Document:

Exhibit 4.1

Exhibit
4.1

JUNIOR
SUBORDINATED INDENTURE

between

HERSHA
HOSPITALITY LIMITED PARTNERSHIP

 

and

 

WILMINGTON
TRUST COMPANY

as
Trustee

 

_____________________

Dated as
of May 31, 2005

_____________________

 

TABLE
OF CONTENTS

 

	 	 	
      Page

	 	 	 
	
      ARTICLE
      I

	
      Definitions
      and Other Provisions of General Application

	 	 	 
	
      SECTION
      1.1.
	
      Definitions
	
      1

	
      SECTION
      1.2.
	
      Compliance
      Certificate and Opinions
	
      10

	
      SECTION
      1.3.
	
      Forms
      of Documents Delivered to Trustee
	
      10

	
      SECTION
      1.4.
	
      Acts
      of Holders
	
      11

	
      SECTION
      1.5.
	
      Notices,
      Etc.
	
      13

	
      SECTION
      1.6.
	
      Notice
      to Holders; Waiver
	
      13

	
      SECTION
      1.7.
	
      Effect
      of Headings and Table of Contents.
	
      14

	
      SECTION
      1.8.
	
      Successors
      and Assigns
	
      14

	
      SECTION
      1.9.
	
      Separability
      Clause
	
      14

	
      SECTION
      1.10.
	
      Benefits
      of Indenture
	
      14

	
      SECTION
      1.11.
	
      Governing
      Law
	
      14

	
      SECTION
      1.12.
	
      Submission
      to Jurisdiction
	
      14

	
      SECTION
      1.13.
	
      Non-Business
      Days
	
      15

	 	 	 
	
      ARTICLE
      II

	
      Security
      Forms

	 	 	 
	
      SECTION
      2.1.
	
      Form
      of Security
	
      15

	
      SECTION
      2.2.
	
      Restricted
      Legend
	
      19

	
      SECTION
      2.3.
	
      Form
      of Trustee’s Certificate of Authentication
	
      21

	
      SECTION
      2.4.
	
      Temporary
      Securities
	
      22

	
      SECTION
      2.5.
	
      Definitive
      Securities
	
      22

	 	 	 
	
      ARTICLE
      III

	
      The
      Securities

	 	 	 
	
      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
	
      29

 

-i-

 

	
      SECTION
      3.7.
	
      Persons
      Deemed Owners
	
      29

	
      SECTION
      3.8.
	
      Cancellation
	
      30

	
      SECTION
      3.9.
	
      RESERVED
	
      30

	
      SECTION
      3.10.
	
      Right
      of Set-Off
	
      30

	
      SECTION
      3.11.
	
      Agreed
      Tax Treatment
	
      30

	
      SECTION
      3.12.
	
      CUSIP
      Numbers
	
      30

	 	 	 
	
      ARTICLE
      IV

	
      Satisfaction
      and Discharge

	 	 	 
	
      SECTION
      4.1.
	
      Satisfaction
      and Discharge of Indenture
	
      30

	
      SECTION
      4.2.
	
      Application
      of Trust Money
	
      32

	 	 	 
	
      ARTICLE
      V

	
      Remedies

	 	 	 
	
      SECTION
      5.1.
	
      Events
      of Default
	
      32

	
      SECTION
      5.2.
	
      Acceleration
      of Maturity; Rescission and Annulment
	
      33

	
      SECTION
      5.3.
	
      Collection
      of Indebtedness and Suits for Enforcement by Trustee
	
      34

	
      SECTION
      5.4.
	
      Trustee
      May File Proofs of Claim
	
      35

	
      SECTION
      5.5.
	
      Trustee
      May Enforce Claim Without Possession of Securities
	
      35

	
      SECTION
      5.6.
	
      Application
      of Money Collected
	
      35

	
      SECTION
      5.7.
	
      Limitation
      on Suits
	
      36

	
      SECTION
      5.8.
	
      Unconditional
      Right of Holders to Receive Principal, Premium and Interest; Direct Action
      by Holders of Preferred Securities
	
      37

	
      SECTION
      5.9.
	
      Restoration
      of Rights and Remedies
	
      37

	
      SECTION
      5.10.
	
      Rights
      and Remedies Cumulative
	
      37

	
      SECTION
      5.11.
	
      Delay
      or Omission Not Waiver
	
      37

	
      SECTION
      5.12.
	
      Control
      by Holders
	
      38

	
      SECTION
      5.13.
	
      Waiver
      of Past Defaults
	
      38

	
      SECTION
      5.14.
	
      Undertaking
      for Costs
	
      38

	
      SECTION
      5.15.
	
      Waiver
      of Usury, Stay or Extension Laws
	
      39

	 	 	 
	
      ARTICLE
      VI

	
      The
      Trustee

	 	 	 
	
      SECTION
      6.1.
	
      Corporate
      Trustee Required
	
      39

	
      SECTION
      6.2.
	
      Certain
      Duties and Responsibilities
	
      39

	
      SECTION
      6.3.
	
      Notice
      of Defaults
	
      41

	
      SECTION
      6.4.
	
      Certain
      Rights of Trustee
	
      41

 

-ii-

	
      SECTION
      6.5.
	
      May
      Hold Securities
	
      43

	
      SECTION
      6.6.
	
      Compensation;
      Reimbursement; Indemnity
	
      43

	
      SECTION
      6.7.
	
      Resignation
      and Removal; Appointment of Successor
	
      44

	
      SECTION
      6.8.
	
      Acceptance
      of Appointment by Successor
	
      45

	
      SECTION
      6.9.
	
      Merger,
      Conversion, Consolidation or Succession to Business
	
      45

	
      SECTION
      6.10.
	
      Not
      Responsible for Recitals or Issuance of Securities
	
      46

	
      SECTION
      6.11.
	
      Appointment
      of Authenticating Agent
	
      46

	 	 	 
	
      ARTICLE
      VII

	
      Holder’s
      Lists and Reports by Trustee and Company

	 	 	 
	
      SECTION
      7.1.
	
      Company
      to Furnish Trustee Names and Addresses of Holders
	
      47

	
      SECTION
      7.2.
	
      Preservation
      of Information, Communications to Holders
	
      48

	
      SECTION
      7.3.
	
      Reports
      by Company and Trustee
	
      48

	 	 	 
	
      ARTICLE
      VIII

	
      Consolidation,
      Merger, Conveyance, Transfer or Lease

	 	 	 
	
      SECTION
      8.1.
	
      Company
      May Consolidate, Etc., Only on Certain Terms
	
      49

	
      SECTION
      8.2.
	
      Successor
      Company Substituted
	
      49

	 	 	 
	
      ARTICLE
      IX

	
      Supplemental
      Indentures

	 	 	 
	
      SECTION
      9.1.
	
      Supplemental
      Indentures without Consent of Holders
	
      50

	
      SECTION
      9.2.
	
      Supplemental
      Indentures with Consent of Holders
	
      51

	
      SECTION
      9.3.
	
      Execution
      of Supplemental Indentures
	
      51

	
      SECTION
      9.4.
	
      Effect
      of Supplemental Indentures
	
      52

	
      SECTION
      9.5.
	
      Reference
      in Securities to Supplemental Indentures
	
      52

	 		 
	
      ARTICLE
      X

	
      Covenants

	 	 	 
	
      SECTION
      10.1.
	
      Payment
      of Principal, Premium and Interest
	
      52

	
      SECTION
      10.2.
	
      Money
      for Security Payments to be Held in Trust
	
      52

	
      SECTION
      10.3.
	
      Statement
      as to Compliance
	
      53

	
      SECTION
      10.4.
	
      Calculation
      Agent
	
      54

	
      SECTION
      10.5.
	
      Additional
      Tax Sums
	
      54

	
      SECTION
      10.6.
	
      Additional
      Covenants
	
      55

	
      SECTION
      10.7.
	
      Waiver
      of Covenants
	
      56

 

-iii-

	
      SECTION
      10.8.
	
      Treatment
      of Securities
	
      56

	 	 	 
	
      ARTICLE
      XI

	
      Redemption
      of Securities

	 	 	 
	
      SECTION
      11.1.
	
      Optional
      Redemption
	
      56

	
      SECTION
      11.2.
	
      Special
      Event Redemption
	
      56

	
      SECTION
      11.3.
	
      Election
      to Redeem; Notice to Trustee
	
      57

	
      SECTION
      11.4.
	
      Selection
      of Securities to be Redeemed
	
      57

	
      SECTION
      11.5.
	
      Notice
      of Redemption
	
      57

	
      SECTION
      11.6.
	
      Deposit
      of Redemption Price
	
      58

	
      SECTION
      11.7.
	
      Payment
      of Securities Called for Redemption
	
      58

	 	 	 
	
      ARTICLE
      XII

	
      Subordination
      of Securities

	 	 	 
	
      SECTION
      12.1.
	
      Securities
      Subordinate to Senior Debt
	
      59

	
      SECTION
      12.2.
	
      No
      Payment When Senior Debt in Default; Payment Over of Proceeds Upon
      Dissolution, Etc.
	
      59

	
      SECTION
      12.3.
	
      Payment
      Permitted If No Default
	
      61

	
      SECTION
      12.4.
	
      Subrogation
      to Rights of Holders of Senior Debt
	
      61

	
      SECTION
      12.5.
	
      Provisions
      Solely to Define Relative Rights
	
      61

	
      SECTION
      12.6.
	
      Trustee
      to Effectuate Subordination
	
      62

	
      SECTION
      12.7.
	
      No
      Waiver of Subordination Provisions
	
      62

	
      SECTION
      12.8.
	
      Notice
      to Trustee
	
      62

	
      SECTION
      12.9.
	
      Reliance
      on Judicial Order or Certificate of Liquidating Agent
	
      63

	
      SECTION
      12.10.
	
      Trustee
      Not Fiduciary for Holders of Senior Debt
	
      63

	
      SECTION
      12.11.
	
      Rights
      of Trustee as Holder of Senior Debt; Preservation of Trustee’s
      Rights
	
      63

	
      SECTION
      12.12.
	
      Article
      Applicable to Paying Agents
	
      64

 

SCHEDULES

 

	
      Schedule
      A 
	
      Determination
      of LIBOR

	 	 
	
      Exhibit
      A
	
      Form
      of Officer’s Certificate

	
      Exhibit
      B
	
      Form
      of Officers’ Certificate pursuant to Section
10.3

 

-iv-

 

Junior
Subordinated Indenture, dated
as of May 31, 2005, between Hersha Hospitality Limited Partnership, a Virginia
limited partnership (the “Company”), and
Wilmington Trust Company, a Delaware banking corporation, as Trustee (in such
capacity, the “Trustee”).

Recitals
of the Company

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

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

Now,
therefore, this Indenture Witnesseth:

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

ARTICLE
I

Definitions
and Other Provisions of General Application

	 	
      SECTION
      1.1.
	
      Definitions.

 

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

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

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

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

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

 

1

 

(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, a 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.

“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.

“Bankruptcy
Code” means
Title 11 of the United States Code or any successor statute thereto, in each
case as amended from time to time.

“Board
of Trustees” means
the Board of Trustees of HHT, on behalf of the Company.

 

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 HHT 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.

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

“Common
Stock” means
the Priority Class A common shares, par value $0.1 per share, of the
Company.

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

“Company
Request” and
“Company
Order” mean,
respectively, the written request or order signed in the name of the Company by
the Chief Executive Officer, President or a Vice President of HHT, as the
Company’s general partner, and by the Chief Financial Officer, Treasurer, an
Assistant Treasurer, Secretary or an Assistant Secretary of HHT, as the
Company’s general partner, 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 Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890-0001, Attention: Corporate Capital
Markets.

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

 

3

“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.

“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.

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

 

4

“HHT” means
Hersha Hospitality Trust, a Maryland real estate investment trust and the
general partner of the Company.

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

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

“Interest
Payment Date” means
January 30th, April 30th, July 30th and October 30th of each year, commencing on
July 30, 2005, during the term of this Indenture.

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

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

“LIBOR” has the
meaning specified in Schedule
A.

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

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

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

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

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

 

5

“Officers’
Certificate” means a
certificate signed by the the Chief Executive Officer, President or a Vice
President of HHT, as the Company’s general partner, and by the Chief Financial
Officer, Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary, of HHT, as the Company’s general partner, 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.

“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 (other than the
Company) in trust or set aside and segregated in trust by the Company (if the
Company shall act as its own Paying Agent) 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, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities that a Responsible Officer of the Trustee actually knows to be so
owned shall be so disregarded. Securities so owned that have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee’s right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or such other obligor.
Notwithstanding anything herein to the contrary, Securities initially issued to
the Trust that are owned by the Trust shall be deemed to be Outstanding
notwithstanding the ownership by the Company or an Affiliate of any beneficial
interest in the Trust.

 

6

“Paying
Agent” means
the Trustee or any Person 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, limited liability company, trust,
unincorporated association, 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.

“Placement
Agent” has the
meaning specified in the Trust Agreement.

“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.

“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.

“Purchaser” means
Credit Suisse First Boston, acting through its Cayman Islands branch, as
purchaser of the Preferred Securities pursuant to the Subscription
Agreement.

“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
price at which such Security or portion thereof is to be redeemed as fixed by or
pursuant to this Indenture.

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

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

“Responsible
Officer” means,
with respect to the Trustee, any Senior Vice President, any Vice President, any
Assistant Vice President, the Secretary, any Assistant Secretary, the Treasurer,
any Assistant Treasurer, any Trust Officer or Assistant Trust Officer, or any
other officer in the Corporate Trust Office of the Trustee with direct
responsibility for the administration of this Indenture and also means, with
respect to a particular corporate trust matter, any other officer of the Trustee
to whom such matter is referred because of that officer’s knowledge of and
familiarity with the particular subject.

 

7

“Rights
Plan” means a
plan of the Company providing for the issuance by the Company to all holders of
its Common Stock of rights entitling the holders thereof to subscribe for or
purchase shares of any class or series of capital stock of the Company which
rights (i) are deemed to be transferred with such shares of such Common Stock
and (ii) are also issued in respect of future issuances of such Common Stock, 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; provided,
however, that
Senior Debt shall not include any other debt securities, and guarantees in
respect of such debt securities, issued to any trust other than the Trust (or a
trustee of 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 that rank pari passu with or junior in right of payment to the
Indenture, including, without limitation, the debt securities of the Company
issued under the Indenture, dated May 11, 2005, between the Company and JPMorgan
Chase Bank, National Association, as trustee.

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

“Special
Event Redemption Price” has the
meaning specified in Section
11.2.

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

“Stated
Maturity” means
July 30, 2035.

 

8

“Subscription
Agreement” means
the Preferred Securities Subscription Agreement, dated as of May 31, 2005, by
and among the Company, Hersha Hospitality Trust, the Trust, the Purchaser and
Credit Suisse First Boston LLC (as to certain provisions thereof).

“Subsidiary” means a
Person more than fifty percent (50%) of the outstanding voting stock or other
voting interests of which is owned, directly or indirectly, by the Company or by
one or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For purposes of this definition, “voting stock” means stock that
ordinarily has voting power for the election of directors, whether at all times
or only so long as no senior class of stock has such voting power by reason of
any contingency.

“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, the 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.

 

9

 

	 	
      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 furnish to the Trustee an
Officers’ Certificate stating that all conditions precedent (including covenants
compliance with which constitutes a condition precedent), if any, provided for
in this Indenture relating to the proposed action have been complied with and an
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent (including covenants compliance with which constitutes a
condition precedent), if any, have been complied with, except that, in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.

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

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

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

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

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

 

	 	
      SECTION
      1.3.
	
      Forms
      of Documents Delivered to
Trustee.

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

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

 

10

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

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

 

	 	
      SECTION
      1.4.
	
      Acts
      of Holders.

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

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

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

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

 

11

(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 below) by Holders of the requisite
principal amount of Outstanding Securities on such record date. Nothing in this
paragraph shall be construed to prevent the Company from setting a new record
date for any action for which a record date has previously been set pursuant to
this paragraph (whereupon the record date previously set shall automatically and
with no action by any Person be canceled and of no effect). Promptly after any
record date is set pursuant to this paragraph, the Company, at its own expense,
shall cause notice of such record date, the proposed action by Holders and the
applicable Expiration Date to be given to the Trustee in writing and to each
Holder of Securities in the manner set forth in Section
1.6.

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

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

 

12

	 	
      SECTION
      1.5.
	
      Notices,
      Etc.

 

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 the Trustee at its Corporate Trust Office,

(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 510 Walnut Street,
9th Floor,
Philadelphia, Pennsylvania, 19106, Attn: Chief Financial Officer, or at any
other address previously furnished in writing to the Trustee by the
Company,

(c)    
the
Placement Agent by the Trustee, the Company, any Holder or any holder or
beneficial owner of the Preferred Securities, shall be sufficient for every
purpose hereunder if in writing and mailed, first-class postage prepaid to the
Placement Agent at Eleven Madison Avenue, New York, New York 10010, Attention:
CDO Group, or any other address previously furnished by the Placement Agent,
or

(d)    
the
Purchaser by the Trustee, the Company, any Holder or any holder or beneficial
owner of the Preferred Securities, shall be sufficient for every purpose
hereunder if in writing and mailed first-class postage prepaid to the Purchaser
at c/o Credit Suisse First Boston LLC, Eleven Madison Avenue, New York, New York
10010, Attention: CDO Group, or any other address previously furnished by the
Purchaser.

	 	
      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, and not earlier than the earliest date, 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.

 

13

 

	 	
      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 and enforced in accordance with and governed by
the laws of the State of New York without reference to its conflict of laws
provisions (other than Section 5-1401 of the General Obligations
Law).

	 	
      SECTION
      1.12.
	
      Submission
      to Jurisdiction

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

 

14

	 	
      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:

Hersha
Hospitality Limited Partnership

Junior
Subordinated Note due 2035

	
      No.
      _____________
	
      $__________

Hersha
Hospitality Limited Partnership, a limited partnership organized and existing
under the laws of Virginia (hereinafter called the “Company,” which
term includes any successor Person under the Indenture hereinafter referred to),
for value received, hereby promises to pay to _______________, or registered
assigns, the principal sum of $__________ Dollars [if
the Security is a Global Security, then insert— or such
other principal amount represented hereby as may be set forth in the records of
the Securities Registrar hereinafter referred to in accordance with the
Indenture] on July 30, 2035. The Company further promises to pay interest on
said principal sum from May 31, 2005, or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, quarterly in arrears
on January 30th, April 30th, July 30th and October 30th of each year, commencing
on July 30, 2005, 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 per annum equal to
7.173% through the Interest Payment Date in July, 2010, and a variable rate per
annum, reset quarterly, equal to LIBOR plus 3.00% thereafter, 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, that
any overdue principal, premium, if any, or Additional Tax Sums and any overdue
installment of interest shall bear Additional Interest (to the extent that the
payment of such interest shall be legally enforceable) at a fixed rate per annum
equal to 7.173% through the Interest Payment Date in July, 2010, and a variable
rate per annum, reset quarterly, equal to LIBOR plus 3.00% thereafter,
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.

 

15

The
amount of interest payable shall be computed on the basis of a 360-day year and
the actual number of days elapsed in the relevant interest period. The amount of
interest payable for any full interest period shall be computed by dividing the
applicable rate per annum by four. 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 office or agency of the Company maintained for that purpose in 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.

 

16

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

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

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 May 31, 2005 (the
“Indenture”),
between the Company and Wilmington Trust Company, 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 and the Holders of the
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 May 31, 2005 (as modified, amended or
supplemented from time to time, the “Trust
Agreement”),
relating to Hersha Statutory Trust II (the “Trust”), among
the Company, as Depositor, the trustees named therein and the holders from time
to time of the Trust Securities issued pursuant thereto, shall have the meanings
assigned to them in the Indenture or the Trust Agreement, as the case may
be.

The
Company may, on any Interest Payment Date, at its option, upon not less than
thirty (30) days’ nor more than sixty (60) days’ written notice to the Holders
of the Securities (unless a shorter notice period shall be satisfactory to the
Trustee) on or after July 30, 2010 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, to but excluding the date fixed for
redemption.

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 the Special Event Redemption Price.

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

 

17

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, 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 registrable in the Securities Register, upon
surrender of this Security for registration of transfer at the office or agency
of the Company maintained for such purpose, duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Company and the
Securities Registrar and duly executed by, the Holder hereof or such Holder’s
attorney duly authorized in writing, and thereupon one or more new Securities,
of like tenor, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.

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

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

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

 

18

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

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

IN
WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

	 	
      Hersha
      Hospitality Limited Partnership

	 	 
	 	 
	 	
      By:
      Hersha Hospitality Trust, its general partner

	 	
      By:
       
	  
	 	
      Name:

	 	
      Title:

	 	
      SECTION
      2.2.
	
      Restricted
      Legend.

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

 

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

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

 

19

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 UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, OR (III)
TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a)
(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE
SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF AN “ACCREDITED INVESTOR”
WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3) OR (7) OF RULE 501, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, IN EACH CASE IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER APPLICABLE JURISDICTION AND, IN THE CASE OF (III), SUBJECT TO THE
RIGHT OF THE COMPANY TO REQUIRE AN OPINION OF COUNSEL ADDRESSING COMPLIANCE WITH
THE U.S. SECURITIES LAWS, AND OTHER INFORMATION SATISFACTORY TO IT 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.

 

20

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, UNLESS SUCH PURCHASER OR
HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF
LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38, 90-1 OR 84-14
OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF THIS SECURITY, OR
ANY INTEREST THEREIN, ARE NOT PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975
OF THE CODE WITH RESPECT TO SUCH PURCHASE AND HOLDING. ANY PURCHASER OR HOLDER
OF THE SECURITIES OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY
ITS PURCHASE AND HOLDING THEREOF THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT
PLAN OR OTHER PLAN TO WHICH TITLE I OF ERISA OR SECTION 4975 OF THE CODE IS
APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF ANY SUCH EMPLOYEE
BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE “PLAN ASSETS” OF
ANY SUCH EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCH
PURCHASE OR HOLDING WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION
406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH FULL EXEMPTIVE RELIEF IS NOT
AVAILABLE UNDER AN APPLICABLE STATUTORY OR ADMINISTRATIVE
EXEMPTION.

(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,
at the written direction of the Company, a Security that does not bear the
legend.

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

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

 

21

This
represents Securities designated therein and referred to in the within-mentioned
Indenture.

	Dated:	 
		
      WILMINGTON
      TRUST COMPANY,
      not in its 

	 	individual
      capacity but solely as Trustee
	 	
       

	 	
      By:
       
	  
	 	
      Authorized
      office

	 	
      SECTION
      2.4.
	
      Temporary
      Securities.

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

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

	 	
      SECTION
      2.5.
	
      Definitive
      Securities.

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

 

22

 

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
per annum equal to 7.173% through the Interest Payment Date in July, 2010, and a
variable rate per annum, reset quarterly, equal to LIBOR plus 3.00% thereafter,
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 (to the extent payment of
such interest would be legally enforceable) at a fixed rate per annum equal to
7.173% through the Interest Payment Date in July, 2010, and a variable rate per
annum, reset quarterly, equal to LIBOR plus 3.00% thereafter, from the dates
such amounts are due until they are paid or funds for the payment thereof are
made available for payment.

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

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

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

 

23

(ii)    
The
Company may make payment of any Defaulted Interest 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 (or by the Trustee if the Securities are not listed), if, after notice
given by the Company to the Trustee of the proposed payment pursuant to this
clause, such payment shall be deemed practicable by the Trustee.

(d)    
Payments
of interest on the Securities shall include interest accrued to but excluding
the respective Interest Payment Dates. Interest payments for the Securities
shall be computed and paid on the basis of a 360-day year and the actual number
of days elapsed in the relevant interest period. The amount of interest payable
for any full interest period shall be computed by dividing the applicable rate
per annum by four.

(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 the 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 the Security will be made at such place and to
such account as may be designated by the Property Trustee.

(f)    
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.

 

24

	 	
      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 $ 25,774,000 executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities. In
authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and shall be fully protected in relying upon:

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

(ii)    
an
Opinion of Counsel stating that (1) such Securities, when authenticated and
delivered by the Trustee and issued by the Company in the manner and subject to
any conditions specified in such Opinion of Counsel, will constitute valid and
legally binding obligations of the Company, 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; and (3) the Securities are not required to be registered
under the Securities Act.

(b)    
The
Securities shall be executed on behalf of the Company by an authorized officer
of HHT, the Company’s general partner. The signature of an authorized officer of
HHT 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 HHT (so long as HHT is the Company’s general partner) 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 officers, 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.

 

25

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

	 	
      SECTION
      3.4.
	
      Global
      Securities.

 

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

(b)    
Notwithstanding
any other provision in this Indenture, no Global Security may be exchanged in
whole or in part for registered Securities, and no transfer of a Global Security
in whole or in part may be registered, in the name of any Person other than the
Depositary for such Global Security or a nominee thereof unless (i) such
Depositary advises the Trustee and the Company in writing that such Depositary
is no longer willing or able to properly discharge its responsibilities as
Depositary with respect to such Global Security, and no qualified successor is
appointed by the Company within ninety (90) days of receipt by the Company of
such notice, (ii) such Depositary ceases to be a clearing agency registered
under the Exchange Act and no successor is appointed by the Company within
ninety (90) days after obtaining knowledge of such event, (iii) the Company
executes and delivers to the Trustee a Company Order stating that the Company
elects to terminate the book-entry system through the Depositary or (iv) an
Event of Default shall have occurred and be continuing. Upon the occurrence of
any event specified in clause (i), (ii), (iii) or (iv) above, the Trustee shall
notify the Depositary and instruct the Depositary to notify all owners of
beneficial interests in such Global Security of the occurrence of such event and
of the availability of Securities to such owners of beneficial interests
requesting the same. 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
the portion thereof to be so exchanged or canceled, or equal to 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.

 

26

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

(e)    
Securities
distributed to holders of Book-Entry Preferred Securities (as defined in the
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.

 

27

	 	
      SECTION
      3.5.
	
      Registration,
      Transfer and Exchange
Generally.

 

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

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

(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
upon receipt thereof 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 to (i)
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.

 

28

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

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

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

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

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

	 	
      SECTION
      3.7.
	
      Persons
      Deemed
Owners.

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

 

29

	 	
      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
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 United States 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 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.

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

 

30

(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, if any, and interest (including any Additional
Interest) to the date of such deposit (in the case of Securities that have
become due and payable) or to the Stated Maturity (or any date of principal
repayment upon early maturity) or Redemption Date, as the case may
be;

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

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

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

 

31

	 	
      SECTION
      4.2.
	
      Application
      of Trust
Money.

 

Subject
to the provisions of Section
10.2(e), all
money deposited with the Trustee pursuant to Section
4.1 shall be
held in trust and applied by the Trustee, in accordance with the provisions of
the Securities and this Indenture, to the payment in accordance with
Section
3.1, either
directly or through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of
the principal and any premium, if any, 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, if any, 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 and continuance of such default or breach for a period of thirty
(30) days after there has been given, by registered or certified mail, to the
Company by the Trustee or to the Company and the Trustee by the Holders of at
least twenty five percent (25%) in aggregate principal amount of the Outstanding
Securities a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a “Notice of Default” hereunder;
or

(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; or

 

32

(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.

	 	
      SECTION5.2.
	
      Acceleration
      of Maturity; Rescission and
Annulment.

(a)    
If an
Event of Default occurs and is continuing, then and in every such case the
Trustee or the Holders of not less than twenty five percent (25%) in principal
amount of the Outstanding Securities may declare the principal amount of all the
Securities to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders), provided, that if, upon an
Event of Default, the Trustee or the Holders of not less than twenty five
percent (25%) in principal amount of the Outstanding Securities fail to declare
the principal of all the Outstanding Securities to be immediately due and
payable, the holders of at least twenty five percent (25%) in aggregate
Liquidation Amount of the Preferred Securities then outstanding shall have the
right to make such declaration by a notice in writing to the Property Trustee,
the Company and the Trustee; and upon any such declaration the principal amount
of and the accrued interest (including any Additional Interest) on all the
Securities shall become immediately due and payable; provided, however, that
upon any such declaration prior to July 30, 2010, there shall become immediately
due and payable, in addition to the principal amount of and the accrued interest
(including any Additional Interest) on all the Securities, a premium equal to
seven and one-half (7.5%) percent of the principal amount of the
Securities.

(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 principal amount of the Outstanding Securities, by
written notice to the Indenture Trustee, or the holders of a majority in
aggregate Liquidation Amount of the Preferred Securities, by written notice to
the Property Trustee, the Company and the Trustee, may rescind and annul such
declaration and its consequences if:

 

33

(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, if any, 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 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.

 

34

(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:

 

35

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.

 

36

	 	
      SECTION
      5.8.
	
      Unconditional
      Right of Holders to Receive Principal, Premium 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.

 

37

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

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

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

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

	 	
      SECTION
      5.14.
	
      Undertaking
      for
Costs.

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

 

38

	 	
      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 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 corporation 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 corporation 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.

(a)    
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

 

39

(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 a majority in aggregate Liquidation Amount of
the 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 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 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, if applicable, from the holders of a majority in aggregate Liquidation
Amount of the Preferred Securities), relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee under this
Indenture; and

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

 

40

	 	
      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.

	 	
      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 Trustees 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;

 

41

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

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

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

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

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

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

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

 

42

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

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

	 	
      SECTION
      6.5.
	
      May
      Hold Securities.

 

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

	 	
      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 (including
in its individual capacity) 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 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.

 

43

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

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

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

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

	 	
      SECTION
      6.7.
	
      Resignation
      and Removal; Appointment of
Successor.

 

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

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

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

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

 

44

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

	 	
      SECTION
      6.8.
	
      Acceptance of Appointment by
Successor.

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

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

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

	 	
      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.

 

45

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

 

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

	 	
      SECTION
      6.11.
	
      Appointment
      of Authenticating
Agent.

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

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

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

 

46

(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, an alternative certificate of
authentication in the following form:

This
represents Securities designated therein and referred to in the within mentioned
Indenture.

	Dated:	 
		
      WILMINGTON
      TRUST COMPANY,
      not in its 

	 	individual
      capacity but solely as Trustee
	 	
       
      

	 	Authenticating Agent
	 	 
	 	
      By:
       
	  
	 	
              
      Authorized office

 

ARTICLE
VII

Holder’s
Lists and Reports by Trustee and 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)    
semi-annually,
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.

 

47

	 	
      SECTION
      7.2. 
	
      Preservation
      of Information, Communications to
Holders.

 

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

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

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

	 	
      SECTION
      7.3. 
	
      Reports
      by Company and
Trustee.

 

(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. 

(b)    
The
Company shall furnish (or cause to be furnished) to (i) the Holders and to
subsequent holders of Securities, (ii) the Purchaser, (iii) any beneficial owner
of the Securities or beneficial owner of the Preferred Securities reasonably
identified to the Company (which identification may be made either by such
beneficial owner or by the Placement Agent or the Purchaser) and (iv) any
designee of (i), (ii) or (iii) above, a duly completed and executed certificate
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 (or caused to be furnished) by the Company not later than forty
five (45) days after the end of each of the first three fiscal quarters of each
fiscal year of HHT and not later than ninety (90) days after the end of each
fiscal year of HHT.

(c)    
The
Trustee shall receive all reports, certificates and information, which it is
entitled to receive under each of the Operative Documents (as defined in the
Trust Agreement), and deliver to (i) the Purchaser, (ii) the Placement Agent and
(iii) a designee of (i) or (ii) above, as identified in writing to the Trustee,
all such reports, certificates or information promptly upon receipt
thereof.

 

48

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:

(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 Officers’ 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 Officers’ 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.

 

49

(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.

(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 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

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

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

 

50

	 	
      SECTION
      9.2.
	
      Supplemental
      Indentures with Consent of
Holders.

 

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

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

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

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

provided,
further, that, so
long as any Preferred Securities remain outstanding, no amendment under this
Section
9.2 shall be
effective until the holders of a majority in Liquidation Amount of the Trust
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 Trust Security shall have consented to such
amendment.

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

	 	
      SECTION
      9.3. 
	
      Execution
      of Supplemental
Indentures.

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

 

51

	 	
      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 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 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)    
If the
Company shall at any time act as its own Paying Agent with respect to the
Securities, it will, on or before each due date of the principal of and any
premium or interest (including any Additional Interest) on the Securities,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal and any premium or interest (including
Additional Interest) so becoming due until such sums shall be paid to such
Persons or otherwise disposed of as herein provided, and will promptly notify
the Trustee in writing of its failure so to act.

(b)    
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 a
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 so to
act.

 

52

(c)    
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.

(d)    
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
terms 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.

(e)    
Any money
deposited with the Trustee or any Paying Agent, or then held by the Company in
trust 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 Officers’ Certificate (substantially in the form attached hereto as
Exhibit
B)
covering the preceding fiscal 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.

 

53

	 	
      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. Except as described in the
immediately preceding sentence, so long as the Property Trustee holds any of the
Securities, the Calculation Agent shall be the Property Trustee. If the
Calculation Agent is unable or unwilling to act as such or is removed by the
Company, the Company will promptly appoint as a replacement Calculation Agent
the London office of a leading bank which is engaged in transactions in
Eurodollar deposits in the international Eurodollar market and which does not
control or is not controlled by or under common control with the Company or its
Affiliates. The Calculation Agent may not resign its duties without a successor
having been duly appointed.

(b)    
The
Calculation Agent shall be required to agree that, as soon as possible after
11:00 a.m. (London time) on each LIBOR Determination Date (as defined in
Schedule
A), but in
no event later than 11:00 a.m. (London time) on the Business Day immediately
following each LIBOR Determination Date, the Calculation Agent will calculate
the interest rate (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.

 

54

	 	
      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 shares of the Company’s capital stock,
or (ii) make any payment of principal of or any interest or premium 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 shares of capital stock of the
Company in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of any one or more employees,
officers, directors or consultants, in connection with a dividend reinvestment
or stockholder stock purchase plan or in connection with the issuance of capital
stock of the Company (or securities convertible into or exercisable for such
capital stock) as consideration in an acquisition transaction entered into prior
to the applicable Event of Default, (B) as a result of an exchange or conversion
of any class or series of the Company’s capital stock (or any capital stock of a
Subsidiary of the Company) for any class or series of the Company’s capital
stock or of any class or series of the Company’s indebtedness for any class or
series of the Company’s capital stock, (C) the purchase of fractional interests
in shares of the Company’s capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
(D) any declaration of a dividend in connection with any Rights Plan, the
issuance of rights, stock or other property under any Rights Plan or the
redemption or repurchase of rights pursuant thereto, or (E) any dividend in the
form of stock, warrants, options or other rights where the dividend stock or the
stock issuable upon exercise of such warrants, options or other rights is the
same stock as that on which the dividend is being paid or ranks pari
passu with or
junior to such stock.

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

 

(c)    
HHT shall
use its best efforts to maintain its status as a real estate investment trust
under the Internal Revenue Code of 1986, as amended, until such time that the
Board of Trustees of HHT, in its good faith determination, determines that it is
no longer in the best economic interest of HHT and its subsidiaries to do
so.

 

55

 

	 	
      SECTION  10.7.
	
      Waiver
      of
Covenants.

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

	 	
      SECTION 
      10.8.
	
      Treatment
      of Securities.

 

The
Company will treat the Securities as indebtedness, and the amounts 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.

ARTICLE
XI

Redemption
of Securities

	 	
      SECTION 
      11.1. 
	
      Optional
      Redemption.

The
Company may, at its option, on any Interest Payment Date, on or after July 30,
2010, 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 interest, including any Additional
Interest, to but excluding the date fixed for redemption.

	 	
      SECTION 
      11.2. 
	
      Special
      Event
Redemption.

 

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, prior to the
Interest Payment Date in July, 2010, at a redemption price equal to one hundred
seven and one-half (107.5%) percent of the principal amount thereof, and
following the Interest Payment Date in July 2010, at a Redemption Price equal to
100% (100%) of the principal amount thereof, together, in the case of any such
redemption, with accrued interest, including any Additional Interest, to but
excluding the date fixed for redemption (the “Special Event Redemption
Price”).

 

56

	 	
      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 Officers’ Certificate and an Opinion of Counsel
evidencing compliance with such restriction or condition.

	 	
      SECTION  11.4.
	
      Selection
      of Securities to be
Redeemed.

 

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

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

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

	 	
      SECTION 
      11.5. 
	
      Notice
      of
Redemption.

(a)    
Notice of
redemption shall be given not later than the 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:

 

57

(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
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 (or if
the Company is acting as its own Paying Agent, the Company will segregate and
hold in trust as provided in Section
10.2) 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.

 

58

(b)    
Upon
presentation of any Security redeemed in part only, the Company shall execute
and upon receipt thereof 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.

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

 

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

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

 

59

(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 capital stock, partnership
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 or any security, whether in cash, securities or
other property (other than securities of the Company or any other entity
provided for by a plan of reorganization or readjustment the payment of which is
subordinate, at least to the extent provided in these subordination provisions
with respect to the indebtedness evidenced by the Securities, to the payment of
all Senior Debt at the time outstanding and to any securities issued in respect
thereof under any such plan of reorganization or readjustment) shall be received
by the Trustee or any Holder in contravention of any of the terms hereof and
before all Senior Debt shall have been paid in full, such payment or
distribution or security shall be received in trust for the benefit of, and
shall be paid over or delivered and transferred to, the holders of the Senior
Debt at the time outstanding in accordance with the priorities then existing
among such holders for application to the payment of all Senior Debt remaining
unpaid, to the extent necessary to pay all such Senior Debt (including any
interest thereon accruing after the commencement of any Proceeding) in full. In
the event of the failure of the Trustee or any Holder to endorse or assign any
such payment, distribution or security, each holder of Senior Debt is hereby
irrevocably authorized to endorse or assign the same.

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

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

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

 

60

	 	
      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 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.

 

61

 

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

	 	
      SECTION 
      12.7.
	
       No
      Waiver of Subordination
Provisions.

 

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

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

	 	
      SECTION 
      12.8.
	
      Notice
      to Trustee.

 

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

 

62

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

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

 

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

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

 

The
Trustee, in its capacity as trustee under this Indenture, shall not owe or 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 as any other holder of Senior Debt, and nothing in this Indenture shall
deprive the Trustee of any of its rights as such holder. With respect to the
holders of Senior Debt of the Company, the Trustee undertakes to perform only
such of its obligations as are specifically set forth in this Article XII, and
no implied covenants or obligations with respect to the holders of such Senior
Debt shall be read into this Indenture against the Trustee. Nothing in this
Article XII shall apply to claims of, or payments to, the Trustee under or
pursuant to Section 6.6.

 

63

	 	
      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; provided, that
Sections 12.8 and
12.11 shall
not apply to the Company or any Affiliate of the Company if the Company or such
Affiliate acts as Paying Agent.

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.

* * *
*

 

64

 

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

 

		
      
      HERSHA
      HOSPITALITY LIMITED 

	 	
      PARTNERSHIP

	 	
       

	 	
      BY:
      HERSHA HOSPITALITY TRUST, ITS

	 	GENERAL
      PARTNER
	 	 
	 	 
		
      By:
      
	 
	 	      Name:
	 	      Title:
	 	 
	 	 
	 	WILMINGTON
      TRUST COMPANY,
      as Trustee
	 	 
		By:	 
	 	
             
      Name:

	 	       
      Title:

 

65

 

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 an Interest Payment Date
(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 U.S. Dollar deposits in Europe, which appears
on Dow Jones Telerate Page 3750 (as defined in the International Swaps and
Derivatives Association, Inc. 1991 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 U.S. Dollar deposits in Europe 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 U.S. Dollar deposits in
Europe 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.

 

 

Schedule
A-1

 

Exhibit
A

 

 

Form of
Officer’s Financial Certificate

The
undersigned, the [Chief Financial Officer/Treasurer/Assistant Treasurer/
Secretary/ Assistant Secretary, Chairman/ViceChairman/Chief Executive
Officer/President/Vice President] of Hersha Hospitality Trust, the general
partner of Hersha Hospitality Limited Partnership (the “Company”) hereby
certifies, pursuant to Section 7.3(b) of the Junior Subordinated Indenture,
dated as of May 31, 2005 (the “Indenture”), among the Company and Wilmington
Trust Company, as trustee, that, as of [date], [20__], HHT had
the following ratios and balances on a consolidated basis:

As of
[Quarterly/Annual
Financial Date]

	
      Senior
      secured indebtedness for borrowed money (“Debt”)
	
      $_____

	
      Senior
      unsecured Debt
	
      $_____

	
      Subordinated
      Debt
	
      $_____

	
      Total
      Debt
	
      $_____

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

[FOR
FISCAL YEAR END: Attached hereto are the audited consolidated financial
statements (including the balance sheet, income statement and statement of cash
flows, and notes thereto, together with the report of the independent
accountants thereon) of HHT and its consolidated subsidiaries for the three
years ended [date], 20__.]

[FOR
FISCAL QUARTER END: Attached hereto are the unaudited consolidated financial
statements (including the balance sheet and income statement) of HHT 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 HHT and its consolidated subsidiaries, and the results of operations and
changes in financial condition as of the date, and for the [quarter] [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).

 

 

Ex.
A-1

 

Exhibit
A

 

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

	 	
      By:
      
	
       

	 	
      Name:
	
       

	 	 	 
	 	 	 
	 	 	
      Hersha
      Hospitality Trust

	 	 	
      [Address]

	 	 	
      [Telephone
      Number]

	 	 	 
	 	 	 

 

 

Ex.
A-2

Exhibit
B

FORM
OF

OFFICERS’
CERTIFICATE

UNDER

SECTION
10.3

 

Pursuant
to Section 10.3 of the Indenture, dated as of May 31, 2005 (as amended or
supplemented from time to time, the “Indenture”), between Hersha Hospitality
Limited Partnership, as issuer (the “Company”), and Wilmington Trust Company, as
trustee, each of the undersigned hereby certifies that, to the knowledge of the
undersigned, the Company is not in default in the performance or observance of
any of the terms, provisions or conditions contained in the Indenture (without
regard to any period of grace or requirement of notice provided under the
Indenture), for the fiscal year ending on ________, 20__ [, except as follows:
specify
each such default and the nature and status thereof].

 

Capitalized
terms used herein, and not otherwise defined herein, have the respective
meanings assigned thereto in the Indenture.

 

IN
WITNESS WHEREOF, the undersigned have executed this Officers’ Certificate as of
___________, 20__.

	 	
      Hersha
      Hospitality Limited Partnership

	 	 
	 	
      By:
      Hersha Hospitality Trust, its general partner

	 	 
	 	
      By:
	 
	 	 	
      Name:

	 	 	
      Title:
      [Must
      be the Chairman of the Board, 

	 	 	
      a
      Vice Chairman of the Board, the

	 	 	
      Chief
      Executive Officer, the 

	 	 	
      President,
      or a Vice President]

 

Ex.
B-1

	 	
      By:
	 
	 	 	
      Name:

	 	 	
      Title:
      [Must
      be the Chief Financial Officer, 

	 	 	
      the
      Treasurer, an Assistant Treasurer,

	 	 	
      the
      Secretary or an Assistant Secretary]

	 	 	 
	 	 	 
	 	 	 

 

B-2Exhibit 4.2

Exhibit
4.2

 

 

AMENDED
AND RESTATED TRUST AGREEMENT

among

HERSHA
HOSPITALITY LIMITED PARTNERSHIP,

as
Depositor

WILMINGTON
TRUST COMPANY

as
Property Trustee

WILMINGTON
TRUST COMPANY

as
Delaware Trustee

and

THE
ADMINISTRATIVE TRUSTEES NAMED HEREIN

as
Administrative Trustees

________________

Dated as
of May 31, 2005

HERSHA
STATUTORY TRUST II

 

 

TABLE
OF CONTENTS

	 	
      Page

	 	 
	 	 
	
      ARTICLE
      I.     Defined Terms
	
      1

	
      SECTION
      1.1.     Definitions
	
      1

	 	 
	
      ARTICLE
      II.    The Trust
	
      10

	
      SECTION
      2.1.     Name
	
      10

	
      SECTION
      2.2.     Office of the Delaware Trustee; Principal Place of
      Business
	
      10

	
      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
	
      11

	
      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
	
      19

	
      SECTION
      4.4.     Payment Procedures
	
      20

	
      SECTION
      4.5.     Withholding Tax
	
      20

	
      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
	
      21

	
      SECTION
      4.9.     Exchanges
	
      21

	
      SECTION
      4.10.   Calculation Agent
	
      22

	
      SECTION
      4.11.   Certain Accounting Matters
	
      22

	 	 
	
      ARTICLE
      V.    Securities
	
      23

	
      SECTION
      5.1.     Initial Ownership
	
      23

	
      SECTION
      5.2.     Authorized Trust Securities
	
      23

	
      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
	
      28

	
      SECTION
      5.9.     Persons Deemed Holders
	
      29

	
      SECTION
      5.10.   Cancellation
	
      29

	
      SECTION
      5.11.   Ownership of Common Securities by
    Depositor
	
      29

	
      SECTION
      5.12.   Restricted Legends
	
      30

	
      SECTION
      5.13.   Form of Certificate of
    Authentication
	
      33

i

	
      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
	
      34

	
      SECTION
      6.8.     Inspection
      of Records
	
      35

	
      SECTION
      6.9.     Limitations
      on Voting Rights
	
      36

	
      SECTION
      6.10.   Acceleration
      of Maturity; Rescission of Annulment; Waivers of Past
    Defaults
	
      36

	 	 
	
      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
	
      41

	
      SECTION
      8.4.     Appointment
      of Administrative Trustees
	
      42

	
      SECTION
      8.5.     Duties
      and Responsibilities of the Trustees
	
      42

	
      SECTION
      8.6.     Notices
      of Defaults and Extensions
	
      44

	
      SECTION
      8.7.     Certain
      Rights of Property Trustee
	
      44

	
      SECTION
      8.8.     Delegation
      of Power
	
      46

	
      SECTION
      8.9.     May
      Hold Securities
	
      46

	
      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
	
      49

	
      SECTION
      8.14.   Not
      Responsible for Recitals or Issuance of Securities
	
      50

	
      SECTION
      8.15.   Property
      Trustee May File Proofs of Claim
	
      50

	
      SECTION
      8.16.   Reports
      to and from the Property Trustee
	
      50

	 	 
	
      ARTICLE
      IX.  Termination,
      Liquidation and Merger
	
      51

	
      SECTION
      9.1.     Dissolution
      Upon Expiration Date
	
      51

	
      SECTION
      9.2.     Early
      Termination
	
      51

	
      SECTION
      9.3.     Termination
	
      52

	
      SECTION
      9.4.     Liquidation
	
      52

	
      SECTION
      9.5.     Mergers,
      Consolidations, Amalgamations or Replacements of Trust
	
      53

	 	 
	
      ARTICLE
      X.   Information
      to Purchaser
	
      55

	
      SECTION
      10.1.     Depositor
      Obligations to Purchaser
	
      55

	
      SECTION
      10.2.     Property
      Trustee’s Obligations to Purchaser
	
      55

	 	 
	
      ARTICLE
      XI.   Miscellaneous
      Provisions
	
      55

	
      SECTION
      11.1.     Limitation
      of Rights of Holders.
	
      55

	
      SECTION
      11.2.     Agreed
      Tax Treatment of Trust and Trust Securities
	
      55

	
      SECTION
      11.3.     Amendment
	
      56

	
      SECTION
      11.4.     Separability
	
      57

ii

	
      SECTION
      11.5.     Governing
      Law
	
      57

	
      SECTION
      11.6.     Successors
	
      57

	
      SECTION
      11.7.     Headings
	
      58

	
      SECTION
      11.8.     Reports,
      Notices and Demands
	
      58

	
      SECTION
      11.9.     Agreement
      Not to Petition
	
      58

	
      Exhibit
      A
	 	Certificate
      of Trust of Hersha Statutory Trust II

	
      Exhibit
      B
	 	
      Form
      of Common Securities Certificate

	
      Exhibit
      C
	 	
      Form
      of Preferred Securities Certificate

	
      Exhibit
      D
	 	
      Junior
      Subordinated Indenture

	
      Exhibit
      E
	 	
      Form
      of Transferee Certificate to be Executed by Transferees other than
      QIBs

	
      Exhibit
      F
	 	
      Form
      of Transferor Certificate to be Executed by QIBs

	
      Exhibit
      G
	 	
      Form
      of Officer’s Certificate

	
      Exhibit
      H
	 	
      Officers’
      Certificate pursuant to Section 8.16(a)

	 	 	 
	
      Schedule
      A
	 	
      Calculation
      of LIBOR

 

iii

AMENDED
AND RESTATED TRUST AGREEMENT, dated as of May 31, 2005, among (i) Hersha
Hospitality Limited Partnership, a Virginia limited partnership (including any
successors or permitted assigns, the “Depositor”), (ii) Wilmington Trust
Company, a Delaware banking corporation, as property trustee (in such capacity,
the “Property Trustee”), (iii) Wilmington Trust Company, a Delaware banking
corporation, as Delaware trustee (in such capacity, the “Delaware Trustee”),
(iv) Jay H. Shah, an individual, Ashish R. Parikh, an individual, and David L.
Desfor, an individual, each of whose address is c/o Hersha Hospitality Limited
Partnership, 510 Walnut Street, 9th Floor, Philadelphia, Pennsylvania
19106, 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, the Property Trustee 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 May 24, 2005 (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 Subscription 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 Placement Agreement.

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

“Commission”
means the Securities and Exchange Commission, as from time to time constituted,
created under the Exchange Act or, if at any time after the execution of this
Trust Agreement such Commission is not existing and performing the duties
assigned to it, then the body performing such duties at such time.

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

3

“Common
Security” means a common security of the Trust, denominated as such and
representing an undivided beneficial interest in the assets of the Trust, having
a Liquidation Amount of $1,000 and having the terms 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 Rodney Square North, 1100
North Market Street, Wilmington, Delaware 19890-0001, Attention: Corporate
Capital Markets.

“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.

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

4

(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
twenty five percent (25%) 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.

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

“HHT”
means Hersha Hospitality Trust, a Maryland real estate investment trust and the
general partner of the Company.

“Holder”
means a Person in whose name a Trust Security or Trust Securities are registered
in the Securities Register; any such Person shall 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 Depositor
and the Note Trustee contemporaneously with the execution and 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.

“Indenture
Redemption Price” has the meaning specified in Section
4.2(c).

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

5

“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 of the Preferred Securities” means Preferred Securities
representing more than fifty percent (50%) of the aggregate Liquidation Amount
of all (or a specified group of) then Outstanding Preferred
Securities.

“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.

“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.

6

“Officers’
Certificate” means a certificate signed by the Chief Executive Officer, the
President or an Executive Vice President of HHT, as general partner of the
Company, and by the Chief Financial Officer, Treasurer or an Assistant
Treasurer, of the Depositor of HHT, as general partner of the Company, and
delivered to the Trustees. Any Officers’ 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(a)) shall
include:

(a) a
statement by each officer signing the Officers’ 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 Officers’ 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 Placement Agreement, the Indenture, the Trust Agreement,
the Subscription 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.

“Original
Issue Date” means the date of original issuance of the Trust
Securities.

“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;

7

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 authorized by the Administrative Trustees to pay
Distributions or other amounts in respect of any Trust Securities on behalf of
the Trust.

“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.

“Placement
Agent” means Credit Suisse First Boston LLC, as Placement Agent pursuant to the
Placement Agreement, whose address is Eleven Madison Avenue, New York, New York
10010.

“Placement
Agreement” means the Placement Agreement, dated as of May 31, 2005, executed and
delivered by the Trust, the Depositor, Hersha Hospitality Trust and Credit
Suisse First Boston LLC, as placement agent.

“Preferred
Security” means a preferred security of the Trust, denominated as such and
representing an undivided beneficial interest in the assets of the Trust, having
a Liquidation Amount of $1,000 and having the terms provided therefor in this
Trust Agreement.

8

“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.

“Purchaser”
means Credit Suisse First Boston, acting through its Cayman Islands branch, as
purchaser of the Preferred Securities pursuant to the Subscription Agreement,
whose address is c/o Credit Suisse First Boston LLC, Eleven Madison Avenue, New
York, New York 10010.

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

“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, with respect to any Trust Security, the Liquidation Amount of such
Trust Security, plus accumulated and unpaid Distributions to the Redemption
Date, plus the related amount of the premium, if any, paid by the Depositor upon
the concurrent redemption or payment at maturity of a Like Amount of
Notes.

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

“Responsible
Officer” means, with respect to the Property Trustee, any Senior Vice President,
any Vice President, any Assistant Vice President, the Secretary, any Assistant
Secretary, the Treasurer, any Assistant Treasurer, any Trust Officer or
Assistant Trust Officer or any other officer in the Corporate Trust Office of
the Property Trustee with direct responsibility for the administration of this
Trust Agreement and also means, with respect to a particular corporate trust
matter, any other officer of the Property Trustee to whom such matter is
referred because of that officer’s knowledge of and familiarity with the
particular subject.

“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
Event Redemption Price” has the meaning specified in Section
11.2 of the
Indenture.

9

“Subscription
Agreement” means the Preferred Securities Subscription Agreement, dated as of
May 31, 2005, by and among the Company, Hersha Hospitality Trust, the Trust, the
Purchaser and Credit Suisse First Boston LLC (as to certain provisions
thereof).

“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 “Hersha Statutory Trust II,” which
was created on May 24, 2005, 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, including all
Schedules and Exhibits (other than Exhibit D), as the same may be modified,
amended or supplemented from time to time in accordance with the applicable
provisions hereof.

“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.

ARTICLE
II.

 

THE
TRUST

 

	 	
      SECTION
      2.1.
	
      Name.

The trust
continued hereby shall be known as “Hersha Statutory Trust II,” 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 Rodney Square North,
1100 North Market Street, Wilmington, Delaware 19890-0001, Attention: Corporate
Capital Markets, 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 c/o Hersha Hospitality Limited Partnership, 510 Walnut Street,
9th Floor,
Philadelphia, Pennsylvania 19106, 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.

10

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 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 (or, in the
case of the Property Trustee, to the actual knowledge of a Responsible Officer
would 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 (or, in the case of the Property Trustee,
to the actual knowledge of a Responsible Officer 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 (or,
in the case of the Property Trustee, to the actual knowledge of a Responsible
Officer 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:

11

(i)    
As among the Trustees, each Administrative Trustee shall severally have the
power, authority and authorization 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, documents, instruments, certificates and other
writings 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 subscription agreement and
to cause the Trust to perform the Placement Agreement and the Subscription
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)    
the appointment of a successor Paying Agent and Calculation Agent in accordance
with this Trust Agreement;

(F)    
execution and delivery of the Trust Securities on behalf of the Trust in
accordance with this Trust Agreement;

(G)    
execution and delivery of closing certificates, if any, pursuant to the
Placement Agreement;

(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 and other writings 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.

12

(ii)    
As among the Trustees, the Property Trustee shall have the power, authority and
authorization 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 receipt 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 and the preparation, execution and filing of the
certificate of cancellation of the Trust with the Secretary of State of the
State of Delaware; 

(I)    
application for a taxpayer identification number for the Trust;

(J)    
the authentication of the Preferred Securities as provided in this Trust
Agreement; and

(K)    
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 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
Placement Agreement and the Subscription 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

13

(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 to operate the Trust so that
the Trust will not be taxable as a corporation or classified as other than a
grantor trust for United States federal income tax purposes, so that the Notes
will be treated as indebtedness of the Depositor for United States 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 this connection, 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 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.

14

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
Property Trustee is appointed as the initial Paying Agent and hereby accepts
such appointment. 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 also 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.

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 May 31, 2005, and, except as provided in
clause (ii) below, shall be payable quarterly in arrears on January
30th, April
30th, July
30th and
October 30th of each
year, commencing on July 30,
2005. 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 per annum
equal to7.173% of the Liquidation Amount of the Trust Securities through the
Distribution Date in July, 2010 and a variable rate per annum, reset quarterly,
equal to LIBOR plus 3.00% of the Liquidation Amount of the Trust Securities,
thereafter. LIBOR shall be determined by the Calculation Agent in accordance
with Schedule
A. 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 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 fifteenth day (whether or not a Business Day)
preceding the relevant Distribution Date. 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.

 

	 	
      SECTION
      4.2.
	
      Redemption.

16

(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 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 the Outstanding Trust Securities are to be redeemed, the identification
(and, in the case of partial redemption, the respective Liquidation 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 July 30, 2010, in whole or
in part, from time to time at a redemption price equal to 100% of the principal
amount thereof, together, in the case of any such redemption, with accrued
interest, including any Additional Interest, to but excluding the date fixed for
redemption (the “Indenture Redemption Price”). The Notes may also be redeemed by
the Depositor, at its option, in whole but not in part, upon the occurrence of
an Investment Company Event or a Tax Event at the Special Event Redemption Price
(as set forth in the Indenture).

17

(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 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.

18

(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. The Preferred Securities to be redeemed
shall be selected on a pro rata basis based upon their respective Liquidation
Amounts 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, however, 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 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.

19

(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.

 

	 	
      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.

 

20

 

	 	
      SECTION
      4.6.
	
      Tax
      Returns and Other Reports.

 

(a)    
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
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.

 

	 	
      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 (i) shall be exercisable effective on any
Distribution Date by such Depositor Affiliate delivering to the Property Trustee
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 (ii) 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.

 

21

 

	 	
      SECTION
      4.10.
	
      Calculation
      Agent.

 

(a)    
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. The Calculation Agent
may be removed by the Administrative Trustees at any time. If the Calculation
Agent is unable or unwilling to act as such or is removed by the Administrative
Trustees, the 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 U.S. dollar deposits in Europe 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
(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 Property Trustee, each Paying Agent and the Depositary. The
Calculation Agent will also specify to the Administrative Trustees 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.

22

(b)    
The
Administrative Trustees shall either (i) if the Depositor is then subject to
such reporting requirements, cause each Form 10-K and Form 10-Q prepared by the
Depositor and filed with the Commission in accordance with the Exchange Act to
be delivered to each Holder, with a copy to the Property Trustee, within thirty
(30) days after the filing thereof or (ii) 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. If the
Depositor files its annual and quarterly reports on Forms 10-K and 10-Q,
respectively, with the Securities and Exchange Commission (the “Commission”) in
electronic form pursuant to Regulation S -T of the Commission using the
Commissioner’s Electronic Data Gathering, Analysis and Retrieval (“EDGAR”) system,
the Depositor shall notify the Property Trustee in the manner prescribed herein
of each such annual and quarterly filing. The Property Trustee is hereby
authorized and directed to access the EDGAR system for purposes of retrieving
the financial information so filed. The Property Trustee shall have no duty to
search for or obtain any electronic or other filings that the Depositor makes
with the Commission, regardless of whether such filings are periodic,
supplemental or otherwise. Delivery of reports, information and documents to the
Property Trustee pursuant to this Section
4.11(b) shall be
solely for purposes of compliance with this Section
4.11(b) and, if
applicable, with Section 314(a) of the Trust Indenture Act.. The Property
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 Depositor’s compliance with any of its
covenants hereunder, as to which the Property Trustee is entitled to rely upon
Officers’ Certificates.

(c)    
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 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 $25,000,000 and one series of Common Securities
having an aggregate Liquidation Amount of $774,000.

 

23

 

	 	
      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 774 Common Securities having
an aggregate Liquidation Amount of $774,000, against receipt by the Trust of the
aggregate purchase price of such Common Securities of $774,000.
Contemporaneously therewith and with the sale by the Trust to the Holders of an
aggregate of 25,000 Preferred Securities having an aggregate Liquidation Amount
of $25,000,000, an Administrative Trustee, on behalf of the Trust, shall
subscribe for and 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 $25,774,000, 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 $25,774,000 (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 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 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 the Property Trustee as 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 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 a Responsible Officer 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 and deliver one
or more Preferred Security Certificates evidencing 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.

24

(e)    
Upon
issuance of the Trust Securities as provided in this Trust Agreement, the Trust
Securities so issued shall be deemed to be validly issued, fully paid and
nonassessable, and each Holder thereof shall be entitled to the benefits
provided by this Trust Agreement.

 

	 	
      SECTION
      5.5.
	
      Rights
      of Holders.

The Trust
Securities shall have no, and the issuance of the Trust Securities is not
subject to, 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 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, 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 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.

25

(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, and the Property Trustee,
upon receipt thereof, shall authenticate and deliver such Definitive Preferred
Securities Certificates. 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
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 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 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.

26

(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 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 upon receipt thereof 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 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 upon receipt
thereof 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.

27

(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
(i) if such Preferred Securities Certificate is being transferred otherwise than
to a QIB, accompanied by a certificate of the transferee substantially in the
form set forth as Exhibit
E hereto
or (ii) if such Preferred Securities Certificate is being transferred to a QIB,
accompanied by a certificate of the transferor substantially in the form set
forth as Exhibit
F
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.

 

	 	
      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 and the Administrative Trustees to save each of them
harmless, 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
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 and the Administrative Trustees such
security or indemnity as may be required by them to save each of them 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.

28

(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, instead
of issuing a new Trust Security, pay such Trust Security.

(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 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 the Trust Securities evidenced by such Securities Certificate for the
purpose of receiving Distributions and for all other purposes whatsoever, and
none of the Trustees and the Securities Registrar shall be bound by any notice
to the contrary.

 

	 	
      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 disposed of by the Property Trustee in
accordance with its customary practices and the Property Trustee shall deliver
to the Administrative Trustees a certificate of such disposition.

 

	 	
      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.”

29

(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:

“[IF
THIS SECURITY IS A GLOBAL SECURITY INSERT: 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 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
HERSHA STATUTORY TRUST II 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.

30

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, (II) TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER”
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, OR (III) TO AN INSTITUTIONAL “ACCREDITED INVESTOR”
WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3) OR (7) OF RULE 501 UNDER
THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR
THE ACCOUNT OF AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a)
(1), (2), (3) OR (7) OF RULE 501, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW
TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF
THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND,
IN THE CASE OF (III), SUBJECT TO THE RIGHT OF THE TRUST AND THE DEPOSITOR TO
REQUIRE AN OPINION OF COUNSEL ADDRESSING COMPLIANCE WITH THE U.S. SECURITIES
LAWS, AND OTHER INFORMATION SATISFACTORY TO EACH OF THEM 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 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
LIQUIDATION AMOUNT OF OR DISTRIBUTIONS ON SUCH PREFERRED SECURITIES, OR ANY
INTEREST THEREIN, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO
INTEREST WHATSOEVER IN SUCH PREFERRED SECURITIES.

31

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, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE
EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION
CLASS EXEMPTION 96-23, 95-60, 91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE
EXEMPTION OR ITS PURCHASE AND HOLDING OF THIS SECURITY, OR ANY INTEREST THEREIN,
ARE NOT PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE WITH
RESPECT TO SUCH PURCHASE AND HOLDING. 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 EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN
OR OTHER PLAN TO WHICH TITLE I OF ERISA OR SECTION 4975 OF THE CODE IS
APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF ANY SUCH EMPLOYEE
BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE “PLAN ASSETS” OF
ANY SUCH EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCH
PURCHASE OR HOLDING WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION
406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH FULL EXEMPTIVE RELIEF IS NOT
AVAILABLE UNDER AN APPLICABLE STATUTORY OR ADMINISTRATIVE
EXEMPTION.

(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 or violation of 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 authenticate and deliver, at
the written direction of the Administrative Trustees and the Depositor,
Preferred Securities Certificates that do not bear the legend.

32

 

	 	
      SECTION
      5.13.
	
      Form
      of Certificate of Authentication.

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

This
represents Preferred Securities referred to in the within-mentioned Trust
Agreement.

 

	
      Dated:
	
      Wilmington
      Trust Company, not in its individual capacity, but solely as Property
      Trustee

	 	 	 
	 	
      By:
	 
	 	 	
      Authorized
      officer

 

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 twenty five percent (25%) 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.

 

	 	
      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.

 

	 	
      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.

34

(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.

 

	 	
      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.

 

35

 

	 	
      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 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, (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 United States 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.

 

	 	
      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 twenty five
percent (25%) 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 least twenty-five percent (25%) 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:

36

(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 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.

37

(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 on (including any
Additional Interest) 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 Property Trustee to take any action deemed proper by the Property Trustee
and which is not inconsistent with such direction.

38

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 Delaware banking corporation with trust powers, duly
organized, validly existing and in good standing under the laws of the State of
Delaware;

(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 Delaware banking corporation, duly organized with trust
powers, validly existing and in good standing under the laws of the State of
Delaware and with its principal place of business in the State of
Delaware;

(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 and similar laws affecting creditors’ rights generally
and to general principles of equity and the discretion of the court (regardless
of whether considered in a proceeding in equity or at law);

(f)    
the
execution, delivery and performance of this Trust Agreement have been duly
authorized by all necessary 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 Charter or By-laws
of the Property Trustee or the Delaware Trustee or (ii) violate any applicable
law, governmental rule or regulation of the United States or the State of
Delaware, as the case may be, governing the banking and trust 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 and trust powers of the Property Trustee or the Delaware Trustee, as
the case may be; and

39

(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
that:

(a)    
the
Depositor is a limited partnership duly formed, validly existing and in good
standing under the laws of its state of incorporation;

(b)    
the
Depositor has full 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;

(e)    
the
execution, delivery and performance of this Trust Agreement have been duly
authorized by all necessary corporate or other action on the part of the
Depositor and do not require any approval of stockholders of the Depositor and
such execution, delivery and performance will not (i) violate the articles or
certificate of incorporation or by-laws (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

40

(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 corporation 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 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 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.

(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.

 

41

 

	 	
      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 either 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
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. 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.

42

(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:

(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
relating to the time, method and place of conducting any proceeding for any
remedy available to the Property Trustee hereunder or under the Indenture, or
exercising any trust or power conferred upon the Property Trustee under this
Trust Agreement;

(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; 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.

 

43

 

	 	
      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; provided, that, except in the case of a default
in the payment of the principal of or any premium or interest (including any
Additional Interest) on any Trust Security, the Property Trustee shall be fully
protected in withholding such 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 Property Trustee in good faith determines that the withholding
of such notice is in the interests of the Holders of the Trust Securities. 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)    
RESERVED.

(c)    
The
Property Trustee shall not be deemed to have knowledge of any default or Event
of Default unless the Property Trustee shall have received written notice
thereof from the Depositor, any Administrative Trustee or any Holder or unless a
Responsible Officer of the Property Trustee shall have obtained actual knowledge
of such default or Event of Default.

(d)    
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 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;

44

(c)    
any
direction or act of the Depositor contemplated by this Trust Agreement shall be
sufficiently evidenced by an Officers’ 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 (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;

(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;

45

(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 be
herein specifically prescribed) may, in the absence of bad faith on its part,
request and rely on an Officers’ 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 or otherwise, delegate to any other Person
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.

 

46

 

	 	
      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 (including in its individual capacity), (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 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 reasonable 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. 

 

47

 

	 	
      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 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.

48

(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 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.

 

49

 

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

 

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.

 

	 	
      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 and from 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 Depositor ending after the date of this Trust
Agreement, an Officers’ Certificate (substantially in the form attached hereto
as Exhibit
H)
covering the preceding fiscal period, stating whether or not to the knowledge of
the signers thereof the Depositor, the Administrative Trustees or 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, the
Administrative Trustees or the Trust shall be in default, specifying all such
defaults and the nature and status thereof of which they have
knowledge.

50

(b)    
The
Depositor shall furnish (or cause to be furnished) to (i) the Property Trustee,
(ii) the Purchaser, (iii) any Owner of the Preferred Securities reasonably
identified to the Depositor or the Trust (which identification may be made
either by such Owner or by the Placement Agent or Purchaser) and (iv) any
designee of (i), (ii) or (iii) above, a duly completed and executed certificate
in the form attached hereto as Exhibit G, including the financial statements
referenced in such Exhibit, which certificate and financial statements shall be
so furnished (or caused to be furnished) by the Depositor not later than forty
five (45) days after the end of each of the first three fiscal quarters of each
fiscal year of the Depositor and not later than ninety (90) days after the end
of each fiscal year of the Depositor. The
delivery requirements under this Section 8.16(b) may be satisfied by compliance
with Section 7.3(b) of the Indenture.

(c)    
The
Property Trustee shall receive all reports, certificates and information, which
it is entitled to obtain under each of the Operative Documents, and deliver to
(i) the Purchaser, (ii) the Placement Agent and (iii) a designee of (i) or (ii)
above, as identified in writing to the Property Trustee, copies of all such
reports, certificates or information promptly upon receipt thereof.

ARTICLE
IX.

TERMINATION,
LIQUIDATION AND MERGER

 

	 	
      SECTION
      9.1.
	
      Dissolution
      Upon Expiration Date.

Unless
earlier dissolved, the Trust shall automatically dissolve on July 30, 2040 (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).

51

(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.

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

 

	 	
      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 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.

52

(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;

53

(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
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 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.

54

ARTICLE
X. 

 

INFORMATION
TO PURCHASER

 

	 	
      SECTION
      10.1.
	
      Depositor
      Obligations to Purchaser.

Notwithstanding
any other provision herein, the Depositor shall furnish to (a) the Purchaser,
(b) any Owner of the Preferred Securities reasonably identified to the Depositor
or the Trust (which identification may be made either by such Owner or by the
Placement Agent or Purchaser) and (c) any designee of (a) or (b) above, copies
of all correspondence, notices, forms, filings, reports and other documents
required to be provided by the Depositor, whether acting through an
Administrative Trustee or otherwise, to the Property Trustee or Delaware Trustee
under this Trust Agreement.

 

	 	
      SECTION
      10.2.
	
      Property
      Trustee’s Obligations to Purchaser.

Notwithstanding
any other provision herein, the Property Trustee shall furnish to (a) the
Purchaser, (b) the Placement Agent and (c) a designee of (a) or (b) above as
identified in writing to the Property Trustee, copies of all (i) correspondence,
notices, forms, filings, reports and other documents received by the Property
Trustee or Delaware Trustee from the Depositor, whether acting through an
Administrative Trustee or otherwise, under this Trust Agreement, and (ii) all
correspondence, notices, forms, filings, reports and other documents required to
be provided to the Depositor or a Holder by the Property Trustee or Delaware
Trustee under this Trust Agreement.

 

ARTICLE
XI.

 

MISCELLANEOUS PROVISIONS

 

	 	
      SECTION
      11.1.
	
      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
      11.2.
	
      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.

 

55

 

	 	
      SECTION
      11.3.
	
      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
11.3(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 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.

(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, (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,” this Section
11.3(c),
Sections
4.1,
4.2,
4.3,
6.10(e) or
Article
IX.

56

(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 Officers’
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.

(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
      11.4.
	
      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
      11.5.
	
      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
      11.6.
	
      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.

 

57

 

	 	
      SECTION
      11.7.
	
      Headings.

 

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

 

	 	
      SECTION
      11.8.
	
      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 Hersha Hospitality
Limited Partnership, 510 Walnut Street, 9th Floor,
Philadelphia, Pennsylvania 19106, 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
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: (a) with respect to the Property Trustee and the Delaware Trustee to
Wilmington Trust Company, Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890-0001, Attention: Corporate Capital Markets, facsimile
no. (302) 636-4140; (b) with respect to the Administrative Trustees, to them at
the address above for notices to the Depositor, marked “Attention:
Administrative Trustees of Hersha Statutory Trust II,” and (c) 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
      11.9.
	
      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
11.9, 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.

58

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.

 

	 	
      Hersha
      Hospitality Limited Partnership,

      as
      Depositor

	 	 	 
	 	
      By:
	
        

	 	 	
      Name:

	 	 	
      Title:

	
      Wilmington
      Trust Company, as Property Trustee
	 	
      Wilmington
      Trust Company, as Delaware Trustee

	 	 	 	 	 
	
      By:
	
        
	 	
      By:
	
        

	 	
      Name:
	 	 	
      Name:

	 	
      Title:
	 	 	
      Title:

	
        
	 	 	 
	
      Administrative
      Trustee
	 	Administrative
      Trustee	 
	
      Name:
	 	Name:	 
	 	 	 	 
	
        
	 	
        
	 
	
      Administrative
      Trustee
	 	
       
	 
	
      Name:
	 	
       
	 

 

 

Exhibit
A

CERTIFICATE
OF TRUST

OF

Hersha
Statutory Trust II

This
Certificate of Trust of Hersha Statutory Trust II (the “Trust”) is being duly
executed and filed on behalf of the Trust by the undersigned, as trustees, 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: Hersha
Statutory Trust II.

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 Wilmington Trust Company, Rodney Square
North, 1100 North Market Street, Wilmington, Delaware 19890-0001, Attention:
Corporate Capital Markets.

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 have duly executed this Certificate of Trust in
accordance with Section 3811(a)(1) of the Act.

	 	
      Wilmington
      Trust Company,
      not in its individual capacity, but solely as Property
    Trustee

	 	 	 
	 	
      By:
	 
	 	 	
      Name:

	 	 	
      Title:

	 	 	 
	 	
      Wilmington
      Trust Company,
      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

       

      C-

       
	 	
      _________
      Common Securities

 

Certificate
Evidencing Common Securities

of

Hersha
Statutory Trust II

Common
Securities

(liquidation
amount $1,000 per Common Security)

Hersha
Statutory Trust II, a statutory trust created under the laws of the State of
Delaware (the “Trust”), hereby certifies that ______________________ (the
“Holder”) is the registered owner of ____________common securities of the Trust
representing undivided common beneficial interests in the assets of the Trust
and designated the Hersha Statutory Trust II 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 May 31, 2005, as the same may be amended from time to time
(the “Trust Agreement”), among Hersha Hospitality Limited Partnership, as
Depositor, Wilmington Trust Company, as Property Trustee, Wilmington Trust
Company, as Delaware Trustee, the Administrative Trustees named therein and the
Holders, from time to time, of 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.

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

B-1

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 ________________.

	 	 Hersha
      Statutory Trust II
	 	 	 
	 	
      By:
	 
	 	 	
      Name:

	 	 	
      Administrative
      Trustee

 

B-2

 

Exhibit
C

[FORM OF
PREFERRED SECURITIES CERTIFICATE]

“[IF
THIS SECURITY IS A GLOBAL SECURITY INSERT: 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
HERSHA STATUTORY TRUST II 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, (II) TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER”
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, OR (III) TO AN INSTITUTIONAL “ACCREDITED INVESTOR”
WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3) OR (7) OF RULE 501 UNDER
THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR
THE ACCOUNT OF AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a)
(1), (2), (3) OR (7) OF RULE 501, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW
TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF
THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND,
IN THE CASE OF (III), SUBJECT TO THE RIGHT OF THE TRUST AND THE DEPOSITOR TO
REQUIRE AN OPINION OF COUNSEL ADDRESSING COMPLIANCE WITH THE U.S. SECURITIES
LAWS, AND OTHER INFORMATION SATISFACTORY TO EACH OF THEM AND (B) THE HOLDER WILL
NOTIFY ANY PURCHASER OF ANY PREFERRED SECURITIES FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE.

C-1

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 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
LIQUIDATION AMOUNT OF OR DISTRIBUTIONS 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, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE
EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION
CLASS EXEMPTION 96-23, 95-60, 91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE
EXEMPTION OR ITS PURCHASE AND HOLDING OF THIS SECURITY, OR ANY INTEREST THEREIN,
ARE NOT PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE WITH
RESPECT TO SUCH PURCHASE AND HOLDING. 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 EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN
OR OTHER PLAN TO WHICH TITLE I OF ERISA OR SECTION 4975 OF THE CODE IS
APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF ANY SUCH EMPLOYEE
BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE “PLAN ASSETS” OF
ANY SUCH EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCH
PURCHASE OR HOLDING WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION
406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH FULL EXEMPTIVE RELIEF IS NOT
AVAILABLE UNDER AN APPLICABLE STATUTORY OR ADMINISTRATIVE
EXEMPTION.

 

C-2

 

	
      Certificate
      Number
	 	
      _________
      Preferred Securities

      ________
      Aggregate Liquidation Amount

CUSIP
NO.

_______________

Certificate
Evidencing Preferred Securities

of

Hersha
Statutory Trust II

Preferred
Securities

(liquidation
amount $1,000 per Preferred Security)

Hersha
Statutory Trust II, a statutory trust created under the laws of the State of
Delaware (the “Trust”), hereby certifies that ___________________ (the “Holder”)
is the registered owner of ___________ Preferred Securities [if the Preferred
Security is a Global Security, then insert--,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 Hersha
Statutory Trust II Preferred Securities (liquidation amount $1,000 per Preferred
Security) (the “Preferred Securities”). 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 May 31, 2005, as the same may be amended from time to time (the “Trust
Agreement”), among Hersha Hospitality Limited Partnership, a Virginia limited
partnership, as Depositor, Wilmington Trust Company, as Property Trustee,
Wilmington Trust Company, as Delaware Trustee, the Administrative Trustees named
therein and the Holders, from time to time, of 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 principal place of business or registered
office.

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

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

C-3

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 __________, ____.

 

	 	 Hersha
      Statutory Trust II
	 	 	 
	 	
      By:
	 
	 	 	
      Name:

	 	 	
      Administrative
      Trustee

 

This
represents Preferred Securities referred to in the within-mentioned Trust
Agreement.

 

	
      Dated:
	
       

	 	Wilmington
      Trust Company,
      not in its individual capacity, but solely as Property
Trustee
	 	 
	 	
      By:
	 
	 	 	
      Authorized
      officer

 

C-4

[FORM OF
REVERSE OF SECURITY]

The Trust
promises to pay Distributions from May 31, 2005, or from the most recent
Distribution Date to which Distributions have been paid or duly provided for,
quarterly in arrears on January 30th, April
30th, July
30th and
October 30th of each
year, commencing on July 30, 2005, at a fixed rate per annum equal to 7.173% of
the Liquidation Amount of the Preferred Securities represented by this Preferred
Securities Certificate through the Distribution Date in July, 2010 and a
variable rate per annum, reset quarterly, equal to LIBOR plus 3.00% of the
Liquidation Amount of the Preferred Securities represented by this Preferred
Securities Certificate, thereafter, 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.

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 July 30, 2010 in whole or in part from time to
time at a redemption price equal to one hundred percent (100%) 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 time, in whole but not in part,
upon the occurrence of an Investment Company Event or a Tax Event at the Special
Event Redemption Price.

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. 

C-5

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
E

FORM OF
TRANSFEREE CERTIFICATE

TO BE
EXECUTED BY TRANSFEREES OTHER THAN QIBS

__________,
[    ]

Hersha
Hospitality Limited Partnership 

Hersha
Statutory Trust II

510
Walnut Street, 9th
Floor

Philadelphia,
Pennsylvania 19106

Re:         
Purchase
of $1,000 stated liquidation amount of Preferred 

Securities
(the “Preferred Securities”) of Hersha
Statutory Trust II

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 Hersha
Statutory Trust II (the “Trust”) (including the guarantee (the “Guarantee”) of
Hersha Hospitality Limited Partnership (the “Company”) executed in connection
therewith) and the Junior Subordinated Notes due 2035 of the Company (the
“Subordinated Notes”) (the Preferred Securities, the Guarantee 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, such
offer, sale or transfer will be made only (a) to the Trust, (b) to a person we
reasonably believe is a “qualified institutional buyer” (a “QIB”) (as defined in
Rule 144 under the Securities Act) in a transaction meeting the requirements of
Rule 144A or (c) to an institutional “accredited investor” within the meaning of
subparagraph (a) (1), (2), (3) or (7) of Rule 501 under the Securities Act that
is acquiring Offered Securities for its own account, or for the account of such
an “accredited investor,” for investment purposes and not with a view to, or for
offer or sale in connection with, any distribution thereof in violation of the
Securities Act, in each case in accordance with any applicable securities laws
of any state of the United States or any other applicable jurisdiction and, in
the case of (c) subject to the right of the Trust and the depositor to require
an opinion of counsel and other information satisfactory to each of them. The
foregoing restrictions on resale will not apply subsequent to the date on which,
in the written opinion of counsel, the Preferred Securities are not “restricted
securities” within the meaning of Rule 144 under the Securities Act. If any
resale or other transfer of the Offered Securities is proposed to be made
pursuant to clause (c) above, the transferor shall deliver a letter from the
transferee substantially in the form of this letter to the Property Trustee as
Transfer Agent, which shall provide as applicable, among other things, that the
transferee is an “accredited investor” within the meaning of subparagraph (a)
(1), (2), (3) or (7) of Rule 501 under the Securities Act that is acquiring such
Securities for investment purposes and not for distribution in violation of the
Securities Act. We acknowledge on our behalf and on behalf of any investor
account for which we are purchasing Securities that the Trust and the Company
reserve the right prior to any offer, sale or other transfer pursuant to clause
(c) to require the delivery of any opinion of counsel, certifications and/or
other information satisfactory to the Trust and the Company. We understand that
the certificates for any Offered Security that we receive will bear a legend
substantially to the effect of the foregoing.

E-1

2.    
We are an
“accredited investor” within the meaning of subparagraph (a) (1), (2), (3) or
(7) of Rule 501 under the Securities Act purchasing for our own account or for
the account of such an “accredited investor,” and we are acquiring the Offered
Securities for investment purposes and not with view to, or for offer or sale in
connection with, any distribution in violation of the Securities Act, 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.

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 either (A) we are not (and are not acting as a fiduciary of or
on behalf of) 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 are not purchasing the Offered Securities on behalf of or with “plan assets”
by reason of any Plan’s investment in the entity; (B) we are eligible for the
exemptive relief available under one or more of the following prohibited
transaction class exemptions (“PTCEs”) issued by the U.S. Department of Labor:
PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 or another applicable exemption; or (C)
our purchase and holding of this security, or any interest therein, are not
prohibited by Section 406 of ERISA or Section 4975 of the Code with respect to
such purchase and holding.

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 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.

E-2

 

	 	
      (Name
      of Purchaser)

	 	 	 
	 	 	 
	 	 	 
	 	
      By:
	 
	 	 	 
	 	
      Date:
	 

Upon
transfer, the Offered Securities would be registered in the name of the new
beneficial owner as follows.

 

	
      Name:
	 	

 

 

	
      Address:
	 	

 

	
      Taxpayer
      ID Number:
	 	

 

E-3

 

Exhibit
F

FORM OF
TRANSFEROR CERTIFICATE

TO BE
EXECUTED FOR QIBs

__________,
[   ]

Hersha
Hospitality Limited Partnership 

Hersha
Statutory Trust II

510
Walnut Street, 9th
Floor

Philadelphia,
Pennsylvania 19106

Re:         
Purchase
of $1,000 stated liquidation amount of 

Preferred
Securities (the “Preferred Securities”) of Hersha
Statutory Trust II

Reference
is hereby made to the Amended and Restated Trust Agreement of Hersha Statutory
Trust II, dated as of May 31, 2005 (the “Trust Agreement”), among Jay H. Shah,
Ashish R. Parikh and David L. Desfor, as Administrative Trustees, Wilmington
Trust Company, as Delaware Trustee, Wilmington Trust Company, as Property
Trustee, Hersha Hospitality Limited Partnership, as Depositor, and the holders
from time to time of undivided beneficial interests in the assets of Hersha
Statutory Trust II. Capitalized terms used but not defined herein shall have the
meanings given them in the Trust Agreement.

This
letter relates to $________________________ aggregate liquidation amount of
Preferred Securities which are held in the name of _____________ (the
“Transferor”).

In
accordance with Article V of the Trust Agreement, the Transferor hereby
certifies that such Preferred Securities are being transferred in accordance
with (i) the transfer restrictions set forth in the Preferred Securities and
(ii) Rule 144A under the Securities Act (“Rule 144A”), to a transferee that the
Transferor reasonably believes is purchasing the Preferred Securities for its
own account or an account with respect to which the transferee exercises sole
investment discretion and the transferee and any such account is a “qualified
institutional buyer” within the meaning of Rule 144A, in a transaction meeting
the requirements of Rule 144A and in accordance with applicable securities laws
of any state of the United States or any other jurisdiction.

You are
entitled to rely upon this letter and are irrevocably authorized to produce this
letter or a copy hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered
hereby.

 

		 	(Name of Transferor)
	 	 	 	 
	 	 	By:	 
	 	 	 	Name:
	 	 	 	Title:
	 	 	 	 
	Date:	 	 		 

 

F-1

 

Exhibit
G

Form of
Officer’s Financial Certificate

The
undersigned, the [Chief Financial Officer/Treasurer/Assistant Treasurer/
Secretary/ Assistant Secretary, Chairman/Vice Chairman/Chief Executive
Officer/President/Vice President] of Hersha Hospital Trust (“HHT”), the general
partner of Hersha Hospitality Limited Partnership, hereby certifies, pursuant to
Section 8.16(b) of the Amended and Restated Trust Agreement, dated as of May 31,
2005, that, as of [date], [20__], HHT had
the following ratios and balances on a consolidated basis:

As of
[Quarterly/Annual
Financial Date]

	 	 
	
      Senior
      secured indebtedness for borrowed money (“Debt”)
	
       

      $_____

	
      Senior
      unsecured Debt
	
       

      $_____

	
      Subordinated
      Debt
	
       

      $_____

	
      Total
      Debt
	
       

      $
      _____

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

       
      _____%

[FOR
FISCAL YEAR END: Attached hereto are the audited consolidated financial
statements (including the balance sheet, income statement and statement of cash
flows, and notes thereto, together with the report of the independent
accountants thereon) of HHT and its consolidated subsidiaries for the three
years ended [date], 20__.]

[FOR
FISCAL QUARTER END: Attached hereto are the unaudited consolidated financial
statements (including the balance sheet and income statement) of HHT 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 HHT and its consolidated subsidiaries, and the results of operations and
changes in financial condition as of the date, and for the [quarter] [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).

 

G-1

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

 

	 	
      By:
	 
	 	
      Name:
	 
	 	 	 
	 	 	 
	 	 	Hersha Hospitality
      Trust 
	 	 	510 Walnut Street,
      9th
      Floor
	 	 	Philadelphia,
      Pennsylvania 19106
	 	 	(215)
  238-1046

 

G-2

 

Exhibit
H

FORM
OF

OFFICERS’
CERTIFICATE

UNDER

SECTION
8.16(a)

Pursuant
to Section 8.16(a) of the Amended and Restated Trust Agreement, dated as of May
31, 2005 (as modified, supplemented or amended from time to time, the “Trust
Agreement”) of Hersha Statutory Trust II, a Delaware statutory trust (the
“Trust”), each of the undersigned hereby certifies that, to the knowledge of the
undersigned, none of the Depositor, the Administrative Trustees and the Trust
are in default in the performance or observance of any of the terms, provisions
and conditions of the Trust Agreement (without regard to any period of grace or
requirement of notice provided under the Trust Agreement) for the fiscal period
ending on _________, 20__ [, except as follows: specify
each such default and the nature and status thereof].

Capitalized
terms used herein, and not otherwise defined herein, have the respective
meanings assigned thereto in the Trust Agreement.

 

[signatures
appear on the next page]

H-1

IN
WITNESS WHEREOF, the undersigned have executed this Officers’ Certificate as of
__________, 20__.

 

 

	 	
      Hersha Hospitality Limited
    Partnership

	 	 
	 	By: 	Hersha Hospitality
      Trust, its general partner 
	 	
       
	 
	 	By: 	 
	 	 	Name: 
	 	 	
      Title: [Must
      be the Chief Executive Officer, the President, or an Executive Vice
      President]
      

	 	 	
	 	 	 
	 	By:  	 
	 	 	Name:
	 	 	
      Title:
      [Must
      be the Chief Financial Officer, the Treasurer,
      or an Assistant Treasurer]  

	 	 	
       

	 	 
	 	Administrative Trustee of Hersha Statutory Trust II
	 	Name:
	 	 
	 	 
	 	 
	 	Administrative Trustee of Hersha Statutory Trust II
	 	Name:
	 	 
	 	 
	 	 
	 	Administrative Trustee of Hersha Statutory Trust II
	 	Name:

 

H-2

 

Schedule
A

With
respect to the Trust 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 (each
such day, a “LIBOR Determination Date”), LIBOR for any given security shall, for
the following distribution period, equal the rate, as obtained by the
Calculation Agent from Bloomberg Financial Markets Commodities News, for
three-month U.S. Dollar deposits in Europe, which appears on Dow Jones Telerate
Page 3750 (as defined in the International Swaps and Derivatives Association,
Inc. 1991 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 U.S. Dollar deposits in Europe 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 U.S. Dollar deposits in
Europe 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.

 

Schedule
A-1

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