-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ASstvg2BapCl3AOaNPv18PApaTMNTGjRE2HMuxAv7QUUyMd1xvP7WrD+C+Q6x2q5 aRq740JkjfjgYQqbIwdGKA== 0001104659-10-021592.txt : 20100426 0001104659-10-021592.hdr.sgml : 20100426 20100423201827 ACCESSION NUMBER: 0001104659-10-021592 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20100426 DATE AS OF CHANGE: 20100423 GROUP MEMBERS: YUCAIPA AMERICAN ALLIANCE (PARALLEL) FUND II, L.P. GROUP MEMBERS: YUCAIPA AMERICAN ALLIANCE FUND II, L.P. GROUP MEMBERS: YUCAIPA AMERICAN ALLIANCE FUND II, LLC GROUP MEMBERS: YUCAIPA AMERICAN FUNDS, LLC GROUP MEMBERS: YUCAIPA AMERICAN MANAGEMENT, LLC FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: BURKLE RONALD W CENTRAL INDEX KEY: 0001015899 FILING VALUES: FORM TYPE: SC 13D/A SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: Morgans Hotel Group Co. CENTRAL INDEX KEY: 0001342126 STANDARD INDUSTRIAL CLASSIFICATION: HOTELS & MOTELS [7011] IRS NUMBER: 161736884 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-81634 FILM NUMBER: 10768561 BUSINESS ADDRESS: STREET 1: 475 TENTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10018 BUSINESS PHONE: 212-277-4100 MAIL ADDRESS: STREET 1: 475 TENTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10018 SC 13D/A 1 a10-8641_1sc13da.htm SC 13D/A

	UNITED STATES
	SECURITIES AND EXCHANGE COMMISSION
	Washington, D.C. 20549

	SCHEDULE 13D/A

Under the Securities Exchange Act of 1934
(Amendment No. 1)*

MORGANS HOTEL GROUP CO.

(Name of Issuer)

Common Stock, par value $0.01 per share

(Title of Class of Securities)

61748W108

(CUSIP Number)

Robert P. Bermingham

The Yucaipa Companies LLC

9130 W. Sunset Boulevard

Los Angeles, California 90069

(310) 789-7200

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

April 21, 2010

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box. o

Note. Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No. 61748W108						SCHEDULE 13D

	1	Name of Reporting Persons I.R.S. Identification Nos. of Above Persons (Entities Only) Ronald W. Burkle

	2	Check the Appropriate Box if a Member of a Group*
		(a)			x
		(b)			o

	3	SEC Use Only

	4	Source of Funds* OO, WC

	5	Check Box if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o

	6	Citizenship or Place of Organization United States

Number of Shares Beneficially Owned by Each Reporting Person With			7	Sole Voting Power 0 shares

			8	Shared Voting Power 3,288,231 shares(1)

			9	Sole Dispositive Power 0 shares

			10	Shared Dispositive Power 3,288,231 shares(1)

	11	Aggregate Amount Beneficially Owned by Each Reporting Person 3,288,231 shares (1)

	12	Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares* o

	13	Percent of Class Represented by Amount in Row (11) 9.9% (1)

	14.	Type of Reporting Person* IN

* See Instructions

(1) Beneficial ownership of common stock of the issuer through warrants to purchase an aggregate of 12,500,000 shares of the issuer’s common stock, subject to an exercise cap that limits the warrant holders from exercising such warrants to the extent that doing so would result in the warrant holders and their affiliates beneficially owning in excess of 9.9% of the issuer’s common stock. The number of shares shown as beneficially owned represents 9.9% of the issuer’s common stock based on 29,926,229 shares issued and outstanding on March 11, 2010 as increased by the assumed exercise of the warrants.

CUSIP No. 61748W108						SCHEDULE 13D

	1	Name of Reporting Persons I.R.S. Identification Nos. of Above Persons (Entities Only) Yucaipa American Management, LLC 30-0013506

	2	Check the Appropriate Box if a Member of a Group*
		(a)			x
		(b)			o

	3	SEC Use Only

	4	Source of Funds* OO, WC

	5	Check Box if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o

	6	Citizenship or Place of Organization Delaware

Number of Shares Beneficially Owned by Each Reporting Person With			7	Sole Voting Power 0 shares

			8	Shared Voting Power 3,288,231 shares(1)

			9	Sole Dispositive Power 0 shares

			10	Shared Dispositive Power 3,288,231 shares(1)

	11	Aggregate Amount Beneficially Owned by Each Reporting Person 3,288,231 shares (1)

	12	Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares* o

	13	Percent of Class Represented by Amount in Row (11) 9.9% (1)

	14.	Type of Reporting Person* OO

* See Instructions

CUSIP No. 61748W108						SCHEDULE 13D

	1	Name of Reporting Persons I.R.S. Identification Nos. of Above Persons (Entities Only) Yucaipa American Funds, LLC 30-0013485

	2	Check the Appropriate Box if a Member of a Group*
		(a)			x
		(b)			o

	3	SEC Use Only

	4	Source of Funds* OO, WC

	5	Check Box if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o

	6	Citizenship or Place of Organization Delaware

Number of Shares Beneficially Owned by Each Reporting Person With			7	Sole Voting Power 0 shares

			8	Shared Voting Power 3,288,231 shares(1)

			9	Sole Dispositive Power 0 shares

			10	Shared Dispositive Power 3,288,231 shares(1)

	11	Aggregate Amount Beneficially Owned by Each Reporting Person 3,288,231 shares (1)

	12	Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares* o

	13	Percent of Class Represented by Amount in Row (11) 9.9% (1)

	14.	Type of Reporting Person* OO

* See Instructions

CUSIP No. 61748W108						SCHEDULE 13D

	1	Name of Reporting Persons I.R.S. Identification Nos. of Above Persons (Entities Only) Yucaipa American Alliance Fund II, LLC 26-2119718

	2	Check the Appropriate Box if a Member of a Group*
		(a)			x
		(b)			o

	3	SEC Use Only

	4	Source of Funds* OO, WC

	5	Check Box if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o

	6	Citizenship or Place of Organization Delaware

Number of Shares Beneficially Owned by Each Reporting Person With			7	Sole Voting Power 0 shares

			8	Shared Voting Power 3,288,231 shares(1)

			9	Sole Dispositive Power 0 shares

			10	Shared Dispositive Power 3,288,231 shares (1)

	11	Aggregate Amount Beneficially Owned by Each Reporting Person 3,288,231 shares (1)

	12	Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares* o

	13	Percent of Class Represented by Amount in Row (11) 9.9% (1)

	14.	Type of Reporting Person* OO

* See Instructions

CUSIP No. 61748W108						SCHEDULE 13D

	1	Name of Reporting Persons I.R.S. Identification Nos. of Above Persons (Entities Only) Yucaipa American Alliance Fund II, L.P. 26-2119783

	2	Check the Appropriate Box if a Member of a Group*
		(a)			x
		(b)			o

	3	SEC Use Only

	4	Source of Funds* OO, WC

	5	Check Box if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o

	6	Citizenship or Place of Organization Delaware

Number of Shares Beneficially Owned by Each Reporting Person With			7	Sole Voting Power 1,982,298 shares(2)

			8	Shared Voting Power 0 shares

			9	Sole Dispositive Power 1,982,298 shares(2)

			10	Shared Dispositive Power 0 shares

	11	Aggregate Amount Beneficially Owned by Each Reporting Person 1,982,298 shares (2)

	12	Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares* o

	13	Percent of Class Represented by Amount in Row (11) 5.97% (2)

	14.	Type of Reporting Person* PN

* See Instructions

(2) Beneficial ownership of common stock of the issuer through warrants to purchase 7,535,580 shares of the issuer’s common stock, subject to an exercise cap that limits the reporting person from exercising such warrants to the extent that doing so would result in the reporting person and its affiliates beneficially owning in excess of 9.9% of the issuer’s common stock. The number of shares shown as beneficially owned represents 5.97% of the issuer’s common stock based on an initial amount of 29,926,229 shares of common stock issued and outstanding on March 11, 2010 as increased by the assumed pro rata exercise of the warrants and other warrants held by Yucaipa American Alliance (Parallel) Fund II, L.P., another reporting person.

CUSIP No. 61748W108						SCHEDULE 13D

	1	Name of Reporting Persons I.R.S. Identification Nos. of Above Persons (Entities Only) Yucaipa American Alliance (Parallel) Fund II, L.P. 26-2119907

	2	Check the Appropriate Box if a Member of a Group*
		(a)			x
		(b)			o

	3	SEC Use Only

	4	Source of Funds* OO, WC

	5	Check Box if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o

	6	Citizenship or Place of Organization U.S. Citizen

Number of Shares Beneficially Owned by Each Reporting Person With			7	Sole Voting Power 1,305,933 shares(3)

			8	Shared Voting Power 0 shares

			9	Sole Dispositive Power 1,305,933 shares (3)

			10	Shared Dispositive Power 0 shares

	11	Aggregate Amount Beneficially Owned by Each Reporting Person 1,305,933 shares (3)

	12	Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares* o

	13	Percent of Class Represented by Amount in Row (11) 3.93% (3)

	14.	Type of Reporting Person* PN

* See Instructions

(3) Beneficial ownership of common stock of the issuer through warrants to purchase 4,964,420 shares of the issuer’s common stock, subject to an exercise cap that limits the reporting person from exercising such warrants to the extent that doing so would result in the reporting person and its affiliates beneficially owning in excess of 9.9% of the issuer’s common stock. The number of shares shown as beneficially owned represents 3.93% of the issuer’s common stock based on an initial amount of 29,926,229 shares of common stock issued and outstanding on March 11, 2010 as increased by the assumed pro rata exercise of the warrants and other warrants held by Yucaipa American Alliance Fund II, L.P., another reporting person.

CUSIP No. 61748W108

SCHEDULE 13D

This Amendment No. 1 amends and supplements the Schedule 13D filed with the Securities and Exchange Commission (the “SEC”) on November 25, 2009 (this “Schedule 13D”) by (i) Ronald W. Burkle, an individual, (ii) Yucaipa American Management, LLC, a Delaware limited liability company (“Yucaipa American”), (iii) Yucaipa American Funds, LLC, a Delaware limited liability company (“Yucaipa American Funds”), (iv) Yucaipa American Alliance Fund II, LLC, a Delaware limited liability company (“YAAF II LLC”), (v) Yucaipa American Alliance Fund II, L.P., a Delaware limited partnership (“YAAF II”), and (vi) Yucaipa American Alliance (Parallel) Fund II, L.P., a Delaware limited partnership (“YAAF II Parallel” and, together with YAAF II, the “Investors”; and the Investors, together with Mr. Burkle, Yucaipa American, Yucaipa American Funds, and YAAF II LLC, are referred to herein as the “Reporting Persons”), with respect to the common stock, par value $0.01 per share (the “Common Stock”), of Morgans Hotel Group Co., a Delaware corporation (the “Company”). The filing of any amendment to this Schedule 13D (including the filing of this Amendment No. 1) shall not be construed to be an admission by the Reporting Persons that a material change has occurred in the facts set forth in this Schedule 13D or that such amendment is required under Rule 13d-2 of the Securities Exchange Act of 1934, as amended.

The Investor Warrants issued to the Investors on October 15, 2009 have not been amended or modified in any manner. However, because additional shares of Common Stock have been reported as outstanding on the Company’s Annual Report on Form 10-K for the year ended December 31, 2009, as filed on March 15, 2010, the aggregate number of shares of Common Stock that may be received upon exercise of the Investor Warrants (subject to the Exercise Cap) has increased, although the percentage of the class of Common Stock has remained constant.

Item 4.	Purpose of Transaction
Item 4 of this Schedule 13D is hereby amended to include the following information: On April 21, 2010 the Investors agreed to purchase $78 million aggregate principal amount of the Company’s 2.375% Senior Subordinated Convertible Notes due 2014 (the “Convertible Notes”) and purchased such Convertible Notes on April 23, 2010. The Convertible Notes are currently not convertible into shares of Common Stock of the Company. In order to purchase such Convertible Notes, the Investors entered into a Waiver Agreement (the “Waiver Agreement”) with the Company as more fully described in Item 6 below. Additionally, on April 21, 2010 the Company and Mellon Investor Services LLC (“Mellon”) amended the Company’s Amended and Restated Stockholder Protection Rights Agreement (the “Rights Agreement”), dated as of October 1, 2009, between the Company and Mellon, as Rights Agent, to exempt the ownership of the Convertible Notes by any person from the determination of the beneficial ownership of Common Stock by such person under the Rights Agreement for so long as the Convertible Notes are not acquired in the two years preceding October 17, 2014 and provided further that at the time the Convertible Notes are acquired the market price of the shares of Common Stock did not exceed the conversion rate applicable to the Convertible Notes. This description of Amendment No. 2 to the Rights Agreement is qualified in its entirety by reference to Amendment No. 2 to the Rights Agreement filed as Exhibit 1 to this Schedule 13D, which is incorporated herein by reference.

Item 5.	Interest in Securities of the Issuer
Item 5 of this Schedule 13D is hereby amended to delete paragraphs (a)(i) and (a)(ii) in their entirety and replace them with the following: (a) (i) YAAF II is the direct beneficial owner of 1,982,298 shares of Common Stock, and YAAF II Parallel is the direct beneficial owner of 1,305,933 shares of Common Stock based upon the Exercise Cap referred to in Item 4. These amounts assume that the rights to exercise the Investor Warrants subject thereto are allocated on a pro rata basis as between the Investors. However, either Investor may exercise Investor Warrants for a greater amount of shares of Common Stock, provided the Investors together do not exceed the Exercise Cap. (ii) Based upon the 29,926,229 shares of Common Stock outstanding as of March 11, 2010, as disclosed by the Company in its Annual Report on Form 10-K for the year ended December 31, 2009, as filed on March 15, 2010, the number of shares of Common Stock directly beneficially owned by YAAF II and YAAF II Parallel represents approximately 5.97% and 3.93% of the Common Stock, respectively, and 9.9% of the Common

CUSIP No. 61748W108

SCHEDULE 13D

Stock in the aggregate, in each case on a fully diluted basis based on the Exercise Cap referred to in Item 4. These amounts and percentages assume that the right to exercise the Investor Warrants subject to the Exercise Cap are allocated on a pro rata basis as between the Investors. However, either Investor may exercise Investor Warrants for a greater amount of shares of Common Stock, provided the Investors together do not exceed the Exercise Cap.

Item 6.	Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer
Item 6 of this Schedule 13D is hereby amended to include the following information: On April 21, 2010 the Investors agreed to purchase $78 million aggregate principal amount of the Company’s Convertible Notes and purchased such Convertible Notes on April 23, 2010. The purchase agreement is filed as Exhibit 2 to this Schedule 13D, which is incorporated herein by reference. In order to purchase such Convertible Notes, the Investors entered into a Waiver Agreement dated April 21, 2010. The Waiver Agreement permits the purchase by the Investors of up to $88 million in aggregate principal amount of the Convertible Notes within six months of April 21, 2010, subject to the limitations and conditions set forth therein. Pursuant to the Waiver Agreement, in the event an Investor proposes to sell Convertible Notes at a time when the market price of a share of Common Stock exceeds the then effective conversion rate of the Convertible Notes, the Company is granted certain rights of first refusal for the purchase of the same from the Investors. In the event an Investor proposes to sell the Convertible Notes at a time when the market price of a share of Common Stock is equal to or less than the then effective conversion rate of the Convertible Notes, the Company is granted certain rights of first offer to purchase the same from the Investors. This description of the Waiver Agreement is qualified in its entirety by reference to the Waiver Agreement filed as Exhibit 3 to this Schedule 13D, which is incorporated herein by reference. In connection with the Investors entering into an agreement on April 21, 2010 to purchase certain Convertible Notes as discussed in Item 4, the Company and Mellon amended the Rights Agreement as discussed in Item 4.

CUSIP No. 61748W108

SCHEDULE 13D

Item 7.

Materials to be Filed as Exhibits.

Exhibit No.		Description of Exhibit

1.		Amendment No. 2, dated as of April 21, 2010, to Amended and Restated Stockholder Protection Rights Agreement, dated as of October 1, 2009, between the Company and Mellon Investor Services LLC, as Rights Agent*

2.		Letter Agreement, dated as of April 21, 2010, by and among the Investors, Harbinger Capital Partners Master Fund I, Ltd., Harbinger Capital Partners Special Situations Fund, L.P., and Credit Distressed Blue Line Master Fund, Ltd.

3.		Waiver Agreement, dated as of April 21, 2010, by and among the Company and the Investors**

* Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on April 22, 2010.

** Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 22, 2010.

CUSIP No. 61748W108

SCHEDULE 13D

SIGNATURES

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: April 23, 2010
	RONALD W. BURKLE

	By:	/s/ Ronald W. Burkle


	YUCAIPA AMERICAN MANAGEMENT, LLC

	By:	/s/ Ronald W. Burkle
		Name: Ronald W. Burkle
		Its: Managing Member


	YUCAIPA AMERICAN FUNDS, LLC

	By: Yucaipa American Management, LLC
	Its: Managing Member

		By:	/s/ Ronald W. Burkle
			Name: Ronald W. Burkle
			Its: Managing Member


	YUCAIPA AMERICAN ALLIANCE FUND II, LLC

	By: Yucaipa American Funds, LLC
	Its: Managing Member

		By: Yucaipa American Management, LLC
		Its: Managing Member

			By:	/s/ Ronald W. Burkle
				Name: Ronald W. Burkle
				Its: Managing Member

CUSIP No. 61748W108

SCHEDULE 13D

YUCAIPA AMERICAN ALLIANCE FUND II, L.P.

By: Yucaipa American Alliance Fund II, LLC
Its: General Partner

	By: Yucaipa American Funds, LLC
	Its: Managing Member

		By: Yucaipa American Management, LLC
		Its: Managing Member

			By:	/s/ Ronald W. Burkle
				Name: Ronald W. Burkle
				Its: Managing Member

YUCAIPA AMERICAN ALLIANCE (PARALLEL) FUND II, L.P.

By: Yucaipa American Alliance Fund II, LLC
Its: General Partner

	By: Yucaipa American Funds, LLC
	Its: Managing Member

		By: Yucaipa American Management, LLC
		Its: Managing Member

			By:	/s/ Ronald W. Burkle
				Name: Ronald W. Burkle
				Its: Managing Member

EX-2 2 a10-8641_1ex2.htm EX-2

Exhibit 2

Harbinger Capital Partners® Master Fund I, Ltd.
Harbinger Capital Partners® Special Situations Fund, L.P.
Credit Distressed Blue Line Master Fund, Ltd.

April 21, 2010

Yucaipa American Alliance Fund II, L.P. and

Yucaipa American Alliance (Parallel) Fund II, L.P.

9130 West Sunset Boulevard

Los Angeles, CA 90069

Attention: Derex Walker

Re: $78,000,000 aggregate amount of Morgans Hotel Group Co. (“Issuer”) 2.375% Senior Subordinated Convertible Notes due 2014, CUSIP 61748WAB4 (“Securities”)

Ladies and Gentlemen:

Harbinger Capital Partners Master Fund I, Ltd. (“HCPMFI”), Harbinger Capital Partners Special Situations Fund, L.P. (“HCPSSF”), and Credit Distressed Blue Line Master Fund, Ltd. (collectively with HCPMFI and HCPSSF, “Seller”) agree to sell to Yucaipa American Alliance Fund II, L.P. (“YAAF II”) and Yucaipa American Alliance (Parallel) Fund II, L.P. (collectively with YAAF II, “Purchaser”), and Purchaser agree to buy from Seller, the Securities on terms previously negotiated in the amount and at the price as set forth on Schedule A hereto (such sale and purchase of the Securities, the “Transaction”). The Transaction will close on Friday, April 23, 2010. At the closing Seller, or an agent acting on behalf of Seller, shall transfer the Securities to an account specified by Purchaser against payment by Purchaser of the purchase price (including accrued interest as set forth Schedule A hereto) therefor.

A. Seller represents and warrants to Purchaser the following:

1. Seller represents to Purchaser that it is a sophisticated seller with respect to the Securities and has adequate information concerning the business and financial condition of the Issuer of the Securities to make an informed decision regarding the Transaction, and it has independently and without reliance upon Purchaser in its independent judgment made its own analysis and decision to enter into the Transaction based on such information as it has deemed appropriate, including its own due diligence.

2. Pursuant to that certain Letter Agreement, dated as of April 21, 2010, by and between Seller, Purchaser, and the Issuer (the “Confidentiality Agreement”), the Issuer has made available certain material non-public information to Seller regarding Issuer’s 2010 first quarter financial performance (the “Provided Information”). Notwithstanding the foregoing, Seller acknowledges that Purchaser and Purchaser’s principals, representatives, consultants, affiliates and their agents may possess other material non-public information that has not been made available to Seller by Purchaser, (“Purchaser Excluded Information”) regarding the

Securities, the Issuer, its other outstanding debt or securities, its financial performance, prospects, projections and plans that have not been provided to Seller, including without limitation, information received on a confidential basis directly or indirectly from (i) the Issuer or its affiliates, (ii) other creditors of and/or potential investors in, the Issuer or its affiliates, and (iii) the respective representatives or agents of the foregoing. Seller acknowledges that it has not requested and does not wish to receive Purchaser Excluded Information from Purchaser, and Seller will not rely upon Purchaser to furnish or make available any documents or other information regarding the credit, affairs, financial condition, future plans, business of, or any other matter concerning the Issuer, its affiliates, or the Securities. The Purchaser Excluded Information may be indicative of a value of the Securities that is substantially different than the purchase price reflected in the Transaction. Seller agrees that Purchaser shall have no liability to Seller with respect to the non-disclosure of Purchaser Excluded Information or the disclosure of the Provided Information, and Seller releases and forever discharges Purchaser from any such liability.

3. Seller has not received any investment advice or opinion from Purchaser as to whether the Transaction is prudent or suitable for Seller, and Seller is not relying on any representation or warranty of Purchaser in connection with the Transaction except as expressly set forth herein.

4. Seller has full power and authority to enter into and perform this letter agreement (this “Agreement”), the Transaction, and the transactions contemplated hereby and thereby. The sale of the Securities by it to Purchaser has been duly authorized, and this Agreement, the Confidentiality Agreement, and any other agreements or instruments of transfer have been (or will be) duly executed and delivered and this Agreement is a legal, valid, binding and enforceable obligation against it in accordance with its terms, subject to the limitations of bankruptcy and equitable principles generally.

5. Seller is the sole legal and beneficial owner of the Securities free and clear of any liens, claims, charges, encumbrances or security interest.

6. Seller has made no prior assignment, sale, transfer, conveyance or disposition of the Securities or any interest therein. In addition, Seller has not received any principal payment with respect to the Securities from Issuer or any other person.

7. Seller is a sophisticated investor that is an “accredited investor” within the meaning of Rule 501 under the Securities Act of 1933, as amended, (the “Act”) and Seller is experienced, sophisticated and knowledgeable in negotiating and trading in the securities and credit obligations of private and public companies and understands the disadvantage to which the Seller is subject on account of the disparity of information as between the Purchaser and the Seller. Notwithstanding the fact that Seller is aware that Purchaser Excluded Information exists and is known to Purchaser and that Purchaser has not disclosed such Purchaser Excluded Information to Seller, Seller is willing to enter the Transaction to sell the Securities to Purchaser.

8. Seller has had the opportunity to consult with its legal, financial and other advisers as it deems appropriate regarding the Transaction.

9. Seller acknowledges that Purchaser is relying on this Agreement in engaging in the Transaction, and would not engage in the Transaction in the absence of this Agreement.

Seller hereby irrevocably waives and releases Purchaser from any and all claims and causes of action that it or any institutional investor or other person for which it is acting as a duly authorized fiduciary or agent may have or may hereafter acquire against Purchaser relating to (a) Purchaser’s possession of Purchaser Excluded Information in connection with the Transaction, (b) any failure of Purchaser to disclose the Purchaser Excluded Information in connection with the Transaction, (c) Issuer’s disclosure of the Provided Information, and (d) Purchaser’s representatives’ membership on the board of directors of the Issuer or its affiliates in connection with the Transaction.

B. Purchaser represents and warrants to Seller the following:

1. Purchaser represents to Seller that it is a sophisticated purchaser with respect to the Securities and has adequate information concerning the business and financial condition of the Issuer of the Securities to make an informed decision regarding the Transaction, and it has independently and without reliance upon Seller in its independent judgment made its own analysis and decision to enter into the Transaction based on such information as it has deemed appropriate, including its own due diligence.

2. Pursuant to the Confidentiality Agreement and/or otherwise, the Issuer has made available to Purchaser the Provided Information. Notwithstanding the foregoing, Purchaser acknowledges that Seller and Seller’s principals, representatives, consultants, affiliates and their agents may possess other material non-public information that has not been made available to Purchaser by Seller (“Seller Excluded Information”), regarding the Securities, the Issuer, its other outstanding debt or securities, its financial performance, prospects, projections and plans that have not been provided to Purchaser, including without limitation, information received on a confidential basis directly or indirectly from (i) the Issuer or its affiliates, (ii) other creditors of and/or potential investors in, the Issuer or its affiliates, and (iii) the respective representatives or agents of the foregoing. Purchaser acknowledges that it has not requested and does not wish to receive Seller Excluded Information from Seller, and Purchaser will not rely upon Seller to furnish or make available any documents or other information regarding the credit, affairs, financial condition, future plans, business of, or any other matter concerning the Issuer, its affiliates, or the Securities. The Seller Excluded Information may be indicative of a value of the Securities that is substantially different than the purchase price reflected in the Transaction. Purchaser agrees that Seller shall have no liability to Purchaser with respect to the non-disclosure of Seller Excluded Information or the disclosure of the Provided Information, and Purchaser releases and forever discharges Seller from any such liability.

3. Purchaser has not received any investment advice or opinion from Seller as to whether the Transaction is prudent or suitable for Purchaser, and Purchaser is not relying on any representation or warranty of Seller in connection with the Transaction except as expressly set forth herein.

4. Purchaser has full power and authority to enter into and perform this Agreement, the Transaction, and the transactions contemplated hereby and thereby. The purchase of the Securities from Seller has been duly authorized, and this Agreement, the Confidentiality Agreement, and any other agreements or instruments of transfer have been (or will be) duly executed and delivered and this Agreement is a legal, valid, binding and enforceable obligation against it in accordance with its terms, subject to the limitations of bankruptcy and equitable principles generally.

5. Purchaser is a sophisticated investor that is an “accredited investor” within the meaning of Rule 501 under the Act and Purchaser is experienced, sophisticated and knowledgeable in negotiating and trading in the securities and credit obligations of private and public companies and understands the disadvantage to which the Purchaser is subject on account of the disparity of information as between the Seller and the Purchaser. Notwithstanding the fact that Purchaser is aware that Seller Excluded Information exists and is known to Seller and that Seller has not disclosed such Seller Excluded Information to Purchaser, Purchaser is willing to enter the Transaction to purchase the Securities from Seller.

6. Purchaser has had the opportunity to consult with its legal, financial and other advisers as it deems appropriate regarding the Transaction.

7. Purchaser acknowledges that Seller is relying on this Agreement in engaging in the Transaction, and would not engage in the Transaction in the absence of this Agreement.

Purchaser hereby irrevocably waives and releases Seller from any and all claims and causes of action that it or any institutional investor or other person for which it is acting as a duly authorized fiduciary or agent may have or may hereafter acquire against Seller relating to (a) Seller’s possession of Seller Excluded Information in connection with the Transaction, (b) any failure of Seller to disclose the Seller Excluded Information in connection with the Transaction, and (c) Issuer’s disclosure of the Provided Information.

This Agreement may be executed in any number of counterparts, each of which when so executed and delivered, shall be an original, but all of which together shall constitute one agreement. Transmission by electronic means of an executed counterpart of this letter agreement shall be deemed to constitute due delivery of such counterpart. The representations, warranties, covenants, agreements and indemnities contained herein shall survive the execution, delivery and performance of this letter agreement and all documents to be executed in connection herewith.

From and after the date hereof, each of Purchaser and Seller covenants and agrees to execute and deliver all such agreements, instruments and documents and to take all such further actions as any other Party may reasonably deem necessary from time to time to carry out the intent of this letter agreement to fully effect the transfer of the Securities to Purchaser. This letter agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without regard to any conflict of laws provisions thereof.

ACKNOWLEDGED, ACCEPTED and AGREED to:

YUCAIPA AMERICAN ALLIANCE FUND II, L.P.

By: Yucaipa American Alliance Fund II, LLC

Its: General Partner

By:	/s/ Robert P. Bermingham
Name: Robert P. Bermingham
Title: Vice President

YUCAIPA AMERICAN ALLIANCE (PARALLEL) FUND II, L.P.

By: Yucaipa American Alliance Fund II, LLC

Its: General Partner

By:	/s/ Robert P. Bermingham
Name: Robert P. Bermingham
Title: Vice President:

ACKNOWLEDGED, ACCEPTED and AGREED to:

HARBINGER CAPITAL PARTNERS MASTER FUND I, LTD.

By: Harbinger Capital Partners LLC

Its: Investment Manager

By:	/s/ Ian W. Estus
Name:		Ian W. Estus
Title:		Vice President

HARBINGER CAPITAL PARTNERS SPECIAL SITUATIONS FUND, L.P.

By: Harbinger Capital Partners Special Situations GP, LLC

Its: General Partner

By:	/s/ Ian W. Estus
Name:		Ian W. Estus
Title:		Vice President

CREDIT DISTRESSED BLUE LINE MASTER FUND, LTD.

By: Harbinger Capital Partners II LP

Its: Investment Manager

By:	/s/ Ian W. Estus
Name:		Ian W. Estus
Title:		Vice President

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