happened and be continuing; and

(c)           the
Company has delivered to the Trustee an Officer’s Certificate and an Opinion of
Counsel, each stating that such consolidation, merger, conveyance, transfer or
lease and, if a supplemental indenture is required in connection with such
transaction, any such supplemental indenture comply with this Article VIII
and that all conditions precedent herein provided for relating to such
transaction have been complied with; and the Trustee may rely upon such Officer’s
Certificate and Opinion of Counsel as conclusive evidence that such transaction
complies with this Section 8.1.

SECTION 8.2.                Successor Company Substituted.

(a)           Upon
any consolidation or merger by the Company with or into any other Person, or
any conveyance, transfer or lease by the Company of its properties and assets
substantially as an entirety to any Person in accordance with Section 8.1
and the execution and delivery to the Trustee of the supplemental indenture
described in Section 8.1(a), the successor entity formed by such
consolidation or into which the Company is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor Person had been named as the Company herein;
and in the event of any such conveyance or transfer, following the execution
and delivery of such supplemental indenture, the Company shall be discharged
from all obligations and covenants under the Indenture and the Securities.

(b)           Such
successor Person may cause to be executed, and may issue either in its own name
or in the name of the Company, any or all of the Securities issuable hereunder
that theretofore shall not have been signed by the Company and delivered to the
Trustee; and, upon the order of such successor Person instead of the Company
and subject to all the terms, conditions and limitations in this Indenture
prescribed, the Trustee shall authenticate and shall deliver any Securities
that previously shall have been signed and delivered by the officers of the
Company to the Trustee for authentication, and any Securities that such
successor Person thereafter shall cause to be executed and delivered to the
Trustee on its behalf.  All the
Securities so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Securities theretofore or thereafter issued in
accordance with the terms of this Indenture.

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(c)           In
case of any such consolidation, merger, sale, conveyance or lease, such changes
in phraseology and form may be made in the Securities thereafter to be issued
as may be appropriate to reflect such occurrence.

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 (b) 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 (e)
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 (f) 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

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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 Officer’s 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

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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
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.

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 10:00 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.

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(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 and twenty (120) days after the end of each fiscal year of the Company
ending after the date hereof, an Officer’s 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

 55
 

 

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 or
(ii) make any payment of principal of or any interest or premium, if any, on or
repay, repurchase or redeem any debt securities of the Company that rank pari passu in all respects with or junior
in interest to the Securities (other than (a) repurchases, redemptions or
other acquisitions of Equity Interests in connection with any employment
contract, benefit plan or other similar arrangement with or for the benefit of
one or more employees, officers, directors or consultants or in connection with
the issuance of Equity Interests (or securities convertible into or exercisable
for such Equity Interests) as consideration in a transaction entered into prior
to the Event of Default, (b) as a result of any exchange or conversion of
any class or series of  Equity Interests
or indebtedness for any class or series of Equity Interests or indebtedness,
(c) the purchase of fractional interests in Equity Interests, and
(d) any dividend in the form of Equity Interests, warrants, options or
other rights where the dividend Equity Interests or the Equity Interests
issuable upon exercise of such warrants, options or other rights is the same
Equity Interest as that on which the dividend is being paid or ranks pari passu with or junior to such Equity Interests and any
cash payments in lieu of fractional shares issued in connection therewith).

(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.

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.

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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 and that no withholding is
required 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.

The Guarantor shall fully perform and satisfy the
following financial covenants:

(a)           The
Guarantor shall not permit the Fixed Charge Coverage, in each case for any
period of four consecutive fiscal quarters, to be less than 1.4 to 1.

(b)           The
Guarantor shall not, and shall not permit any subsidiary to, for a period of
six (6) months from August 4, 2006, directly or indirectly, create, incur,
assume, guarantee, have outstanding, or otherwise become or remain directly or
indirectly liable with respect to any (i) Unsecured Debt that is pari passu
with or subordinated to the Securities, or (ii) any Unsecured Debt issued to
(directly or indirectly) an issuer of trust preferred securities.

ARTICLE XI

REDEMPTION OF SECURITIES

SECTION 11.1.              Optional Redemption.

The Company may, at its option, on any Interest
Payment Date, on or after October 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 October 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 three percent (103%) 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”).

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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 forty-five (45)
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 Officer’s 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 thirtieth (30th) 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:

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(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.

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.

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(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.

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.  Notwithstanding
anything herein to the contrary, the Securities shall be senior to the trade
debt of the Company incurred in the ordinary course of business.

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 on any Senior
Debt (following any grace period, if applicable) upon written notice of such
default to the Company by the holders of such Senior Debt or any trustee, agent
or representative 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

 61
 

 

(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 (and each trustee, agent or representative for
holders 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 or
representative 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.

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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.

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

 63
 

 

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),

 64
 

 

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).  With
respect to any Senior Debt that is a syndicated loan, all rights of the holders
of such Senior Debt (including, without limitation, the rights to give and
receive notices) shall be taken or exercised on behalf of the holders of such
Senior Debt by an administrative agent for such holders or an equivalent
party.  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.

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

 65
 

 

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.

* *
* *

 66
 

 

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

	
  

  	
  MORGANS HOTEL GROUP CO.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
    Name: Marc Gordon

  
	
   

  	
   

  	
    Title: 
  Chief Investment Officer and Executive

  
	
   

  	
   

  	
  Vice President
  of Capital Markets

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MORGANS GROUP LLC

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Morgans Hotel Group Co., its managing

  member

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Marc
  Gordon

  	
   

  
	
   

  	
   

  	
   

  	
  Title:  Chief Investment Officer and

  	
   

  
	
   

  	
   

  	
   

  	
  Executive Vice
  President of Capital

  
	
   

  	
   

  	
   

  	
  Markets

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,

  not in its individual capacity, but solely as Trustee

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
    Name:

  	
   

  
	
   

  	
   

  	
   

  	
    Title:

  	
   

  
							

 

 67

 

Schedule
A

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 after the expiration of the Fixed Rate
Period (each such day, a “LIBOR
Determination Date”), LIBOR for any given security shall for the
following interest payment period equal the rate, as obtained by the
Calculation Agent from Bloomberg Financial Markets Commodities News, for three-month Eurodollar deposits that
appears on Dow Jones Telerate Page 3750 (as defined in the International Swaps
and Derivatives Association, Inc.  2000
Interest Rate and Currency Exchange Definitions), or such other page as may
replace such Page 3750, as of 11:00 a.m. (London time) on such LIBOR
Determination Date.

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

(3) As used herein: 
“Reference Banks” means
four major banks in the London interbank market selected by the Calculation
Agent; and “LIBOR Business Day”
means a day on which commercial banks are open for business (including dealings
in foreign exchange and foreign currency deposits) in London.

 1

 

Form of Officer’s
Financial Certificate

The undersigned, the [Chairman/Vice Chairman/Chief
Executive Officer/President/ Vice President/Chief
Financial Officer/Treasurer/Assistant Treasurer] of Morgans Hotel Group Co.,
hereby certifies, pursuant to Section 7.3(b) of the Junior Subordinated
Indenture, dated as of August 4, 2006, among Morgans Hotel Group Co. (the “Guarantor”),
Morgans Group LLC (the “Company”) and JPMorgan Chase Bank, National
Association, as trustee, that:

[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 Guarantor 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 Guarantor and its consolidated subsidiaries
for the fiscal quarter ended [date], 20   .]

The financial statements fairly present in all
material respects, in accordance with U.S. 
generally accepted accounting principles (“GAAP”), the financial
position of the Guarantor and its consolidated subsidiaries, and the results of
operations and changes in financial condition as of the date, and for the
[quarterly] [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 Guarantor 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 Guarantor has
taken, is taking, or proposes to take with respect to each such condition or
event.]

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

[Insert any exceptions by listing, 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
Guarantor’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   .

	
   

  	
  MORGANS HOTEL GROUP CO.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   Name:

  
	
   

  	
   

  	
   Title:

  
	
   

  	
   

  
	
   

  	
  Morgans Hotel
  Group Co.

  
	
   

  	
  475 Tenth Avenue

  
	
   

  	
  New York, NY
  10018

  
	
   

  	
  (212) 277-4260Exhibit 4.2

EXECUTION COPY

 

AMENDED AND RESTATED
TRUST AGREEMENT

among

MORGANS GROUP LLC,

AS DEPOSITOR

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,

AS PROPERTY TRUSTEE

CHASE BANK USA, NATIONAL ASSOCIATION,

AS DELAWARE TRUSTEE

AND

THE ADMINISTRATIVE TRUSTEES NAMED HEREIN,

AS ADMINISTRATIVE TRUSTEES

 

DATED AS OF AUGUST 4, 2006

 

MHG CAPITAL TRUST I

 

TABLE OF CONTENTS

	
  Clause

  	
   

  	
   

  	
   

  	
  Page

  
	
  ARTICLE I.

  	
  Defined Terms

  	
   

  	
  1

  
	
  SECTION 1.1.

  	
  Definitions

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II.

  	
  The Trust

  	
   

  	
  11

  
	
  SECTION 2.1.

  	
  Name

  	
   

  	
  11

  
	
  SECTION 2.2.

  	
  Office of the Delaware Trustee; Principal Place of
  Business

  	
   

  	
  11

  
	
  SECTION 2.3.

  	
  Initial Contribution of Trust Property; Fees, Costs
  and Expenses

  	
   

  	
  11

  
	
  SECTION 2.4.

  	
  Purposes of Trust

  	
   

  	
  11

  
	
  SECTION 2.5.

  	
  Authorization to Enter into Certain Transactions

  	
   

  	
  12

  
	
  SECTION 2.6.

  	
  Assets of Trust

  	
   

  	
  14

  
	
  SECTION 2.7.

  	
  Title to Trust Property

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III.

  	
  Payment Account; Paying Agents

  	
   

  	
  15

  
	
  SECTION 3.1.

  	
  Payment Account

  	
   

  	
  15

  
	
  SECTION 3.2.

  	
  Appointment of Paying Agents

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV.

  	
  Distributions; Redemption

  	
   

  	
  16

  
	
  SECTION 4.1.

  	
  Distributions

  	
   

  	
  16

  
	
  SECTION 4.2.

  	
  Redemption

  	
   

  	
  17

  
	
  SECTION 4.3.

  	
  Subordination of Common Securities

  	
   

  	
  20

  
	
  SECTION 4.4.

  	
  Payment Procedures

  	
   

  	
  20

  
	
  SECTION 4.5.

  	
  Withholding Tax

  	
   

  	
  21

  
	
  SECTION 4.6.

  	
  Tax Returns and Other Reports

  	
   

  	
  21

  
	
  SECTION 4.7.

  	
  Payment of Taxes, Duties, Etc. of the Trust

  	
   

  	
  21

  
	
  SECTION 4.8.

  	
  Payments under Indenture or Pursuant to Direct
  Actions

  	
   

  	
  22

  
	
  SECTION 4.9.

  	
  Exchanges

  	
   

  	
  22

  
	
  SECTION 4.10.

  	
  Calculation Agent

  	
   

  	
  22

  
	
  SECTION 4.11.

  	
  Certain Accounting Matters

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V.

  	
  Securities

  	
   

  	
  24

  
	
  SECTION 5.1.

  	
  Initial Ownership

  	
   

  	
  24

  
	
  SECTION 5.2.

  	
  Authorized Trust Securities

  	
   

  	
  24

  
	
  SECTION 5.3.

  	
  Issuance of the Common Securities; Subscription and
  Purchase of Notes

  	
   

  	
  24

  
	
  SECTION 5.4.

  	
  The Securities Certificates

  	
   

  	
  24

  
	
  SECTION 5.5.

  	
  Rights of Holders

  	
   

  	
  25

  
	
  SECTION 5.6.

  	
  Book-Entry Preferred Securities

  	
   

  	
  25

  
	
  SECTION 5.7.

  	
  Registration of Transfer and Exchange of Preferred
  Securities Certificates

  	
   

  	
  27

  
						

 

 

 

	
  SECTION 5.8.

  	
  Mutilated, Destroyed, Lost or Stolen Securities
  Certificates

  	
   

  	
  29

  
	
  SECTION 5.9.

  	
  Persons Deemed Holders

  	
   

  	
  29

  
	
  SECTION 5.10.

  	
  Cancellation

  	
   

  	
  30

  
	
  SECTION 5.11.

  	
  Ownership of Common Securities by Depositor

  	
   

  	
  30

  
	
  SECTION 5.12.

  	
  Restricted Legends

  	
   

  	
  30

  
	
  SECTION 5.13.

  	
  Form of Certificate of Authentication

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI.

  	
  Meetings; Voting; Acts of Holders

  	
   

  	
  33

  
	
  SECTION 6.1.

  	
  Notice of Meetings

  	
   

  	
  33

  
	
  SECTION 6.2.

  	
  Meetings of Holders of the Preferred Securities

  	
   

  	
  33

  
	
  SECTION 6.3.

  	
  Voting Rights

  	
   

  	
  34

  
	
  SECTION 6.4.

  	
  Proxies, Etc.

  	
   

  	
  34

  
	
  SECTION 6.5.

  	
  Holder Action by Written Consent

  	
   

  	
  34

  
	
  SECTION 6.6.

  	
  Record Date for Voting and Other Purposes

  	
   

  	
  34

  
	
  SECTION 6.7.

  	
  Acts of Holders

  	
   

  	
  35

  
	
  SECTION 6.8.

  	
  Inspection of Records

  	
   

  	
  36

  
	
  SECTION 6.9.

  	
  Limitations on Voting Rights

  	
   

  	
  36

  
	
  SECTION 6.10.

  	
  Acceleration of Maturity; Rescission of Annulment;
  Waivers of Past Defaults

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII.

  	
  Representations and Warranties

  	
   

  	
  39

  
	
  SECTION 7.1.

  	
  Representations and Warranties of the Property
  Trustee and the Delaware Trustee

  	
   

  	
  39

  
	
  SECTION 7.2.

  	
  Representations and Warranties of Depositor

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII.

  	
  The Trustees

  	
   

  	
  41

  
	
  SECTION 8.1.

  	
  Number of Trustees

  	
   

  	
  41

  
	
  SECTION 8.2.

  	
  Property Trustee Required

  	
   

  	
  41

  
	
  SECTION 8.3.

  	
  Delaware Trustee Required

  	
   

  	
  42

  
	
  SECTION 8.4.

  	
  Appointment of Administrative Trustees

  	
   

  	
  42

  
	
  SECTION 8.5.

  	
  Duties and Responsibilities of the Trustees

  	
   

  	
  43

  
	
  SECTION 8.6.

  	
  Notices of Defaults and Extensions

  	
   

  	
  44

  
	
  SECTION 8.7.

  	
  Certain Rights of Property Trustee

  	
   

  	
  44

  
	
  SECTION 8.8.

  	
  Delegation of Power

  	
   

  	
  47

  
	
  SECTION 8.9.

  	
  May Hold Securities

  	
   

  	
  47

  
	
  SECTION 8.10.

  	
  Compensation; Reimbursement; Indemnity

  	
   

  	
  47

  
	
  SECTION 8.11.

  	
  Resignation and Removal; Appointment of Successor

  	
   

  	
  48

  
	
  SECTION 8.12.

  	
  Acceptance of Appointment by Successor

  	
   

  	
  49

  
	
  SECTION 8.13.

  	
  Merger, Conversion, Consolidation or Succession to
  Business

  	
   

  	
  50

  
	
  SECTION 8.14.

  	
  Not Responsible for Recitals, Issuance of Securities
  or Representations

  	
   

  	
  50

  
	
  SECTION 8.15.

  	
  Property Trustee May File Proofs of Claim

  	
   

  	
  51

  
	
  SECTION 8.16.

  	
  Reports to the Property Trustee

  	
   

  	
  51

  
						

 

 ii
 

 

 

	
  ARTICLE IX.

  	
  Termination, Liquidation and Merger

  	
   

  	
  52

  
	
  SECTION 9.1.

  	
  Dissolution Upon Expiration Date

  	
   

  	
  52

  
	
  SECTION 9.2.

  	
  Early Termination

  	
   

  	
  52

  
	
  SECTION 9.3.

  	
  Termination

  	
   

  	
  52

  
	
  SECTION 9.4.

  	
  Liquidation

  	
   

  	
  53

  
	
  SECTION 9.5.

  	
  Mergers, Consolidations, Amalgamations or
  Replacements of Trust

  	
   

  	
  54

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X.

  	
  Miscellaneous Provisions

  	
   

  	
  56

  
	
  SECTION 10.1.

  	
  Limitation of Rights of Holders

  	
   

  	
  56

  
	
  SECTION 10.2.

  	
  Agreed Tax Treatment of Trust and Trust Securities

  	
   

  	
  56

  
	
  SECTION 10.3.

  	
  Amendment

  	
   

  	
  56

  
	
  SECTION 10.4.

  	
  Separability

  	
   

  	
  58

  
	
  SECTION 10.5.

  	
  Governing Law

  	
   

  	
  58

  
	
  SECTION 10.6.

  	
  Successors

  	
   

  	
  58

  
	
  SECTION 10.7.

  	
  Headings

  	
   

  	
  58

  
	
  SECTION 10.8.

  	
  Reports, Notices and Demands

  	
   

  	
  58

  
	
  SECTION 10.9.

  	
  Agreement Not to Petition

  	
   

  	
  59

  
	
  SECTION 10.10.

  	
  Counterparts

  	
   

  	
  59

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  Certificate of Trust of MHG Capital Trust I

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit B

  	
  Form of Common Securities Certificate

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit C

  	
  Form of Preferred Securities Certificate

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit D

  	
  Junior Subordinated Indenture

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit E

  	
  Form of Certificate to be Executed for Transferees

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Schedule A

  	
  Determination of LIBOR

  	
   

  	
   

  
					

 

 

 iii

THIS AMENDED AND RESTATED TRUST AGREEMENT, dated as of
August 4, 2006, among (i) Morgans Group LLC, a Delaware limited liability
company (including any successors or permitted assigns, the “Depositor”), (ii) JPMorgan Chase Bank, National Association,
a national banking association, as property trustee (in such capacity, the “Property Trustee”), (iii) Chase Bank USA, National
Association, a national banking association, as Delaware trustee (in such
capacity, the “Delaware Trustee”), (iv) Edward
Scheetz, an individual, Richard Szymanski, an individual and Marc S. Gordon, an
individual, each of whose address is c/o Morgans Hotel Group Co., 475 Tenth
Avenue, New York, NY 10018, as administrative trustees (in such capacities,
each an “Administrative Trustee” and, collectively, the “Administrative
Trustees” and, together with the Property Trustee and the Delaware Trustee, the
“Trustees”) and (v) the several Holders,
as hereinafter defined.

WITNESSETH

Whereas, the Depositor and the Delaware Trustee have
heretofore created a Delaware statutory trust pursuant to the Delaware
Statutory Trust Act by entering into a Trust Agreement, dated as of August 2,
2006 (the “Original Trust Agreement”), and by executing and filing with the
Secretary of State of the State of Delaware the Certificate of Trust,
substantially in the form attached as Exhibit A; and

Whereas, the Depositor and the Trustees desire to
amend and restate the Original Trust Agreement in its entirety as set forth
herein to provide for, among other things, (i) the issuance of the Common
Securities by the Trust to the Depositor, (ii) the issuance and sale of
the Preferred Securities by the Trust pursuant to the Purchase Agreement and
(iii) the acquisition by the Trust from the Depositor of all of the right,
title and interest in and to the Notes;

Now, Therefore, in consideration of the agreements and
obligations set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, each party, for the
benefit of the other parties and for the benefit of the Holders, hereby amends
and restates the Original Trust Agreement in its entirety and agrees as
follows:

ARTICLE I

DEFINED TERMS

SECTION 1.1.                                               Definitions.

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

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

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

 

(c)                                  all
accounting terms used but not defined herein have the meanings assigned to them
in accordance with United States generally accepted accounting principles;

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

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

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

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

“Act” has the
meaning specified in Section 6.7.

“Additional Interest”
has the meaning specified in Section 1.1 of the Indenture.

“Additional Interest Amount”
means, with respect to Trust Securities of a given Liquidation Amount and/or a
given period, the amount of Additional Interest paid by the Depositor on a Like
Amount of Notes for such period.

“Additional Taxes”
has the meaning specified in Section 1.1 of the Indenture.

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

“Administrative Trustee”
means each of the Persons identified as an “Administrative
Trustee” in the preamble to this Trust Agreement, solely in each such Person’s
capacity as Administrative Trustee of the Trust and not in such Person’s
individual capacity, or any successor Administrative Trustee appointed as
herein provided.

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

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

“Bankruptcy Event”
means, with respect to any Person:

 2
 

 

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

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

“Bankruptcy Laws”
means all Federal and state bankruptcy, insolvency, reorganization and other
similar laws, including the United States Bankruptcy Code.

“Book-Entry
Preferred Security” means a Preferred Security, the ownership and
transfers of which shall be made through book entries by a Depositary.

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

“Calculation Agent” has the meaning specified in Section
4.10.

“Closing Date”
has the meaning specified in the Purchase Agreement.

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

“Common Securities
Certificate” means a certificate evidencing ownership of Common
Securities, substantially in the form attached as Exhibit B.

 3
 

 

“Common Security”
means an undivided beneficial interest in the assets of the Trust, having a
Liquidation Amount of $1,000 and having the rights provided therefor in this
Trust Agreement.

“Corporate Trust
Office” means the principal office of the Property Trustee at which
any particular time its corporate trust business shall be administered, which
office at the date of this Trust Agreement is located at 600 Travis, 50th Floor, Houston, Texas 77002, Attention:
Worldwide Securities Services - MHG Capital Trust I.  Initially, all notices and correspondence
shall be addressed to Mudassir Mohamed, telephone number (713) 216-2826.

“Definitive
Preferred Securities Certificates” means Preferred Securities issued
in certificated, fully registered form that are not Global Preferred
Securities.

“Delaware Statutory
Trust Act” means Chapter 38 of Title 12 of the Delaware Code, 12
Del.  Code § 3801 et seq., or any
successor statute thereto, in each case as amended from time to time.

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

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

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

“Depositor”
has the meaning specified in the preamble to this Trust Agreement and any successors
and permitted assigns.

“Depositor
Affiliate” has the meaning specified in Section 4.9.

“Distribution Date”
has the meaning specified in Section 4.1(a)(i).

“Distributions”
means amounts payable in respect of the Trust Securities as provided in Section 4.1.

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

“Early Termination
Event” has the meaning specified in Section 9.2.

“Event of Default”
means any one of the following events (whatever the reason for such event and
whether it shall be voluntary or involuntary or be effected by operation of law
or

 4
 

 

pursuant to any judgment, decree or order of any court
or any order, rule or regulation of any administrative or governmental body):

(a)                                  the
occurrence of a Note Event of Default; or

(b)                                 default
by the Trust in the payment of any Distribution when it becomes due and
payable, and continuation of such default for a period of thirty (30) days; or

(c)                                  default
by the Trust in the payment of any Redemption Price of any Trust Security when
it becomes due and payable; or

(d)                                 default
in the performance, or breach, in any material respect of any covenant or
warranty of the Trustees in this Trust Agreement (other than those specified in
clause (b) or (c) above) and continuation of such default or breach for a
period of thirty (30) days after there has been given, by registered or
certified mail, to the Trustees and to the Depositor by the Holders of at least
thirty-three and a third percent (331/3%) in aggregate Liquidation
Amount of the Outstanding Preferred Securities a written notice specifying such
default or breach and requiring it to be remedied and stating that such notice
is a “Notice of Default”
hereunder; or

(e)                                  the
occurrence of a Bankruptcy Event with respect to the Property Trustee if a
successor Property Trustee has not been appointed within ninety (90) days
thereof.

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

“Expiration Date”
has the meaning specified in Section 9.1.

“Fiscal Year”
shall be the fiscal year of the Trust, which shall be the calendar year, or
such other period as is required by the Code.

“Guarantor” means
Morgans Hotel Group Co., a Delaware corporation.

“Global Preferred
Security” means a Preferred Securities Certificate evidencing
ownership of Book-Entry Preferred Securities.

“Holder”
means a Person in whose name a Trust Security or Trust Securities are
registered in the Securities Register; any such Person shall be deemed to be a
beneficial owner within the meaning of the Delaware Statutory Trust Act.

“Indemnified Person”
has the meaning specified in Section 8.10(c).

“Indenture”
means the Junior Subordinated Indenture executed and delivered by the
Guarantor, the Depositor and the Note Trustee contemporaneously with the
execution and

 5
 

 

delivery of this Trust Agreement, for the benefit of
the holders of the Notes, a copy of which is attached hereto as Exhibit D,
as amended or supplemented from time to time.

“Interest Payment Date(s)”
has the meaning specified in Section 1.1 of the Indenture.

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

“Investment Company Event”
has the meaning specified in Section 1.1 of the Indenture.

“LIBOR” has the meaning specified
in Schedule A.

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

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

“Lien”
means any lien, pledge, charge, encumbrance, mortgage, deed of trust, adverse
ownership interest, hypothecation, assignment, security interest or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever.

“Like Amount”
means (a) with respect to a redemption of any Trust Securities, Trust
Securities having a Liquidation Amount equal to the principal amount of Notes
to be contemporaneously redeemed or paid at maturity in accordance with the
Indenture, the proceeds of which will be used to pay the Redemption Price of
such Trust Securities, (b) with respect to a distribution of Notes to
Holders of Trust Securities in connection with a dissolution of the Trust,
Notes having a principal amount equal to the Liquidation Amount of the Trust
Securities of the Holder to whom such Notes are distributed and (c) with
respect to any distribution of Additional Interest Amounts to Holders of Trust
Securities, Notes having a principal amount equal to the Liquidation Amount of
the Trust Securities in respect of which such distribution is made.

“Liquidation Amount”
means the stated amount of $1,000 per Trust Security.

“Liquidation Date”
means the date on which assets are to be distributed to Holders in accordance
with Section 9.4(a) hereunder following dissolution of the Trust.

“Liquidation
Distribution” has the meaning specified in Section 9.4(d).

“Majority in
Liquidation Amount” means Common or Preferred Securities, as the
case may be, representing more than fifty percent (50%) of the aggregate Liquidation
Amount of all (or a specified group of) then Outstanding Common or Preferred
Securities, as the case may be.

“Note Event of
Default” means any “Event
of Default” specified in Section 5.1 of the Indenture.

“Note Redemption
Date” means, with respect to any Notes to be redeemed under the
Indenture, the date fixed for redemption of such Notes under the Indenture.

 6
 

 

“Note Trustee”
means the Person identified as the “Trustee”
in the Indenture, solely in its capacity as Trustee pursuant to the Indenture and
not in its individual capacity, or its successor in interest in such capacity,
or any successor Trustee appointed as provided in the Indenture.

“Notes”
means the Depositor’s Junior Subordinated Notes issued pursuant to the
Indenture.

“Officer’s Certificate”
means a certificate signed by the Chief Executive Officer, the President, an
Executive Vice President, the Chief Financial Officer, the Treasurer or an
Assistant Treasurer, a Vice President, or the Secretary or an Assistant
Secretary of the Depositor, and delivered to the Trustees.  Any Officer’s Certificate delivered with
respect to compliance with a condition or covenant provided for in this Trust
Agreement (other than the certificate provided pursuant to Section 8.16
which is not an Officer’s Certificate) shall include:

(a)                                  a
statement by each officer signing the Officer’s Certificate that such officer
has read the covenant or condition and the definitions relating thereto;

(b)                                 a
brief statement of the nature and scope of the examination or investigation
undertaken by such officer in rendering the Officer’s Certificate;

(c)                                  a
statement that such officer has made such examination or investigation as, in
such officer’s opinion, is necessary to enable such officer to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and

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

“Operative
Documents” means the Indenture, the Trust Agreement, the Notes and
the Trust Securities.

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

“Optional Note
Redemption Price” means, with respect to any Note to be redeemed on
any Redemption Date under the Indenture, an amount equal to one hundred percent
(100%) of the outstanding principal amount of such Note, together with accrued
interest, including any Additional Interest (to the extent legally
enforceable), thereon through but not including the date fixed as such
Redemption Date.

“Optional
Redemption Price” means, with respect to any Trust Security, an
amount equal to one hundred percent (100%) of the Liquidation Amount of such
Trust Security on the Redemption Date, plus accumulated and unpaid
Distributions to the Redemption Date, plus the related amount of the premium,
if any, and/or accrued interest, including Additional Interest, if any, thereon
paid by the Depositor upon the concurrent redemption or payment at maturity of
a Like Amount of Notes.

 7
 

 

“Original Trust
Agreement” has the meaning specified in the recitals to this Trust
Agreement.

“Outstanding”,
when used with respect to any Trust Securities, means, as of the date of
determination, all Trust Securities theretofore executed and delivered under
this Trust Agreement, except:

(a)                                  Trust
Securities theretofore canceled by the Property Trustee or delivered to the
Property Trustee for cancellation;

(b)                                 Trust
Securities for which payment or redemption money in the necessary amount has
been theretofore deposited with the Property Trustee or any Paying Agent in
trust for the Holders of such Trust Securities; provided, that if such Trust Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this Trust
Agreement; and

(c)                                  Trust
Securities that have been paid or in exchange for or in lieu of which other
Trust Securities have been executed and delivered pursuant to the provisions of
this Trust Agreement, unless proof satisfactory to the Property Trustee is
presented that any such Trust Securities are held by Holders in whose hands
such Trust Securities are valid, legal and binding obligations of the Trust;

provided, that in
determining whether the Holders of the requisite Liquidation Amount of the Outstanding
Preferred Securities have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Preferred Securities owned by the
Depositor, any Trustee or any Affiliate of the Depositor or of any Trustee
shall be disregarded and deemed not to be Outstanding, except that (i) in
determining whether any Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Preferred Securities that such Trustee knows to be so owned shall be so
disregarded and (ii) the foregoing shall not apply at any time when all of
the Outstanding Preferred Securities are owned by the Depositor, one or more of
the Trustees and/or any such Affiliate. 
Preferred Securities so owned that have been pledged in good faith may
be regarded as Outstanding if the pledgee establishes to the satisfaction of
the Administrative Trustees the pledgee’s right so to act with respect to such
Preferred Securities and that the pledgee is not the Depositor, any Trustee or
any Affiliate of the Depositor or of any Trustee.

“Owner”
means each Person who is the beneficial owner of Book-Entry Preferred
Securities as reflected in the records of the Depositary or, if a Depositary
Participant is not the beneficial owner, then the beneficial owner as reflected
in the records of the Depositary Participant.

“Paying Agent”
means any Person (other than the Depositor or any Affiliate of the Depositor)
authorized by the Administrative Trustee to pay Distributions or other amounts
in respect of any Trust Securities on behalf of the Trust.

 8
 

 

“Payment Account”
means a segregated non-interest-bearing corporate trust account maintained by
the Property Trustee for the benefit of the Holders in which all amounts paid
in respect of the Notes will be held and from which the Property Trustee,
through the Paying Agent, shall make payments to the Holders in accordance with
Sections 3.1, 4.1 and 4.2.

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

“Preferred Security”
means an undivided beneficial interest in the assets of the Trust, having a
Liquidation Amount of $1,000 and having the rights provided therefor in this
Trust Agreement.

“Preferred
Securities Certificate” means a certificate evidencing ownership of
Preferred Securities, substantially in the form attached as Exhibit C.

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

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

“QIB”
means a “qualified institutional buyer” as defined in Rule 144A under the
Securities Act of 1933, as amended.

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

“QIB/QP” means a QIB that is also a
QP.

“Redemption Date”
means, with respect to any Trust Security to be redeemed, the date fixed for
such redemption by or pursuant to this Trust Agreement; provided, that each Note Redemption Date and the
stated maturity (or any date of principal repayment upon early maturity) of the
Notes shall be a Redemption Date for a Like Amount of Trust Securities.

“Redemption Price”
means the Special Redemption Price or Optional Redemption Price, as
applicable.  If the Depositor has
redeemed the Notes at the Special Note Redemption Price, the Trust shall redeem
the Trust Securities at the Special Redemption Price.  If the Depositor has redeemed the Notes at
the Optional Note Redemption Price, the Trust shall redeem the Trust Securities
at the Optional Redemption Price.

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

 9
 

 

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

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

“Securities
Certificate” means any one of the Common Securities Certificates or
the Preferred Securities Certificates.

“Securities
Register” and “Securities
Registrar” have the respective meanings specified in Section 5.7.

“Special Note
Redemption Price” means, with respect to any Note to be redeemed on
any Redemption Date under the Indenture, an amount equal to one hundred three
percent (103%) of the outstanding principal amount of such Note, together with accrued
interest, including Additional Interest, thereon through but not including the
date fixed as such Redemption Date.

“Special Redemption
Price” means, with respect to any Trust Security, an amount equal to
one hundred three percent (103%) of the Liquidation Amount of such Trust
Security on the Redemption Date, plus accumulated and unpaid Distributions to
the Redemption Date, plus the related amount of the premium, if any, and/or
accrued interest, including Additional Interest, if any, thereon paid by the
Depositor upon the concurrent redemption or payment at maturity of a Like
Amount of Notes.

“Successor
Securities” has the meaning specified in Section 9.5(a).

“Tax Event” has
the meaning specified in Section 1.1 of the Indenture.

“Trust”
means the Delaware statutory trust known as “MHG Capital Trust I,” which was
created on August 4, 2006 under
the Delaware Statutory Trust Act pursuant to the Original Trust Agreement and
the filing of the Certificate of Trust, and continued pursuant to this Trust
Agreement.

“Trust Agreement”
means this Amended and Restated Trust Agreement, as the same may be modified,
amended or supplemented from time to time in accordance with the applicable
provisions hereof, including all Schedules and Exhibits.

“Trustees”
means the Administrative Trustees, the Property Trustee and the Delaware
Trustee, each as defined in this Article I.

“Trust Property”
means (a) the Notes, (b) any cash on deposit in, or owing to, the
Payment Account and (c) all proceeds and rights in respect of the foregoing
and any other property and assets for the time being held or deemed to be held
by the Property Trustee pursuant to the trusts of this Trust Agreement.

“Trust Security”
means any one of the Common Securities or the Preferred Securities.

 10
 

 

ARTICLE II

THE TRUST

SECTION 2.1.                                               Name.

The trust continued hereby shall be known as “MHG
Capital Trust I,” as such name may be modified
from time to time by the Administrative Trustees following written notice to
the Holders of Trust Securities and the other Trustees, in which name the
Trustees may conduct the business of the Trust, make and execute contracts and
other instruments on behalf of the Trust and sue and be sued.

SECTION 2.2.                                               Office
of the Delaware Trustee; Principal Place of Business.

The address of the Delaware Trustee in the State of
Delaware is Chase Bank USA, National Association, 500 Stanton Christiana Road,
Building 4 (3rd Floor), Newark, DE 19713, Attention: Worldwide
Securities Services, or such other address in the State of Delaware as the
Delaware Trustee may designate by written notice to the Holders, the Depositor,
the Property Trustee and the Administrative Trustees.  The principal executive office of the Trust
is 475 Tenth Avenue, New York, NY 10018, Attention: Chief Financial Officer, as
such address may be changed from time to time by the Administrative Trustees
following written notice to the Holders and the other Trustees.

SECTION 2.3.                                               Initial
Contribution of Trust Property; Fees, Costs and Expenses.

The Property Trustee acknowledges receipt from the
Depositor in connection with the Original Trust Agreement of the sum of ten
dollars ($10), which constituted the initial Trust Property.  The Depositor shall pay all fees, costs and
expenses of the Trust (except with respect to the Trust Securities) as they
arise or shall, upon request of any Trustee, promptly reimburse such Trustee
for any such fees, costs and expenses paid by such Trustee.  The Depositor shall make no claim upon the
Trust Property for the payment of such fees, costs or expenses.

SECTION 2.4.                                               Purposes
of Trust.

(a)                                  The
exclusive purposes and functions of the Trust are to (i) issue and sell
Trust Securities and use the proceeds from such sale to acquire the Notes and
(ii)  engage in only those activities necessary or incidental thereto.  The Delaware Trustee, the Property Trustee
and the Administrative Trustees are trustees of the Trust, and have all the
rights, powers and duties to the extent set forth herein.  The Trustees hereby acknowledge that they are
trustees of the Trust.

(b)                                 So
long as this Trust Agreement remains in effect, the Trust (or the Trustees
acting on behalf of the Trust) shall not undertake any business, activities or
transaction except as expressly provided herein or contemplated hereby.  In particular, the Trust (or the Trustees
acting on behalf of the Trust) shall not (i) acquire any investments or
engage in any activities not authorized by this Trust Agreement,
(ii) sell, assign, transfer, exchange, mortgage, pledge, set-off or
otherwise dispose of any of the Trust Property or interests therein, including
to Holders, except as expressly provided herein, (iii) incur any
indebtedness for borrowed money or issue

 11
 

 

any other debt, (iv) take or consent to any
action that would result in the placement of a Lien on any of the Trust
Property, (v) take or consent to any action that would reasonably be
expected to cause the Trust to become taxable as a corporation or classified as
other than a grantor trust for United States federal income tax purposes, (vi)
take or consent to any action that would cause the Notes to be treated as other
than indebtedness of the Depositor for United States federal income tax
purposes or (vii) take or consent to any action that would cause the Trust to
be deemed to be an “investment company” required to be registered under the
Investment Company Act.

SECTION 2.5.                                               Authorization
to Enter into Certain Transactions.

(a)                                  The
Trustees shall conduct the affairs of the Trust in accordance with and subject
to the terms of this Trust Agreement.  In
accordance with the following provisions (i) and (ii), the Trustees shall have
the authority to enter into all transactions and agreements determined by the
Trustees to be appropriate in exercising the authority, express or implied,
otherwise granted to the Trustees, under this Trust Agreement, and to perform
all acts in furtherance thereof, including the following:

(i)                                     As
among the Trustees, each Administrative Trustee shall severally have the power
and authority to act on behalf of the Trust with respect to the following
matters:

(A)                              the
issuance and sale of the Trust Securities;

(B)                                to
cause the Trust to enter into, and to execute, deliver and perform on behalf of
the Trust, such agreements as may be necessary or desirable in connection with
the purposes and function of the Trust, including, without limitation, a common
securities subscription agreement and a junior subordinated note purchase
agreement;

(C)                                assisting
in the sale of the Preferred Securities in one or more transactions exempt from
registration under the Securities Act, and in compliance with applicable state
securities or blue sky laws;

(D)                               assisting
in the sending of notices (other than notices of default) and other information
regarding the Trust Securities and the Notes to the Holders in accordance with
this Trust Agreement;

(E)                                 execution
of the Trust Securities on behalf of the Trust in accordance with this Trust
Agreement;

(F)                                 the
appointment of a Paying Agent and Securities Registrar in accordance with this
Trust Agreement;

(G)                                execution
and delivery of closing certificates, if any, pursuant to the Purchase
Agreement and application for a taxpayer identification number for the Trust;

 12

 

(H)                               preparation
and filing of all applicable tax returns and tax information reports that are
required to be filed on behalf of the Trust;

(I)                                    establishing
a record date with respect to all actions to be taken hereunder that require a
record date to be established, except as provided in Section 6.10(a);

(J)                                   unless
otherwise required by the Delaware Statutory Trust Act to execute on behalf of
the Trust (either acting alone or together with the other Administrative
Trustees) any documents that such Administrative Trustee has the power to
execute pursuant to this Trust Agreement; and

(K)                               the
taking of any action incidental to the foregoing as such Administrative Trustee
may from time to time determine is necessary or advisable to give effect to the
terms of this Trust Agreement.

(ii)                                  As
among the Trustees, the Property Trustee shall have the power, duty and
authority to act on behalf of the Trust with respect to the following matters:

(A)                              the
receipt and holding of legal title of the Notes;

(B)                                the
establishment of the Payment Account;

(C)                                the
collection of interest, principal and any other payments made in respect of the
Notes and the holding of such amounts in the Payment Account;

(D)                               the
distribution through the Paying Agent of amounts distributable to the Holders
in respect of the Trust Securities;

(E)                                 the
exercise of all of the rights, powers and privileges of a holder of the Notes
in accordance with the terms of this Trust Agreement;

(F)                                 the
sending of notices of default and other information regarding the Trust
Securities and the Notes to the Holders in accordance with this Trust
Agreement;

(G)                                the
distribution of the Trust Property in accordance with the terms of this Trust
Agreement;

(H)                               to
the extent provided in this Trust Agreement, the winding up of the affairs of
and liquidation of the Trust, provided that the Administrative Trustees shall
have the power, duty and authority to act on behalf of the Trust with respect
to the preparation, execution and filing of the certificate of cancellation of
the Trust with the Secretary of State of the State of Delaware; and

(I)                                    the
taking of any action incidental to the foregoing as the Property Trustee may
from time to time determine is necessary or advisable to give effect to the
terms of this Trust Agreement and protect and conserve the Trust Property

 13
 

 

for the benefit of the
Holders (without consideration of the effect of any such action on any
particular Holder).

(b)                                 In
connection with the issue and sale of the Preferred Securities, the Depositor
shall have the right and responsibility to assist the Trust with respect to, or
effect on behalf of the Trust, the following (and any actions taken by the
Depositor in furtherance of the following prior to the date of this Trust
Agreement are hereby ratified and confirmed in all respects):

(i)                                     the
negotiation of the terms of, and the execution and delivery of, the Purchase
Agreement providing for the sale of the Preferred Securities in one or more
transactions exempt from registration under the Securities Act, and in compliance
with applicable state securities or blue sky laws; and

(ii)                                  the
taking of any other actions necessary or desirable to carry out any of the
foregoing activities.

(c)                                  Notwithstanding
anything herein to the contrary, the Administrative Trustees are authorized and
directed to conduct the affairs of the Trust and authorized to operate the
Trust so that the Trust will not be taxable as a corporation or classified as
other than a grantor trust for U.S. 
federal income tax purposes, so that the Notes will be treated as
indebtedness of the Depositor for U.S. 
federal income tax purposes and so that the Trust will not be deemed to
be an “investment company” required to be registered under the Investment
Company Act.  In respect thereof, each
Administrative Trustee is authorized to take any action, not inconsistent with
applicable law, the Certificate of Trust or this Trust Agreement, that such
Administrative Trustee determines in his or her discretion to be necessary or
desirable for such purposes, as long as such action does not adversely affect
in any material respect the interests of the Holders of the Outstanding
Preferred Securities.  In no event shall
the Administrative Trustees be liable to the Trust or the Holders for any
failure to comply with this Section 2.5 to the extent that such failure
results solely from a change in law or regulation or in the interpretation
thereof.

(d)                                 Any
action taken by a Trustee in accordance with its powers shall constitute the
act of and serve to bind the Trust.  In
dealing with any Trustee acting on behalf of the Trust, no Person shall be
required to inquire into the authority of such Trustee to bind the Trust.  Persons dealing with the Trust are entitled
to rely conclusively on the power and authority of any Trustee as set forth in
this Trust Agreement.

SECTION 2.6.                                               Assets
of Trust.

The assets of the Trust shall consist of the Trust
Property.

SECTION 2.7.                                               Title to
Trust Property.

(a)                                  Legal
title to all Trust Property shall be vested at all times in the Property
Trustee and shall be held and administered by the Property Trustee in trust for
the benefit of the Trust and the Holders in accordance with this Trust
Agreement.

(b)                                 The
Holders shall not have any right or title to the Trust Property other than the
undivided beneficial interest in the assets of the Trust conferred by their
Trust Securities and

 14
 

 

they shall have no right to call for any partition or
division of property, profits or rights of the Trust except as described
below.  The Trust Securities shall be
personal property giving only the rights specifically set forth therein and in
this Trust Agreement.

ARTICLE III

PAYMENT ACCOUNT; PAYING AGENTS

SECTION 3.1.                                               Payment
Account.

(a)                                  On
or prior to the Closing Date, the Property Trustee shall establish the Payment
Account.  The Property Trustee and the
Paying Agent shall have exclusive control and sole right of withdrawal with
respect to the Payment Account for the purpose of making deposits in and
withdrawals from the Payment Account in accordance with this Trust Agreement.  All monies and other property deposited or
held from time to time in the Payment Account shall be held by the Property
Trustee in the Payment Account for the exclusive benefit of the Holders and for
Distribution as herein provided.

(b)                                 The
Property Trustee shall deposit in the Payment Account, promptly upon receipt,
all payments of principal of or interest on, and any other payments with
respect to, the Notes.  Amounts held in
the Payment Account shall not be invested by the Property Trustee pending
distribution thereof.

SECTION 3.2.                                               Appointment
of Paying Agents.

The Paying Agent shall initially be the Property
Trustee.  The Paying Agent shall make
Distributions to Holders from the Payment Account and shall report the amounts
of such Distributions to the Property Trustee and the Administrative
Trustees.  Any Paying Agent shall have
the revocable power to withdraw funds from the Payment Account solely for the
purpose of making the Distributions referred to above.  The Administrative Trustees may revoke such
power and remove the Paying Agent in their sole discretion.  Any Person acting as Paying Agent shall be
permitted to resign as Paying Agent upon thirty (30) days’ written notice to
the Administrative Trustees and the Property Trustee.  If the Property Trustee shall no longer be
the Paying Agent or a successor Paying Agent shall resign or its authority to
act be revoked, the Administrative Trustees shall appoint a successor (which
shall be a bank or trust company) to act as Paying Agent.  Such successor Paying Agent appointed by the
Administrative Trustees shall execute and deliver to the Trustees an instrument
in which such successor Paying Agent shall agree with the Trustees that as
Paying Agent, such successor Paying Agent will hold all sums, if any, held by it
for payment to the Holders in trust for the benefit of the Holders entitled
thereto until such sums shall be paid to such Holders.  The Paying Agent shall return all unclaimed
funds to the Property Trustee and upon removal of a Paying Agent such Paying Agent
shall return all funds in its possession to the Property Trustee.  The provisions of Article VIII shall
apply to the Property Trustee also in its role as Paying Agent, for so long as
the Property Trustee shall act as Paying Agent and, to the extent applicable,
to any other Paying Agent appointed hereunder. 
Any reference in this Trust Agreement to the Paying Agent shall include
any co-paying agent unless the context requires otherwise.  For the avoidance of doubt, the Depositor
shall not be permitted to appoint itself or any Affiliate as a Paying Agent
hereunder.

 15
 

 

ARTICLE IV

DISTRIBUTIONS; REDEMPTION

SECTION 4.1.                                               Distributions.

(a)                                  The
Trust Securities represent undivided beneficial interests in the Trust
Property, and Distributions (including any Additional Interest Amounts) will be
made on the Trust Securities at the rate and on the dates that payments of
interest (including any Additional Interest) are made on the Notes.  Accordingly:

(i)                                     Distributions
on the Trust Securities shall be cumulative, and shall accumulate whether or
not there are funds of the Trust available for the payment of
Distributions.  Distributions shall
accumulate from August 4, 2006, and, except as provided in clause (ii) below,
shall be payable quarterly in
arrears on January 30, April 30, July 30 and October 30 of each year,
commencing on October 30, 2006.  If any
date on which a Distribution is otherwise payable on the Trust Securities is
not a Business Day, then the payment of such Distribution shall be made on the
next succeeding Business Day (and no interest shall accrue in respect of the
amounts whose payment is so delayed for the period from and after each such
date until the next succeeding Business Day), except that, if such Business Day
falls in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case, with the same force and
effect as if made on such date (each date on which Distributions are payable in
accordance with this Section 4.1(a)(i), a “Distribution Date”);

(ii)                                  Distributions
shall accumulate in respect of the Trust Securities at a fixed rate equal to
8.676% per annum through the Interest Payment Date in October 30, 2016 and
thereafter at a variable rate
equal to LIBOR plus 3.25% per annum of the Liquidation Amount of the Trust
Securities, such rate being the rate of interest payable on the Notes.  LIBOR shall be determined by the Calculation
Agent in accordance with Schedule A. 
During the Fixed Rate Period,
the amount of Distributions payable for any period less than a full
Distribution period shall be computed on the basis of a 360-day year of twelve
30-day months and the amount payable for any partial period shall be computed
on the basis of the number of days elapsed in a 360-day year of twelve 30-day
months.  Upon expiration of the Fixed
Rate Period, the amount of interest payable for any Distribution period will be
computed on the basis of a 360-day year and the actual number of days elapsed
in the relevant Distribution period.  The
amount of Distributions payable for any period shall include any Additional
Interest Amounts in respect of such period; and

(iii)                               Distributions
on the Trust Securities shall be made by the Paying Agent from the Payment
Account and shall be payable on each Distribution Date only to the extent that
the Trust has funds then on hand and available in the Payment Account for the
payment of such Distributions.

(b)                                 Distributions
on the Trust Securities with respect to a Distribution Date shall be payable to
the Holders thereof as they appear on the Securities Register for the Trust
Securities at the close of business on the relevant record date, which shall be
at the close of business on the

 16
 

 

fifteenth day (whether or not a Business Day)
preceding the relevant Distribution Date, except that Distributions and any
Additional Interest Amounts payable on the stated maturity (or any date of
principal repayment upon early maturity) of the principal of a Trust Security
or on a Redemption Date shall be paid to the Person to whom principal is
paid.  Distributions payable on any Trust
Securities that are not punctually paid on any Distribution Date as a result of
the Depositor having failed to make an interest payment under the Notes will
cease to be payable to the Person in whose name such Trust Securities are
registered on the relevant record date, and such defaulted Distributions and
any Additional Interest Amounts will instead be payable to the Person in whose
name such Trust Securities are registered on the special record date, or other specified
date for determining Holders entitled to such defaulted Distribution and
Additional Interest Amount, established in the same manner, and on the same
date, as such is established with respect to the Notes under the Indenture.

(c)                                  As
a condition to the payment of any principal of or interest on the Trust
Securities without the imposition of withholding tax, the Administrative
Trustees shall require the previous delivery of properly completed and signed
applicable U.S.  federal income tax
certifications (generally, an Internal Revenue Service Form W-9 (or applicable
successor form) in the case of a person that is a “United States person” within
the meaning of Section 7701(a)(30) of the Code or an Internal Revenue Service
Form W-8 (or applicable successor form) in the case of a person that is not a “United
States person” within the meaning of Section 7701(a)(30) of the Code) and any
other certification acceptable to it to enable the Paying Agent to determine
its duties and liabilities with respect to any taxes or other charges that it
may be required to pay, deduct or withhold in respect of such Trust Securities.

SECTION 4.2.                                               Redemption.

(a)                                  On
each Note Redemption Date and on the stated maturity (or any date of principal
repayment upon early maturity) of the Notes and on each other date on (or in
respect of) which any principal on the Notes is repaid, the Trust will be
required to redeem a Like Amount of Trust Securities at the Redemption Price.

(b)                                 Notice
of redemption shall be given by the Property Trustee by first-class mail,
postage prepaid, mailed not less than thirty (30) nor more than sixty (60) days
prior to the Redemption Date to each Holder of Trust Securities to be redeemed,
at such Holder’s address appearing in the Securities Register.  All notices of redemption shall state:

(i)                                     the
Redemption Date;

(ii)                                  the
Redemption Price or, if the Redemption Price cannot be calculated prior to the
time the notice is required to be sent, the estimate of the Redemption Price
provided pursuant to the Indenture, as calculated by the Depositor, together
with a statement that it is an estimate and that the actual Redemption Price
will be calculated by the Calculation Agent on the fifth (5th) 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);

 17
 

 

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

(iv)                              that
on the Redemption Date, the Redemption Price will become due and payable upon
each such Trust Security, or portion thereof, to be redeemed and that Distributions
thereon will cease to accumulate on such Trust Security or such portion, as the
case may be, on and after said date, except as provided in Section 4.2(d);

(v)                                 the
place or places where the Trust Securities are to be surrendered for the payment
of the Redemption Price; and

(vi)                              such
other provisions as the Property Trustee deems relevant.

(c)                                  The
Trust Securities (or portion thereof) redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the proceeds from the contemporaneous
redemption or payment at maturity of Notes. 
Redemptions of the Trust Securities (or portion thereof) shall be made
and the Redemption Price shall be payable on each Redemption Date only to the
extent that the Trust has funds then on hand and available in the Payment
Account for the payment of such Redemption Price.  Under the Indenture, the Notes may be
redeemed by the Depositor on any Interest Payment Date, at the Depositor’s
option, on or after October 30,
2011, in whole or in part, from
time to time at the Optional Note Redemption Price.  The Notes may also be redeemed by the
Depositor, at its option pursuant to the terms of the Indenture, in whole but
not in part, upon the occurrence and during the continuation of an Investment
Company Event or a Tax Event, at the Special Note Redemption Price.

(d)                                 If
the Property Trustee gives a notice of redemption in respect of any Preferred
Securities, then by 10:00 a.m., New York City time, on the Redemption Date, the
Depositor shall deposit sufficient funds with the Property Trustee to pay the
Redemption Price.  If such deposit has
been made by such time, then by 12:00 noon, New York City time, on the
Redemption Date, the Property Trustee will, with respect to Book-Entry
Preferred Securities, irrevocably deposit with the Depositary for such
Book-Entry Preferred Securities, to the extent available therefor, funds
sufficient to pay the applicable Redemption Price and will give such Depositary
irrevocable instructions and authority to pay the Redemption Price to the
Holders of the Preferred Securities. 
With respect to Preferred Securities that are not Book-Entry Preferred
Securities, the Property Trustee will irrevocably deposit with the Paying
Agent, to the extent available therefor, funds sufficient to pay the applicable
Redemption Price and will give the Paying Agent irrevocable instructions and
authority to pay the Redemption Price to the Holders of the Preferred
Securities upon surrender of their Preferred Securities Certificates.  Notwithstanding the foregoing, Distributions
payable on or prior to the Redemption Date for any Trust Securities (or portion
thereof) called for redemption shall be payable to the Holders of such Trust
Securities as they appear on the Securities Register on the relevant record
dates for the related Distribution Dates. 
If notice of redemption shall have been given and funds deposited as
required, then upon the date of such deposit, all rights of Holders holding
Trust Securities (or portion thereof) so called for redemption will cease,
except the right of

 18
 

 

such Holders to receive the Redemption Price and any
Distribution payable in respect of the Trust Securities on or prior to the
Redemption Date, but without interest, and, in the case of a partial
redemption, the right of such Holders to receive a new Trust Security or
Securities of authorized denominations, in aggregate Liquidation Amount equal
to the unredeemed portion of such Trust Security or Securities, and such
Securities (or portion thereof) called for redemption will cease to be
Outstanding.  In the event that any date
on which any Redemption Price is payable is not a Business Day, then payment of
the Redemption Price payable on such date will be made on the next succeeding
Business Day (and no interest shall accrue in respect of the amounts whose
payment is so delayed for the period from and after each such date until the
next succeeding Business Day), except that, if such Business Day falls in the
next succeeding calendar year, such payment shall be made on the immediately preceding
Business Day, in each case, with the same force and effect as if made on such
date.  In the event that payment of the
Redemption Price in respect of any Trust Securities (or portion thereof) called
for redemption is improperly withheld or refused and not paid either by the
Trust, Distributions on such Trust Securities (or portion thereof) will
continue to accumulate, as set forth in Section 4.1, from the Redemption
Date originally established by the Trust for such Trust Securities (or portion
thereof) to the date such Redemption Price is actually paid, in which case the
actual payment date will be the date fixed for redemption for purposes of
calculating the Redemption Price.

(e)                                  Subject
to Section 4.3(a), if less than all the Outstanding Trust Securities
are to be redeemed on a Redemption Date, then the aggregate Liquidation Amount
of Trust Securities to be redeemed shall be allocated pro rata to the Common Securities and the
Preferred Securities based upon the relative aggregate Liquidation Amounts of
the Common Securities and the Preferred Securities.  Upon such a partial redemption, the Preferred
Securities to be redeemed from each Holder of Preferred Securities shall
be selected on a pro rata basis based upon the respective Liquidation
Amounts of the Preferred Securities then held by each Holder of the
Preferred Securities not more than sixty (60) days prior to the Redemption Date
by the Property Trustee from the Outstanding Preferred Securities not
previously called for redemption; provided, that
with respect to Holders that would be required to hold less than one hundred
(100) but more than zero (0) Trust Securities as a result of such redemption,
the Trust shall redeem Trust Securities of each such Holder so that after such
redemption such Holder shall hold either one hundred (100) Trust Securities or
such Holder no longer holds any Trust Securities, and shall use such method
(including, without limitation, by lot) as the Trust shall deem fair and
appropriate; and provided, further, that so long as the Preferred
Securities are Book-Entry Preferred Securities, such selection shall be made in
accordance with the Applicable Depositary Procedures for the Preferred
Securities by such Depositary.  The
Property Trustee shall promptly notify the Securities Registrar in writing of
the Preferred Securities (or portion thereof) selected for redemption and, in
the case of any Preferred Securities selected for partial redemption, the
Liquidation Amount thereof to be redeemed. 
For all purposes of this Trust Agreement, unless the context otherwise
requires, all provisions relating to the redemption of Preferred Securities
shall relate, in the case of any Preferred Securities redeemed or to be
redeemed only in part, to the portion of the aggregate Liquidation Amount of
Preferred Securities that has been or is to be redeemed.

(f)                                    The
Trust in issuing the Trust Securities may use “CUSIP” numbers (if then
generally in use), and, if so, the Property Trustee shall indicate the “CUSIP”
numbers of the Trust Securities in notices of redemption and related materials
as a convenience to Holders; provided, that any such notice may state that no
representation is made as to the correctness of

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such numbers either as printed on the Trust Securities
or as contained in any notice of redemption and related materials.

SECTION 4.3.                                               Subordination
of Common Securities.

(a)                                  Payment
of Distributions (including any Additional Interest Amounts) on, the Redemption
Price of and the Liquidation Distribution in respect of, the Trust Securities,
as applicable, shall be made, pro rata
among the Common Securities and the Preferred Securities based on the
Liquidation Amount of the respective Trust Securities; provided, that if on any Distribution
Date, Redemption Date or Liquidation Date an Event of Default shall have
occurred and be continuing, no payment of any Distribution (including any
Additional Interest Amounts) on, Redemption Price of or Liquidation
Distribution in respect of, any Common Security, and no other payment on
account of the redemption, liquidation or other acquisition of Common
Securities, shall be made unless payment in full in cash of all accumulated and
unpaid Distributions (including any Additional Interest Amounts) on all
Outstanding Preferred Securities for all Distribution periods terminating on or
prior thereto, or in the case of payment of the Redemption Price the full
amount of such Redemption Price on all Outstanding Preferred Securities then
called for redemption, or in the case of payment of the Liquidation
Distribution the full amount of such Liquidation Distribution on all
Outstanding Preferred Securities, shall have been made or provided for, and all
funds immediately available to the Property Trustee shall first be applied to
the payment in full in cash of all Distributions (including any Additional
Interest Amounts) on, or the Redemption Price of or the Liquidation
Distribution in respect of, the Preferred Securities then due and payable.

(b)                                 In
the case of the occurrence of any Event of Default, the Holders of the Common
Securities shall have no right to act with respect to any such Event of Default
under this Trust Agreement until all such Events of Default with respect to the
Preferred Securities have been cured, waived or otherwise eliminated.  Until all such Events of Default under this
Trust Agreement with respect to the Preferred Securities have been so cured,
waived or otherwise eliminated, the Property Trustee shall act solely on behalf
of the Holders of the Preferred Securities and not on behalf of the Holders of
the Common Securities, and only the Holders of all the Preferred Securities
will have the right to direct the Property Trustee to act on their behalf.

SECTION 4.4.                                               Payment
Procedures.

Payments of Distributions (including any Additional
Interest Amounts), the Redemption Price, Liquidation Amount or any other
amounts in respect of the Preferred Securities shall be made by wire transfer
at such place and to such account at a banking institution in the United States
as may be designated in writing at least ten (10) Business Days prior to the
date for payment by the Person entitled thereto unless proper written transfer
instructions have not been received by the relevant record date, in which case
such payments shall be made by check mailed to the address of such Person as
such address shall appear in the Securities Register.  If any Preferred Securities are held by a
Depositary, such Distributions thereon shall be made to the Depositary in
immediately available funds.  Payments in
respect of the Common Securities shall be made in such manner as shall be
mutually agreed between the Property Trustee and the Holder of all the Common
Securities.

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SECTION 4.5.                       Withholding
Tax.

The Trust and the Administrative Trustees shall comply
with all withholding and backup withholding tax requirements under United
States federal, state and local law.  The
Administrative Trustees on behalf of the Trust shall request, and the Holders
shall provide to the Trust, such forms or certificates as are necessary to
establish an exemption from withholding and backup withholding tax with respect
to each Holder and any representations and forms as shall reasonably be
requested by the Administrative Trustees on behalf of the Trust to assist it in
determining the extent of, and in fulfilling, its withholding and backup
withholding tax obligations.  The
Administrative Trustees shall file required forms with applicable jurisdictions
and, unless an exemption from withholding and backup withholding tax is properly
established by a Holder, shall remit amounts withheld with respect to the
Holder to applicable jurisdictions.  To
the extent that the Trust is required to withhold and pay over any amounts to
any jurisdiction with respect to Distributions or allocations to any Holder,
the amount withheld shall be deemed to be a Distribution in the amount of the
withholding to the Holder.  In the event
of any claimed overwithholding, Holders shall be limited to an action against
the applicable jurisdiction.  If the
amount required to be withheld was not withheld from actual Distributions made,
the Administrative Trustees on behalf of the Trust may reduce subsequent
Distributions by the amount of such required withholding.

SECTION 4.6.                                               Tax
Returns and Other Reports.

The Administrative Trustees shall prepare (or cause to
be prepared) at the principal office of the Trust in the United States, as
defined for purposes of Treasury regulations section 301.7701-7, at the
Depositor’s expense, and file, all United States federal, state and local tax
and information returns and reports required to be filed by or in respect of
the Trust.  The Administrative Trustees
shall prepare at the principal office of the Trust in the United States, as
defined for purposes of Treasury regulations section 301.7701-7, and furnish
(or cause to be prepared and furnished), by January 31 in each taxable year of
the Trust to each Holder all Internal Revenue Service forms and returns
required to be provided by the Trust. 
The Administrative Trustees shall provide the Depositor, Taberna Capital
Management, LLC and the Property Trustee with a copy of all such returns and
reports promptly after such filing or furnishing.

SECTION 4.7.                                               Payment
of Taxes, Duties, Etc.  of the Trust.

Upon receipt under the Notes of Additional Tax Sums
and upon the written direction of the Administrative Trustees, the Property
Trustee shall promptly pay, solely out of monies on deposit pursuant to this
Trust Agreement, any Additional Taxes imposed on the Trust by the United States
or any other taxing authority.

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SECTION 4.8.                                               Payments
under Indenture or Pursuant to Direct Actions.

Any amount payable hereunder to any Holder of
Preferred Securities shall be reduced by the amount of any corresponding
payment such Holder (or any Owner with respect thereto) has directly received
pursuant to Section 5.8 of the Indenture or Section 6.10(b) of
this Trust Agreement.

SECTION 4.9.                                               Exchanges.

(a)                                  If
at any time the Depositor or any of its Affiliates (in either case, a “Depositor Affiliate”) is the Owner or
Holder of any Preferred Securities, such Depositor Affiliate shall have the
right to deliver to the Property Trustee all or such portion of its Preferred
Securities as it elects and, subject to compliance with Sections 2.2 and 3.5 of
the Indenture, receive, in exchange therefor, a Like Amount of Notes.  Such election shall be exercisable effective
on any Distribution Date by such Depositor Affiliate delivering to the Property
Trustee (i) at least ten (10) Business Days prior to the Distribution Date on
which such exchange is to occur, the registration instructions and the
documentation, if any, required pursuant to Sections 2.2 and 3.5 of the
Indenture to enable the Indenture Trustee to issue the requested Like Amount of
Notes, (ii) a written notice of such election specifying the Liquidation Amount
of Preferred Securities with respect to which such election is being made and
the Distribution Date on which such exchange shall occur, which Distribution
Date shall be not less than ten (10) Business Days after the date of receipt by
the Property Trustee of such election notice and (iii) shall be conditioned
upon such Depositor Affiliate having delivered or caused to be delivered to the
Property Trustee or its designee the Preferred Securities that are the subject
of such election by 10:00 a.m. New York time, on the Distribution Date on which
such exchange is to occur.  After the
exchange, such Preferred Securities will be canceled and will no longer be
deemed to be Outstanding and all rights of the Depositor Affiliate with respect
to such Preferred Securities will cease.

(b)                                 In
the case of an exchange described in Section 4.9(a), the Property
Trustee on behalf of the Trust will, on the date of such exchange, exchange
Notes having a principal amount equal to a proportional amount of the aggregate
Liquidation Amount of the Outstanding Common Securities, based on the ratio of
the aggregate Liquidation Amount of the Preferred Securities exchanged pursuant
to Section 4.9(a) divided by the aggregate Liquidation Amount of the
Preferred Securities Outstanding immediately prior to such exchange, for such
proportional amount of Common Securities held by the Depositor (which
contemporaneously shall be canceled and no longer be deemed to be Outstanding);
provided, that the Depositor
delivers or causes to be delivered to the Property Trustee or its designee the
required amount of Common Securities to be exchanged by 10:00 a.m. New York
time, on the Distribution Date on which such exchange is to occur.

SECTION 4.10.                                         Calculation
Agent.

(a)                                  The
Calculation Agent may be removed by the Administrative Trustees at any
time.  Notwithstanding the foregoing, the
Property Trustee shall initially and, subject to the immediately following
sentence, for so long as it holds any of the Notes, be the Calculation Agent
for purposes of determining LIBOR for each Distribution Date.  If the Calculation Agent is unable or
unwilling to act as such or is removed by the Administrative Trustees, the

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Administrative Trustees will promptly appoint as a
replacement Calculation Agent the London office of a leading bank which is
engaged in transactions in three-month Eurodollar deposits in the international
Eurodollar market and which does not control or is not controlled by or under
common control with the Administrative Trustee or its Affiliates.  The Calculation Agent may not resign its
duties without a successor having been duly appointed.

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

SECTION 4.11.                                         Certain
Accounting Matters.

(a)                                  At
all times during the existence of the Trust, the Administrative Trustees shall
keep, or cause to be kept at the principal office of the Trust in the United
States, as defined for purposes of Treasury Regulations section 301.7701-7,
full books of account, records and supporting documents, which shall reflect in
reasonable detail each transaction of the Trust.  The books of account shall be maintained on
the accrual method of accounting, in accordance with generally accepted
accounting principles, consistently applied.

(b)                                 The
Administrative Trustees shall cause to be prepared at the principal office of
the Trust in the United States, as defined for purposes of Treasury Regulations
section 301.7701-7, and delivered to each of the Holders, with a copy to the
Property Trustee, within ninety (90) days after the end of each Fiscal Year,
annual financial statements of the Trust, including a balance sheet of the
Trust as of the end of such Fiscal Year, and the related statements of income
or loss.

(c)                                  [Reserved.]

(d)                                 The
Trust shall maintain one or more bank accounts in the United States, as defined
for purposes of Treasury Regulations section 301.7701-7, in the name and for
the sole benefit of the Trust; provided, however,
that all payments of funds in respect of the Notes held by the Property Trustee
shall be made directly to the Payment Account and no other funds of the

 23
 

 

Trust shall be deposited in the Payment Account.  The sole signatories for such accounts
(including the Payment Account) shall be designated by the Property Trustee.

ARTICLE V

SECURITIES

SECTION 5.1.                                               Initial
Ownership.

Upon the creation of the Trust and the contribution by
the Depositor referred to in Section 2.3 and until the issuance of
the Trust Securities, and at any time during which no Trust Securities are
Outstanding, the Depositor shall be the sole beneficial owner of the Trust.

SECTION 5.2.                                               Authorized
Trust Securities.

The Trust shall be authorized to issue one series of
Preferred Securities having an aggregate Liquidation Amount of $50,000,000 and
one series of Common Securities having an aggregate Liquidation Amount of
$100,000.

SECTION
5.3.                                               Issuance
of the Common Securities; Subscription and Purchase of Notes.

On the Closing Date, an Administrative Trustee, on
behalf of the Trust, shall execute and deliver to the Depositor Common
Securities Certificates, registered in the name of the Depositor, evidencing an
aggregate of 100 Common Securities having an aggregate Liquidation Amount of
One Hundred Thousand Dollars ($100,000), against receipt by the Trust of the
aggregate purchase price of such Common Securities of One Hundred Thousand
Dollars ($100,000).  Contemporaneously
therewith and with the sale by the Trust to the Holders of an aggregate of
50,000 Preferred Securities having an aggregate Liquidation Amount of Fifty
Million Dollars ($50,000,000), an
Administrative Trustee, on behalf of the Trust, shall purchase from the
Depositor Notes, to be registered in the name of the Property Trustee on behalf
of the Trust and having an aggregate principal amount equal to Fifty Million
One Hundred Thousand Dollars ($50,100,000), and, in satisfaction of the purchase
price for such Notes, the Property Trustee, on behalf of the Trust, shall
deliver to the Depositor the sum of Fifty Million One Hundred Thousand Dollars
($50,100,000) (being the aggregate amount paid by the Holders for the Preferred
Securities, and the amount paid by the Depositor for the Common Securities).

SECTION 5.4.                                               The
Securities Certificates.

(a)                                  The
Preferred Securities Certificates shall be issued in minimum denominations of
$100,000 Liquidation Amount and integral multiples of $1,000 in excess thereof,
and the Common Securities Certificates shall be issued in minimum denominations
of $10,000 Liquidation Amount and integral multiples of $1,000 in excess
thereof.  The Securities Certificates
shall be executed on behalf of the Trust by manual or facsimile signature of at
least one Administrative Trustee. 
Securities Certificates bearing the signatures of individuals who were,
at the time when such signatures shall have been affixed, authorized to sign
such Securities Certificates on behalf of the Trust shall be validly issued and
entitled to the benefits of this Trust

 24
 

 

Agreement, notwithstanding that such individuals or
any of them shall have ceased to be so authorized prior to the delivery of such
Securities Certificates or did not have such authority at the date of delivery
of such Securities Certificates.

(b)                                 On
the Closing Date, upon the written order of an authorized officer of the
Depositor, the Administrative Trustees shall cause Securities Certificates to
be executed on behalf of the Trust and delivered, without further corporate
action by the Depositor, in authorized denominations.

(c)                                  The
Preferred Securities issued to QIBs/QPs shall be, except as provided in Section
5.6, Book-Entry Preferred Securities issued in the form of one or more
Global Preferred Securities registered in the name of the Depositary, or its
nominee and deposited with the Depositary or a custodian for the Depositary for
credit by the Depositary to the respective accounts of the Depositary
Participants thereof (or such other accounts as they may direct).  The Preferred Securities issued to a Person
other than a QIB/QP shall be issued in the form of Definitive Preferred
Securities Certificates.

(d)                                 A
Preferred Security shall not be valid until authenticated by the manual signature
of an authorized signatory of the Property Trustee.  Such signature shall be conclusive evidence
that the Preferred Security has been authenticated under this Trust
Agreement.  Upon written order of the
Trust signed by one Administrative Trustee, the Property Trustee shall
authenticate the Preferred Securities for original issue.  The Property Trustee may appoint an
authenticating agent that is a U.S. 
Person acceptable to the Trust to authenticate the Preferred
Securities.  A Common Security need not
be so authenticated and shall be valid upon execution by one or more
Administrative Trustees.  The form of
this certificate of authentication can be found in Section 5.13.

SECTION 5.5.                                               Rights
of Holders.

The Trust Securities
shall have no preemptive or similar rights and when issued and delivered to
Holders against payment of the purchase price therefor will be fully paid and
non-assessable by the Trust.  Except as
provided in Section 5.11(b), the Holders of the Trust Securities, in
their capacities as such, shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.

SECTION 5.6.                                               Book-Entry
Preferred Securities.

(a)                                  A
Global Preferred Security may be exchanged, in whole or in part, for Definitive
Preferred Securities Certificates registered in the names of the Owners only if
such exchange complies with Section 5.7 and (i) the Depositary
advises the Administrative Trustees and the Property Trustee in writing that
the Depositary is no longer willing or able properly to discharge its
responsibilities with respect to the Global Preferred Security, and no
qualified successor is appointed by the Administrative Trustees within ninety
(90) days of receipt of such notice, (ii) the Depositary ceases to be a
clearing agency registered under the Exchange Act and the Administrative
Trustees fail to appoint a qualified successor within ninety (90) days of
obtaining knowledge of such event, (iii) the Administrative Trustees at their
option advise the Property

 25
 

 

Trustee in writing that the Trust elects to terminate
the book-entry system through the Depositary or (iv) a Note Event of
Default has occurred and is continuing. 
Upon the occurrence of any event specified in clause (i), (ii), (iii) or
(iv) above, the Administrative Trustees shall notify the Depositary and
instruct the Depositary to notify all Owners of Book-Entry Preferred
Securities, the Delaware Trustee and the Property Trustee of the occurrence of
such event and of the availability of the Definitive Preferred Securities
Certificates to Owners of the Preferred Securities requesting the same.  Upon the issuance of Definitive Preferred
Securities Certificates, the Trustees shall recognize the Holders of the
Definitive Preferred Securities Certificates as Holders.  Notwithstanding the foregoing, if an Owner of
a beneficial interest in a Global Preferred Security wishes at any time to
transfer an interest in such Global Preferred Security to a Person other than a
QIB/QP, such transfer shall be effected, subject to the Applicable Depositary
Procedures, in accordance with the provisions of this Section 5.6 and Section
5.7, and the transferee shall receive a Definitive Preferred Securities
Certificate in connection with such transfer. 
A holder of a Definitive Preferred Securities Certificate that is a
QIB/QP may, upon request and in accordance with the provisions of this Section
5.6 and Section 5.7, exchange such Definitive Preferred Securities
Certificate for a beneficial interest in a Global Preferred Security.

(b)                                 If
any Global Preferred Security is to be exchanged for Definitive Preferred
Securities Certificates or canceled in part, or if any Definitive Preferred
Securities Certificate is to be exchanged in whole or in part for any Global
Preferred Security, then either (i) such Global Preferred Security shall be so
surrendered for exchange or cancellation as provided in this Article V
or (ii) the aggregate Liquidation Amount represented by such Global Preferred
Security shall be reduced, subject to Section 5.4, or increased by an
amount equal to the Liquidation Amount represented by that portion of the
Global Preferred Security to be so exchanged or canceled, or equal to the
Liquidation Amount represented by such Definitive Preferred Securities
Certificates to be so exchanged for any Global Preferred Security, as the case
may be, by means of an appropriate adjustment made on the records of the
Securities Registrar, whereupon the Property Trustee, in accordance with the
Applicable Depositary Procedures, shall instruct the Depositary or its
authorized representative to make a corresponding adjustment to its
records.  Upon any such surrender to the
Administrative Trustees or the Securities Registrar of any Global Preferred
Security or Securities by the Depositary, accompanied by registration
instructions, the Administrative Trustees, or any one of them, shall execute
the Definitive Preferred Securities Certificates in accordance with the
instructions of the Depositary.  None of
the Securities Registrar or the Trustees shall be liable for any delay in
delivery of such instructions and may conclusively rely on, and shall be fully
protected in relying on, such instructions.

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

(d)                                 The
Depositary or its nominee, as registered owner of a Global Preferred Security,
shall be the Holder of such Global Preferred Security for all purposes under
this Trust Agreement and the Global Preferred Security, and Owners with respect
to a Global Preferred Security shall hold such interests pursuant to the
Applicable Depositary Procedures.  The
Securities Registrar and the Trustees shall be entitled to deal with the
Depositary for all purposes

 26
 

 

of this Trust Agreement relating to the Global
Preferred Securities (including the payment of the Liquidation Amount of and
Distributions on the Book-Entry Preferred Securities represented thereby and
the giving of instructions or directions by Owners of Book-Entry Preferred
Securities represented thereby and the giving of notices) as the sole Holder of
the Book-Entry Preferred Securities represented thereby and shall have no
obligations to the Owners thereof.  None
of the Trustees nor the Securities Registrar shall have any liability in
respect of any transfers effected by the Depositary.

(e)                                  The
rights of the Owners of the Book-Entry Preferred Securities shall be exercised
only through the Depositary and shall be limited to those established by law,
the Applicable Depositary Procedures and agreements between such Owners and the
Depositary and/or the Depositary Participants; provided,
that solely for the purpose of determining whether the Holders of the requisite
amount of Preferred Securities have voted on any matter provided for in this
Trust Agreement, to the extent that Preferred Securities are represented by a
Global Preferred Security, the Trustees may conclusively rely on, and shall be
fully protected in relying on, any written instrument (including a proxy)
delivered to the Property Trustee by the Depositary setting forth the Owners’
votes or assigning the right to vote on any matter to any other Persons either
in whole or in part.  To the extent that
Preferred Securities are represented by a Global Preferred Security, the
initial Depositary will make book-entry transfers among the Depositary Participants
and receive and transmit payments on the Preferred Securities that are
represented by a Global Preferred Security to such Depositary Participants, and
none of the Depositor or the Trustees shall have any responsibility or
obligation with respect thereto.

(f)                                    To
the extent that a notice or other communication to the Holders is required
under this Trust Agreement, for so long as Preferred Securities are represented
by a Global Preferred Security, the Trustees shall give all such notices and
communications to the Depositary, and shall have no obligations to the Owners.

SECTION
5.7.                                               Registration
of Transfer and Exchange of Preferred Securities Certificates.

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

(b)                                 Subject
to Section 5.7(d), upon surrender for registration of transfer of any Preferred
Securities Certificate at the office or agency maintained pursuant to Section 5.7(f),
the Administrative Trustees or any one of them shall execute by manual or
facsimile signature and deliver to the Property Trustee, and the Property
Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Preferred Securities Certificates in
authorized denominations of a like aggregate Liquidation Amount as may be
required by this Trust Agreement dated the date of execution by such
Administrative Trustee or

 27
 

 

Trustees.  At
the option of a Holder, Preferred Securities Certificates may be exchanged for
other Preferred Securities Certificates in authorized denominations and of a
like aggregate Liquidation Amount upon surrender of the Preferred Securities
Certificate to be exchanged at the office or agency maintained pursuant to Section
5.7(f).  Whenever any Preferred
Securities Certificates are so surrendered for exchange, the Administrative
Trustees or any one of them shall execute by manual or facsimile signature and
deliver to the Property Trustee, and the Property Trustee shall authenticate
and deliver, the Preferred Securities Certificates that the Holder making the
exchange is entitled to receive.

(c)                                  The
Securities Registrar shall not be required, (i) to issue, register the
transfer of or exchange any Preferred Security during a period beginning at the
opening of business fifteen (15) days before the day of selection for
redemption of such Preferred Securities pursuant to Article IV and
ending at the close of business on the day of mailing of the notice of redemption
or (ii) to register the transfer of or exchange any Preferred Security so
selected for redemption in whole or in part, except, in the case of any such
Preferred Security to be redeemed in part, any portion thereof not to be
redeemed.

(d)                                 Every
Preferred Securities Certificate presented or surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Securities Registrar duly
executed by the Holder or such Holder’s attorney duly authorized in writing and
accompanied by a certificate of the transferee substantially in the form set
forth as Exhibit E hereto.

(e)                                  No
service charge shall be made for any registration of transfer or exchange of
Preferred Securities Certificates, but the Property Trustee on behalf of the
Trust may require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer or exchange of
Preferred Securities Certificates.

(f)                                    The
Administrative Trustees shall designate an office or offices or agency or
agencies where Preferred Securities Certificates may be surrendered for
registration of transfer or exchange and initially designate the Corporate
Trust Office as its office and agency for such purposes.  The Administrative Trustees shall give prompt
written notice to the Depositor, the Property Trustee and to the Holders of any
change in the location of any such office or agency.

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

(h)                                 Neither
the Trustee nor the Securities Registrar shall be responsible for ascertaining
whether any transfer hereunder complies with the registration provisions of or
any exemptions from the Securities Act, applicable state securities laws or the
applicable laws of any other jurisdiction, ERISA, the Code or the Investment
Company Act; provided, that if a certificate is specifically required by the
express terms of this Section 5.7 to be delivered to the Trustee or the
Securities Registrar by a Holder or transferee of a Security, the Trustee and
the Securities Registrar shall be under a duty to receive and examine the same
to determine whether or not the certificate substantially conforms on its face
to the requirements of this Indenture and shall promptly notify the party
delivering the same if such certificate does not comply with such terms.

 28

 

SECTION 5.8.                                               Mutilated,
Destroyed, Lost or Stolen Securities Certificates.

(a)                                  If
any mutilated Securities Certificate shall be surrendered to the Securities
Registrar together with such security or indemnity as may be required by the
Securities Registrar to save each of the Trustees harmless, the Administrative
Trustees, or any one of them, on behalf of the Trust, shall execute and make
available for delivery in exchange therefor a new Securities Certificate of
like class, tenor and denomination.

(b)                                 If
the Securities Registrar shall receive evidence to its satisfaction of the
destruction, loss or theft of any Securities Certificate and there shall
be delivered to the Securities Registrar such security or indemnity as may be
required by it to save each of the Trustees harmless, then in the absence of
notice that such Securities Certificate shall have been acquired by a protected
purchaser, the Administrative Trustees, or any one of them, on behalf of the
Trust, shall execute and make available for delivery, and, with respect to
Preferred Securities, the Property Trustee shall authenticate, in exchange for
or in lieu of any such destroyed, lost or stolen Securities Certificate, a new
Securities Certificate of like class, tenor and denomination.

(c)                                  In
connection with the issuance of any new Securities Certificate under this Section 5.8,
the Administrative Trustees or the Securities Registrar may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith.

(d)                                 Any
duplicate Securities Certificate issued pursuant to this Section 5.8
shall constitute conclusive evidence of an undivided beneficial interest in the
assets of the Trust corresponding to that evidenced by the mutilated, lost,
stolen or destroyed Securities Certificate, as if originally issued, whether or
not the lost, stolen or destroyed Securities Certificate shall be found at any
time.

(e)                                  If
any such mutilated, destroyed, lost or stolen Securities Certificate has become
or is about to become due and payable, the Depositor in its discretion may
provide the Property Trustee or Paying Agent, as applicable, with the funds to
pay such Trust Security and upon receipt of such funds, the Property Trustee or
Paying Agent, as applicable, shall pay such Trust Security instead of issuing a
new Securities Certificate.

(f)                                    The
provisions of this Section 5.8 are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement of
mutilated, destroyed, lost or stolen Securities Certificates.

SECTION 5.9.                                               Persons
Deemed Holders.

The Trustees, the Paying Agent and the Securities
Registrar shall each treat the Person in whose name any Securities Certificate
shall be registered in the Securities Register as the owner of such Securities
Certificate for the purpose of receiving Distributions and for all other
purposes whatsoever, and none of the Trustees, the Paying Agent nor the
Securities Registrar shall be bound by any notice to the contrary.

 29
 

 

SECTION 5.10.                                         Cancellation.

All Preferred Securities Certificates surrendered for
registration of transfer or exchange or for payment shall, if surrendered to
any Person other than the Property Trustee, be delivered to the Property
Trustee, and any such Preferred Securities Certificates and Preferred
Securities Certificates surrendered directly to the Property Trustee for any
such purpose shall be promptly canceled by it. 
The Administrative Trustees may at any time deliver to the Property
Trustee for cancellation any Preferred Securities Certificates previously
delivered hereunder that the Administrative Trustees may have acquired in any
manner whatsoever, and all Preferred Securities Certificates so delivered shall
be promptly canceled by the Property Trustee. 
No Preferred Securities Certificates shall be executed and delivered in
lieu of or in exchange for any Preferred Securities Certificates canceled as
provided in this Section 5.10, except as expressly permitted by this
Trust Agreement.  All canceled Preferred
Securities Certificates shall be retained by the Property Trustee in accordance
with its customary practices.

SECTION 5.11.                                         Ownership of
Common Securities by Depositor.

(a)                                  On
the Closing Date, the Depositor shall acquire, and thereafter shall retain,
beneficial and record ownership of the Common Securities.  Neither the Depositor nor any successor
Holder of the Common Securities may transfer less than all the Common
Securities, and the Depositor or any such successor Holder may transfer the
Common Securities only (i) in connection with a consolidation or merger of
the Depositor into another Person, or any conveyance, transfer or lease by the
Depositor of its properties and assets substantially as an entirety to any
Person (in which event such Common Securities will be transferred to such
surviving entity, transferee or lessee, as the case may be), pursuant to
Section 8.1 of the Indenture or (ii) to the Depositor or an Affiliate
of the Depositor, in each such case in compliance with applicable law (including
the Securities Act, and applicable state securities and blue sky laws).  To the fullest extent permitted by law, any
attempted transfer of the Common Securities other than as set forth in the
immediately preceding sentence shall be void. 
The Administrative Trustees shall cause each Common Securities
Certificate issued to the Depositor to contain a legend stating substantially “THIS
CERTIFICATE IS NOT TRANSFERABLE EXCEPT IN COMPLIANCE WITH APPLICABLE LAW AND
SECTION 5.11 OF THE TRUST AGREEMENT.”

(b)                                 Any
Holder of the Common Securities shall be liable for the debts and obligations
of the Trust in the manner and to the extent set forth with respect to the
Depositor and agrees that it shall be subject to all liabilities to which the
Depositor may be subject and, prior to becoming such a Holder, shall deliver to
the Administrative Trustees an instrument of assumption satisfactory to such
Trustees.

SECTION 5.12.                                         Restricted
Legends.

(a)                                  Each
Preferred Security Certificate shall bear a legend in substantially the
following form:

“THIS PREFERRED SECURITY IS A GLOBAL SECURITY WITHIN
THE MEANING OF THE TRUST AGREEMENT HEREINAFTER REFERRED TO AND IS

 30
 

 

REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY
(“DTC”) OR A NOMINEE OF DTC.  THIS
PREFERRED SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE TRUST AGREEMENT, AND NO TRANSFER OF THIS PREFERRED SECURITY
(OTHER THAN A TRANSFER OF THIS PREFERRED SECURITY AS A WHOLE BY DTC TO A
NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC) MAY BE
REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.

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

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

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

THE PREFERRED SECURITIES WILL BE ISSUED AND MAY BE
TRANSFERRED ONLY IN BLOCKS HAVING AN AGGREGATE LIQUIDATION AMOUNT OF NOT LESS
THAN $100,000.  TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY

 31
 

 

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

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

(b)                                 The
above legend shall not be removed from any of the Preferred Securities
Certificates unless there is delivered to the Property Trustee and the
Depositor satisfactory evidence, which may include an Opinion of Counsel, as
may be reasonably required to ensure that any future transfers thereof may be
made without restriction under the provisions of the Securities Act and other
applicable law.  Upon provision of such
satisfactory evidence, one or more of the Administrative Trustees on behalf of
the Trust shall execute and deliver to the Property Trustee, and the Property
Trustee shall deliver, at the written direction of the Administrative Trustees
and the Depositor, Preferred Securities Certificates that do not bear the
legend.

SECTION 5.13.                                         Form of
Certificate of Authentication.

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

 32
 

 

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

	
  Dated:

  	
  JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,

  not in its individual capacity, but solely as
  Property Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized signatory

  

ARTICLE VI

MEETINGS; VOTING; ACTS OF HOLDERS

SECTION 6.1.                                               Notice
of Meetings.

Notice of all meetings of the Holders of the Preferred
Securities, stating the time, place and purpose of the meeting, shall be given
by the Property Trustee pursuant to Section 10.8 to each Holder of
Preferred Securities, at such Holder’s registered address, at least fifteen
(15) days and not more than ninety (90) days before the meeting.  At any such meeting, any business properly
before the meeting may be so considered whether or not stated in the notice of
the meeting.  Any adjourned meeting may
be held as adjourned without further notice.

SECTION 6.2.                                               Meetings
of Holders of the Preferred Securities.

(a)                                  No
annual meeting of Holders is required to be held.  The Property Trustee, however, shall call a
meeting of the Holders of the Preferred Securities to vote on any matter upon
the written request of the Holders of at least thirty-three and a third percent
(331/3%) in aggregate Liquidation
Amount of the Outstanding Preferred Securities and the Administrative Trustees
or the Property Trustee may, at any time in their discretion, call a meeting of
the Holders of the Preferred Securities to vote on any matters as to which such
Holders are entitled to vote.

(b)                                 The
Holders of at least a Majority in Liquidation Amount of the Preferred
Securities, present in person or by proxy, shall constitute a quorum at any
meeting of the Holders of the Preferred Securities.

(c)                                  If
a quorum is present at a meeting, an affirmative vote by the Holders present,
in person or by proxy, holding Preferred Securities representing at least a
Majority in Liquidation Amount of the Preferred Securities held by the Holders
present, either in person or by proxy, at such meeting shall constitute the
action of the Holders of the Preferred Securities, unless this Trust Agreement
requires a lesser or greater number of affirmative votes.

 33
 

 

SECTION 6.3.                       Voting
Rights.

Holders shall be entitled to one vote for each $10,000
of Liquidation Amount represented by their Outstanding Trust Securities in
respect of any matter as to which such Holders are entitled to vote.  All votes must be made by a U.S. Person that
is a beneficial owner of a Trust Security or by a U.S. Person acting as
irrevocable agent with discretionary powers for the beneficial owner of a Trust
Security that is not a U.S. Person. 
Holders that are not U.S. Persons must irrevocably appoint a U.S. Person
with discretionary powers to act as their agent with respect to consents and
other votes.

SECTION 6.4.                                               Proxies,
Etc.

At any meeting of Holders, any Holder entitled to vote
thereat may vote by proxy, provided,
that no proxy shall be voted at any meeting unless it shall have been placed on
file with the Administrative Trustees, or with such other officer or agent of
the Trust as the Administrative Trustees may direct, for verification prior to
the time at which such vote shall be taken. 
Pursuant to a resolution of the Property Trustee, proxies may be
solicited in the name of the Property Trustee or one or more officers of the
Property Trustee.  Only Holders of record
shall be entitled to vote.  When Trust Securities
are held jointly by several Persons, any one of them may vote at any meeting in
person or by proxy in respect of such Trust Securities, but if more than one of
them shall be present at such meeting in person or by proxy, and such joint
owners or their proxies so present disagree as to any vote to be cast, such
vote shall not be received in respect of such Trust Securities.  A proxy purporting to be executed by or on
behalf of a Holder shall be deemed valid unless challenged at or prior to its
exercise, and the burden of proving invalidity shall rest on the
challenger.  No proxy shall be valid more
than three years after its date of execution.

SECTION 6.5.                                               Holder
Action by Written Consent.

Any action that may be taken by Holders at a meeting
may be taken without a meeting and without prior notice if Holders holding at
least a Majority in Liquidation Amount of all Preferred Securities entitled to
vote in respect of such action (or such lesser or greater proportion thereof as
shall be required by any other provision of this Trust Agreement) shall consent
to the action in writing; provided,
that notice of such action is promptly provided to the Holders of Preferred
Securities that did not consent to such action. 
Any action that may be taken by the Holders of all the Common Securities
may be taken without a meeting and without prior notice if such Holders shall
consent to the action in writing.

SECTION 6.6.                                               Record
Date for Voting and Other Purposes.

Except as provided in Section 6.10(a), for the
purposes of determining the Holders who are entitled to notice of and to vote
at any meeting or to act by written consent, or to participate in any
distribution on the Trust Securities in respect of which a record date is not
otherwise provided for in this Trust Agreement, or for the purpose of any other
action, the Administrative Trustees may from time to time fix a date, not more
than ninety (90) days prior to the date of any meeting of Holders or the
payment of a Distribution or other action, as the case may be, as a record date
for the determination of the identity of the Holders of record for such
purposes.

 34
 

 

SECTION 6.7.                                               Acts
of Holders.

(a)                                  Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Trust Agreement to be given, made or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent
thereof duly appointed in writing; and, except as otherwise expressly provided
herein, such action shall become effective when such instrument or instruments
are delivered to an Administrative Trustee. 
Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such
instrument or instruments.  Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Trust Agreement and conclusive in
favor of the Trustees, if made in the manner provided in this Section 6.7.

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

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

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

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

(f)                                    If
any dispute shall arise among the Holders or the Trustees with respect to the
authenticity, validity or binding nature of any request, demand, authorization,
direction, notice, consent, waiver or other Act of such Holder or Trustee under
this Article VI, then the determination of such matter by the Property
Trustee shall be conclusive with respect to such matter.

 35
 

 

SECTION 6.8.                                               Inspection
of Records.

Upon reasonable written notice to the Administrative
Trustees and the Property Trustee, the records of the Trust shall be open to
inspection by any Holder during normal business hours for any purpose
reasonably related to such Holder’s interest as a Holder.

SECTION 6.9.                                               Limitations
on Voting Rights.

(a)                                  Except
as expressly provided in this Trust Agreement and in the Indenture and as
otherwise required by law, no Holder of Preferred Securities shall have any
right to vote or in any manner otherwise control the administration, operation
and management of the Trust or the obligations of the parties hereto, nor shall
anything herein set forth, or contained in the terms of the Securities
Certificates, be construed so as to constitute the Holders of Preferred
Securities from time to time as partners or members of an association.

(b)                                 So
long as any Notes are held by the Property Trustee on behalf of the Trust, the
Property Trustee shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Note Trustee, or
exercise any trust or power conferred on the Property Trustee with respect to
the Notes, (ii) waive any past default that may be waived under
Section 5.13 of the Indenture or waive compliance with any covenant or
condition under Section 10.7 of the Indenture, (iii) exercise any right to
rescind or annul a declaration that the principal of all the Notes shall be due
and payable or (iv) consent to any amendment, modification or termination
of the Indenture or the Notes, where such consent shall be required, without,
in each case, obtaining the prior approval of the Holders of at least a
Majority in Liquidation Amount of the Preferred Securities; provided, that where a consent under the
Indenture would require the consent of each holder of Notes (or each Holder of
Preferred Securities) affected thereby, no such consent shall be given by the
Property Trustee without the prior written consent of each Holder of Preferred
Securities.  The Property Trustee shall
not revoke any action previously authorized or approved by a vote of the
Holders of the Preferred Securities, except by a subsequent vote of the Holders
of the Preferred Securities.  In addition
to obtaining the foregoing approvals of the Holders of the Preferred
Securities, prior to taking any of the foregoing actions, the Property Trustee
shall, at the expense of the Depositor, obtain an Opinion of Counsel
experienced in such matters to the effect that such action shall not cause the
Trust to be taxable as a corporation or classified as other than a grantor
trust for U.S.  federal income tax purposes.

(c)                                  If
any proposed amendment to the Trust Agreement provides for, or the Trustees
otherwise propose to effect, (i) any action that would adversely affect in
any material respect the powers, preferences or special rights of the Preferred
Securities, whether by way of amendment to the Trust Agreement or otherwise or
(ii) the dissolution, winding-up or termination of the Trust, other than
pursuant to the terms of this Trust Agreement, then the Holders of Outstanding
Preferred Securities as a class will be entitled to vote on such amendment or
proposal and such amendment or proposal shall not be effective except with the
approval of the Holders of at least a Majority in Liquidation Amount of the
Preferred Securities.  Notwithstanding
any other provision of this Trust Agreement, no amendment to this Trust
Agreement may be made if, as a result of such amendment, it would cause the
Trust to be taxable as a corporation or classified as other than a grantor
trust for United States federal income tax purposes.

 36
 

 

SECTION 6.10.                                         Acceleration
of Maturity; Rescission of Annulment; Waivers of Past Defaults.

(a)                                  For
so long as any Preferred Securities remain Outstanding, if, upon a Note Event
of Default, the Note Trustee fails or the holders of not less than thirty-three
and a third percent (331/3%) in principal amount of the
outstanding Notes fail to declare the principal of all of the Notes to be
immediately due and payable, the Holders of at thirty-three and a third percent
(331/3%) in Liquidation Amount of the
Preferred Securities then Outstanding shall have the right to make such
declaration by a notice in writing to the Property Trustee, the Depositor and
the Note Trustee.  At any time after a
declaration of acceleration with respect to the Notes has been made and before
a judgment or decree for payment of the money due has been obtained by the Note
Trustee as provided in the Indenture, the Holders of at least a Majority in
Liquidation Amount of the Preferred Securities, by written notice to the
Property Trustee, the Depositor and the Note Trustee, may rescind and annul
such declaration and its consequences if:

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

(A)                              all
overdue installments of interest on all of the Notes;

(B)                                any
accrued Additional Interest on all of the Notes;

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

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

(ii)                                  all
Note Events of Default, other than the non-payment of the principal of the
Notes that has become due solely by such acceleration, have been cured or
waived as provided in Section 5.13 of the Indenture.

Upon receipt by the Property Trustee of written notice
requesting such an acceleration, or rescission and annulment thereof, by
Holders of any part of the Preferred Securities, a record date shall be
established for determining Holders of Outstanding Preferred Securities
entitled to join in such notice, which record date shall be at the close of
business on the day the Property Trustee receives such notice.  The Holders on such record date, or their
duly designated proxies, and only such Persons, shall be entitled to join in
such notice, whether or not such Holders remain Holders after such record date;
provided, that, unless such
declaration of acceleration, or rescission and annulment, as the case may be,
shall have become effective by virtue of the requisite percentage having joined
in such notice prior to the day that is ninety (90) days after such record
date, such notice of declaration of acceleration, or rescission and annulment,
as the case may be, shall automatically and without further action by any
Holder be canceled and of no further effect. 
Nothing in this paragraph shall prevent a Holder, or a proxy of a
Holder, from giving, after expiration of such ninety (90)-day period, a new
written notice of declaration of

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acceleration, or rescission and annulment thereof, as
the case may be, that is identical to a written notice that has been canceled
pursuant to the proviso to the preceding sentence, in which event a new record
date shall be established pursuant to the provisions of this Section 6.10(a).

(b)                                 For
so long as any Preferred Securities remain Outstanding, to the fullest extent permitted
by law and subject to the terms of this Trust Agreement and the Indenture, upon
a Note Event of Default specified in paragraph (a) or (b) of Section 5.1
of the Indenture, any Holder of Preferred Securities shall have the right to
institute a proceeding directly against the Depositor, pursuant to
Section 5.8 of the Indenture, for enforcement of payment to such Holder of
any amounts payable in respect of Notes having an aggregate principal amount
equal to the aggregate Liquidation Amount of the Preferred Securities of such
Holder.  Except as set forth in Section 6.10(a)
and this Section 6.10(b), the Holders of Preferred Securities shall
have no right to exercise directly any right or remedy available to the holders
of, or in respect of, the Notes.

(c)                                  Notwithstanding
paragraphs (a) and (b) of this Section 6.10, the Holders of at least a
Majority in Liquidation Amount of the Preferred Securities may, on behalf of
the Holders of all the Preferred Securities, waive any Note Event of Default,
except any Note Event of Default arising from the failure to pay any principal
of or premium, if any, or interest (including any Additional Interest) on the
Notes (unless such Note Event of Default has been cured and a sum sufficient to
pay all matured installments of interest and all principal and premium, if any,
on all Notes due otherwise than by acceleration has been deposited with the
Note Trustee) or a Note Event of Default in respect of a covenant or provision
that under the Indenture cannot be modified or amended without the consent of
the holder of each outstanding Note. 
Upon any such waiver, such Note Event of Default shall cease to exist
and any Note Event of Default arising therefrom shall be deemed to have been
cured for every purpose of the Indenture; but no such waiver shall affect any
subsequent Note Event of Default or impair any right consequent thereon.

(d)                                 Notwithstanding
paragraphs (a) and (b) of this Section 6.10, the Holders of at least a
Majority in Liquidation Amount of the Preferred Securities may, on behalf of
the Holders of all the Preferred Securities, waive any past Event of Default
and its consequences.  Upon such waiver,
any such Event of Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Trust Agreement, but no such waiver shall extend to any subsequent or other
Event of Default or impair any right consequent thereon.

(e)                                  The
Holders of a Majority in Liquidation Amount of the Preferred Securities shall
have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee in respect of this
Trust Agreement or the Notes or exercising any trust or power conferred upon
the Property Trustee under this Trust Agreement; provided, that, subject to Sections 8.5 and 8.7,
the Property Trustee shall have the right to decline to follow any such
direction if the Property Trustee being advised by counsel determines that the
action so directed may not lawfully be taken, or if the Property Trustee in
good faith shall, by an officer or officers of the Property Trustee, determine
that the proceedings so directed would be illegal or involve it in personal
liability or be unduly prejudicial to the rights of Holders not party to such
direction, and provided, further,
that nothing in this Trust Agreement shall impair the right of the

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Property Trustee to take any action deemed proper by
the Property Trustee and which is not inconsistent with such direction.

ARTICLE VII

REPRESENTATIONS AND WARRANTIES

SECTION 7.1.                                               Representations
and Warranties of the Property Trustee and the Delaware Trustee.

The Property Trustee and the Delaware Trustee, each
severally on behalf of and as to itself, hereby represents and warrants for the
benefit of the Depositor and the Holders that:

(a)                                  the
Property Trustee is a national banking association, duly organized and validly
existing under the laws of the United States of America;

(b)                                 the
Property Trustee has full corporate power, authority and legal right to
execute, deliver and perform its obligations under this Trust Agreement and has
taken all necessary action to authorize the execution, delivery and performance
by it of this Trust Agreement;

(c)                                  the
Delaware Trustee is a national banking association, duly formed and validly
existing under the laws of the United States;

(d)                                 the
Delaware Trustee has full corporate power, authority and legal right to
execute, deliver and perform its obligations under this Trust Agreement and has
taken all necessary action to authorize the execution, delivery and performance
by it of this Trust Agreement;

(e)                                  this
Trust Agreement has been duly authorized, executed and delivered by the
Property Trustee and the Delaware Trustee and constitutes the legal, valid and
binding agreement of each of the Property Trustee and the Delaware Trustee
enforceable against each of them in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws affecting creditors’ rights generally and to
general principles of equity;

(f)                                    the
execution, delivery and performance of this Trust Agreement have been duly
authorized by all corporate or other action on the part of the Property Trustee
and the Delaware Trustee and do not require any approval of stockholders of the
Property Trustee and the Delaware Trustee and such execution, delivery and
performance will not (i) violate the Restated Organization Certificate or
Articles of Association, as applicable, or By-laws of the Property Trustee or
the Delaware Trustee, (ii) violate any provision of, or constitute, with or
without notice or lapse of time, a default under, or result in the imposition
of any lien on any properties included in the Trust Property pursuant to the provisions
of any indenture, mortgage, credit agreement, license or other agreement or
instrument to which the Property Trustee or the Delaware Trustee is a party or
by which it is bound, or (iii) violate any applicable law, governmental
rule or regulation of the

 39
 

 

United States or the
State of Delaware, as the case may be, governing the banking, trust or general
powers of the Property Trustee or the Delaware Trustee or any order, judgment
or decree applicable to the Property Trustee or the Delaware Trustee;

(g)                                 neither
the authorization, execution or delivery by the Property Trustee or the
Delaware Trustee of this Trust Agreement nor the consummation of any of the
transactions by the Property Trustee or the Delaware Trustee contemplated
herein requires the consent or approval of, the giving of notice to, the
registration with or the taking of any other action with respect to any
governmental authority or agency under any existing law of the United States or
the State of Delaware governing the banking, trust or general powers of the
Property Trustee or the Delaware Trustee, as the case may be; and

(h)                                 to
the best of each of the Property Trustee’s and the Delaware Trustee’s
knowledge, there are no proceedings pending or threatened against or affecting
the Property Trustee or the Delaware Trustee in any court or before any
governmental authority, agency or arbitration board or tribunal that,
individually or in the aggregate, would materially and adversely affect the
Trust or would question the right, power and authority of the Property Trustee
or the Delaware Trustee, as the case may be, to enter into or perform its
obligations as one of the Trustees under this Trust Agreement.

SECTION 7.2.                                               Representations
and Warranties of Depositor.

The Depositor hereby represents and warrants for the
benefit of the Holders and the Trustees that:

(a)                                  the
Depositor is a limited liability company duly organized, validly existing and
in good standing under the laws of its state of formation;

(b)                                 the
Depositor has full limited liability power, authority and legal right to
execute, deliver and perform its obligations under this Trust Agreement and has
taken all necessary action to authorize the execution, delivery and performance
by it of this Trust Agreement;

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

(d)                                 the
Securities Certificates issued at the Closing Date on behalf of the Trust have
been duly authorized and will have been duly and validly executed, issued and
delivered by the applicable Trustees pursuant to the terms and provisions of,
and in accordance with the requirements of, this Trust Agreement and the
Holders will be, as of such date, entitled to the benefits of this Trust
Agreement;

 40

 

(e)                                  the
execution, delivery and performance of this Trust Agreement have been duly
authorized by all necessary limited liability company or other action on the
part of the Depositor and do not require any approval of members of the
Depositor and such execution, delivery and performance will not
(i) violate the certificate of formation or operating agreement (or other
organizational documents) of the Depositor or (ii) violate any applicable
law, governmental rule or regulation governing the Depositor or any material
portion of its property or any order, judgment or decree applicable to the
Depositor or any material portion of its property;

(f)                                    neither
the authorization, execution or delivery by the Depositor of this Trust
Agreement nor the consummation of any of the transactions by the Depositor
contemplated herein requires the consent or approval of, the giving of notice
to, the registration with or the taking of any other action with respect to any
governmental authority or agency under any existing law governing the Depositor
or any material portion of its property; and

(g)                                 there
are no proceedings pending or, to the best of the Depositor’s knowledge,
threatened against or affecting the Depositor or any material portion of its
property in any court or before any governmental authority, agency or
arbitration board or tribunal that, individually or in the aggregate, would
materially and adversely affect the Trust or would question the right, power
and authority of the Depositor, as the case may be, to enter into or perform
its obligations under this Trust Agreement.

ARTICLE VIII

THE TRUSTEES

SECTION 8.1.                                               Number
of Trustees.

The number of Trustees shall be five (5); provided, that the Property Trustee and
the Delaware Trustee may be the same Person, in which case the number of
Trustees shall be four (4).  The number
of Trustees may be increased or decreased by Act of the Holder of the Common
Securities subject to Sections 8.2, 8.3, and 8.4.  The death, resignation, retirement, removal,
bankruptcy, incompetence or incapacity to perform the duties of a Trustee shall
not operate to annul, dissolve or terminate the Trust.

SECTION 8.2.                                               Property
Trustee Required.

There shall at all times be a Property Trustee
hereunder with respect to the Trust Securities. 
The Property Trustee shall be a (i) a U.S. Person (within the meaning of
the Code) and (ii) 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 fifty million dollars ($50,000,000), subject to supervision or
examination by federal or state authority and having an office within the
United States.  If any such Person publishes
reports of condition at least annually pursuant to law or to the requirements
of its supervising or examining authority, then for the purposes of this Section
8.2, the combined capital and

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surplus of such Person shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published.  If at any time
the Property Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.2, it shall resign immediately in the
manner and with the effect hereinafter specified in this Article VIII.

SECTION 8.3.                                               Delaware
Trustee Required.

(a)                                  If
required by the Delaware Statutory Trust Act, there shall at all times be a
Delaware Trustee with respect to the Trust Securities.  The Delaware Trustee shall be a U.S. Person
(within the meaning of the Code) and either be (i) a natural person who is
at least 21 years of age and a resident of the State of Delaware or (ii) a
legal entity that has its principal place of business in the State of Delaware,
otherwise meets the requirements of applicable Delaware law and shall act
through one or more persons authorized to bind such entity.  If at any time the Delaware Trustee shall
cease to be eligible in accordance with the provisions of this Section 8.3,
it shall resign immediately in the manner and with the effect hereinafter
specified in this Article VIII. 
The Delaware Trustee shall have the same rights, privileges and
immunities as the Property Trustee.

(b)                                 The
Delaware Trustee shall not be entitled to exercise any powers, nor shall the
Delaware Trustee have any of the duties and responsibilities, of the Property
Trustee or the Administrative Trustees set forth herein.  The Delaware Trustee shall be one of the
trustees of the Trust for the sole and limited purpose of fulfilling the
requirements of Section 3807 of the Delaware Statutory Trust Act and for
taking such actions as are required to be taken by a Delaware trustee under the
Delaware Statutory Trust Act.  The duties
(including fiduciary duties), liabilities and obligations of the Delaware
Trustee shall be limited to (a) accepting legal process served on the Trust in
the State of Delaware and (b) the execution of any certificates required to be
filed with the Secretary of State of the State of Delaware that the Delaware
Trustee is required to execute under Section 3811 of the Delaware Statutory
Trust Act and there shall be no other duties (including fiduciary duties) or
obligations, express or implied, at law or in equity, of the Delaware Trustee.

SECTION 8.4.                                               Appointment
of Administrative Trustees.

(a)                                  There
shall at all times be one or more Administrative Trustees hereunder with
respect to the Trust Securities.  Each
Administrative Trustee shall be a U.S. Person (within the meaning of the Code)
and a natural person who is at least 21 years of age or a legal entity that
shall act through one or more persons authorized to bind that entity.  Each of the individuals identified as an “Administrative Trustee” in the preamble
of this Trust Agreement hereby accepts his or her appointment as such.

(b)                                 Except
where a requirement for action by a specific number of Administrative Trustees
is expressly set forth in this Trust Agreement, any act required or permitted
to be taken by, and any power of the Administrative Trustees may be exercised
by, or with the consent of, any one such Administrative Trustee.  Whenever a vacancy in the number of
Administrative Trustees shall occur, until such vacancy is filled by the
appointment of an Administrative Trustee in accordance with Section 8.11,
the Administrative Trustees in office, regardless of their number (and
notwithstanding any other provision of this Trust Agreement), shall have all
the

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powers granted to the Administrative Trustees and
shall discharge all the duties imposed upon the Administrative Trustees by this
Trust Agreement.

SECTION 8.5.                                               Duties
and Responsibilities of the Trustees.

(a)                                  The
rights, immunities, duties and responsibilities of the Trustees shall be as
provided by this Trust Agreement and there shall be no other duties (including
fiduciary duties) or obligations, express or implied, at law or in equity, of
the Trustees; provided, however,
that if an Event of Default known to the Property Trustee has occurred and is
continuing, the Property Trustee shall, prior to the receipt of directions, if
any, from the Holders of at least a Majority in Liquidation Amount of the
Preferred Securities, exercise such of the rights and powers vested in it by
this Trust Agreement, and use the same degree of care and skill in its
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of such person’s own affairs. 
Notwithstanding the foregoing, no provision of this Trust Agreement
shall require any of the Trustees to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its or their rights or powers, if it or
they shall have reasonable grounds for believing that repayment of such funds
or adequate indemnity against such risk or liability is not reasonably assured
to it.  Whether or not herein expressly
so provided, every provision of this Trust Agreement relating to the conduct or
affecting the liability of or affording protection to the Trustees shall be
subject to the provisions of this Section 8.5.  Nothing in this Trust Agreement shall be
construed to release any Administrative Trustee from liability for his or her
own negligent action, negligent failure to act; or his or her own willful
misconduct.  To the extent that, at law
or in equity, a Trustee has duties and liabilities relating to the Trust or to
the Holders, such Trustee shall not be liable to the Trust or to any Holder for
such Trustee’s good faith reliance on the provisions of this Trust
Agreement.  The provisions of this Trust Agreement,
to the extent that they restrict the duties and liabilities of the Trustees
otherwise existing at law or in equity, are agreed by the Depositor and the
Holders to replace such other duties and liabilities of the Trustees.

(b)                                 All
payments made by the Property Trustee or a Paying Agent in respect of the Trust
Securities shall be made only from the revenue and proceeds from the Trust
Property and only to the extent that there shall be sufficient revenue or
proceeds from the Trust Property to enable the Property Trustee or a Paying
Agent to make payments in accordance with the terms hereof.  Each Holder, by its acceptance of a Trust
Security, agrees that it will look solely to the revenue and proceeds from the Trust
Property to the extent legally available for distribution to it as herein
provided and that the Trustees are not personally liable to it for any amount
distributable in respect of any Trust Security or for any other liability in
respect of any Trust Security.  This Section 8.5(b)
does not limit the liability of the Trustees expressly set forth elsewhere in
this Trust Agreement.

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

 43
 

 

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

(ii)                                  the
Property Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of the
Holders of at least a Majority in Liquidation Amount of the Preferred
Securities;

(iii)                               the
Property Trustee’s sole duty with respect to the custody, safe keeping and
physical preservation of the Notes and the Payment Account shall be to deal
with such Property in a similar manner as the Property Trustee deals with
similar property for its own account, subject to the protections and
limitations on liability afforded to the Property Trustee under this Trust
Agreement;

(iv)                              the
Property Trustee shall not be liable for any interest on any money received by
it except as it may otherwise agree in writing with the Depositor; and money
held by the Property Trustee need not be segregated from other funds held by it
except in relation to the Payment Account maintained by the Property Trustee
pursuant to Section 3.1 and except to the extent otherwise required
by law; and

(v)                                 the
Property Trustee shall not be responsible for monitoring the compliance by the
Administrative Trustees or the Depositor with their respective duties under
this Trust Agreement, nor shall the Property Trustee be liable for the default
or misconduct of any other Trustee or the Depositor.

SECTION 8.6.                                               Notices
of Defaults and Extensions.

(a)                                  Within
ninety (90) days after the occurrence of a default actually known to the
Property Trustee, the Property Trustee shall transmit notice of such default to
the Holders, the Administrative Trustees and the Depositor, unless such default
shall have been cured or waived.  For the
purpose of this Section 8.6, the term “default”
means any event that is, or after notice or lapse of time or both would become,
an Event of Default.

(b)                                 The
Property Trustee shall not be charged with knowledge of any Event of Default
unless either (i) a Responsible Officer of the Property Trustee shall have
actual knowledge or (ii) the Property Trustee shall have received written
notice thereof from the Depositor, an Administrative Trustee or a Holder.

(c)                                  The
Property Trustee shall notify all Holders of the Preferred Securities of any
notice of default received with respect to the Notes.

SECTION 8.7.                                               Certain
Rights of Property Trustee.

Subject to the provisions of Section 8.5:

(a)                                  the
Property Trustee may conclusively rely and shall be protected in acting or
refraining from acting in good faith and in accordance with the terms hereof
upon any resolution, Opinion of Counsel, certificate, written representation of
a Holder or

 44
 

 

transferee, certificate
of auditors or any other resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, appraisal, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;

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

(c)                                  any
direction or act of the Depositor contemplated by this Trust Agreement shall be
sufficiently evidenced by an Officer’s Certificate unless otherwise expressly
provided herein;

(d)                                 any
direction or act of an Administrative Trustee contemplated by this Trust
Agreement shall be sufficiently evidenced by a certificate executed by such
Administrative Trustee and setting forth such direction or act;

(e)                                  the
Property Trustee shall have no duty to see to any recording, filing or
registration of any instrument (including any financing or continuation
statement or any filing under tax or securities laws) or any re-recording,
re-filing or re-registration thereof;

(f)                                    the
Property Trustee may consult with counsel (which counsel may be counsel to the
Property Trustee, the Depositor or any of its Affiliates, and may include any
of its employees) and the advice of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon and in accordance
with such advice; the Property Trustee shall have the right at any time to seek
instructions concerning the administration of this Trust Agreement from any
court of competent jurisdiction;

(g)                                 the
Property Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by this Trust Agreement at the request or direction of any
of the Holders pursuant to this Trust Agreement, unless such Holders shall have
offered to the Property Trustee reasonable security or indemnity against the
costs, expenses

 45
 

 

(including reasonable attorneys’
fees and expenses) and liabilities that might be incurred by it in compliance
with such request or direction, including reasonable advances as may be
requested by the Property Trustee; provided,
however, that nothing contained in this Section 8.7(g) shall
be construed to relieve the Property Trustee, upon the occurrence of an Event
of Default, of its obligation to exercise the rights and powers vested in it by
this Trust Agreement; provided, further, that nothing contained in this Section
8.7(g) shall prevent the Property Trustee from exercising its rights under Section
8.11 hereof;

(h)                                 the
Property Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, approval, bond, debenture, note or
other evidence of indebtedness or other paper or document, unless requested in
writing to do so by one or more Holders, but the Property Trustee may make such
further inquiry or investigation into such facts or matters as it may see fit,
and, if the Property Trustee shall determine to make such inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Depositor, personally or by agent or attorney;

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

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

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

(l)                                     without
prejudice to any other rights available to the Property Trustee under
applicable law, when the Property Trustee incurs expenses or renders services
in connection with a Bankruptcy Event, such expenses (including legal fees and
expenses of its agents and counsel) and the compensation for such services are
intended to constitute expenses of administration under any bankruptcy law or
law relating to creditors rights generally; and

(m)                               whenever
in the administration of this Trust Agreement the Property Trustee shall deem
it desirable that a matter be proved or established prior to taking, suffering
or omitting any action hereunder, the Property Trustee (unless other evidence

 46
 

 

be herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely on an Officer’s Certificate which, upon receipt of such
request, shall be promptly delivered by the Depositor.

No provision of this Trust Agreement shall be deemed
to impose any duty or obligation on any Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in
any jurisdiction in which it shall be illegal, or in which such Person shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts, or to exercise any such right, power, duty or obligation.

SECTION 8.8.                                               Delegation
of Power.

Any Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 its,
his or her power for the purpose of executing any documents contemplated in Section 2.5.  The Trustees shall have power to delegate
from time to time to such of their number or to the Depositor the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Trustees or otherwise as the Trustees may deem expedient, to
the extent such delegation is not prohibited by applicable law or contrary to
the provisions of this Trust Agreement.

SECTION 8.9.                                               May Hold
Securities.

Any Trustee or any other agent of any Trustee or the
Trust, in its individual or any other capacity, may become the owner or pledgee
of Trust Securities and except as provided in the definition of the term “Outstanding” in Article I, may
otherwise deal with the Trust with the same rights it would have if it were not
a Trustee or such other agent.

SECTION 8.10.                                         Compensation;
Reimbursement; Indemnity.

The Depositor agrees:

(a)                                  to
pay to the Trustees from time to time such reasonable compensation for all services
rendered by them hereunder as may be agreed by the Depositor and the Trustees
from time to time (which compensation shall not be limited by any provision of
law in regard to the compensation of a trustee of an express trust);

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

(c)                                  to
the fullest extent permitted by applicable law, to indemnify and hold harmless
(i) each Trustee, (ii) any Affiliate of any Trustee, (iii) any
officer, director, shareholder, employee, representative or agent of any
Trustee or any Affiliate of any Trustee and (iv) any employee or agent of
the Trust (referred to herein as an “Indemnified
Person”) from and against any loss, damage, liability, tax (other
than

 47
 

 

income, franchise or
other taxes imposed on amounts paid pursuant to Section 8.10(a) or (b)
hereof), penalty, expense or claim of any kind or nature whatsoever incurred
without negligence, bad faith or willful misconduct on its part, arising out of
or in connection with the acceptance or administration of the Trust hereunder,
including the advancement of funds to cover the costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.

The Trust shall have no payment, reimbursement or
indemnity obligations to the Trustees under this Section 8.10.  The provisions of this Section 8.10
shall survive the termination of this Trust Agreement and the earlier removal
or resignation of any Trustee.

No Trustee may claim any Lien on any Trust Property
whether before or after termination of the Trust as a result of any amount due
pursuant to this Section 8.10.

To the fullest extent permitted by law, in no event
shall the Property Trustee and the Delaware Trustee be liable for any indirect,
special, punitive or consequential loss or damage of any kind whatsoever,
including, but not limited to, lost profits, even if the Trustee has been
advised of the likelihood of such loss or damage and regardless of the form of
action.

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

SECTION 8.11.                                         Resignation
and Removal; Appointment of Successor.

(a)                                  No
resignation or removal of any Trustee and no appointment of a successor Trustee
pursuant to this Article VIII shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 8.12.

(b)                                 A
Trustee may resign at any time by giving written notice thereof to the Depositor
and, in the case of the Property Trustee and the Delaware Trustee, to the
Holders.

(c)                                  Unless
an Event of Default shall have occurred and be continuing, the Property Trustee
or the Delaware Trustee, or both of them, may be removed (with or without cause)
at any time by Act of the Holder of Common Securities.  If an Event of Default shall have occurred
and be continuing, the Property Trustee or the Delaware Trustee, or both of
them, may be removed (with or without cause) at such time by Act of the Holders
of at least a Majority in Liquidation Amount of the Preferred Securities,
delivered to the removed Trustee (in its individual capacity and on behalf of
the Trust).  An Administrative Trustee
may be removed (with or without cause) only by Act of the Holder of the Common
Securities at any time.

(d)                                 If
any Trustee shall resign, be removed or become incapable of acting as Trustee,
or if a vacancy shall occur in the office of any Trustee for any reason, at a
time when no Event of Default shall have occurred and be continuing, the Holder
of the Common Securities, by Act of

 48
 

 

the Holder of the Common Securities, shall promptly
appoint a successor Trustee or Trustees, and such successor Trustee and the
retiring Trustee shall comply with the applicable requirements of Section
8.12.  If the Property Trustee or the
Delaware Trustee shall resign, be removed or become incapable of continuing to
act as the Property Trustee or the Delaware Trustee, as the case may be, at a
time when an Event of Default shall have occurred and be continuing, the
Holders of the Preferred Securities, by Act of the Holders of a Majority in
Liquidation Amount of the Preferred Securities, shall promptly appoint a
successor Property Trustee or Delaware Trustee, and such successor Property
Trustee or Delaware Trustee and the retiring Property Trustee or Delaware
Trustee shall comply with the applicable requirements of Section 8.12.  If an Administrative Trustee shall resign, be
removed or become incapable of acting as Administrative Trustee, at a time when
an Event of Default shall have occurred and be continuing, the Holder of the
Common Securities by Act of the Holder of Common Securities shall promptly
appoint a successor Administrative Trustee and such successor Administrative
Trustee and the retiring Administrative Trustee shall comply with the
applicable requirements of Section 8.12. 
If no successor Trustee shall have been so appointed by the Holder of
the Common Securities or Holders of the Preferred Securities, as the case may
be, and accepted appointment in the manner required by Section 8.12
within thirty (30) days after the giving of a notice of resignation by a
Trustee, the removal of a Trustee, or a Trustee becoming incapable of acting as
such Trustee, any Holder who has been a Holder of Preferred Securities for at
least six (6) months may, on behalf of himself and all others similarly
situated, and any resigning Trustee may, in each case, at the expense of the
Depositor, petition any court of competent jurisdiction for the appointment of a
successor Trustee.

(e)                                  The
Depositor shall give notice of each resignation and each removal of the
Property Trustee or the Delaware Trustee and each appointment of a successor
Property Trustee or Delaware Trustee to all Holders in the manner provided in Section
10.8.  Each notice shall include the
name of the successor Property Trustee or Delaware Trustee and the address of
its Corporate Trust Office if it is the Property Trustee.

(f)                                    Notwithstanding
the foregoing or any other provision of this Trust Agreement, in the event any
Administrative Trustee or a Delaware Trustee who is a natural person dies or
becomes, in the opinion of the Holder of Common Securities, incompetent or
incapacitated, the vacancy created by such death, incompetence or incapacity may
be filled by (i) the unanimous act of the remaining Administrative Trustees if
there are at least two of them or (ii) otherwise by the Holder of the Common
Securities (with the successor in each case being a Person who satisfies the
eligibility requirement for Administrative Trustees or Delaware Trustee, as the
case may be, set forth in Sections 8.3 and 8.4).

(g)                                 Upon
the appointment of a successor Delaware Trustee, such successor Delaware
Trustee shall file a Certificate of Amendment to the Certificate of Trust in
accordance with section 3810 of the Delaware Statutory Trust Act.

SECTION 8.12.                                         Acceptance of
Appointment by Successor.

(a)                                  In
case of the appointment hereunder of a successor Trustee, each successor
Trustee shall execute and deliver to the Depositor and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee

 49
 

 

shall become effective and each such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee; but, on
request of the Trust or any successor Trustee such retiring Trustee shall, upon
payment of its charges, duly assign, transfer and deliver to such successor
Trustee all Trust Property, all proceeds thereof and money held by such
retiring Trustee hereunder with respect to the Trust Securities and the Trust.

(b)                                 Upon
request of any such successor Trustee, the Trust (or the retiring Trustee if
requested by the Depositor) shall execute any and all instruments for more
fully and certainly vesting in and confirming to such successor Trustee all
such rights, powers and trusts referred to in the preceding paragraph.

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

SECTION 8.13.                                         Merger,
Conversion, Consolidation or Succession to Business.

Any Person into which the Property Trustee or the
Delaware Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which such Trustee shall be a party, or any Person succeeding
to all or substantially all the corporate trust business of such Trustee, shall
be the successor of such Trustee hereunder, without the execution or filing of
any paper or any further act on the part of any of the parties hereto,
provided, that such Person shall be otherwise qualified and eligible under this
Article VIII.

SECTION 8.14.                                         Not
Responsible for Recitals, Issuance of Securities or Representations.

The recitals contained herein and in the Securities
Certificates shall be taken as the statements of the Trust and the Depositor,
and the Trustees do not assume any responsibility for their correctness.  The Trustees make no representations as to
the title to, or value or condition of, the property of the Trust or any part
thereof, nor as to the validity or sufficiency of this Trust Agreement, the
Notes or the Trust Securities.  The
Trustees shall not be accountable for the use or application by the Depositor
of the proceeds of the Notes.  It is
expressly understood and agreed by the parties hereto that insofar as any
document, agreement or certificate is executed on behalf of the Trust by any
Trustee (i) such document, agreement or certificate is executed and delivered
by such Trustee, not in its individual capacity but solely as Trustee under
this Trust Agreement in the exercise of the powers and authority conferred and
vested in it, (ii) each of the representations, undertakings and agreements
made on the part of the Trust is made and intended not as representations,
warranties, covenants, undertakings and agreements by any Trustee in its
individual capacity but is made and intended for the purpose of binding only
the Trust and (iii) under no circumstances shall any Trustee in its individual
capacity be personally liable for the payment of any indebtedness or expenses
of the Trust or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Trust under this
Trust Agreement or any other document, agreement or certificate.

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SECTION 8.15.                                         Property
Trustee May File Proofs of Claim.

(a)                                  In
case of any Bankruptcy Event (or event that with the passage of time would
become a Bankruptcy Event) relative to the Trust or any other obligor upon the
Trust Securities or the property of the Trust or of such other obligor or their
creditors, the Property Trustee (irrespective of whether any Distributions on
the Trust Securities shall then be due and payable and irrespective of whether
the Property Trustee shall have made any demand on the Trust for the payment of
any past due Distributions) shall be entitled and empowered, to the fullest
extent permitted by law, by intervention in such proceeding or otherwise:

(i)                                     to
file and prove a claim for the whole amount of any Distributions owing and
unpaid in respect of the Trust Securities and to file such other papers or
documents as may be necessary or advisable in order to have the claims of the
Property Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Property Trustee, its agents and
counsel) and of the Holders allowed in such judicial proceeding; and

(ii)                                  to
collect and receive any monies or other property payable or deliverable on any
such claims and to distribute the same;

and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such proceeding is
hereby authorized by each Holder to make such payments to the Property Trustee
and, in the event the Property Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Property Trustee first any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Property Trustee, its agents and counsel, and any other amounts
due the Property Trustee.

(b)                                 Nothing
herein contained shall be deemed to authorize the Property Trustee to authorize
or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or compensation affecting the Trust
Securities or the rights of any Holder thereof or to authorize the Property
Trustee to vote in respect of the claim of any Holder in any such proceeding.

SECTION 8.16.                                         Reports to the
Property Trustee.

(a)                                  The
Depositor and the Administrative Trustees shall deliver to the Property
Trustee, not later than forty-five (45) days after the end of each of the first
three fiscal quarters of the Depositor and not later than ninety (90) days
after the end of each fiscal year of the Trust ending after the date of this
Trust Agreement, an Officer’s Certificate covering the preceding fiscal year,
stating whether or not to the knowledge of the signers thereof the Depositor
and the Trust are in default in the performance or observance of any of the
terms, provisions and conditions of this Trust Agreement (without regard to any
period of grace or requirement of notice provided hereunder) and, if the
Depositor or the Trust shall be in default, specifying all such defaults and
the nature and status thereof of which they have knowledge.

(b)                                 The
Depositor shall furnish to the Holders and to prospective purchasers of
Securities, upon their request, the information required to be furnished
pursuant to Rule

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144A(d)(4) under the Securities Act.  The delivery requirement set forth in the
preceding sentence may be satisfied by compliance with Section 10.8(b) hereof.

(c)                                  The
Property Trustee shall obtain all reports, certificate and information, which
it is entitled to obtain under each of the Operative Documents.

ARTICLE IX

TERMINATION, LIQUIDATION AND MERGER

SECTION 9.1.                                               Dissolution
Upon Expiration Date.

Unless earlier dissolved, the Trust shall
automatically dissolve on October 30, 2041 (the
“Expiration Date”), and the Trust
Property shall be liquidated in accordance with Section 9.4.

SECTION 9.2.                                               Early
Termination.

The first to occur of any of the following events is
an “Early Termination Event”,
upon the occurrence of which the Trust shall be dissolved:

(a)                                  the
occurrence of a Bankruptcy Event in respect of, or the dissolution or
liquidation of, the Depositor, in its capacity as the Holder of the Common
Securities, unless the Depositor shall have transferred the Common Securities
as provided by Section 5.11, in which case this provision shall refer
instead to any such successor Holder of the Common Securities;

(b)                                 the
written direction to the Property Trustee from the Holder of the Common
Securities at any time to dissolve the Trust and, after satisfaction of any
liabilities of the Trust as required by applicable law, to distribute the Notes
to Holders in exchange for the Preferred Securities (which direction is
optional and wholly within the discretion of the Holder of the Common
Securities);

(c)                                  the
redemption of all of the Preferred Securities in connection with the payment at
maturity or redemption of all the Notes; and

(d)                                 the
entry of an order for dissolution of the Trust by a court of competent
jurisdiction.

SECTION 9.3.                                               Termination.

(a)                                  The
respective obligations and responsibilities of the Trustees and the Trust shall
terminate upon the latest to occur of the following: (a) the distribution
by the Property Trustee to Holders of all amounts required to be distributed
hereunder upon the liquidation of the Trust pursuant to Section 9.4,
or upon the redemption of all of the Trust Securities pursuant to Section 4.2;
(b) the satisfaction of any expenses owed by the Trust; and (c) the
discharge of all administrative duties of the Administrative Trustees,

 52
 

 

including the performance
of any tax reporting obligations with respect to the Trust or the Holders.

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

SECTION 9.4.                                               Liquidation.

(a)                                  If
an Early Termination Event specified in Section 9.2(a), (b) or (d)
occurs or upon the Expiration Date, the Trust shall be liquidated by the
Property Trustee as expeditiously as the Property Trustee shall determine to be
possible by distributing, after satisfaction of liabilities to creditors of the
Trust as provided by applicable law, to each Holder a Like Amount of Notes,
subject to Section 9.4(d). 
Notice of liquidation shall be given by the Property Trustee not less
than thirty (30) nor more than sixty (60) days prior to the Liquidation Date to
each Holder of Trust Securities at such Holder’s address appearing in the
Securities Register.  All such notices of
liquidation shall:

(i)                                     state
the Liquidation Date;

(ii)                                  state
that from and after the Liquidation Date, the Trust Securities will no longer
be deemed to be Outstanding and (subject to Section 9.4(d)) any
Securities Certificates not surrendered for exchange will be deemed to
represent a Like Amount of Notes; and

(iii)                               provide
such information with respect to the mechanics by which Holders may exchange
Securities Certificates for Notes, or if Section 9.4(d) applies,
receive a Liquidation Distribution, as the Property Trustee shall deem
appropriate.

(b)                                 Except
where Section 9.2(c) or 9.4(d) applies, in order to effect the
liquidation of the Trust and distribution of the Notes to Holders, the Property
Trustee, either itself acting as exchange agent or through the appointment of a
separate exchange agent, shall establish a record date for such distribution
(which shall not be more than forty-five (45) days prior to the Liquidation
Date nor prior to the date on which notice of such liquidation is given to the
Holders) and establish such procedures as it shall deem appropriate to effect
the distribution of Notes in exchange for the Outstanding Securities
Certificates.

(c)                                  Except
where Section 9.2(c) or 9.4(d) applies, after the Liquidation
Date, (i) the Trust Securities will no longer be deemed to be Outstanding,
(ii) certificates representing a Like Amount of Notes will be issued to
Holders of Securities Certificates, upon surrender of such Certificates to the
exchange agent for exchange, (iii) the Depositor shall use its best efforts to
have the Notes listed on the New York Stock Exchange or on such other exchange,
interdealer quotation system or self-regulatory organization on which the
Preferred Securities are then listed, if any, (iv) Securities Certificates not
so surrendered for exchange will be deemed to represent a

 53
 

 

Like Amount of Notes bearing accrued and unpaid
interest in an amount equal to the accumulated and unpaid Distributions on such
Securities Certificates until such certificates are so surrendered (and until
such certificates are so surrendered, no payments of interest or principal will
be made to Holders of Securities Certificates with respect to such Notes) and (v)
all rights of Holders holding Trust Securities will cease, except the right of
such Holders to receive Notes upon surrender of Securities Certificates.

(d)                                 Notwithstanding
the other provisions of this Section 9.4, if distribution of the
Notes in the manner provided herein is determined by the Property Trustee not
to be permitted or practical, the Trust Property shall be liquidated, and the
Trust shall be wound up by the Property Trustee in such manner as the Property
Trustee determines.  In such event, Holders
will be entitled to receive out of the assets of the Trust available for
distribution to Holders, after satisfaction of liabilities to creditors of the
Trust as provided by applicable law, an amount equal to the Liquidation Amount
per Trust Security plus accumulated and unpaid Distributions thereon to the
date of payment (such amount being the “Liquidation
Distribution”).  If, upon any
such winding up the Liquidation Distribution can be paid only in part because
the Trust has insufficient assets available to pay in full the aggregate
Liquidation Distribution, then, subject to the next succeeding sentence, the
amounts payable by the Trust on the Trust Securities shall be paid on a pro
rata basis (based upon Liquidation Amounts). 
The Holder of the Common Securities will be entitled to receive
Liquidation Distributions upon any such winding up pro rata (based upon
Liquidation Amounts) with Holders of all Trust Securities, except that, if an
Event of Default has occurred and is continuing, the Preferred Securities shall
have a priority over the Common Securities as provided in Section 4.3.

SECTION 9.5.                                               Mergers,
Consolidations, Amalgamations or Replacements of Trust.

The Trust may not merge with or into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its properties and
assets substantially as an entirety to, any Person except pursuant to this Article
IX.  At the request of the Holders of
the Common Securities, without the consent of the Holders of the Preferred
Securities, the Trust may merge with or into, consolidate, amalgamate, or be
replaced by or convey, transfer or lease its properties and assets
substantially as an entirety to a trust organized as such under the laws of any
State; provided, that:

(a)                                  such
successor entity either (i) expressly assumes all of the obligations of
the Trust under this Trust Agreement with respect to the Preferred Securities
or (ii) substitutes for the Preferred Securities other securities having
substantially the same terms as the Preferred Securities (such other
Securities, the “Successor Securities”)
so long as the Successor Securities have the same priority as the Preferred
Securities with respect to distributions and payments upon liquidation,
redemption and otherwise;

(b)                                 a
trustee of such successor entity possessing substantially the same powers and
duties as the Property Trustee is appointed to hold the Notes;

(c)                                  if
the Preferred Securities or the Notes are rated, such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not cause the
Preferred Securities or the Notes (including any Successor Securities) to be

 54
 

 

downgraded by any
nationally recognized statistical rating organization that then assigns a
rating to the Preferred Securities or the Notes;

(d)                                 the
Preferred Securities are listed, or any Successor Securities will be listed
upon notice of issuance, on any national securities exchange or interdealer
quotation system on which the Preferred Securities are then listed, if any;

(e)                                  such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease
does not adversely affect the rights, preferences and privileges of the Holders
of the Preferred Securities (including any Successor Securities) in any
material respect;

(f)                                    such
successor entity has a purpose substantially identical to that of the Trust;

(g)                                 prior
to such merger, consolidation, amalgamation, replacement, conveyance, transfer
or lease, the Depositor has received an Opinion of Counsel from a nationally
recognized, independent counsel to the Depositor experienced in such matters to
the effect that (i) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the Holders of the Preferred Securities (including any
Successor Securities) in any material respect; (ii) following such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease,
neither the Trust nor such successor entity will be required to register as an “investment
company” under the Investment Company Act and (iii) following such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, the
Trust (or the successor entity) will continue to be classified as a grantor
trust for U.S.  federal income tax
purposes; and

(h)                                 the
Depositor or its permitted transferee owns all of the common securities of such
successor entity.

Notwithstanding the foregoing, the Trust shall not,
except with the consent of Holders of all of the Preferred Securities, consolidate,
amalgamate, merge with or into, or be replaced by or convey, transfer or lease
its properties and assets substantially as an entirety to any other Person or
permit any other entity to consolidate, amalgamate, merge with or into, or
replace, the Trust if such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease would cause the Trust or the successor entity to
be taxable as a corporation or classified as other than a grantor trust for
United States federal income tax purposes or cause the Notes to be treated as
other than indebtedness of the Depositor for United States federal income tax
purposes.

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ARTICLE X

MISCELLANEOUS
PROVISIONS

SECTION
10.1.                                         Limitation
of Rights of Holders.

Except as set forth in Section 9.2, the death,
bankruptcy, termination, dissolution or incapacity of any Person having an
interest, beneficial or otherwise, in Trust Securities shall not operate to
terminate this Trust Agreement, nor annul, dissolve or terminate the Trust nor
entitle the legal representatives or heirs of such Person or any Holder for
such Person, to claim an accounting, take any action or bring any proceeding in
any court for a partition or winding up of the arrangements contemplated
hereby, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.

SECTION 10.2.                                         Agreed Tax
Treatment of Trust and Trust Securities.

The parties hereto and, by its acceptance or
acquisition of a Trust Security or a beneficial interest therein, the Holder
of, and any Person that acquires a beneficial interest in, such Trust Security
intend and agree to treat the Trust as a grantor trust for United States
federal, state and local tax purposes, and to treat the Trust Securities
(including all payments and proceeds with respect to such Trust Securities) as
undivided beneficial ownership interests in the Trust Property (and payments
and proceeds therefrom, respectively) for United States federal, state and
local tax purposes and to treat the Notes as indebtedness of the Depositor for
United States federal, state and local tax purposes.  The provisions of this Trust Agreement shall
be interpreted to further this intention and agreement of the parties.

SECTION 10.3.                                         Amendment.

(a)                                  This
Trust Agreement may be amended from time to time by the Property Trustee, the
Administrative Trustees and the Holder of all the Common Securities, without
the consent of any Holder of the Preferred Securities, (i) to cure any
ambiguity, correct or supplement any provision herein that may be defective or
inconsistent with any other provision herein, or to make or amend any other
provisions with respect to matters or questions arising under this Trust
Agreement, which shall not be inconsistent with the other provisions of this
Trust Agreement, (ii) to modify, eliminate or add to any provisions of
this Trust Agreement to such extent as shall be necessary to ensure that the
Trust will neither be taxable as a corporation nor be classified as other than
a grantor trust for United States federal income tax purposes at all times that
any Trust Securities are Outstanding or to ensure that the Notes are treated as
indebtedness of the Depositor for United States federal income tax purposes, or
to ensure that the Trust will not be required to register as an “investment
company” under the Investment Company Act or (iii) to add to the covenants,
restrictions or obligations of the Depositor; provided,
that in the case of clauses (i), (ii) or (iii), such action shall not adversely
affect in any material respect the interests of any Holder.

(b)                                 Except
as provided in Section 10.3(c), any provision of this Trust Agreement
may be amended by the Property Trustee, the Administrative Trustees and the
Holder of all of the Common Securities and with (i) the consent of Holders of
at least a Majority in Liquidation

 56
 

 

Amount of the Preferred Securities and (ii) receipt by
the Trustees of an Opinion of Counsel to the effect that such amendment or the
exercise of any power granted to the Trustees in accordance with such amendment
will not cause the Trust to be taxable as a corporation or classified as other
than a grantor trust for United States federal income tax purposes or affect
the treatment of the Notes as indebtedness of the Depositor for United States
federal income tax purposes or affect the Trust’s exemption from status (or
from any requirement to register) as an “investment company” under the
Investment Company Act.  In addition to
and subject to the foregoing, the Distribution Dates, Redemption Date and
Stated Maturity (as defined in the Indenture) with respect to the Preferred
Securities or a portion of the Preferred Securities shall be conformed in
connection with any modification of the Interest Payment Date, Redemption Date
or Stated Maturity of the Junior Subordinated Notes made by the Depositor and
the Trust at the direction of any holder of the Preferred Securities or a
portion of the Preferred Securities as set forth in Section 6 of the Purchase
Agreement.

(c)                                  Notwithstanding
any other provision of this Trust Agreement, without the consent of each
Holder, this Trust Agreement may not be amended to (i) change the accrual
rate, amount, currency or timing of any Distribution on or the redemption price
of the Trust Securities or otherwise adversely affect the amount of any
Distribution or other payment required to be made in respect of the Trust
Securities as of a specified date, except
as set forth in the last sentence of Section 10.3(b) above, (ii) restrict
or impair the right of a Holder to institute suit for the enforcement of any
such payment on or after such date, (iii) reduce the percentage of aggregate
Liquidation Amount of Outstanding Preferred Securities, the consent of whose
Holders is required for any such amendment, or the consent of whose Holders is
required for any waiver of compliance with any provision of this Trust
Agreement or of defaults hereunder and their consequences provided for in this
Trust Agreement; (iv) impair or adversely affect the rights and interests of
the Holders in the Trust Property, or permit the creation of any Lien on any
portion of the Trust Property; or (v) modify the definition of “Outstanding,” in this Section 10.3(c),
Sections 4.1, 4.2, 4.3, 6.10(e) or Article IX.

(d)                                 Notwithstanding
any other provision of this Trust Agreement, no Trustee shall enter into or
consent to any amendment to this Trust Agreement that would cause the Trust to
be taxable as a corporation or to be classified as other than a grantor trust
for United States federal income tax purposes or that would cause the Notes to
fail or cease to be treated as indebtedness of the Depositor for United States
federal income tax purposes or that would cause the Trust to fail or cease to
qualify for the exemption from status (or from any requirement to register) as
an “investment company” under the Investment Company Act.

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

(f)                                    No
Trustee shall be required to enter into any amendment to this Trust Agreement
that affects its own rights, duties or immunities under this Trust
Agreement.  The Trustees shall be
entitled to receive an Opinion of Counsel and an Officer’s Certificate stating
that any amendment to this Trust Agreement is in compliance with this Trust
Agreement and all conditions precedent herein provided for relating to such
action have been met.

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(g)                                 No
amendment or modification to this Trust Agreement that adversely affects in any
material respect the rights, duties, liabilities, indemnities or immunities of
the Delaware Trustee hereunder shall be permitted without the prior written
consent of the Delaware Trustee.

SECTION 10.4.                                         Separability.

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

SECTION 10.5.                                         Governing Law.

THIS TRUST AGREEMENT AND THE RIGHTS
AND OBLIGATIONS OF EACH OF THE HOLDERS, THE TRUST, THE DEPOSITOR AND THE
TRUSTEES WITH RESPECT TO THIS TRUST AGREEMENT AND THE TRUST SECURITIES SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE
OF DELAWARE WITHOUT REFERENCE TO ITS CONFLICTS OF LAWS PROVISIONS.

SECTION 10.6.                                         Successors.

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

SECTION 10.7.                                         Headings.

The Article and Section headings are for convenience
only and shall not affect the construction of this Trust Agreement

SECTION 10.8.                                         Reports,
Notices and Demands.

(a)                                  Any
report, notice, demand or other communication that by any provision of this
Trust Agreement is required or permitted to be given or served to or upon any
Holder or the Depositor may be given or served in writing delivered in person,
or by reputable, overnight courier, by telecopy or by deposit thereof,
first-class postage prepaid, in the United States mail, addressed, (a) in
the case of a Holder of Preferred Securities, to such Holder as such Holder’s
name and address may appear on the Securities Register; and (b) in the
case of the Holder of all the Common Securities or the Depositor, to Morgans
Group LLC, 475 Tenth Avenue, New York, NY 10018, Attention:  Chief Financial Officer, or to such other
address as may be specified in a written notice by the Holder of all the Common
Securities or the Depositor, as the case may be, to the Property Trustee.  Such report, notice, demand or other communication
to or upon a Holder or the Depositor shall be deemed to have been given when
received in person, within one (1) Business Day following delivery by overnight
courier, when telecopied with

 58
 

 

receipt confirmed, or within three (3) Business Days
following delivery by mail, except that if a notice or other document is
refused delivery or cannot be delivered because of a changed address of which
no notice was given, such notice or other document shall be deemed to have been
delivered on the date of such refusal or inability to deliver.

(b)                                 Any
notice, demand or other communication that by any provision of this Trust
Agreement is required or permitted to be given or served to or upon the
Property Trustee, the Delaware Trustee, the Administrative Trustees or the
Trust shall be given in writing by deposit thereof, first-class postage
prepaid, in the U.S. mail, personal delivery or facsimile transmission,
addressed to such Person as follows: (i) with respect to the Property
Trustee to JPMorgan Chase Bank, National Association, 600 Travis, 50th Floor, Houston, Texas 77002, Attention:
Worldwide Securities Services—MHG Capital Trust I, facsimile no. (713)
216-2101, initially, all notices and correspondence shall be addressed to
Mudassir Mohamed, (713) 216-2860; (ii) with respect to the Delaware
Trustee, to Chase Bank USA, National Association, c/o JPMorgan Chase Bank,
National Association, 500 Stanton Christiana Road, Building 4 (3rd Floor), Newark, Delaware 19713,
Attention:  Worldwide Securities
Services—MHG Capital Trust I, facsimile no. (302) 552-6280; (iii) with
respect to the Administrative Trustees, to them at the address above for
notices to the Depositor, marked “Attention: Administrative Trustees of MHG
Capital Trust I”, and (iv) with respect to the Trust, to its principal
executive office specified in Section 2.2, with a copy to the Property
Trustee.  Such notice, demand or other
communication to or upon the Trust, the Property Trustee or the Administrative
Trustees shall be deemed to have been sufficiently given or made only upon
actual receipt of the writing by the Trust, the Property Trustee or the
Administrative Trustees.

SECTION 10.9.                                         Agreement Not
to Petition.

Each of the Trustees and the Depositor agree for the
benefit of the Holders that, until at least one year and one day after the
Trust has been terminated in accordance with Article IX, they shall not
file, or join in the filing of, a petition against the Trust under any
Bankruptcy Law or otherwise join in the commencement of any proceeding against
the Trust under any Bankruptcy Law.  If
the Depositor takes action in violation of this Section 10.9, the
Property Trustee agrees, for the benefit of Holders, that at the expense of the
Depositor, it shall file an answer with the applicable bankruptcy court or
otherwise properly contest the filing of such petition by the Depositor against
the Trust or the commencement of such action and raise the defense that the
Depositor has agreed in writing not to take such action and should be estopped
and precluded therefrom and such other defenses, if any, as counsel for the
Property Trustee or the Trust may assert.

SECTION 10.10.                                   Counterparts.

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

[REMAINDER OF THIS
PAGE INTENTIONALLY LEFT BLANK]

 59

 

IN WITNESS WHEREOF, the parties hereto have executed
this Amended and Restated Trust Agreement as of the day and year first above
written.

	
  

  	
   

  	
  MORGANS GROUP LLC

  
	
   

  	
   

  	
  as Depositor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: Morgans Hotel Group Co., its managing member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Marc Gordon

  
	
   

  	
   

  	
   

  	
  Title: Chief Investment Officer and Executive

  
	
   

  	
   

  	
   

  	
   Vice President of Capital Markets

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, not in its individual capacity, but

  solely as Property Trustee

  	
   

  	
  CHASE BANK USA, NATIONAL ASSOCIATION,

  not in its individual capacity, but solely as
  Delaware Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  	
  Name:

  
	
   

  	
  Title:

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Administrative Trustee

  	
   

  	
  Administrative Trustee

  
	
  Name: W. Edward Scheetz

  	
   

  	
  Name: Marc Gordon

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Administrative Trustee

  	
   

  	
   

  
	
  Name: Richard Szymanski

  	
   

  	
   

  
								

 

 

 

Exhibit
A

CERTIFICATE OF TRUST

OF

MHG CAPITAL TRUST I

This Certificate of Trust of MHG Capital Trust I (the “Trust”) is being duly executed and filed
on behalf of the Trust by the undersigned, as trustee, to form a statutory
trust under the Delaware Statutory Trust Act (12 Del.  C. 
§3801 et seq.) (the “Act”).

1.                                       Name.  The name of the statutory trust formed by
this Certificate of Trust is: MHG Capital Trust I.

2.                                       Delaware
Trustee.  The name and business
address of the trustee of the Trust with its principal place of business in the
State of Delaware are Chase Bank USA, National Association c/o JPMorgan Chase
Bank, National Association, 500 Stanton Christiana Road, Building 4 (3rd Floor), Newark, Delaware 19713, Attention:
Worldwide Securities Services.

3.                                       Effective
Date.  This Certificate of Trust
shall be effective upon its filing with the Secretary of State of the State of
Delaware.

IN WITNESS WHEREOF, the undersigned trustee has
executed this Certificate of Trust in accordance with Section 3811(a)(1) of the
Act.

	
  

  	
  CHASE BANK USA, NATIONAL ASSOCIATION, not in its individual capacity, but solely as Delaware Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 A-1

 

Exhibit
B

[FORM OF COMMON
SECURITIES CERTIFICATE]

THIS COMMON SECURITY HAS
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAWS AND MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EXEMPTION FROM
REGISTRATION.  THIS CERTIFICATE IS NOT
TRANSFERABLE EXCEPT IN COMPLIANCE WITH APPLICABLE LAW AND SECTION 5.11 OF THE
TRUST AGREEMENT

	
  Certificate Number

  	
   

  	
  Number of Common Securities

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C-

  	
   

  	
   

  	
   

  	
   

  

 

Certificate Evidencing
Common Securities

of

MHG CAPITAL TRUST I

Common Securities

(liquidation amount $1,000 per Common Security)

MHG Capital Trust I, a statutory trust created under
the laws of the State of Delaware (the “Trust”),
hereby certifies that Morgans Group LLC, a Delaware limited
liability company (the “Holder”)
is the registered owner of One Hundred (100) common securities of the Trust
representing undivided common beneficial interests in the assets of the Trust
and designated the MHG Capital Trust I Common Securities (liquidation amount
$1,000 per Common Security) (the “Common
Securities”).  Except in
accordance with Section 5.11 of the Trust Agreement (as defined
below), the Common Securities are not transferable and, to the fullest extent
permitted by law, any attempted transfer hereof other than in accordance
therewith shall be void.  The
designations, rights, privileges, restrictions, preferences and other terms and
provisions of the Common Securities are set forth in, and this certificate and
the Common Securities represented hereby are issued and shall in all respects
be subject to the terms and provisions of, the Amended and Restated Trust
Agreement of the Trust, dated as of August 4, 2006 as the same may be amended
from time to time (the “Trust Agreement”),
among Morgans Group LLC, as
Depositor, JPMorgan Chase Bank, National Association, as Property Trustee,
Chase Bank USA, National Association, as Delaware Trustee, the Administrative
Trustees named therein and the Holders, from time to time, of the Trust
Securities.  The Trust will furnish a
copy of the Trust Agreement to the Holder without charge upon written request
to the Trust at its principal place of business or registered office.

 B-1
  
 

 

Upon receipt of this certificate, the Holder is bound
by the Trust Agreement and is entitled to the benefits thereunder.

This Common Securities Certificate shall be governed
by and construed in accordance with the laws of the State of Delaware.

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

In Witness Whereof, one of the Administrative Trustees
of the Trust has executed on behalf of the Trust this certificate this      
day of                      ,
200    .

	
  

  	
  MHG Capital Trust I

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Administrative Trustee

  

 

 B-2
  

 

Exhibit
C

[FORM OF PREFERRED
SECURITIES CERTIFICATE]

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

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

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

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

THE PREFERRED SECURITIES WILL BE ISSUED AND MAY BE
TRANSFERRED ONLY IN BLOCKS HAVING AN AGGREGATE LIQUIDATION AMOUNT OF NOT LESS
THAN $100,000.  TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY ATTEMPTED

 C-1
 

 

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

THE HOLDER OF THIS SECURITY, OR ANY INTEREST THEREIN,
BY ITS ACCEPTANCE HEREOF OR THEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT
IT IS NOT AN EMPLOYEE BENEFIT 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
PREFERRED SECURITY OR ANY INTEREST THEREIN. 
ANY PURCHASER OR HOLDER OF THE PREFERRED SECURITIES OR ANY INTEREST
THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF
THAT IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF
ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR
OTHER PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER
PERSON OR ENTITY USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO
FINANCE SUCH PURCHASE.

 C-2
 

 

 

	
   Certificate Number

  	
   

  	
  Aggregate
  Liquidation Amount

  Preferred Securities

  

 

CUSIP NO.

Certificate Evidencing Preferred Securities

of

MHG CAPITAL TRUST I

Preferred Securities

(liquidation amount $1,000 per Preferred Security)

MHG Capital Trust I, a statutory trust created under
the laws of the State of Delaware (the “Trust”),
hereby certifies that                            ,
a                    (the
“Holder”) is the registered owner
of                       
Preferred Securities or such other number of Preferred Securities
represented hereby as may be set forth in the records of the Securities
Registrar hereinafter referred to in accordance with the Trust Agreement (as
defined below) of the Trust representing an undivided preferred beneficial
interest in the assets of the Trust and designated the MHG Capital Trust I
Preferred Securities, (liquidation amount $1,000 per Preferred Security) (the “Preferred Securities”).  Subject to the terms of the Trust Agreement
(as defined below), the Preferred Securities are transferable on the books and
records of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer as
provided in Section 5.7 of the Trust Agreement (as defined
below).  The designations, rights,
privileges, restrictions, preferences and other terms and provisions of the
Preferred Securities are set forth in, and this certificate and the Preferred
Securities represented hereby are issued and shall in all respects be subject
to the terms and provisions of, the Amended and Restated Trust Agreement of the
Trust, dated as of August 4, 2006, as the same may be amended from time to time
(the “Trust Agreement”), among
Morgans Group LLC, as Depositor, JPMorgan Chase Bank, National Association, as
Property Trustee, Chase Bank USA, National Association, as Delaware Trustee,
the Administrative Trustees named therein and the Holders, from time to time,
of the Trust Securities.  The Trust will
furnish a copy of the Trust Agreement to the Holder without charge upon written
request to the Property Trustee at its Corporate Trust Office.

Upon receipt of this certificate, the Holder is bound
by the Trust Agreement and is entitled to the benefits thereunder.

 C-3
 

 

This Preferred Securities Certificate shall be
governed by and construed in accordance with the laws of the State of Delaware.

All capitalized terms used but not defined in this
Preferred Securities Certificate are used with the meanings specified in the
Trust Agreement, including the Schedules and Exhibits thereto.

IN WITNESS WHEREOF, one of the Administrative Trustees
of the Trust has executed on behalf of the Trust this certificate this            day of                    , 20     .

	
  

  	
  MHG CAPITAL
  TRUST I

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Administrative
  Trustee

  

 

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

 

	
  Dated:

  	
   

  	
  JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,

  not in its individual capacity, but solely as
  Property Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Authorized Signatory

  

 C-4
 

 

[FORM OF REVERSE OF
SECURITY]

The Trust promises to pay Distributions from August 4, 2006, or from the most
recent Distribution Date to which Distributions have been paid or duly provided
for, quarterly in arrears on January
30, April 30, July 30 and October 30 of each year,
commencing on October 30, 2006,
at a fixed rate equal to 8.676% per annum through the Interest Payment Date on
October 30, 2016 and thereafter at a variable rate equal to LIBOR plus 3.25% per annum of the Liquidation
Amount of the Preferred Securities represented by this Preferred Securities
Certificate, together with any Additional Interest Amounts, in respect to such
period.

Distributions on the Trust Securities shall be made by
the Paying Agent from the Payment Account and shall be payable on each
Distribution Date only to the extent that the Trust has funds then on hand and
available in the Payment Account for the payment of such Distributions.

Distributions on the Securities must be paid on the
dates payable to the extent that the Trust has funds available for the payment
of such Distributions in the Payment Account of the Trust.  The Trust’s funds available for Distribution
to the Holders of the Preferred Securities will be limited to payments received
from the Depositor.

During an Event of Default, the Depositor shall not
(i) declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of the Depositor’s
Equity Interests (as defined in the Indenture) or (ii) make any payment of
principal of or any interest or premium, if any, on or repay, repurchase or
redeem any debt securities of the Depositor that rank pari passu in all respects with or junior
in interest to the Notes (other than (a) repurchases, redemptions or other
acquisitions of Equity Interests in connection with any employment contract,
benefit plan or other similar arrangement with or for the benefit of one or
more employees, officers, directors or consultants or in connection with the
issuance of Equity Interests (or securities convertible into or exercisable for
such Equity Interests) as consideration in a transaction entered into prior to
the Event of Default, (b) as a result of any exchange or conversion of any
class or series of Equity Interests or indebtedness for any class or series of
Equity Interests or indebtedness, (c) the purchase of fractional interests
in Equity Interests, and (d) any dividend in the form of Equity Interests,
warrants, options or other rights where the dividend Equity Interests or the
Equity Interests issuable upon exercise of such warrants, options or other
rights is the same Equity Interest as that on which the dividend is being paid
or ranks pari passu with or
junior to such Equity Interests and any cash payments in lieu of fractional
shares issued in connection therewith).

On each Note Redemption Date, on the stated maturity
(or any date of principal repayment upon early maturity) of the Notes and on
each other date on (or in respect of) which any principal on the Notes is
repaid, the Trust will be required to redeem a Like Amount of Trust Securities
at the Redemption Price.  Under the
Indenture, the Notes may be redeemed by the Depositor on any Interest Payment
Date, at the Depositor’s option, on or after October 30, 2011 in whole or in part from time to time at the
Optional Note Redemption Price of the principal amount thereof or the redeemed
portion thereof, as applicable, together, in the case of any such redemption,
with accrued interest, including any Additional Interest, to but excluding the
date fixed for redemption.  The Notes may
also be redeemed by the Depositor, at its option, at any

 C-5
 

 

time, in whole but not in part, upon the occurrence of
an Investment Company Event or a Tax Event at the Special Note Redemption
Price; provided, that such
Investment Company Event or a Tax Event is continuing on the Redemption Date.

The Trust Securities redeemed on each Redemption Date
shall be redeemed at the Redemption Price with the proceeds from the
contemporaneous redemption or payment at maturity of Notes.  Redemptions of the Trust Securities (or
portion thereof) shall be made and the Redemption Price shall be payable on
each Redemption Date only to the extent that the Trust has funds then on hand
and available in the Payment Account for the payment of such Redemption Price.

Payments of Distributions (including any Additional
Interest Amounts), the Redemption Price, Liquidation Amount or any other
amounts in respect of the Preferred Securities shall be made by wire transfer
at such place and to such account at a banking institution in the United States
as may be designated in writing at least ten (10) Business Days prior to the
date for payment by the Person entitled thereto unless proper written transfer
instructions have not been received by the relevant record date, in which case such
payments shall be made by check mailed to the address of such Person as such
address shall appear in the Security Register. 
If any Preferred Securities are held by a Depositary, such Distributions
shall be made to the Depositary in immediately available funds.

The indebtedness evidenced by the Notes is, to the
extent provided in the Indenture, subordinate and junior in right of payment to
the prior payment in full of all Senior Debt (as defined in the Indenture), and
this Security is issued subject to the provisions of the Indenture with respect
thereto.

 C-6
 

 

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned assigns and transfers
this Preferred Securities Certificate to:

 

 

(Insert assignee’s social
security or tax identification number)

 

 

 

(Insert address and zip
code of assignee)

 

and irrevocably appoints

 

 

agent to transfer this Preferred Securities
Certificate on the books of the Trust. 
The agent may substitute another to act for him or her.

	
  Date: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature:

  	
   

  	
   

  
	
   

  	
  (Sign exactly as
  your name appears on the other side of this Preferred Securities Certificate)

  
					

 

The signature(s) should be guaranteed by an eligible
guarantor institution (banks, stockbrokers, savings and loan associations and
credit unions with membership in an approved signature guarantee medallion
program), pursuant to S.E.C. Rule 17Ad-15.

 C-7

 

Exhibit
D

Junior Subordinated
Indenture

 

 D-1

 

Exhibit
F

Form of Transferee
Certificate

to be Executed by Transferees

, [     ]

JPMorgan Chase Bank,
National Association
600 Travis, 50th Floor

Houston, Texas 77002

Attention: Worldwide Securities Services – MHG Capital Trust I

Morgans Group LLC

MHG Capital Trust I

475 Tenth Avenue

New York, NY 10018

Re:                               Purchase of $                     
stated liquidation amount of Preferred

Securities (the “Preferred Securities”) of MHG Capital Trust I

Ladies and Gentlemen:

In connection with our purchase of the Preferred
Securities we confirm that:

1.                                       We
understand that the Preferred Securities (the “Preferred Securities”) of MHG
Capital Trust I (the “Trust”) of Morgans Group LLC (the “Company”) executed in
connection therewith, and the Junior Subordinated Notes due 2036 of the Company
(the “Subordinated Notes”) (the entire amount of the Trust’s outstanding
Preferred Securities and the Subordinated Notes together being referred to
herein as the “Offered Securities”), have not been registered under the
Securities Act of 1933, as amended (the “Securities Act”), and may not be
offered or sold except as permitted in the following sentence.  We agree on our own behalf and on behalf of
any investor account for which we are purchasing the Offered Securities that,
if we decide to offer, sell or otherwise transfer any such Offered Securities,
(i) such offer, sale or transfer will be made only (a) to the Trust, (b) to a
person we reasonably believe is a “qualified purchaser” (a “QP”) (as defined in
Section 2(a)(51) of the Investment Company Act of 1940, as amended) and in
compliance with the Securities Act.  We
understand that the certificates for any Offered Security that we receive will
bear a legend substantially to the effect of the foregoing.

2.                                       We
are a “qualified purchaser” within the meaning of section 2(a)(51) of the
Investment Company Act of 1940, as amended, and are purchasing for our own
account or for the account of such a “qualified purchaser,” and we have such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of our investment in the Offered Securities,
and we and any account for which we are acting are each able to bear the
economic risks of our or its investment.

 F-1
 

 

3.                                       We
are acquiring the Offered Securities purchased by us for our own account (or
for one or more accounts as to each of which we exercise sole investment
discretion and have authority to make, and do make, the statements contained in
this letter) and not with a view to any distribution of the Offered Securities,
subject, nevertheless, to the understanding that the disposition of our
property will at all times be and remain within our control.

4.                                       In
the event that we purchase any Preferred Securities or any Subordinated Notes,
we will acquire such Preferred Securities having an aggregate stated
liquidation amount of not less than $100,000 or such Subordinated Notes having
an aggregate principal amount not less than $100,000, for our own account and
for each separate account for which we are acting.

5.                                       We
acknowledge that we are not a fiduciary of (i) an employee benefit, individual
retirement account or other plan or arrangement subject to Title I of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or
section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”)
(each a “Plan”); or (ii) an entity whose underlying assets include “plan assets”
by reason of any Plan’s investment in the entity, and are not purchasing any of
the Offered Securities on behalf of or with “plan assets” by reason of any Plan’s
investment in the entity.

6.                                       We
acknowledge that the Trust and the Company and others will rely upon the truth
and accuracy of the foregoing acknowledgments, representations, warranties and
agreements and agree that if any of the acknowledgments, representations,
warranties and agreements deemed to have been made by our purchase of any of
the Offered Securities are no longer accurate, we shall promptly notify the
Company.  If we are acquiring any Offered
Securities as a fiduciary or agent for one or more investor accounts, we
represent that we have sole discretion with respect to each such investor
account and that we have full power to make the foregoing acknowledgments,
representations and agreement on behalf of each such investor account.

	
   

  	
  (Name of Purchaser)

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  	
   

  
					

 

Upon transfer, the Preferred Securities (having a
stated liquidation amount of $                     )
would be registered in the name of the new beneficial owner as follows.

	
  Name:

  
	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Taxpayer ID
  Number: 

  	
   

  	
   

  
				

 

 F-2

 

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 after the expiration of the Fixed Rate
Period (each such day, a “LIBOR
Determination Date”), LIBOR for any given security shall for the
following interest payment period equal the rate, as obtained by the
Calculation Agent from Bloomberg Financial Markets Commodities News, for three-month Eurodollar deposits that
appears on Dow Jones Telerate Page 3750 (as defined in the International Swaps
and Derivatives Association, Inc.  2000
Interest Rate and Currency Exchange Definitions), or such other page as may
replace such Page 3750, as of 11:00 a.m. (London time) on such LIBOR
Determination Date.

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

(3) As used herein: 
“Reference Banks” means
four major banks in the London interbank market selected by the Calculation
Agent; and “LIBOR Business Day”
means a day on which commercial banks are open for business (including dealings
in foreign exchange and foreign currency deposits) in London.

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