SUPPLEMENTAL INDENTURE
Exhibit 4.1
THIS SUPPLEMENTAL INDENTURE, dated as of November 2, 2009 (this “Supplemental Indenture”) is
entered into by and among MORGANS GROUP LLC, a limited liability company formed under the laws of
Delaware (the “Company”), MORGANS HOTEL GROUP CO., a corporation incorporated under the laws of
Delaware (the “Guarantor”) and THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION (as
successor to JPMorgan Chase Bank, National Association), a national banking association, as trustee
(the “Trustee”).
Reference is made to that certain Junior Subordinated Indenture dated as of August 4, 2006, by
and among the Company, Guarantor and the Trustee pursuant to which the Company issued Junior
Subordinated Notes due 2036, in an aggregate amount of US $50,100,000 (as modified, amended and
supplemented by this Supplemental Indenture, the “Indenture”). Capitalized terms used herein and
not defined herein shall have the meanings given to such terms under the Indenture.
WHEREAS, the execution and delivery by each of the Company and the Guarantor of this
Supplemental Indenture has been duly authorized by all requisite corporate/limited liability
company action and all other actions required to make this Supplemental Indenture a valid and
binding instrument have been duly taken and performed.
NOW, THEREFORE, in consideration of the foregoing, the Trustee, the Company, and the Guarantor
are entering into this Supplemental Indenture pursuant to Section 9.2 of the Indenture as
follows:
Section 1.01 Section 1.1 of the Indenture is hereby amended by adding the following
defined terms:
“Credit Agreement” shall mean that certain Credit Agreement dated October 6, 2006, as
amended from time to time thereafter, by and among the Company and certain of its
subsidiaries, as borrowers and guarantors, Morgans Hotel Group Co., Wachovia Bank, National
Association, as agent, and the several lenders named therein.
Section 1.02 Section 1.1 of the Indenture is hereby amended by deleting (a)
the defined terms (i) “EBITDA,” (ii) “Fixed Charge Coverage,” (iii) “Interest Charges,” (iv) “Net
Income,” (v) “Special Event,” and (vi) “Special Redemption Price” and (b) the phrases “the Special
Redemption Price or” and “, as applicable,” from the definition of “Redemption Price.”
Section 1.03 For all purposes under this Indenture, the form of securities described
in Section 2.1 of the Indenture and the Securities issued pursuant hereto, the following paragraph
shall be deemed deleted in its entirety:
“In addition, upon the occurrence and during the continuation of a Special Event, the Company
may, at its option, upon not less than thirty (30) days’ nor more than sixty (60) days’ written
notice to the Holders of the Securities (unless a shorter notice period shall be satisfactory
to the Trustee), redeem this Security, in whole but not in part, subject to the terms and
conditions of Article XI of the Indenture at a Redemption Price equal to one hundred three
percent (103%) of the principal amount hereof, together, in the case of any such redemption,
with accrued interest, including any Additional Interest, through but excluding the date fixed
as the Redemption Date.”
Section 1.04 Section 5.1 of the Indenture is hereby amended as follows:
(a) Sections 5.1(a) and 5.1(c) are each hereby amended by deleting the phrase “thirty
(30) days” and substituting in lieu thereof the phrase “five (5) Business Days”;
(b) Section 5.1(e) is hereby amended by deleting the word “or” from the end of Section
5.1(e);
(c) Section 5.1(f) is hereby amended by deleting the “.” at the end thereof and
replacing it with “;”; and
(d) The following new Sections 5.1(g) and 5.1(h) are hereby added at the end of Section
5.1:
(g) the occurrence of an event of default under the Credit Agreement;
provided, that (i) any Event of Default under this Section 5.1(g) shall cease
to exist (automatically, without any further action or consent of any Person) in the
event that and at such time as such event of default under the Credit Agreement no
longer continues to exist (as evidenced by a fully executed agreement of the agent
under the Credit Agreement to that effect and certified in writing by the Company to
the Holders and the Trustee) and (ii) the maturity of the principal amount of the
Securities may not be accelerated and neither the Trustee nor the Holders shall be
entitled to commence any proceedings or exercise any other remedy, as a result solely
of any Event of Default under this Section 5.1(g) unless and until the indebtedness
under the Credit Agreement is accelerated; and
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(h) default in the performance, or breach, of any covenant of the Company or the
Guarantor in the Inspection Rights and Confidentiality Agreement, dated as of November
2, 2009, by and among the Company, the Guarantor, and Taberna Capital Management, LLC (as it may be amended from time to time) and continuance of such
default or breach for a period of fifteen (15) days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the Company and the
Trustee by the Holders of at least thirty three and a third percent (33-1/3%) in
aggregate principal amount of the Outstanding Securities a written notice specifying
such default or breach and requiring it to be remedied and stating that such notice is
a “Notice of Default” hereunder.
Section 1.05 Section 5.3(a)(i) of the Indenture is hereby amended by deleting
the phrase “thirty (30) days” and substituting in lieu thereof the phrase “five (5) Business Days”.
Section 1.06 Section 7.3(b) of the Indenture is hereby amended by deleting the
phrase “Attn: Xxxxxx Xxxxx” and substituting in lieu thereof the phrase “Attn: Xxxxxxx Xxxxx”.
Section 1.07 Article X of the Indenture hereby amended by deleting Section
10.9(a) in its entirety, and replacing Section 10.9 (a) with the word “Reserved.”
Section 1.08 Section 11.1 of the Indenture is hereby amended by deleting the
phrase “on or after October 30, 2011” and substituting in lieu thereof the phrase “at any time
from time to time”.
In addition, for purposes of the third paragraph in the Form of Reverse Securities described in
Section 2.01 of this Indenture and the Securities issued pursuant hereto, the phrase “on or after
October 30, 2011” shall be deemed deleted and replaced with the phrase “at any time from time to
time”.
Section 1.09 Article XI of the Indenture is hereby amended by deleting the
text of Section 11.2 in its entirety, and replace such text with the word “Reserved.” The
table of contents of the Indenture shall be amended in a corresponding manner.
Section 2.01 By execution of this Supplemental Indenture, each of MHG Capital Trust I,
as holder of $50,100,000 in aggregate principal amount of Outstanding Securities; Taberna Preferred
Funding VII, Ltd., as Holder of $25,000,000 in Liquidation Amount of the Preferred Securities (“TPF
VII”) and Taberna Preferred Funding VIII, Ltd., as holder of $25,000,000 in aggregate principal
amount of the Preferred Securities (“TPF VIII”), hereby (a) waives any existing default under
Section 10.9 (a) of the Indenture such that the Company is not and shall not be deemed to
be in default as a result of any existing breach of Section 10.9(a) of the Indenture, (b)
confirms that it has not accelerated the obligations of the Company under the Securities as a
result of any failure of the Guarantor to comply with Section 10.9(a) of the Indenture, and
(c) in accordance with Section 9.2 of the Indenture, (i) consents to the Trustee executing
and delivering this Supplemental Indenture, (ii) directs the Trustee to execute and deliver this
Supplemental Indenture and (iii) agrees to and does hereby release the Trustee for any action taken
or to be taken by the Trustee in connection with its execution and delivery of this Supplemental
Indenture and for any liability or responsibility arising in connection herewith.
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Section 2.02 The Trustee accepts the trust in this Supplemental Indenture declared and
provided upon the terms and conditions set forth in the Indenture. The Trustee shall not be
responsible in any manner whatsoever for the validity or sufficiency of this Supplemental Indenture
or the due execution hereof by the Company or for or in respect of the recitals and statements
contained herein, all of which recitals and statements are made solely by the Company.
Section 2.03 Except as hereby expressly modified, the Indenture and the Securities
issued thereunder are ratified and confirmed and all the terms, conditions and provisions thereof
shall remain in full force and effect.
Section 2.04 This Supplemental Indenture shall become effective upon the execution and
delivery hereof.
Section 2.05 This Supplemental Indenture may be executed in any number of
counterparts, each of which shall be deemed to be an original for all purposes; but such
counterparts shall together be deemed to constitute but one and the same instrument. The executed
counterparts may be delivered by facsimile transmission or by scanned and emailed transmission,
which facsimile or scanned copies shall be deemed original copies with originals to follow via
overnight courier.
Section 2.06 The laws of the State of New York shall govern this Supplemental
Indenture without regard to the conflict of law principles thereof that would indicate the
applicability of the laws of any other jurisdiction.
Section 2.07 In the event of any inconsistency between the terms and provisions of
this Supplemental Indenture and the Indenture, the terms and provisions of this Supplemental
Indenture shall prevail.
Section 2.08 The Company agrees that this Supplemental Indenture, the Reaffirmation of
Guaranty, and Inspection Rights and Confidentiality Agreement contain the entire agreement between
the Company, MHG Capital Trust I, TPF VII and TPF VIII with respect to all of the matters set forth
the Letter Agreement, and such Letter Agreement is hereby superseded by the terms and conditions of
this Supplemental Indenture.
—SIGNATURE PAGES TO FOLLOW—
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| COMPANY: MORGANS GROUP LLC |
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| By: | MORGANS HOTEL GROUP CO., its managing member | |||
| By: | /s/ Xxxx Xxxxxx | |||
| Name: Xxxx Xxxxxx | ||||
| Title: President | ||||
| GUARANTOR: MORGANS HOTEL GROUP CO. |
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| By: | /s/ Xxxx Xxxxxx | |||
| Name: | Xxxx Xxxxxx | |||
| Title: | President | |||
| TRUSTEE: THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION |
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| By: | /s/ Xxxx Xxxxxxxx | |||
| Name: | Xxxx Xxxxxxxx | |||
| Title: | Vice President | |||
| As to Section 2.01 only: TABERNA PREFERRED FUNDING VII, LTD. |
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| By: | Taberna Capital Management, LLC | |||
| By: | /s/ Xxxxxxx X. Xxxxxx | |||
| Name: Xxxxxxx X. Xxxxxx Title: Managing Director |
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| TABERNA PREFERRED FUNDING VIII, LTD. | ||||
| By: | Taberna Capital Management, LLC | |||
| By: | /s/ Xxxxxxx X. Xxxxxx | |||
| Name: Xxxxxxx X. Xxxxxx Title: Managing Director |
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| MHG CAPITAL TRUST I |
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| By: | /s/ Xxxx Xxxxxxxx | |||
| Name: | Xxxx Xxxxxxxx | |||
| Title: | Administrative Trustee | |||