-----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, S/7n6XGc+S9CMxLS0uhqvF7mJ8KzX4BRmqAYRRryKcNztv6npZ8dmxw6psNTsl7U QIa5/M6uFg7iWVAT6Eilnw== 0001104659-06-012277.txt : 20060227 0001104659-06-012277.hdr.sgml : 20060227 20060227171832 ACCESSION NUMBER: 0001104659-06-012277 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 15 FILED AS OF DATE: 20060227 DATE AS OF CHANGE: 20060227 GROUP MEMBERS: DAVID T. HAMAMOTO GROUP MEMBERS: NCIC MHG SUBSIDIARY LLC GROUP MEMBERS: NORTHSTAR PARTNERSHIP, L.P. GROUP MEMBERS: W. EDWARD SCHEETZ 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 SEC ACT: 1934 Act SEC FILE NUMBER: 005-81634 FILM NUMBER: 06647552 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 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: NORTHSTAR CAPITAL INVESTMENT CORP /MD/ CENTRAL INDEX KEY: 0001057749 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 522072936 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 527 MADISON AVE STREET 2: 17TH FL CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 2123193400 MAIL ADDRESS: STREET 1: 527 MADISON AVE STREET 2: 17TH FL CITY: NEW YORK STATE: NY ZIP: 10022 SC 13D 1 a06-5838_1sc13d.htm BENEFICIAL OWNERSHIP OF 5% OR MORE

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

	SCHEDULE 13D

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

Morgans Hotel Group Co.

(Name of Issuer)

Common Stock, par value $0.01 per share

(Title of Class of Securities)

61748W108

(CUSIP Number)

Richard J. McCready

NorthStar Capital Investment Corp.

527 Madison Avenue, 16^th Floor

New York, New York 10022

Telephone: (212) 319-3400

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

February 17, 2006

(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 §§240.13d-1(e), 240.13d-1(f) or 240.13d-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 §240.13d-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

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only) NorthStar Capital Investment Corp.

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			o
		(b)			o

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) OO

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

	6.	Citizenship or Place of Organization Maryland

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power 10,164,693 Shares

			8.	Shared Voting Power 0 Shares

			9.	Sole Dispositive Power 10,164,693 Shares

			10.	Shared Dispositive Power 0 Shares

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 10,164,693

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o

	13.	Percent of Class Represented by Amount in Row (11) 30.3%

	14.	Type of Reporting Person (See Instructions) CO

CUSIP No. 61748W108

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only) NCIC MHG Subsidiary LLC

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			o
		(b)			o

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) OO

	5.	Check 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 8,164,693 Shares

			8.	Shared Voting Power 0 Shares

			9.	Sole Dispositive Power 8,164,693 Shares

			10.	Shared Dispositive Power 0 Shares

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 8,164,693

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o

	13.	Percent of Class Represented by Amount in Row (11) 24.4%

	14.	Type of Reporting Person (See Instructions) OO

CUSIP No. 61748W108

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only) NorthStar Partnership, L.P.

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			o
		(b)			o

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) OO

	5.	Check 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 2,000,000 Shares

			8.	Shared Voting Power 0 Shares

			9.	Sole Dispositive Power 2,000,000 Shares

			10.	Shared Dispositive Power 0 Shares

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 2,000,000

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o

	13.	Percent of Class Represented by Amount in Row (11) 6.0%

	14.	Type of Reporting Person (See Instructions) PN

CUSIP No. 61748W108

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only) W. Edward Scheetz

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			o
		(b)			o

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) OO/PF

	5.	Check 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 2,079,900 Shares

			8.	Shared Voting Power 0 Shares

			9.	Sole Dispositive Power 2,079,900 Shares

			10.	Shared Dispositive Power 0 Shares

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 2,079,900

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o

	13.	Percent of Class Represented by Amount in Row (11) 6.2%

	14.	Type of Reporting Person (See Instructions) IN

CUSIP No. 61748W108

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only) David T. Hamamoto

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			o
		(b)			o

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) OO

	5.	Check 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 2,057,035 Shares

			8.	Shared Voting Power 0 Shares

			9.	Sole Dispositive Power 2,057,035 Shares

			10.	Shared Dispositive Power 0 Shares

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 2,057,035

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o

	13.	Percent of Class Represented by Amount in Row (11) 6.1%

	14.	Type of Reporting Person (See Instructions) IN

Item 1.	Security and Issuer
This statement on Schedule 13D relates to the common stock, par value $.01 per share (the “Common Stock”), of Morgans Hotel Group Co. (the “Company”), a Delaware corporation. The address of the principal executive offices of the Company is 475 Tenth Avenue, New York, New York 10018.

Item 2.	Identity and Background
This Schedule 13D is being filed by NorthStar Capital Investment Corp (“NCIC”), NCIC MHG Subsidiary LLC (“NCIC MHG Subsidiary”), NorthStar Partnership, L.P. (“NorthStar LP”), Mr. W. Edward Scheetz and Mr. David T. Hamamoto (each a “Reporting Person” and collectively, the “Reporting Persons”)(1) with respect to the Common Stock of the Company.
The business address of NCIC, NCIC MHG Subsidiary, NorthStar LP and Mr. Hamamoto is 527 Madison Avenue, 16^th Floor, New York, New York 10022. The business address of Mr. Scheetz is 475 Tenth Avenue, New York, New York 10018.
NCIC is a Maryland corporation that was formed for the purpose of investing in debt and equity interests in real estate assets and businesses. The name, business address, present principal occupation or employment and citizenship of each director and executive officer of NCIC are set forth in Schedule I hereto and are incorporated herein by reference.
NCIC MHG Subsidiary is a Delaware limited liability company that was formed for the purpose of holding shares of Common Stock distributed to NCIC during the Company’s initial public offering of Common Stock (the “IPO”) which was completed on February 17, 2006, and participating in the IPO as a selling stockholder. NCIC MHG Subsidiary is a wholly-owned subsidiary of NCIC, and NCIC is the sole managing member of NCIC MHG Subsidiary.
NorthStar LP is a Delaware limited partnership that was formed for the purpose of investing in debt and equity interests in real estate assets and businesses. NorthStar LP is a majority-owned subsidiary of NCIC, and NCIC is the sole general partner of NorthStar LP.
Mr. W. Edward Scheetz is involved in the real estate and the hospitality businesses and is the Co-Chief Executive Officer and the Co-Chairman of the Board of Directors of NCIC and the Chief Executive Officer of the Company. Mr. Scheetz is a citizen of the United States.
Mr. David T. Hamamoto is involved in the real estate and the hospitality businesses and is the Co-Chief Executive Officer and the Co-Chairman of the Board of Directors of NCIC. Mr. Hamamoto is a citizen of the United States.
During the past five years, none of the Reporting Persons, or, to the knowledge of the Reporting Persons, any of the persons listed on Schedule I hereto, (i) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws, or finding any violation with respect to such laws.
This Item 2 is qualified in its entirety by reference to Schedule I which is attached hereto and incorporated into this Item by reference.

(1) Neither the present filing nor anything contained herein shall be construed as an admission that NCIC, NCIC MHG Subsidiary or NorthStar LP constitute a “person” for any purpose other than Section 13(d) of the Securities Exchange Act of 1934, as amended.

The Reporting Persons have entered into a Joint Filing Agreement, dated as of Februray 22, 2006, a copy of which is attached hereto as Exhibit 7.

Item 3.	Source and Amount of Funds or Other Consideration
NorthStar LP acquired from the Company an aggregate of 15,694,341 shares of Common Stock in connection with the IPO. Specifically, NorthStar LP acquired 15,694,341 shares of Common Stock in exchange for an equal number of membership units (“Membership Units”) in the operating company of the Company, Morgans Group LLC. This exchange was made pursuant to the terms of the Formation and Structuring Agreement, dated as of October 25, 2005 (the “Formation and Structuring Agreement”), by and among Morgans Group LLC, Morgans Hotel Group LLC (“MHG LLC”), NorthStar LP, NorthStar Hospitality LLC (“NorthStar Hospitality”) and other parties thereto. The Formation and Structuring Agreement is incorporated herein by reference. NorthStar LP received the Membership Units for no consideration through a distribution from its wholly-owned subsidiary, NorthStar Hospitality, which received the Membership Units for no consideration through a distribution of its pro rata share of the Membership Units held by its majority-owned subsidiary, MHG LLC, as a result of transactions (the “Formation and Structuring Transactions”) described under the caption “Formation and Structuring Transactions” in the Company’s final prospectus dated February 13, 2006 (File No. 333-129277, the “Final Prospectus”).
Of the 15,694,341 shares of Common Stock that NorthStar LP received in the IPO, NorthStar LP distributed all but 2,000,000 shares of Common Stock to its partners in accordance with their partnership interests in NorthStar LP. NCIC, as the general partner of NorthStar LP, received 10,035,851 shares of Common Stock in that distribution which it in turn contributed to NCIC MHG Subsidiary for no consideration. Pursuant to the Underwriting Agreement (as defined below), NCIC MHG Subsidiary in turn sold 1,871,158 of such shares of Common Stock in the IPO as a selling stockholder. Messrs. Scheetz and Hamamoto, as limited partners of NorthStar LP, each received 904,270 shares of Common Stock from NorthStar LP in that distribution and each sold 167,928 in the IPO as selling stockholders pursuant to the Underwriting Agreement.
In addition to the distribution of shares of Common Stock received by Mr. Scheetz as described above, Mr. Scheetz directly beneficially owns 11,500 shares of Common Stock purchased in an open market transaction that traded on February 24, 2006. Also, Mr. Scheetz is deemed to indirectly beneficially own (i) 2,400 shares of Common Stock purchased in the IPO by two trusts for the benefit of Mr. Scheetz’s two minor children, and (ii) 10,000 shares of Common Stock purchased in the IPO by Mr. Scheetz’s spouse. These purchases were made from personal funds.
As of February 17, 2006, (i) NCIC, as the managing member of NCIC MHG Subsidiary LLC, may be deemed to indirectly beneficially own 8,164,693 shares of Common Stock through NCIC MHG Subsidiary, which acquired such shares of Common Stock as described above, (ii) NCIC, as the general partner of NorthStar LP, may be deemed to indirectly beneficially own 2,000,000 shares of Common Stock through NorthStar LP, which acquired such shares of Common Stock as described above, and (iii) Messrs. Scheetz and Hamamoto, as Co-Chief Executive Officers of NCIC, may each be deemed to indirectly beneficially own (a) 8,164,693 shares of Common Stock through NCIC, which indirectly beneficially owns such 8,164,693 shares of Common Stock through its wholly-owned subsidiary, NCIC MHG Subsidiary, which acquired such shares of Common Stock as described above, and (b) 2,000,000 shares of Common Stock through NCIC, which indirectly beneficially owns such 2,000,000 shares of Common Stock through its majority-owned subsidiary, NorthStar LP, which acquired such shares of Common Stock as described above. Messrs. Scheetz and Hamamoto disclaim beneficial ownership of the shares of Common Stock held by NCIC MHG Subsidiary and NorthStar LP, except to the extent of their respective pecuniary interests therein.
None of the persons listed on Schedule I hereto has contributed any funds or other consideration towards the acquisition of the Common Stock, except insofar as they may be general or limited partners of, or own membership interests in, certain of the Reporting Persons and have made capital contributions to such Reporting Persons, as the case may be.

Item 4.	Purpose of Transaction
Except for the 11,500 shares of Common Stock purchased by Mr. Scheetz in the open market subsequent to the IPO, each of the Reporting Persons acquired shares of Common Stock in connection with the Company’s IPO for investment purposes or in the ordinary course of business.

As of the date of this statement, none of the Reporting Persons, or to the knowledge and belief of the Reporting Persons, any of the persons listed on Schedule I hereto, has any present plan or proposals which would relate to or would result in any transaction event or action enumerated in paragraphs (a) through (j) of Item 4 of Schedule 13D.
Each of the Reporting Persons expects to evaluate on an ongoing basis the Company’s financial condition, business, operations and prospects, the market price of the Common Stock, conditions in the securities markets generally, general economic and industry conditions and other factors. Accordingly, each Reporting Person reserves the right to change its plans and intentions at any time, as it deems appropriate. In particular, any one or more of the Reporting Persons (and their respective affiliates) may purchase additional shares of Common Stock or other securities of the Company or may sell or transfer shares of Common Stock beneficially owned by them from time to time in public or private transactions and/or may enter into privately negotiated derivative transactions with institutional counterparties to hedge the market risk of some or all of their positions in the shares of Common Stock or other securities and/or may cause any of the Reporting Persons to distribute in kind to their respective partners or members, as the case may be, shares of Common Stock or other securities. Any such transactions may be effected at any time or from time to time subject to (i) the restrictions contained in the Lock-Up Agreements (described in Item 6 below) and (ii) any applicable limitations imposed on the sale of any of their Company securities by the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the “Securities Act”) or other applicable law. To the knowledge of each Reporting Person, each of the persons listed on Schedule I hereto may make similar evaluations from time to time or on an ongoing basis and reserves the same rights.

Item 5.	Interest in Securities of the Issuer
(a) Based on information provided to the Reporting Persons by the Company, there were 33,500,000 shares of Common Stock outstanding as of the close of business on February 27, 2006.
As of February 27, 2006, NCIC MHG Subsidiary beneficially owned 8,164,693 shares of Common Stock, representing in the aggregate approximately 24.4% of the outstanding shares of Common Stock.
As of February 27, 2006, NorthStar LP beneficially owned 2,000,000 shares of Common Stock, representing in the aggregate approximately 6.0% of the outstanding shares of Common Stock.
As of February 27, 2006, NCIC beneficially owned an aggregate of 10,164,693 shares of Common Stock, representing in the aggregate approximately 30.3% of the outstanding shares of Common Stock. Of the 10,164,693 shares of Common Stock beneficially owned by NCIC, 8,164,693 shares of Common Stock represent NCIC’s indirect pecuniary interest in the 8,164,693 shares of Common Stock beneficially owned directly by NCIC MHG Subsidiary, and 2,000,000 shares of Common Stock are indirectly beneficially owned by NCIC through its majority-owned subsidiary, NorthStar LP, which directly beneficially owns such 2,000,000 shares of Common Stock.
As of February 27, 2006, Mr. Scheetz beneficially owned an aggregate of 2,079,900 shares of Common Stock, representing in the aggregate approximately 6.2% of the outstanding shares of Common Stock. Of the 2,079,900 shares of Common Stock beneficially owned by Mr. Scheetz, 365,734 shares of Common Stock represent Mr. Scheetz’s indirect pecuniary interest in the 2,000,000 shares of Common Stock indirectly beneficially owned by NCIC through its majority-subsidiary, NorthStar LP, which directly beneficially owns such 2,000,000 shares of Common Stock, 953,924 shares of Common Stock represent Mr. Scheetz’s indirect pecuniary interest in the 8,164,693 shares of Common Stock beneficially owned indirectly by NCIC through its wholly-owned subsidiary, NCIC MHG Subsidiary LLC., 2,400 shares of Common Stock are indirectly beneficially owned by Mr. Scheetz through two trusts which directly own such 2,400 shares of Common Stock for the benefit of Mr. Scheetz’s two minor children, 10,000 shares of Common Stock are indirectly beneficially owned by Mr. Scheetz through his spouse who directly beneficially owns such 10,000 shares of Common Stock, and 11,500 shares of Common Stock represent Mr. Scheetz’s direct beneficial ownership of 11,500 shares of Common Stock purchased by Mr. Scheetz in the open market subsequent to the IPO.
As of February 27, 2006, Mr. Hamamoto beneficially owned an aggregate of 2,057,035 shares of Common Stock, representing in the aggregate approximately 6.1% of the outstanding shares of Common Stock. Of the 2,057,035 shares of Common Stock beneficially owned by Mr. Hamamoto, 365,938 shares of Common Stock represent Mr. Hamamoto’s indirect pecuniary interest in the 2,000,000 shares of Common Stock indirectly beneficially owned by NCIC through its majority-subsidiary, NorthStar LP, which directly beneficially owns such 2,000,000 shares of Common Stock, and 954,755 shares of Common Stock represent Mr. Hamamoto’s indirect pecuniary

interest in the 8,164,693 shares of Common Stock beneficially owned indirectly by NCIC through its wholly-owned subsidiary, NCIC MHG Subsidiary LLC.
None of the shares of Common Stock reported in rows (11) and (13) of the cover pages to this Schedule 13D are shares as to which there is a right to acquire exercisable within 60 days.
None of the Reporting Persons or, to the knowledge of the Reporting Persons, any of the persons listed on Schedule I hereto, beneficially owned any shares of Common Stock as of February 17, 2006, other than as set forth herein.
(b) Rows (7) through (10) of the cover pages to this Schedule 13D set forth (i) the number of shares of Common Stock as to which there is sole power to vote or direct the vote or to dispose or direct the disposition and (ii) the number of shares of Common Stock as to which there is shared power to vote or direct the vote or to dispose or direct the disposition. Except as set forth herein, each Reporting Person hereby disclaims beneficial ownership of any shares of Common Stock held by any other Reporting Person.
(c) Except with respect to transactions effected by NCIC MHG Subsidiary, Messrs. Scheetz and Hamamoto in their capacity as selling stockholders in the IPO, no transactions in the Common Stock were effected by the Reporting Persons, or, to the knowledge of any of the Reporting Persons, any of the persons listed on Schedule I hereto (other than Mr. Richard J. McCready who effected transactions in his capacity as a selling stockholder in the IPO) during the 60 days prior to and including February 17, 2006.
(d) No other person is known by any Reporting Person to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, any shares of Common Stock beneficially owned by any Reporting Person.
(e) Not applicable.

Item 6.	Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer
FORMATION AND STRUCTURING AGREEMENT
NorthStar LP is a party to the Formation and Structuring Agreement. Pursuant to the Formation and Structuring Agreement, NorthStar LP agreed to exchange all Membership Units that it received in distributions from MHG LLC through NorthStar Hospitality for an equal number of shares of Common Stock.
UNDERWRITING AGREEMENT
In connection with the IPO, an Underwriting Agreement, dated February 13, 2006 (the “Underwriting Agreement”), was entered into by and among the Company, MHG LLC, Morgans Group LLC and Morgan Stanely & Co. Incorporated and Merrill Lynch, Pierece, Fenner & Smith Incorporated, as representatives (the “Representatives”) of the several underwriters listed in Schedule I thereto (the “Underwriters”) and the selling shareholders named in Schedule II thereto (the “selling stockholders”). NCIC MHG Subsidiary, Messrs. Scheetz and Hamamoto were selling stockholders in the IPO as well as Mr. Richard McCready, whose name is listed on Schedule I hereto. The Underwriting Agreement provides for the Underwriters’ purchase of 15,000,000 shares of Common Stock from the Company, 3,000,000 shares of Common Stock from the selling stockholders and the Underwriters’ option to purchase up to an additional 2,700,000 shares of Common Stock from the Company within 30 days from the closing date of the IPO at the same purchase price for the purpose of covering over-allotments. As of the date of this statement, the Underwriters have not exercised the over-allotment option. The initial public offering price in the IPO was $20.00 per share. Under the Underwriting Agreement, the Underwriters purchased the shares of Common Stock net of an underwriting discount of $1.30 per share. The Underwriting Agreement contains standard terms and conditions for a public offering including customary representations and warranties and indemnity provisions.

LOCK-UP AGREEMENTS

In connection with the IPO, each of the Reporting Persons as well as Mr. Richard J. McCready, whose name is listed on Schedule I hereto, have agreed that, during the period beginning on the date of and continuing to and including the date 180 days after February 13, 2006, the date of the Final Prospectus, they will not, without prior written consent of the Representatives, (i) offer, pledge, sell, contract or sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right warrant or purchase, lend or otherwise transfer or disposes of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock, (ii) enter into any swap or other arrangement that transfers to another in whole or in part, any of the economic consequences of ownership of Common Stock, or (iii) demand or otherwise seek registration of shares of Common Stock with the Securities and Exchange Commission (the “SEC”).

REGISTRATION RIGHTS AGREEMENT

NorthStar LP is a party to a Registration Rights Agreement, dated as of February 17, 2006, entered into by and between the Company and NorthStar LP (the “Registration Rights Agreement”). The terms of the Registration Rights Agreement are summarized as follows:

Demand Registration: Beginning on the six-month anniversary of the IPO, NorthStar LP and its affiliates will have certain rights, subject tot certain limitations, to request that the Company register shares of Common Stock owned by them; provided that the number of shares included in such a demand registration would yield gross proceeds to the entities requesting registration of at least $25,000,000. If the value of shares of Common Stock held by those entities is less than $25,000,000 but greater than $15,000,000, the request for registration shall be for all of the shares held by the entities requesting registration. Upon such request, the Company will be required to its reasonable best efforts to file a registration statement within 30 days of such a request, and cause the registration statement to be declared effective by the SEC as soon as practicable thereafter. Subject to certain conditions, the Company may withdraw a previously filed registration statement or postpone the initial filing of that registration for up to 90 days if, based on the Company’s good faith judgment, such withdrawal or postponement would avoid premature disclosure of a matter that the Company had determined would not be in its best interests to disclose at such time.

Piggy-back Registration. Beginning on the six-month anniversary of the IPO, whenever the Company proposes to register any of the shares of Common Stock (other than on a Form S-8 or Form S-4), NorthStar LP and its affiliates will have the right to include shares of Common Stock owned by them on the registration statement.

Shelf Registration. After the Company becomes eligible to file a registration statement on Form S-3, NorthStar LP or its affiliates will be entitled to request that the Company file and maintain a registration statement for the resale of all or any portion of shares of Common Stock owned by them, subject to certain limitations. Upon such request, the Company will be required to use its reasonable best efforts to file such a registration statement within 30 days of the request, and cause it to be declared effective by the SEC as soon as reasonably practicable thereafter.

Transfer of Registration Rights. To the extent NorthStar LP or its affiliates distribute shares of Common Stock to its members, investors or beneficial owners, those distributees will obtain the benefits of these registration rights if they are otherwise restricted from freely transferring those distributed shares of Common Stock.

Expenses. In connection with a demand, piggy-back or shelf registration, any underwriting discounts or commissions attributable to the sale of the registrable shares or fees and expenses of counsel representing the entities requesting registration in excess of the amount specified below shall be borne by those entities. All other expenses of such registration, including the applicable federal and state filing fees and up to $15,000 fees and disbursements of one counsel to the entities requesting registration, shall be borne by the Company.

The foregoing descriptions of the Formation and Structuring Agreement, Underwriting Agreement, Lock-Up Agreements and Registration Rights Agreement are qualified in their entirety by reference to the Formation and Structuring Agreement, Underwriting Agreement, Lock-Up Agreements and Registration Rights Agreement, which are filed as exhibits hereto, each of which is incorporated by reference in their entirety into this Item 6. Except as described herein, none of the Reporting Persons or, to the knowledge of each of the Reporting Persons, any of the persons listed on Schedule I hereto is a party to any contract, arrangement, understanding or relationship with respect to any securities of the Company.

Item 7.

Material to Be Filed as Exhibits

Exhibit		Description

99.1.		Formation and Structuring Agreement, dated as of October 25, 2006, by and among Morgans Group LLC, Morgans Hotel Group LLC, NorthStar Hospitality LLC, NorthStar Partnership, L.P. and RSA Associates, L.P. (incorporated by reference to Exhibit 10.4 to the registration statement on Form S-1 (File No. 333-129277) filed by the Company)).

99.2.		Underwriting Agreement, dated as of February 13, 2006, by and among Morgans Hotel Group Co., Morgans Group LLC, Morgans Hotel Group LLC and Morgan Stanley & Co. Incorporated and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives of the several underwriters named in Schedule I thereto, and the selling stockholders named in Schedule II thereto.

99.3.		Lock-Up Agreement, dated as of February 13, 2006, by and between Morgan Stanley & Co. Incorporated and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives of the several underwriters named in Schedule I of the Underwriting Agreement and NorthStar Capital Investment Corp.

99.4.		Lock-Up Agreement, dated as of February 13, 2006, by and between Morgan Stanley & Co. Incorporated and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives of the several underwriters named in Schedule I of the Underwriting Agreement and NCIC MHG Subsidiary LLC.

99.5.		Lock-Up Agreement, dated as of February 13, 2006, by and between Morgan Stanley & Co. Incorporated and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives of the several underwriters named in Schedule I of the Underwriting Agreement and NorthStar Partnership, L.P.

99.6.		Lock-Up Agreement, dated as of February 13, 2006, by and between Morgan Stanley & Co. Incorporated and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives of the several underwriters named in Schedule I of the Underwriting Agreement and Mr. W. Edward Scheetz.

99.7.		Lock-Up Agreement, dated as of February 13, 2006, by and between Morgan Stanley & Co. Incorporated and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives of the several underwriters named in Schedule I of the Underwriting Agreement and Mr. David T. Hamamoto.

99.8.		Lock-Up Agreement, dated as of February 13, 2006, by and between Morgan Stanley & Co. Incorporated and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives of the several underwriters named in Schedule I of the Underwriting Agreement and Mr. Richard J. McCready.

99.9.		Registration Rights Agreement, dated as of February 17, 2006, by and between Morgans Hotel Group Co. and NorthStar Partnership, L.P.

99.10.		Joint Filing Agreement, dated as of February 22, 2006, by and among NorthStar Capital Investment Corp., NCIC MHG Subsidiary LLC, NorthStar Partnership, L.P., Mr. W. Edward Scheetz and Mr. David T. Hamamoto.

99.11.		Power of Attorney, dated February 22, 2006, relating to NorthStar Capital Investment Corp.

99.12.		Power of Attorney, dated February 22, 2006, relating to NorthStar Partnership, L.P.

Exhibit		Description

99.13.		Power of Attorney, dated February 22, 2006, relating to NCIC MHG Subsidiary LLC.

99.14.		Power of Attorney, dated February 22, 2006, relating to Mr. David T. Hamamoto.

99.15.		Power of Attorney, dated February 22, 2006, relating to Mr. W. Edward Scheetz.

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: February 27, 2006

NORTHSTAR CAPITAL INVESTMENT CORP.


By:	/s/ Richard J. McCready
Name: Richard J. McCready
Title: Chief Operating Officer and Secretary


NCIC MHG SUBSIDIARY LLC

By: NorthStar Capital Investment Corp.,
Its Managing Member


By:	/s/ Richard J. McCready
Name: Richard J. McCready
Title: Chief Operating Officer and Secretary


NORTHSTAR PARTNERSHIP, L.P.

By: NorthStar Capital Investment Corp.,
Its General Partner


By:	/s/ Richard J. McCready
Name: Richard J. McCready
Title: Chief Operating Officer and Secretary


/s/ W. Edward Scheetz
W. Edward Scheetz


/s/ David T. Hamamoto
David T. Hamamoto

EXHIBIT INDEX

Exhibit		Description

99.1.		Formation and Structuring Agreement, dated as of October 25, 2006, by and among Morgans Group LLC, Morgans Hotel Group LLC, NorthStar Hospitality LLC, NorthStar Partnership, L.P. and RSA Associates, L.P. (incorporated by reference to Exhibit 10.4 to the registration statement on Form S-1 (File No. 333-129277) filed by the Company)).

99.2.		Underwriting Agreement, dated as of February 13, 2006, by and among Morgans Hotel Group Co., Morgans Group LLC, Morgans Hotel Group LLC and Morgan Stanley & Co. Incorporated and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives of the several underwriters named in Schedule I thereto, and the selling stockholders named in Schedule II thereto.

99.3.		Lock-Up Agreement, dated as of February 13, 2006, by and between Morgan Stanley & Co. Incorporated and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives of the several underwriters named in Schedule I of the Underwriting Agreement and NorthStar Capital Investment Corp.

99.4.		Lock-Up Agreement, dated as of February 13, 2006, by and between Morgan Stanley & Co. Incorporated and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives of the several underwriters named in Schedule I of the Underwriting Agreement and NCIC MHG Subsidiary LLC.

99.5.		Lock-Up Agreement, dated as of February 13, 2006, by and between Morgan Stanley & Co. Incorporated and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives of the several underwriters named in Schedule I of the Underwriting Agreement and NorthStar Partnership, L.P.

99.6.		Lock-Up Agreement, dated as of February 13, 2006, by and between Morgan Stanley & Co. Incorporated and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives of the several underwriters named in Schedule I of the Underwriting Agreement and Mr. W. Edward Scheetz.

99.7.		Lock-Up Agreement, dated as of February 13, 2006, by and between Morgan Stanley & Co. Incorporated and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives of the several underwriters named in Schedule I of the Underwriting Agreement and Mr. David T. Hamamoto.

99.8.		Lock-Up Agreement, dated as of February 13, 2006, by and between Morgan Stanley & Co. Incorporated and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives of the several underwriters named in Schedule I of the Underwriting Agreement and Mr. Richard J. McCready.

99.9.		Registration Rights Agreement, dated as of February 17, 2006, by and between Morgans Hotel Group Co. and NorthStar Partnership, L.P.

99.10.		Joint Filing Agreement, dated as of February 22, 2006, by and among NorthStar Capital Investment Corp., NCIC MHG Subsidiary LLC, NorthStar Partnership, L.P., Mr. W. Edward Scheetz and Mr. David T. Hamamoto.

99.11.		Power of Attorney, dated February 22, 2006, relating to NorthStar Capital Investment Corp.

99.12.		Power of Attorney, dated February 22, 2006, relating to NorthStar Partnership, L.P.

Exhibit		Description

99.13.		Power of Attorney, dated February 22, 2006, relating to NCIC MHG Subsidiary LLC.

99.14.		Power of Attorney, dated February 22, 2006, relating to Mr. David T. Hamamoto.

99.15.		Power of Attorney, dated February 22, 2006, relating to Mr. W. Edward Scheetz.

SCHEDULE I

The names, position and present principal occupation of each director and executive officer of NorthStar Capital Investment Corp., the sole managing member of NCIC MHG Subsidiary LLC and the sole general partner of NorthStar Partnership, L.P., are set forth below.

The business address of each director and executive officer listed below is c/o NorthStar Capital Investment Corp., 527 Madison Avenue, 16^th Floor, New York, New York 10022.

Each director and executive officer listed below is a citizen of the United States.

Name	Position	Present Principal Occupation
David T. Hamamoto	Co-Chief Executive Officer/Director	Co-Chief Executive Officer and Co-Chairman of the Board of Directors of NorthStar Capital Investment Corp.
W. Edward Scheetz	Co-Chief Executive Officer/Director	President and Chief Executive Officer of Morgans Hotel Group Co.
Richard J. McCready	President/Chief Operating Officer/Secretary/Director	President, Chief Operating Officer and Secretary of NorthStar Capital Investment Corp.
Martin L. Edelman	Director	Of Counsel to Paul, Hastings, Janofsky & Walker LLP.
Robert Soros	Director	Deputy Chairman of Soros Fund Management LLC.
Meridee Moore	Director	Senior Managing Member and Chief Investment Officer of Watershed Asset Management, L.L.C.
Dang Phan	Director	Managing Partner, Chief Operating Officer and Chief Financial Officer of Grove International Partners.
Steven Kauff	Vice President	Vice President of NorthStar Capital Investment Corp.
Rena Flaum	Treasurer	Treasurer of NorthStar Capital Investment Corp.

EX-99.2 2 a06-5838_1ex99d2.htm EXHIBIT 99

Exhibit 99.2

EXECUTION COPY

18,000,000 Shares

MORGANS HOTEL GROUP CO.

COMMON STOCK ($.01 PAR VALUE PER SHARE)

UNDERWRITING AGREEMENT

February 13, 2006

Morgan Stanley & Co. Incorporated

Merrill Lynch, Pierce, Fenner & Smith Incorporated

As representatives of the several Underwriters
Named in Schedule I hereto

c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036

Dear Sirs and Mesdames:

Morgans Hotel Group Co., a Delaware corporation (the “Company”), Morgans Hotel Group LLC, a Delaware limited liability company (“MHG”), and Morgans Group LLC, a Delaware limited liability company (the “Operating Company”), each confirms its agreement with each of the several Underwriters named in Schedule I hereto (the “Underwriters”), for whom Morgan Stanley & Co. Incorporated and Merrill Lynch, Pierce, Fenner & Smith Incorporated are acting as representatives (the “Representatives”), whereby the Company and certain shareholders of the Company (the “Selling Shareholders”) named on Schedule II hereto severally propose to sell to the several Underwriters an aggregate of 18,000,000 shares of the common stock, $.01 par value per share, of the Company (the “Firm Shares”), of which 15,000,000 shares are to be issued and sold by the Company and 3,000,000 shares are to be sold by the Selling Shareholders, each Selling Shareholder selling the amount set forth opposite such Selling Shareholder’s name in Schedule II hereto. The Company also proposes to issue and sell to the several Underwriters not more than an additional 2,700,000 shares of its common stock, $.01 par value per share (the “Additional Shares”), if and to the extent that you, as Representatives, shall have determined to exercise, on behalf of the Underwriters, the right to purchase such shares of common stock granted to the Underwriters in Section 4 hereof. The Firm Shares and the Additional Shares are hereinafter collectively referred to as the “Shares.” The shares of common stock, $.01 par value per share, of the Company to be outstanding after giving effect to the sales contemplated hereby are hereinafter referred to as the “Common Stock.” The Company and the Selling Shareholders are hereinafter sometimes collectively referred to as the “Sellers”.

At or before the Closing Date (as defined below), the Company, the Operating Company, MHG, NorthStar Partnership, L.P. (“NorthStar”) and RSA Associates, L.P. (“RSA”) and certain other members of MHG will complete a series of transactions described in the Prospectus (as defined below) under the caption “Formation and Structuring Transactions” (such transactions being hereinafter called the “Formation Transactions”). As part of the Formation

Transactions, (1) MHG will form the Operating Company and contribute certain assets and related liabilities and rights described in the Prospectus (the “Initial Contributed Assets”) to the Operating Company for no consideration, (2) MHG will distribute all of its membership units in the Operating Company (“OC Units”) held at the time of the contribution of the Initial Contributed Assets to its members on a pro rata basis, (3) MHG will contribute all of the membership interests in Morgans Hotel Group Management LLC (the “Management Company Contribution” and, together with the Initial Contributed Assets, the “Contributed Assets”) to the Operating Company in exchange for additional OC Units, (4) NorthStar and RSA will transfer to the Company all of their respective OC Units in exchange for an equal number of shares of Common Stock, respectively, and (5) the Company will contribute to the Operating Company the net proceeds of the sale of the Shares by the Company in exchange for a number of OC Units equal to the number of Shares issued and sold by the Company.

On the Closing Date but prior to the Formation Transactions, Morgans Hotel Group Management LLC (“MHG Management Company”) will enter into an $80,000,000 Secured Term Loan Facility (the “Term Loan Facility”) evidenced by a credit agreement (the “Term Loan Credit Agreement” and, together with any security documents and other agreements relating to the Term Loan Facility, the “Term Loan Documents”) among MHG Management Company, as borrower, Citicorp North America, Inc., as administrative agent and a syndicate of lenders. On the Closing Date, the Operating Company will enter into a $125,000,000 Secured Revolving Credit Facility (the “Revolving Credit Facility” and, together with the Term Loan Facility, the “Credit Facilities”) evidenced by a credit agreement (the “Revolving Credit Facility Agreement” and, together with any security documents and other agreements relating to the Revolving Credit Facility, the “Revolving Credit Loan Documents”) among the Operating Company, as borrower, the Company, Citicorp North America, Inc., as administrative agent and a syndicate of lenders. As used in this Agreement, the term “Loan Documents” refers to: (1) the Term Loan Documents and (2) the Revolving Credit Loan Documents.

As used in this Agreement, the term “Formation Agreements” collectively refers to: (1) the Formation and Structuring Agreement, by and among the Operating Company, MHG, NorthStar Hospitality LLC, NorthStar, RSA and certain individuals, dated as of October 25, 2005 (the “Formation and Structuring Agreement”) and (2) the Amended and Restated Limited Liability Company Agreement of the Operating Company, the form of which is filed as Exhibit 10.1 to the Registration Statement (as defined below) (the “OC Agreement”).

The Company has filed with the Securities and Exchange Commission (the “Commission”) a registration statement, including a prospectus, relating to the Shares. The registration statement as amended at the time it becomes effective, including the information (if any) deemed to be part of the registration statement at the time of effectiveness pursuant to Rule 430A under the Securities

Act of 1933, as amended (the “Securities Act”), is hereinafter referred to as the “Registration Statement”; the prospectus in the form first used to confirm sales of Shares (or in the form first made available to the Underwriters by the Company to meet requests of purchasers pursuant to Rule 173 under the Securities Act) is hereinafter referred to as the “Prospectus.” If the Company has filed an abbreviated registration statement to register additional shares of Common Stock pursuant to Rule 462(b) under the Securities Act (the “Rule 462 Registration Statement”), then any reference herein to the term “Registration Statement” shall be deemed to include such Rule 462 Registration Statement.

For purposes of this Agreement, “free writing prospectus” has the meaning set forth in Rule 405 under the Securities Act, “Time of Sale Prospectus” means the preliminary prospectus identified on Schedule III hereto, together with the free writing prospectuses, if any, identified on Schedule III hereto and any other information identified in Schedule III hereto, and “broadly available road show” means a “bona fide electronic road show” as defined in Rule 433(h)(5) under the Securities Act that has been made available without restriction to any person. As used herein, the terms “Registration Statement,” “preliminary prospectus,” “Time of Sale Prospectus” and “Prospectus” shall include the documents, if any, incorporated by reference therein. The terms “supplement,” “amendment,” and “amend” as used herein with respect to the Time of Sale Prospectus or any free writing prospectus shall include all documents subsequently filed by the Company with the Commission pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are incorporated by reference therein.

1. Representations and Warranties of the Company and the Operating Company. The Company and the Operating Company jointly and severally represent and warrant to and agree with each of the Underwriters that:

(a) The Registration Statement has become effective; no stop order suspending the effectiveness of the Registration Statement is in effect, and no proceedings for such purpose are pending before or, to the knowledge of the Company or the Operating Company, threatened by the Commission.

(b) (i) The Registration Statement, when it became effective, did not contain and, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) the Registration Statement and the Prospectus comply and, as amended or supplemented, if applicable, will comply in all material respects with the Securities Act and the applicable rules and regulations of the Commission thereunder, (iii) the Time of Sale Prospectus does not, as of the date hereof and at the Closing Date (as defined in Section 6), the Time of Sale Prospectus, as then amended or supplemented by the Company, if applicable, will not, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they

were made, not misleading, (iv) each broadly available road show, if any, and any issuer free writing prospectus as defined in Rule 433(h) under the Securities Act, when considered together with the Time of Sale Prospectus, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading and (v) the Prospectus does not contain and, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the representations and warranties set forth in this paragraph do not apply to statements or omissions in the Registration Statement, the Time of Sale Prospectus, any issuer free writing prospectus as defined in Rule 433(h) under the Securities Act (and to which the Underwriters have not objected in accordance with the provisions of Section 8(c) of this Agreement), or the Prospectus based upon information furnished to the Company in writing by such Underwriter through you expressly for use therein.

(c) Any statistical and market-related data included in the Registration Statement, the Time of Sale Prospectus or the Prospectus are in all material respects based on or derived from sources that the Company believes to be reliable and accurate.

(d) Prior to the date of this Agreement, neither the Company nor the Operating Company has conducted any material business other than in connection with the Formation Transactions.

(e) The Company is not an “ineligible issuer” in connection with the offering pursuant to Rules 164, 405 and 433 under the Securities Act. Any free writing prospectus that the Company is required to file pursuant to Rule 433(d) under the Securities Act has been, or will be, filed with the Commission in accordance with the requirements of the Securities Act and the applicable rules and regulations of the Commission thereunder. Each free writing prospectus that the Company has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act or that was prepared by or on behalf of or used or referred to by the Company complies or will comply in all material respects with the requirements of the Securities Act and the applicable rules and regulations of the Commission thereunder. Except for the free writing prospectuses, if any, identified in Schedule III hereto, and electronic road shows, if any, furnished to you before first use, the Company has not prepared, used or referred to, and will not, without your prior consent, prepare, use or refer to, any free writing prospectus.

(f) The Company has been duly incorporated, is validly existing as a corporation in good standing under the laws of the State of Delaware, and, after giving effect to the Formation Transactions, will have the necessary corporate power and authority to own its property and to conduct its business as described in the Time of Sale Prospectus. The Company is duly qualified to do business as a foreign corporation in good standing in each jurisdiction in which, after giving

effect to the Formation Transactions, the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the financial condition, business or results of operations of the Company and its subsidiaries, taken as a whole (a “Material Adverse Effect”).

(g) The Operating Company has been duly organized, is validly existing as a limited liability company in good standing under the laws of the State of Delaware, and, after giving effect to the Formation Transactions, will have the necessary power and authority to own its property and to conduct its business as described in the Time of Sale Prospectus. The Operating Company is duly qualified to do business as a foreign corporation in good standing in each jurisdiction in which, after giving effect to the Formation Transactions, the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not reasonably be expected to have a Material Adverse Effect.

(h) The Contributed Assets consist of direct or indirect ownership interests in all material assets and related liabilities described in the Time of Sale Prospectus as constituting the hotel business (the “Morgans Hotel Business”) of MHG and its subsidiaries. Each entity (each an “MHG Business Entity”) whose ownership interests are to be contributed to the Company in the Formation Transactions is set forth on Schedule IV hereto. Each MHG Business Entity has been duly organized, is validly existing as a corporation, limited liability company or limited partnership in good standing under the laws of the jurisdiction of its organization, has the power and authority to own its property and to conduct its business as currently conducted and is duly qualified to transact business and is in good standing in each jurisdiction in which, after giving effect to the Formation Transactions, the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that a failure to be so qualified or be in good standing would not reasonably be expected to have a Material Adverse Effect; all of the issued shares of capital stock, membership interests or partnership interests of each MHG Business Entity that, after giving effect to the Formation Transactions, either will be a wholly-owned subsidiary of the Company (as in the case of each MHG Business Entity set forth on Schedule IV hereto other than 495 Geary LLC, SC London LLC and SC Restaurant LLC) or consolidated within the financial statements of the Company, have been duly and validly authorized and issued, are fully paid and non-assessable and are owned by MHG and, after giving effect to the Formation Transactions, except as disclosed in the Time of Sale Prospectus, will be owned by the Operating Company, free and clear of all liens, encumbrances, security interests or similar claims. The Operating Company and the MHG Business Entities whose operations are consolidated in the combined financial statements of the Company are collectively referred to herein as the “Subsidiaries”.

(i) The issuance of the OC Units pursuant to the Formation Transactions as described in the Time of Sale Prospectus has been duly authorized and upon issuance, in accordance with the OC Agreement, the OC Units described in the Time of Sale Prospectus will be validly issued. None of the OC Units will be issued in violation of the preemptive or other similar rights of any security holder in the Operating Company.

(j) The Company, after giving effect to the transactions being consummated on the Closing Date, will be the managing member of the Operating Company and the holder of OC Units representing an aggregate ownership interest in the Operating Company in the percentage set forth in the Prospectus under the caption “Formation and Structuring Transactions,” free and clear of any lien, encumbrance, security interest or similar claim.

(k) The authorized capital stock of the Company conforms as to legal matters in all material respects to the description thereof contained in each of the Time of Sale Prospectus and the Prospectus.

(l) The shares of Common Stock outstanding prior to the issuance of the Shares to be sold by the Company have been duly authorized and are validly issued, fully paid and non-assessable and the shares of Common Stock (including the Shares to be sold by the Selling Shareholders) to be issued to NorthStar and RSA have been duly authorized and, when issued and delivered in accordance with the Formation Agreements, will be validly issued, fully paid and non-assessable.

(m) The Shares to be issued and sold by the Company to the Underwriters hereunder have been duly authorized and, when issued and delivered against payment therefor as provided herein, will be validly issued, fully paid and non-assessable, and the issuance of such Shares will not be subject to any preemptive or similar rights.

(n) Each of the Company and the Operating Company has the power and authority to execute and deliver this Agreement, each Formation Agreement and the Revolving Credit Loan Documents to which it is a party and to consummate the transactions described herein and therein.

(o) This Agreement has been duly authorized, executed and delivered by each of the Company and the Operating Company.

(p) The Formation Agreements and the Revolving Credit Loan Documents have been duly authorized by the Company (to the extent a party thereto) and the Operating Company (to the extent a party thereto) and, upon execution and delivery thereof on or prior to the Closing Date, will have been duly executed and delivered and be legal, valid and binding agreements of the Company (to the extent a party thereto) and the Operating Company (to the extent a party thereto) enforceable against each of the Company (to the extent a party thereto) and the Operating Company (to the extent a party

thereto) in accordance with their respective terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally, and by general equitable principles, and except to the extent that any indemnification and contribution provisions in such agreements may be limited by U.S. federal or state securities laws and public policy considerations in respect thereof.

(q) Except for restrictions imposed by agreements disclosed in the Time of Sale Prospectus, the Operating Company is not prohibited or restricted from making distributions with respect to the OC Units or from repaying to the Company or any other subsidiary of the Company any amounts which may from time to time become due under any loans or advances to the Operating Company.

(r) Neither the Company nor any Subsidiary is in breach of or in default under (nor has any event occurred which with notice, lapse of time, or both would constitute a breach of, or default under) its respective organizational documents, or in the performance or observance of any obligation, agreement, covenant or condition contained in any license, indenture, mortgage, deed of trust, loan or credit agreement or other agreement or instrument to which it is a party or by which it or any of its properties or assets may be bound, except for such breaches and defaults which would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

(s) The execution, delivery and performance of this Agreement, the Formation Agreements, the Loan Documents and the consummation of the transactions contemplated herein and therein will not (A) conflict with, or result in any breach of, or constitute a default under nor constitute any event which (with notice, lapse of time, or both) would constitute a breach of, or default under: (1) any provision of the organizational documents of the Company or any Subsidiary, (2) any provision of any license, indenture, mortgage, deed of trust, loan or credit agreement or other agreement or instrument to which the Company or any Subsidiary is a party or by which any of them or their assets or properties may be bound or affected, (3) any law or regulation binding upon or applicable to the Company or any Subsidiary or any of their respective properties or assets or (4) any decree, judgment or order applicable to the Company or any Subsidiary; or (B) result in the creation or imposition of any lien, security interest or similar claim upon any property or assets of the Company or any Subsidiary, except in each case described in clauses (A)(2) through (4) of this sentence for such conflicts, breaches, defaults and violations as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, and in the case described in clause (B) of this sentence for liens, security interests or similar claims in connection with certain indebtedness described in the Time of Sale Prospectus under the caption “Mortgage and Other Indebtedness Outstanding After This Offering.”

(t) The Formation Transactions comply in all material respects with the requirements of Section 6.10(c) of the Fifth Amended and Restated Limited Liability Company Agreement of MHG, including without limitation, clauses (i) through (x) of such section, regarding certain consent provisions with respect to an “IPO Transaction”.

(u) No consent, approval, authorization or order of or filing, registration or qualification with, any governmental body or agency is required in connection with the Company’s or the Operating Company’s execution, delivery and performance of this Agreement, the consummation of the transactions contemplated herein by the Company or the Operating Company, including the Company’s issuance of the Shares, or in connection with the execution, delivery and performance of the Formation Agreements or the consummation of the transactions contemplated therein by the Company or the Operating Company, other than (A) such as have been obtained and made or will have been obtained and made on or prior to the Closing Date, (B) any necessary qualification under the securities or “blue sky” laws of the various jurisdictions in which the Shares are being offered by the Underwriters, or (C) the absence of which would not reasonably be expected to have a Material Adverse Effect.

(v) Each of the Company and the Subsidiaries has, and will have upon consummation of the Formation Transactions, all necessary licenses, authorizations, consents and approvals and has made all necessary filings required under any U.S. federal, state, local or foreign law, regulation or rule, and has obtained all necessary authorizations, consents and approvals from other persons, required in order to conduct its business as described in the Time of Sale Prospectus, except to the extent that any failure to have any such licenses, authorizations, consents or approvals, to make any such filings or to obtain any such authorizations, consents or approvals would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect; neither the Company nor any of the Subsidiaries is in violation of, in default under, or has received any notice regarding a possible violation, default or revocation of any such license, authorization, consent or approval or any U.S. federal, state, local or foreign law, regulation or rule or any decree, order or judgment applicable to the Company or any Subsidiary, other than any such violations, defaults, or revocations that would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

(w) Upon consummation of the Formation Transactions, the Company and its subsidiaries will have good and marketable title in fee simple to, or a valid leasehold interest in, all real property described in the Time of Sale Prospectus as owned by them (the “Company Properties”), and ownership of all material personal property described in the Time of Sale Prospectus as owned by them (or to be owned upon the consummation of the Formation Transactions), in each case free and clear of all liens, encumbrances, security interests, similar claims and defects in such title (collectively, the “Encumbrances”), except such Encumbrances that are disclosed in the Time of Sale Prospectus or would not

reasonably be expected to materially and adversely affect the value of such property or materially interfere with the use made or proposed to be made of such property by the Company and the Subsidiaries; and any real or personal property held under lease by the Company and the Subsidiaries constituting a portion of Contributed Assets are held by them under valid, subsisting and enforceable leases (such leases, the “Company Leases”) with such exceptions as are not material and do not materially interfere with the use made and proposed to be made of such property. Neither the Company nor any of its subsidiaries is in default under any of the Company Leases, relating to, or any agreement evidencing an Encumbrance on, any Company Property that would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, and neither the Company nor any of the Subsidiaries knows of any event, which but for the passage of time or the giving of notice, or both, would constitute a default under any of such documents or agreements that would reasonably be expected to have a Material Adverse Effect.

(x) Assuming the accuracy of the representations, warranties and agreements of NorthStar, RSA and the other members of MHG contained in the Formation and Structuring Agreement, the issuance of the OC Units pursuant to the Formation and Structuring Agreement will be exempt from registration or qualification under the Securities Act and state securities laws.

(y) Each parcel of real property leased or owned or to be leased or owned upon consummation of the Formation Transactions by the Company or the Subsidiaries complies with all applicable zoning laws, ordinances, regulations and deed restrictions or other covenants in all material respects, except such failure to comply, which does not materially and adversely affect the value of any such property and will not result in a forfeiture or reversion of title; neither the Company nor any Subsidiary has received from any governmental authority any written notice of any condemnation of or zoning change affecting any such property or any part thereof, and none of the Company or the Operating Company knows of any such condemnation or zoning change which is threatened and which, individually or in the aggregate, if consummated would reasonably be expected to have a Material Adverse Effect.

(z) There has not occurred any material adverse change, or any development involving a prospective material adverse change, in the financial condition, or in the earnings, business or operations of the Morgans Hotel Business from that set forth in the Time of Sale Prospectus.

(aa) There are no legal or governmental proceedings pending or, to the Company’s knowledge, threatened to which the Company or any Subsidiary is a party or to which any of the properties of the Company or any of its subsidiaries is subject (i) other than (A) proceedings accurately described in all material respects in the Time of Sale Prospectus or (B) proceedings that would not reasonably be expected to have a Material Adverse Effect, (ii) that would have a material adverse effect on the power or ability of the Company to perform its obligations

under this Agreement or to consummate the Formation Transactions, or (iii) that are required to be described in the Registration Statement or the Time of Sale Prospectus and are not so described; and there are no statutes, regulations, contracts or other documents that are required to be described in the Registration Statement or the Time of Sale Prospectus or to be filed as exhibits to the Registration Statement that are not so described in all material respects or filed as required.

(bb) Each preliminary prospectus filed as part of the registration statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the Securities Act, complied when so filed in all material respects with the Securities Act and the applicable rules and regulations of the Commission thereunder.

(cc) The Company is not, and after giving effect to the Formation Transactions, the offering and sale of the Shares and the application of the proceeds thereof as described in the Prospectus will not be, required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.

(dd) Except as would not be reasonably expected to have a Material Adverse Effect, (i) none of the Company, the Subsidiaries or, to the knowledge of the Company and the Subsidiaries, any director, officer, agent, employee or other person (in each case, while acting on behalf of the Company or the Subsidiaries) is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”), (ii) the Company and the Subsidiaries have conducted their businesses in compliance with the FCPA, and (iii) the Company and the Subsidiaries have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.

(ee) Except as would not be reasonably expected to have a Material Adverse Effect, (i) the operations of the Company and the Subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”) and (ii) no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or the Subsidiaries with respect to the Money Laundering Laws is pending or, to the best knowledge of the Company, threatened.

(ff) The Company and the Subsidiaries (i) are in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the

protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) are in compliance with all terms and conditions of any such permit, license or approval, except where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals would not, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(gg) There are no costs or liabilities associated with Environmental Laws (including, without limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties) which would, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(hh) All U.S. federal, state and other income tax returns of the Company and its subsidiaries required by law to be filed have been filed and all taxes shown by such returns or otherwise assessed, which are due and payable, have been paid or provision has been made for their payment, except for any such tax or other assessment that (i) is currently being contested in good faith, or (ii) would not have, or reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(ii) Except as disclosed in the Time of Sale Prospectus, there are no persons with registration or other similar rights to have any equity or debt securities, including securities that are convertible into or exchangeable for equity securities, registered pursuant to the Registration Statement or otherwise registered by the Company under the Securities Act.

(jj) Subsequent to the respective dates as of which information is given in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus, (i) the Company and the Subsidiaries have not incurred any material liability or obligation, direct or contingent, nor entered into any material transaction; (ii) the Company has not purchased any of its outstanding capital stock, nor declared, paid or otherwise made any dividend or distribution of any kind on its capital stock other than ordinary and customary dividends; and (iii) there has not been any material change in the capital stock, short-term debt or long-term debt of the Company and the Subsidiaries, except in each case as described in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus, respectively.

(kk) The Company and the Subsidiaries own or possess, or can acquire on reasonable terms, all material licenses, inventions, copyrights, know-how (including trade secrets and other confidential information, systems or procedures), trademarks, service marks and trade names currently employed by

them in connection with the business now operated by them, except such as the failure to own, possess or be able to acquire on reasonable terms would not reasonably be expected to have a Material Adverse Effect, and neither the Company nor any of the Subsidiaries has received any notice of infringement of or conflict with asserted rights of others with respect to any of the foregoing which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would reasonably be expected to have a Material Adverse Effect.

(ll) No material labor dispute with the employees of the Company or any of the Subsidiaries exists, except as described in the Time of Sale Prospectus, or, to the knowledge of the Company or the Operating Company, as the case may be, is imminent; and neither the Company nor the Operating Company is aware of any existing, threatened or imminent labor disturbance by the employees of any of its principal suppliers, manufacturers or contractors which would reasonably be expected to have a Material Adverse Effect.

(mm) The Company and each of the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as the Company believes are prudent and customary in the businesses in which they are engaged; and neither the Company nor any of the Subsidiaries has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not reasonably be expected to have a Material Adverse Effect, except as described in the Time of Sale Prospectus.

(nn) Each of the Company and the Subsidiaries maintains a system of internal controls over financial reporting sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as described in the Time of Sale Prospectus, since the end of the Company’s most recent audited fiscal year, there has been no material weakness in the Company’s internal control over financial reporting (whether or not remediated).

(oo) The Company has taken all necessary actions to ensure that, upon the effectiveness of the Registration Statement, it will be in compliance with all provisions of the Sarbanes-Oxley Act of 2002 and all rules and regulations promulgated thereunder or implementing the provisions thereof (the “Sarbanes-Oxley Act”) that are then in effect and which the Company is required to comply with as of the effectiveness of the Registration Statement, and is taking steps to ensure that it will be in compliance with other provisions of the Sarbanes-Oxley

Act not currently in effect, upon the effectiveness of such provisions, or which will become applicable to the Company at all times after the effectiveness of the Registration Statement.

(pp) Except as described in the Time of Sale Prospectus, the Company has not sold, issued or distributed any shares of Common Stock during the six-month period preceding the date hereof, including any sales pursuant to Rule 144A under, or Regulation D or S of, the Securities Act, other than shares issued pursuant to employee benefit plans, qualified stock option plans or other employee compensation plans or pursuant to outstanding options, rights or warrants.

2. Representations and Warranties of MHG. MHG represents and warrants to and agrees with each of the Underwriters that:

(a) MHG has been duly organized and is validly existing as a limited liability company in good standing under the laws of the state of Delaware with full power and authority to own its properties and to conduct its business as described in the Time of Sale Prospectus and to execute and deliver this Agreement and the Formation Agreements to which it is a party and to consummate the transactions described in each such agreement.

(b) This Agreement has been duly authorized, executed and delivered by MHG.

(c) The Formation Agreements to which MHG is a party have been duly authorized by MHG and constitute legal, valid and binding agreements of MHG enforceable against MHG in accordance with their respective terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally, and by general equitable principles, except to the extent that the indemnification and contribution provisions may be limited by U.S. federal or state securities laws and public policy considerations in respect thereof.

(d) The execution, delivery and performance of this Agreement by MHG and the execution, delivery and performance of the Formation Agreements to which MHG is a party, and consummation of the transactions contemplated herein and therein, will not conflict with, or result in any breach of, or constitute a default under (nor constitute any event which with notice, lapse of time, or both would constitute a breach of, or default under), (1) any provision of the organizational documents of MHG, (2) any provision of any license, indenture, mortgage, deed of trust, loan or credit agreement or other agreement or instrument to which MHG is a party or by which it or its assets or properties may be bound or affected, (3) any federal, state, local or foreign law, regulation or rule binding upon or applicable to MHG or any of its properties or assets, or (4) any decree, judgment or order applicable to MHG, except, in the cases of (2), (3) and (4) above, for such conflicts, breaches or defaults as would not, individually or in the

aggregate, reasonably be expected to impair the ability of MHG to consummate the Formation Transactions on the terms described in the Time of Sale Prospectus.

(e) The Formation Transactions comply in all material respects with the requirements of Section 6.10(c) of the Fifth Amended and Restated Limited Liability Company Agreement of MHG, including without limitation, clauses (i) through (x) of such section, regarding certain consent provisions with respect to an “IPO Transaction”.

(f) Subsequent to the respective dates as of which information is given in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus, other than as described in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus, respectively, MHG has not made any distribution in respect of its membership interests.

3. Representations and Warranties of the Selling Shareholders. Each Selling Shareholder, severally and not jointly, represents and warrants to and agrees with each of the Underwriters that:

(a) This Agreement has been duly authorized, executed and delivered by or on behalf of such Selling Shareholder.

(b) The execution and delivery by such Selling Shareholder of, and the performance by such Selling Shareholder of its obligations under, this Agreement and the Power of Attorney appointing certain individuals as such Selling Shareholder’s attorneys-in-fact to the extent set forth therein, relating to the transactions contemplated hereby and by the Registration Statement (the “Power of Attorney”) will not contravene any provision of applicable law, or the certificate of incorporation or by-laws or other organizational documents of such Selling Shareholder (if such Selling Shareholder is an entity), or any agreement or other instrument binding upon such Selling Shareholder or any judgment, order or decree of any governmental body, agency or court having jurisdiction over such Selling Shareholder, and no consent, approval, authorization or order of, or qualification with, any governmental body or agency is required for the performance by such Selling Shareholder of its obligations under this Agreement or the Power of Attorney of such Selling Shareholder, except such as may be required by the securities or “blue sky” laws of the various states in connection with the offer and sale of the Shares.

(c) Such Selling Shareholder on the Closing Date, after giving effect to the Formation Transactions, will have the legal right and power, and all authorization and approval required by law, to sell, transfer and deliver the Shares to be sold by such Selling Shareholder or a security entitlement in respect of such Shares.

(d) The Power of Attorney has been duly authorized, executed and delivered by such Selling Shareholder and is a valid and binding agreement of such Selling Shareholder.

(e) Upon payment of the purchase price by the Underwriters for the Shares being sold by such Selling Shareholder and the delivery by such Selling Shareholder to Cede & Co. (“Cede”) or such other nominee as may be designated by The Depository Trust Company (“DTC”) of the Shares being sold by such Selling Shareholder registered in the name of Cede or such other nominee designated by DTC, both as provided for in this Agreement, and the crediting of such Shares to the account of the Underwriters with DTC, Cede or such other nominee designated by DTC will be a “protected purchaser” (as defined in Section 8-303 of the New York Uniform Commercial Code (the “Code”)) of such Shares, the Underwriters will acquire a valid “security entitlement” (within the meaning of Section 8-501 of the Code) to such Shares, and no action based on an “adverse claim” (as defined in Section 8-102 of the Code) may be asserted against the Underwriters with respect to such security entitlement (assuming that the Underwriters are without notice of any such adverse claim); for purposes of this representation, such Selling Shareholder may assume that when such payment, delivery and crediting occur, (x) such Shares will have been registered in the name of Cede or another nominee designated by DTC, in each case on the Company’s share registry in accordance with its certificate of incorporation, bylaws and applicable law, (y) DTC will be registered as a “clearing corporation” within the meaning of Section 8-102 of the Code and (z) appropriate entries to the accounts of the several Underwriters on the records of DTC will have been made pursuant to the Code.

(f) Such Selling Shareholder is not prompted by any information concerning the Company or its subsidiaries which is not set forth in the Time of Sale Prospectus and the Prospectus to sell its Shares pursuant to this Agreement.

(g) (i) The Registration Statement, when it became effective, did not contain and, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) the Time of Sale Prospectus does not, and at the time of each sale of the Shares in connection with the offering and at the Closing Date (as defined in Section 6), the Time of Sale Prospectus, as then amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading and (iii) the Prospectus does not contain and, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the representations and warranties and agreements set forth in this paragraph 3(g) are limited to the name and address of such Selling Stockholder, the number of shares of Common Stock beneficially owned by such

Selling Stockholder after giving effect to the sale of the Shares being sold by such Selling Stockholder and the number of Shares made available for sale by such Selling Shareholder (the “Selling Shareholder Information”), which information has been furnished to the Company in writing by such Selling Shareholder expressly for use in the Registration Statement, the Time of Sale Prospectus or the Prospectus or any amendments or supplements thereto.

4. Agreements to Sell and Purchase. Each Seller, severally and not jointly, hereby agrees to sell to the several Underwriters, and each Underwriter, upon the basis of the representations and warranties herein contained, but subject to the conditions hereinafter stated, agrees, severally and not jointly, to purchase from such Seller at $18.70 a share (the “Purchase Price”) the number of Firm Shares (subject to such adjustments to eliminate fractional shares as you may determine) that bears the same proportion to the number of Firm Shares to be sold by such Seller as the number of Firm Shares set forth in Schedule I hereto opposite the name of such Underwriter bears to the total number of Firm Shares.

On the basis of the representations and warranties contained in this Agreement, and subject to its terms and conditions, the Company agrees to sell to the Underwriters the Additional Shares, and the Underwriters shall have the right to purchase, severally and not jointly, up to 2,700,000 Additional Shares at the Purchase Price. You may exercise this right on behalf of the Underwriters in whole or from time to time in part by giving written notice not later than 30 days after the date of this Agreement. Any exercise notice shall specify the number of Additional Shares to be purchased by the Underwriters and the date on which such shares are to be purchased. Each purchase date must be at least two business days after the written notice is given and may not be earlier than the closing date for the Firm Shares nor later than ten business days after the date of such notice. Additional Shares may be purchased as provided in Section 6 hereof solely for the purpose of covering over-allotments made in connection with the offering of the Firm Shares. On each day, if any, that Additional Shares are to be purchased (an “Option Closing Date”), each Underwriter agrees, severally and not jointly, to purchase the number of Additional Shares (subject to such adjustments to eliminate fractional shares as you may determine) that bears the same proportion to the total number of Additional Shares to be purchased on such Option Closing Date as the number of Firm Shares set forth in Schedule I hereto opposite the name of such Underwriter bears to the total number of Firm Shares.

The Company hereby agrees that, without the prior written consent of the Representatives on behalf of the Underwriters, it will not, during the period ending 180 days after the date of the Prospectus, (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock (such shares of Common Stock and such Securities, together the “MHG Co. Securities”) or (2) enter into any swap or other arrangement that transfers to another, in whole or

in part, any of the economic consequences of ownership of the Common Stock, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of MHG Co. Securities, in cash or otherwise or (3) file any registration statement with the Commission relating to the offering of any MHG Co. Securities (other than registration statement(s) on Form S-8 to register securities for issuance pursuant to the Company’s 2006 Omnibus Stock Incentive Plan described in the Time of Sale Prospectus).

The restrictions contained in the preceding paragraph shall not apply to (A) the Shares to be sold hereunder, (B) the issuance by the Company of shares of Common Stock upon the exercise of an option or warrant or the conversion of a security outstanding on the date hereof of which the Underwriters have been advised in writing, (C) the issuance by the Company of MHG Co. Securities under the Company’s 2006 Omnibus Stock Incentive Plan described in the Time of Sale Prospectus, (D) the issuance by the Company of shares of Common Stock as part of the Formation Transactions, and (E) the issuance by the Company of shares of Common Stock, or by the Operating Company of OC Units, as consideration for one or more acquisitions, provided that (i) the aggregate market value of all such shares of Common Stock, including shares of Common Stock issuable upon conversion of any such OC Units, does not exceed 10% of the market capitalization of the Company as of 4:30 p.m. (New York City time) on the Closing Date, and (ii) the recipients of any such shares of Common Stock or OC Units shall enter into a written agreement agreeing to the restrictions set forth in the preceding paragraph and this paragraph. Notwithstanding the foregoing, if (1) during the last 17 days of the 180-day restricted period the Company issues an earnings release; or (2) prior to the expiration of the 180-day restricted period, the Company announces that it will release earnings results during the 16-day period beginning on the last day of the 180-day period, the restrictions imposed by this agreement shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release. The Company shall promptly notify the Representatives of any earnings release that may give rise to an extension of the initial 180-day restricted period.

5. Terms of Public Offering. The Sellers are advised by you that the Underwriters propose to make a public offering of their respective portions of the Shares on the terms set forth in the Time of Sale Prospectus as soon after the Registration Statement and this Agreement have become effective as in your judgment is advisable. The Sellers are further advised by you that the Shares are to be offered to the public initially at $20.00 a share (the “Public Offering Price”) and to certain dealers selected by you at a price that represents a concession not in excess of $0.78 a share under the Public Offering Price, and that any Underwriter may allow, and such dealers may reallow, a concession, not in excess of $0.10 a share, to any Underwriter or to certain other dealers.

6. Payment and Delivery. Payment for the Firm Shares to be sold by each Seller shall be made to such Seller in Federal or other funds immediately available in New York City against delivery of such Firm Shares for the

respective accounts of the several Underwriters at 10:00 a.m., New York City time, on February 17, 2006, or at such other time on the same or such other date, not later than February 24, 2006, as shall be designated in writing by you. The time and date of such payment are hereinafter referred to as the “Closing Date.”

Payment for any Additional Shares shall be made to the Company in Federal or other funds immediately available in New York City against delivery of such Additional Shares for the respective accounts of the several Underwriters at 10:00 a.m., New York City time, on the date specified in the corresponding notice described in Section 4 or at such other time on the same or on such other date, in any event not later than March 23, 2006, as shall be designated in writing by you.

The Firm Shares and Additional Shares shall be registered in such names and in such denominations as you shall request in writing not later than one full business day prior to the Closing Date or the applicable Option Closing Date, as the case may be. The Firm Shares and Additional Shares shall be delivered to you on the Closing Date or an Option Closing Date, as the case may be, for the respective accounts of the several Underwriters, with any transfer taxes payable in connection with the transfer of the Shares to the Underwriters duly paid, against payment of the Purchase Price therefor.

7. Conditions to the Underwriters’ Obligations. The obligations of the Sellers to sell the Shares to the Underwriters and the several obligations of the Underwriters to purchase and pay for the Shares on the Closing Date are subject to the condition that the Registration Statement shall have become effective not later than 5:30 p.m.(New York City time) on the date hereof.

The several obligations of the Underwriters are subject to the following further conditions:

(a) Subsequent to the execution and delivery of this Agreement and prior to the Closing Date:

(i) there shall not have occurred any downgrading, nor shall any notice have been given of any intended or potential downgrading or of any review for a possible change that does not indicate the direction of the possible change, in the rating accorded any of the securities of the Company or the Operating Company by any “nationally recognized statistical rating organization,” as such term is defined for purposes of Rule 436(g)(2) under the Securities Act; and

(ii) there shall not have occurred any change, or any development involving a prospective change, in the financial condition, or in the earnings, business or operations of the Company and the Subsidiaries, taken as a whole, from that set forth in the Time of Sale Prospectus that, in your judgment, is material and adverse and that makes it, in your

judgment, impracticable to market the Shares on the terms and in the manner contemplated in the Time of Sale Prospectus.

(b) The Underwriters shall have received on the Closing Date a certificate, dated the Closing Date and signed by an executive officer (i) of the Company, to the effect set forth in Section 7(a)(i) above and to the effect that the representations and warranties of the Company contained in this Agreement are true and correct as of the Closing Date and that the Company has complied in all material respects with all of the agreements and satisfied all of the conditions on its part to be performed or satisfied hereunder on or before the Closing Date and (ii) of each of MHG and the Operating Company to the effect that the representations and warranties of MHG and the Operating Company, as the case may be, contained in this Agreement are true and correct as of the Closing Date and that each of MHG and the Operating Company, as the case may be, has complied in all material respects with all of the agreements and satisfied all of the conditions on its part to be performed or satisfied hereunder on or before the Closing Date.

Each officer signing and delivering such certificates may rely upon the best of his or her knowledge as to proceedings threatened.

(c) The Underwriters shall have received on the Closing Date an opinion of Sullivan & Cromwell LLP, special counsel for the Company and the Operating Company, dated the Closing Date, substantially in the form attached hereto as Exhibit A.

(d) The Underwriters shall have received on the Closing Date an opinion of counsel for each Selling Shareholder, dated the Closing Date, substantially in the form attached hereto as Exhibit B.

(e) The Underwriters shall have received on the Closing Date an opinion, in form and substance satisfactory to the Underwriters, of Cravath, Swaine & Moore LLP, counsel for the Underwriters, dated the Closing Date.

The opinion of Sullivan & Cromwell LLP described in Sections 7(c) above (and any opinions of counsel for any Selling Shareholder referred to above) shall be rendered to the Underwriters at the request of the Company or one or more of the Selling Shareholders, as the case may be, and shall so state therein.

(f) The Underwriters shall have received, on the date hereof a letter dated the date hereof from BDO Seidman, LLP, independent public accountants, substantially in the form attached hereto as Exhibit C.

(g) The Underwriters shall have received, on the Closing Date, a “bring-down” letter dated the Closing Date of BDO Seidman, LLP that shall use a “cut-off date” not earlier than the date hereof, and that is substantially in the form attached hereto as Exhibit D.

(h) The “lock-up” agreements, each substantially in the form attached as Exhibit E hereto, between you and the shareholders, officers and directors of the Company listed on Schedule V hereto relating to sales and certain other dispositions of shares of Common Stock or certain other securities, delivered to you on or before the date hereof, shall be in full force and effect on the Closing Date.

(i) The Underwriters shall have received reasonably satisfactory evidence as to the prior consummation of the Term Loan Facility, the concurrent consummation of the Formation Transactions and that the Operating Company will obtain the Revolving Credit Facility on or promptly after the Closing Date, in each case on the terms set forth in the Time of Sale Prospectus.

The several obligations of the Underwriters to purchase Additional Shares hereunder are subject to the delivery to you on the applicable Option Closing Date of such documents as you may reasonably request with respect to the good standing of the Company, the due authorization and issuance of the Additional Shares to be sold on such Option Closing Date and other matters related to the issuance of such Additional Shares.

8. Covenants of the Company. In further consideration of the agreements of the Underwriters herein contained, the Company covenants with each Underwriter as follows:

(a) To furnish to each Representative, without charge, a conformed copy of the Registration Statement (including exhibits thereto) and for delivery to each other Underwriter if requested by any such Underwriter a conformed copy of the Registration Statement (without exhibits thereto) and to furnish to you in New York City, without charge, prior to 2:00 p.m. New York City time on the business day next succeeding the date of this Agreement and during the period mentioned in Section 8(e) or 8(f) below, as many copies of the Time of Sale Prospectus, the Prospectus and any supplements and amendments thereto or to the Registration Statement as you may reasonably request.

(b) Before amending or supplementing the Registration Statement, the Time of Sale Prospectus or the Prospectus, to furnish to you a copy of each such proposed amendment or supplement and not to file any such proposed amendment or supplement to which you reasonably object, and to file with the Commission within the applicable period specified in Rule 424(b) under the Securities Act any prospectus required to be filed pursuant to such Rule.

(c) To furnish to you a copy of each proposed free writing prospectus to be prepared by or on behalf of, used by, or referred to by the Company and not to use or refer to any proposed free writing prospectus to which you reasonably object.

(d) Without the consent of the Representatives, not to take any action that would result in an Underwriter or the Company being required to file with the Commission pursuant to Rule 433(d) under the Securities Act a free writing prospectus prepared by or on behalf of the Underwriter that the Underwriter otherwise would not have been required to file thereunder.

(e) If the Time of Sale Prospectus is being used to solicit offers to buy the Shares at a time when the Prospectus is not yet available to prospective purchasers and any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Time of Sale Prospectus in order to make the statements therein, in the light of the circumstances, not misleading, or if any event shall occur or condition exist as a result of which the Time of Sale Prospectus conflicts with the information contained in the Registration Statement then on file, or if, in the reasonable opinion of counsel for the Underwriters, it is necessary to amend or supplement the Time of Sale Prospectus to comply with applicable law, forthwith to prepare, file with the Commission and furnish, at its own expense, to the Underwriters and to any dealer upon request, either amendments or supplements to the Time of Sale Prospectus so that the statements in the Time of Sale Prospectus as so amended or supplemented will not, in the light of the circumstances when delivered to a prospective purchaser, be misleading or so that the Time of Sale Prospectus , as amended or supplemented, will no longer conflict with the Registration Statement, or so that the Time of Sale Prospectus, as amended or supplemented, will comply with applicable law.

(f) If, during such period after the first date of the public offering of the Shares as in the reasonable opinion of counsel for the Underwriters the Prospectus (or in lieu thereof the notice referred to in Rule 173(a) under the Securities Act) is required by law to be delivered in connection with sales by an Underwriter or dealer, any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Prospectus in order to make the statements therein, in the light of the circumstances when the Prospectus (or in lieu thereof the notice referred to in Rule 173(a) under the Securities Act) is delivered to a purchaser, not misleading, or if, in the reasonable opinion of counsel for the Underwriters, it is necessary to amend or supplement the Prospectus to comply with applicable law, forthwith to prepare, file with the Commission and furnish, at its own expense, to the Underwriters and to the dealers (whose names and addresses you will furnish to the Company) to which Shares may have been sold by you on behalf of the Underwriters and to any other dealers upon request, either amendments or supplements to the Prospectus so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances when the Prospectus (or in lieu thereof the notice referred to in Rule 173(a) under the Securities Act) is delivered to a purchaser, be misleading or so that the Prospectus, as amended or supplemented, will comply with law.

(g) To endeavor to qualify the Shares for offer and sale under the securities or “blue sky” laws of such jurisdictions as you shall reasonably request.

(h) To make generally available to the Company’s security holders and to you as soon as practicable an earning statement covering the twelve-month period ending March 31, 2007 that satisfies the provisions of Section 11(a) of the Securities Act and the rules and regulations of the Commission thereunder.

(i) To the extent that any portion of the Underwriters’ option to purchase the Additional Shares is exercised, the Company will contribute the net proceeds from the sale of such Additional Shares to the Operating Company for a number of OC Units equal to the number of Additional Shares issued and sold.

9. Expenses. Whether or not the transactions contemplated in this Agreement are consummated or this Agreement is terminated, the Sellers agree to pay or cause to be paid all expenses incident to the performance of their obligations under this Agreement, including: (i) the fees, disbursements and expenses of the Company’s counsel, the Company’s accountants and counsel for the Selling Shareholders in connection with the registration and delivery of the Shares under the Securities Act and all other fees or expenses in connection with the preparation and filing of the Registration Statement, any preliminary prospectus, the Time of Sale Prospectus, the Prospectus, any free writing prospectus prepared by or on behalf of, used by, or referred to by the Company and amendments and supplements to any of the foregoing, including all printing costs associated therewith, and the mailing and delivering of copies thereof to the Underwriters and dealers, in the quantities hereinabove specified, (ii) all costs and expenses related to the transfer and delivery of the Shares to the Underwriters, including any transfer or other taxes payable thereon, (iii) the cost of printing or producing any Blue Sky or Legal Investment memorandum in connection with the offer and sale of the Shares under state securities laws and all expenses in connection with the qualification of the Shares for offer and sale under state securities laws as provided in Section 8(g) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Underwriters in connection with such qualification and in connection with the Blue Sky or Legal Investment memorandum, (iv) all filing fees and the reasonable fees and disbursements of counsel to the Underwriters incurred in connection with the review and qualification of the offering of the Shares by the National Association of Securities Dealers, Inc., (v) all fees and expenses in connection with the preparation and filing of the registration statement on Form 8-A relating to the Common Stock and all costs and expenses incident to listing the Shares on the Nasdaq, (vi) the cost of printing certificates representing the Shares, (vii) the costs and charges of any transfer agent, registrar or depositary, (viii) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the Shares, including, without limitation, expenses associated with the preparation or dissemination of any electronic roadshow, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants (but

excluding the cost of any aircraft chartered in connection with the road show), (ix) the document production charges and expenses associated with printing this Agreement and (x) all other costs and expenses incident to the performance of the obligations of the Company hereunder for which provision is not otherwise made in this Section. It is understood, however, that except as provided in this Section, Section 12 entitled “Indemnity and Contribution” and the last paragraph of Section 14 below, the Underwriters will pay all of their costs and expenses, including fees and disbursements of their counsel, stock transfer taxes payable on resale of any of the Shares by them and any advertising expenses connected with any offers they may make.

The provisions of this Section shall not supersede or otherwise affect any agreement that the Sellers may otherwise have for the allocation of such expenses among themselves.

10. Covenants of the Selling Shareholders. Each Selling Shareholder severally covenants with the Company and the Underwriters not to create, use or refer to any proposed free writing prospectus without the consent of the Company and the Representatives.

11. Covenants of the Underwriters. Each Underwriter severally covenants with the Company not to take any action that would result in the Company being required to create, use or refer to any proposed free writing prospectus without the consent of the Company and the Representatives.

12. Indemnity and Contribution. (a) The Company, the Operating Company and MHG (and with respect only to MHG, for the period commencing on the date of this Agreement and ending on the Closing Date), jointly and severally, agree to indemnify and hold harmless each Underwriter, each person, if any, who controls any Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, and each affiliate of any Underwriter within the meaning of Rule 405 under the Securities Act from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any amendment thereof, any preliminary prospectus, the Time of Sale Prospectus, any issuer free writing prospectus as defined in Rule 433(h) under the Securities Act, any Company information that the Company has filed, or is required to file, pursuant to Rule 433(d) of the Securities Act or the Prospectus or any amendment or supplement thereto, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information furnished to the Company in writing by such Underwriter through you expressly for use therein.

(b) The Company and the Operating Company, jointly and severally, agree to indemnify and hold harmless each Selling Shareholder and each person, if any, who controls any Selling Shareholder within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any amendment thereof, any preliminary prospectus, the Time of Sale Prospectus, any issuer free writing prospectus as defined in Rule 433(h) under the Securities Act, any Company information that the Company has filed, or is required to file, pursuant to Rule 433(d) of the Securities Act or the Prospectus or any amendment or supplement thereto, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission based upon the Selling Shareholder Information of such Selling Shareholder.

(c) Each Selling Shareholder agrees, severally and not jointly, to indemnify and hold harmless the Underwriters and the Company, each person, if any, who controls any Underwriter or the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, and each affiliate of any Underwriter within the meaning of Rule 405 under the Securities Act from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any amendment thereof, any preliminary prospectus, the Time of Sale Prospectus, any free writing prospectus that the Company has filed, or is required to file, pursuant to Rule 433(d) of the Securities Act or the Prospectus or any amendment or supplement thereto, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, but only with reference to the Selling Shareholder Information of such Selling Shareholder. The liability of each Selling Shareholder under the indemnity agreement contained in this paragraph, and under the contribution agreement contained in paragraph (f) of this Section 12, shall be limited to an amount equal to the aggregate Public Offering Price of the Shares sold by such Selling Shareholder under this Agreement.

(d) Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, each Selling Shareholder, the directors of the Company, the officers of the Company who sign the Registration Statement and each person, if any, who controls the Company or any Selling Shareholder within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, to the same extent as the foregoing indemnity from the Company

to such Underwriter, but only with reference to information furnished to the Company in writing by such Underwriter through you expressly for use in the Registration Statement, any preliminary prospectus, the Time of Sale Prospectus, any issuer free writing prospectus or the Prospectus or any amendment or supplement thereto.

(e) In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to Section 12(a), 12(b), 12(c) or 12(d), such person (the “indemnified party”) shall promptly notify the person against whom such indemnity may be sought (the “indemnifying party”) in writing and the indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the reasonably incurred fees and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the indemnifying party shall not, in respect of the legal expenses of any indemnified party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for (i) the reasonably incurred fees and expenses of more than one separate firm (in addition to any local counsel) for all Underwriters and all persons, if any, who control any Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act or who are affiliates of any Underwriter within the meaning of Rule 405 under the Securities Act, (ii) the reasonably incurred fees and expenses of more than one separate firm (in addition to any local counsel) for the Company, its directors, its officers who sign the Registration Statement and each person, if any, who controls the Company within the meaning of either such Section and (iii) the reasonably incurred fees and expenses of more than one separate firm (in addition to any local counsel) for all Selling Shareholders and all persons, if any, who control any Selling Shareholder within the meaning of either such Section, and that all such fees and expenses shall be reimbursed as they are incurred. In the case of any such separate firm for the Underwriters and such control persons and affiliates of any Underwriters, such firm shall be designated in writing by the Representatives. In the case of any such separate firm for the Company, and such directors, officers and control persons of the Company, such firm shall be designated in writing by the Company. In the case of any such separate firm for the Selling Shareholders and such control persons of any Selling Shareholders, such firm shall be designated in writing by the persons named as attorneys-in-fact for the Selling Shareholders under the Powers of Attorney. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such

consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding.

(f) To the extent the indemnification provided for in Section 12(a), 12(b), 12(c) or 12(d) is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the indemnifying party or parties on the one hand and the indemnified party or parties on the other hand from the offering of the Shares or (ii) if the allocation provided by clause 12(f)(i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause 12(f)(i) above but also the relative fault of the indemnifying party or parties on the one hand and of the indemnified party or parties on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company, MHG, the Operating Company and the Selling Shareholders on the one hand and the Underwriters on the other hand in connection with the offering of the Shares shall be deemed to be equal to the total net proceeds from the offering of the Shares (before deducting expenses) received by each Seller and the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover of the Prospectus, bear to the aggregate Public Offering Price of the Shares. The relative fault of the Company, MHG, the Operating Company and the Selling Shareholders on the one hand and the Underwriters on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Underwriters’ respective obligations to contribute pursuant to this Section 12 are several in proportion to the respective number of Shares they have purchased hereunder, and not joint.

(g) The Company, MHG, the Operating Company, each Selling Shareholder and the Underwriters agree that it would not be just or equitable if contribution pursuant to this Section 12 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any

other method of allocation that does not take account of the equitable considerations referred to in Section 12(f). The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 12, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Shares underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages that such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The remedies provided for in this Section 12 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity.

(h) The indemnity and contribution provisions contained in this Section 12 and the representations, warranties and other statements of the Company, the Operating Company, MHG and the Selling Shareholders contained in this Agreement shall remain operative and in full force and effect in accordance with their specified terms and duration regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Underwriter, any person controlling any Underwriter or any affiliate of any Underwriter, any Selling Shareholder or any person controlling any Selling Shareholder, or by or on behalf of the Company, MHG, the Operating Company, their officers or directors or any person controlling the Company, MHG or the Operating Company and (iii) acceptance of and payment for any of the Shares.

13. Termination. The Underwriters may terminate this Agreement by notice given by you to the Company, if after the execution and delivery of this Agreement and prior to the Closing Date (i) trading generally shall have been suspended or materially limited on, or by, as the case may be, any of the New York Stock Exchange, the American Stock Exchange or the Nasdaq National Market, (ii) trading of any securities of the Company shall have been suspended on any exchange or in any over-the-counter market, (iii) a material disruption in securities settlement, payment or clearance services in the United States shall have occurred, (iv) any moratorium on commercial banking activities shall have been declared by Federal or New York State authorities or (v) there shall have occurred any outbreak or escalation of hostilities, or any change in financial markets or any calamity or crisis that, in your judgment, is material and adverse and which, singly or together with any other event specified in this clause (v), makes it, in your judgment, impracticable or inadvisable to proceed with the offer, sale or delivery of the Shares on the terms and in the manner contemplated in the Time of Sale Prospectus or the Prospectus.

14. Effectiveness; Defaulting Underwriters. This Agreement shall become effective upon the execution and delivery hereof by the parties hereto.

If, on the Closing Date or an Option Closing Date, as the case may be, any one or more of the Underwriters shall fail or refuse to purchase Shares that it has or they have agreed to purchase hereunder on such date, and the aggregate number of Shares which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase is not more than one-tenth of the aggregate number of the Shares to be purchased on such date, the other Underwriters shall be obligated severally in the proportions that the number of Firm Shares set forth opposite their respective names in Schedule I bears to the aggregate number of Firm Shares set forth opposite the names of all such non-defaulting Underwriters, or in such other proportions as you may specify, to purchase the Shares which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase on such date; provided that in no event shall the number of Shares that any Underwriter has agreed to purchase pursuant to this Agreement be increased pursuant to this Section 14 by an amount in excess of one-ninth of such number of Shares without the written consent of such Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase Firm Shares and the aggregate number of Firm Shares with respect to which such default occurs is more than one-tenth of the aggregate number of Firm Shares to be purchased on such date, and arrangements satisfactory to you, the Company and the Selling Shareholders for the purchase of such Firm Shares are not made within 36 hours after such default, this Agreement shall terminate without liability on the part of any non-defaulting Underwriter, the Company, MHG, the Operating Company or the Selling Shareholders. In any such case either you or the relevant Sellers shall have the right to postpone the Closing Date, but in no event for longer than seven days, in order that the required changes, if any, in the Registration Statement, in the Time of Sale Prospectus, in the Prospectus or in any other documents or arrangements may be effected. If, on an Option Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase Additional Shares and the aggregate number of Additional Shares with respect to which such default occurs is more than one-tenth of the aggregate number of Additional Shares to be purchased on such Option Closing Date, the non-defaulting Underwriters shall have the option to (i) terminate their obligation hereunder to purchase the Additional Shares to be sold on such Option Closing Date or (ii) purchase not less than the number of Additional Shares that such non-defaulting Underwriters would have been obligated to purchase in the absence of such default. Any action taken under this paragraph shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement.

If this Agreement shall be terminated by the Underwriters, or any of them, because of any failure or refusal on the part of the Company, MHG, the Operating Company or any Selling Shareholder to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason the Company, MHG, the Operating Company or any Selling Shareholder shall be unable to perform its respective obligations under this Agreement, the Company, MHG, the Operating

Company (jointly and severally) and any defaulting Selling Shareholder (severally and not jointly) agree to promptly reimburse the Underwriters or such Underwriters as have so terminated this Agreement with respect to themselves, severally, for all out-of-pocket expenses (including the fees and disbursements of their counsel) reasonably incurred by such Underwriters in connection with this Agreement or the offering contemplated hereunder.

15. Counterparts. This Agreement may be signed in two or more counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

16. Applicable Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York.

17. Headings. The headings of the sections of this Agreement have been inserted for convenience of reference only and shall not be deemed a part of this Agreement.

18. Notices. All communications hereunder shall be in writing and effective only upon receipt and if to the Underwriters shall be delivered, mailed or sent to you in care of Morgan Stanley & Co. Incorporated, 1585 Broadway, New York, New York 10036, Attention: Equity Syndicate Desk, with a copy to the Legal Department and Merrill Lynch, Pierce, Fenner & Smith Incorporated shall be delivered, mailed or sent to 4 World Financial Center, North Tower, 250 Vesey Street, New York, New York 10080, Attention: Equity Syndicate Desk, with a copy to the Office of General Counsel; if to the Company or the Operating Company shall be delivered, mailed or sent to 475 Tenth Avenue, New York, New York 10018, Attention: Chief Financial Officer; and if to MHG shall be delivered, mailed or sent to 527 Madison Avenue, 16th Floor, New York, New York 10022, Attention: Chief Executive Officer; and if to a Selling Shareholder shall be delivered, mailed or sent to the address set forth in the Power of Attorney of such Selling Shareholder.

19. No Fiduciary Duty. The Company acknowledges that in connection with the offering of the Shares: (i) the Underwriters have acted at arms length, are not agents of, and owe no fiduciary duties to, the Company or any other person, (ii) the Underwriters owe the Company only those duties and obligations set forth in this Agreement and prior written agreements (to the extent not superseded by this Agreement), if any, and (iii) the Underwriters may have interests that differ from those of the Company. The Company waives to the full extent permitted by applicable law any claims it may have against the Underwriters arising from an alleged breach of fiduciary duty in connection with the offering of the Shares.

Very truly yours,

MORGANS HOTEL GROUP CO.,


By:	/s/ W. Edward Scheetz
	Name:	W. Edward Scheetz
	Title:	President and Chief
		Executive Officer


MORGANS GROUP LLC,


By:	Morgans Hotel Group LLC, its sole member


By:	/s/ W. Edward Scheetz
	Name:	W. Edward Scheetz
	Title:	Chief Executive Officer


MORGANS HOTEL GROUP LLC,


By:	/s/ W. Edward Scheetz
	Name:	W. Edward Scheetz
	Title:	Chief Executive Officer

	The Selling Shareholders named in Schedule II hereto, acting severally,


	By:	/s/ W. Edward Scheetz
		W. Edward Scheetz
		Attorney-in-Fact

Accepted as of the date hereof

Morgan Stanley & Co. Incorporated
Merrill Lynch, Pierce, Fenner & Smith Incorporated

Acting severally on behalf of themselves and
the several Underwriters named in
Schedule I hereto

By:	Morgan Stanley & Co. Incorporated


By:	/s/ John Tyree
	Name:	John Tyree
	Title:	Executive Director


By:	Merrill Lynch, Pierce, Fenner & Smith Incorporated


By:	/s/ Alexander Virtue
	Name:	Alexander Virtue
	Title:	Vice President, Investment Banking

SCHEDULE I

Underwriter		Number of Firm Shares To Be Purchased

Morgan Stanley & Co. Incorporated		5,841,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated		5,841,000
Citigroup Global Markets Inc.		2,920,500
Banc of America Securities LLC		1,947,000
Thomas Weisel Partners LLC		619,500
Jefferies & Company, Inc.		354,000
JMP Securities LLC		177,000
Blaylock & Company, Inc.		100,000
E*Trade Securities LLC		100,000
Susquehanna Financial Group, LLLP		100,000
Total:		18,000,000

SCHEDULE II

Selling Shareholders		Number of Firm Shares To Be Sold

NCIC MHG Subsidiary LLC		1,871,158
RSA Associates, L.P.		450,000
David T. Hamamoto(1)		167,928
W. Edward Scheetz(2)		167,928
Marc Gordon		7,306
Peter W. Ahl		1,941
Estate of Adam Anhang		243
Deutsche Bank Alex. Brown Exchange Fund I, L.P.		22,450
Exchange Fund II Illiquid Asset Holding and Distribution, L.P.		57,285
Charles Humber		243
Martin J. Lamb		485
Glenn E. Levin		121
Richard J. McCready		2,583
Keith A. Meister		485
Richard J. Sabella		605
Sorco Interfund LLC		240,747
David King		8,492
Total:		3,000,000

(1) Mr. Hamamoto will sell the 167,928 shares offered through DTH Holdings LLC of which he is the sole member.

(2) Mr. Scheetz will sell the 167,928 shares offered through WES Holdings LLC of which he is the sole member.

SCHEDULE III

Time of Sale Prospectus

1. Preliminary Prospectus issued February 9, 2006

2. The issuer free writing prospectus filed pursuant to Rule 433 dated February 13, 2006.

SCHEDULE IV

Name of MHG Business Entity		Jurisdiction of Organization
MMRDH Parent Holding Company LLC		Delaware
Hudson Managing Member LLC		Delaware
Shore Club Holdings LLC		Delaware
Clift Holdings LLC		Delaware
Royalton London LLC		New York
Royalton Europe Holdings LLC		Delaware
Morgans Hotel Group Management LLC		Delaware
495 Geary LLC		Delaware
SC London LLC		Delaware
SC Restaurant LLC		Delaware
Collins Hotel Associates LLC		Delaware
Morgans/LV Investment LLC		Delaware
MHG Scottsdale Holdings LLC		Delaware

SCHEDULE V

Lock-up Agreements

NorthStar Partnership, L.P.

RSA Associates, L.P.

David T. Hamamoto

DTH Holdings LLC

W. Edward Scheetz

WES Holdings LLC

Marc Gordon

Richard Szymanski

Edwin L. Knetzger, III

Fred J. Kleisner

Thomas L. Harrison

Robert Friedman

Lance Armstrong

Anda Andrei

Charles Humber

David King

Deutsche Bank Alex. Brown Exchange Fund I, L.P.

Exchange Fund II Illiquid Asset Holding and Distribution, L.P.

Denise Olsen

Estate of Adam Anhang

Glenn E. Levin

Greg Peck

Harriet Zois Stamatakos

Keith A. Meister

Kevin Reardon

Martin J. Lamb

Michael Overington

NorthStar Capital Investment Corp.

NCIC MHG Subsidiary LLC

Peter W. Ahl

Richard J. McCready

Richard J. Sabella

Sorco Interfund LLC

EXHIBIT A

Form of Opinion of Sullivan & Cromwell LLP

as Special Counsel for the Company and the Operating Company

[TO BE ATTACHED]

EXHIBIT B

Form of Opinion of counsel for each Selling Shareholder

Counsel for each Selling Shareholder shall furnish an opinion to the effect that:

(i) this Agreement has been duly authorized, executed and delivered by or on behalf of such Selling Shareholder;

(ii) the execution and delivery by such Selling Shareholder of, and the performance by such Selling Shareholder of its obligations under, this Agreement and the Power of Attorney of such Selling Shareholder will not contravene any provision of applicable law, or the certificate of incorporation or by-laws or other organizational documents of such Selling Shareholder (if such Selling Shareholder is an entity), or, to the best of such counsel’s knowledge, any agreement or other instrument binding upon such Selling Shareholder or, to the best of such counsel’s knowledge, any judgment, order or decree of any governmental body, agency or court having jurisdiction over such Selling Shareholder, and no consent, approval, authorization or order of, or qualification with, any governmental body or agency is required for the performance by such Selling Shareholder of its obligations under this Agreement or the Power of Attorney of such Selling Shareholder, except such as may be required by the securities or blue sky laws of the various states in connection with offer and sale of the Shares;

(iii) the Power of Attorney of such Selling Shareholder has been duly authorized, executed and delivered by such Selling Shareholder and is a valid and binding agreement of such Selling Shareholder; and

(iv) upon payment of the purchase price by the Underwriters for the Shares being sold by such Selling Shareholder and the delivery by such Selling Shareholder to Cede & Co. (“Cede”) or such other nominee as may be designated by The Depository Trust Company (“DTC”) of the Shares being sold by such Selling Shareholder registered in the name of Cede or such other nominee designated by DTC, both as provided for in this Agreement, and the crediting of such Shares to the account of the Underwriters with DTC, Cede or such other nominee designated by DTC will be a “protected purchaser” (as defined in Section 8-303 of the New York Uniform Commercial Code (the “Code”)) of such Shares, the Underwriters will acquire a valid “security entitlement” (within the meaning of Section 8-501 of the Code) to such Shares, and no action based on an “adverse claim” (as defined in Section 8-102 of the Code) may be asserted against the Underwriters with respect to such security

entitlement (assuming that the Underwriters are without notice of any such adverse claim); in giving this opinion, counsel for such Selling Shareholder may assume that when such payment, delivery and crediting occur, (x) such Shares will have been registered in the name of Cede or another nominee designated by DTC, in each case on the Company’s share registry in accordance with its certificate of incorporation, bylaws and applicable law, (y) DTC will be registered as a “clearing corporation” within the meaning of Section 8-102 of the Code and (z) appropriate entries to the accounts of the several Underwriters on the records of DTC will have been made pursuant to the Code.

EXHIBIT C

Form of Comfort Letter of BDO Seidman, LLP

[TO BE ATTACHED]

EXHIBIT D

Form of “Bring-Down” Comfort Letter of BDO Seidman, LLP

[TO BE ATTACHED]

EXHIBIT E

[FORM OF LOCK-UP LETTER]

, 2006

Morgan Stanley & Co. Incorporated
Merrill Lynch, Pierce, Fenner & Smith Incorporated
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, NY 10036

Dear Sirs and Mesdames:

The undersigned understands that Morgan Stanley & Co. Incorporated (“Morgan Stanley”) and Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”) propose to enter into an Underwriting Agreement (the “Underwriting Agreement”) with Morgans Hotel Group Co., a Delaware corporation (the “Company”), Morgans Hotel Group LLC, a Delaware limited liability company (“MHG”), and Morgans Group LLC, a Delaware limited liability company (the “Operating Company”), providing for the public offering (the “Public Offering”) by the several Underwriters, including Morgan Stanley and Merrill Lynch (the “Underwriters”), of the common stock, $.01 par value per share, of the Company (the “Common Stock”).

To induce the Underwriters that may participate in the Public Offering to participate in the Public Offering, the undersigned hereby agrees that, without the prior written consent of Morgan Stanley and Merrill Lynch on behalf of the Underwriters, the undersigned will not, during the period commencing on the date of the preliminary prospectus relating to the Public Offering that is first printed for use in “road show” meetings and distributed to prospective investors (the “Preliminary Prospectus”) and ending 180 days after the date of the final prospectus relating to the Public Offering (the “Prospectus”), (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock (such shares of Common Stock and such securities, together the “MHG Co. Securities”), or (2) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Common Stock, whether any such transaction described in

clause (1) or (2) above is to be settled by delivery of MHG Co. Securities, in cash or otherwise.

The foregoing paragraph shall not apply to (a) transactions relating to MHG Co. Securities acquired in open market transactions after the completion of the Public Offering, provided that no filing under Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) shall be required or shall be voluntarily made in connection with subsequent sales of MHG Co. Securities acquired in such open market transactions, (b) transfers of MHG Co. Securities as a bona fide gift, (c) distributions of MHG Co. Securities to holders of ownership interests in the undersigned; provided that in the case of any transfer or distribution pursuant to clause (b) or (c), (i) each donee or distributee shall agree to be bound by the lock-up restrictions set forth in this letter as if a party hereto and (ii) no filing under Section 16(a) of the Exchange Act, reporting a reduction in beneficial ownership of shares of Common Stock, shall be required or shall be voluntarily made during the restricted period referred to in the foregoing paragraph, or (d) pledges permitted pursuant to, and subject to the provisions set forth in, the lock-up agreement signed by NorthStar Partnership L.P. in connection with the Public Offering. In addition, the undersigned agrees that, without the prior written consent of Morgan Stanley and Merrill Lynch on behalf of the Underwriters, it will not, during the period commencing on the date of the Preliminary Prospectus and ending 180 days after the date of the Prospectus, make any demand for or exercise any right with respect to, the registration of any MHG Co. Securities. The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the undersigned’s shares of Common Stock except in compliance with the foregoing restrictions.

If during the last 17 days of the 180-day restricted period the Company issues an earnings release, or prior to the expiration of the 180-day restricted period the Company announces that it will release earnings results during the 16-day period beginning on the last day of the 180-day period, the restrictions imposed by this agreement shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release.

The undersigned shall not engage in any transaction that may be restricted by this agreement during the 34-day period beginning on the last day of the initial 180-day restricted period unless the undersigned requests and receives prior confirmation from the Company or Morgan Stanley and Merrill Lynch that the restrictions imposed by this agreement no longer apply.

The undersigned understands that the Company, MHG, the Operating Company and the Underwriters are relying upon this agreement in proceeding toward consummation of the Public Offering. The undersigned further understands that this agreement is irrevocable and shall be binding upon the undersigned’s heirs, legal representatives, successors and assigns.

Whether or not the Public Offering actually occurs depends on a number of factors, including market conditions. Any Public Offering will only be made pursuant to an Underwriting Agreement, the terms of which are subject to negotiation between the Company, MHG, the Operating Company and the Underwriters. This agreement shall expire and be of no further force and effect if the Public Offering is not completed within four (4) weeks of the date of the Preliminary Prospectus.

	Very truly yours,



	(Name)



	(Address)

EX-99.3 3 a06-5838_1ex99d3.htm EXHIBIT 99

Exhibit 99.3

LOCK-UP LETTER AGREEMENT

January , 2006

Morgan Stanley & Co. Incorporated
Merrill Lynch, Pierce, Fenner & Smith Incorporated

c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, NY 10036

Dear Sirs and Mesdames:

The foregoing paragraph shall not apply to (a) transactions relating to MHG Co. Securities acquired in open market transactions after the completion of the Public

Offering, provided that no filing under Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) shall be required or shall be voluntarily made in connection with subsequent sales of MHG Co. Securities acquired in such open market transactions, (b) transfers of MHG Co. Securities as a bona fide gift, (c) the assignment or other transfer of MHG Co. Securities by NorthStar Capital Investment Corp. to NCIC MHG Subsidiary LLC, the distribution of membership interests in NCIC MHG Subsidiary LLC to shareholders of NorthStar Capital Investment Corp. and the distribution or other transfer of MHG Co. Securities by NCIC MHG Subsidiary LLC to its members; provided that each assignee, distributee or other transferee of MHG Co. Securities shall agree to be bound by the lock-up restrictions set forth in this letter as if a party hereto and no filing under Section 16(a) of the Securities Exchange Act of 1934, as amended, shall be required or shall be voluntarily made in connection with such assignment, distribution or other transfer, or (d) pledges of MHG Co. Securities in favor of Allianz Risk Transfer (“ART”); provided that throughout the duration of this agreement, ART is bound by a lock-up agreement delivered to the Underwriters as a condition to the closing of the Public Offering, to the extent ART continues to have a pledge of MHG Co. Securities. In addition, the undersigned agrees that, without the prior written consent of Morgan Stanley and Merrill Lynch on behalf of the Underwriters, it will not, during the period commencing on the date of the Preliminary Prospectus and ending 180 days after the date of the Prospectus, make any demand for or exercise any right with respect to, the registration of any MHG Co. Securities. The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the undersigned’s shares of Common Stock except in compliance with the foregoing restrictions.

Very truly yours,

NORTHSTAR CAPITAL INVESTMENT CORP.

By:	/s/ Richard J. McCready
		Name:	Richard J. McCready
		Title:	President

[LOCK-UP LETTER AGREEMENT]

EX-99.4 4 a06-5838_1ex99d4.htm EXHIBIT 99

Exhibit 99.4

LOCK-UP LETTER AGREEMENT

January , 2006

Morgan Stanley & Co. Incorporated
Merrill Lynch, Pierce, Fenner & Smith Incorporated

c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, NY 10036

Dear Sirs and Mesdames:

The foregoing paragraph shall not apply to (a) transactions relating to MHG Co. Securities acquired in open market transactions after the completion of the Public

Very Truly Yours,

NCIC MHG SUBSIDIARY LLC

By:	Northstar Capital Investment Corp.,
	its managing member

	By:	/s/ Richard J. McCready
			Name: Richard J. McCready
			Title: President

[LOCK-UP LETTER AGREEMENT]

EX-99.5 5 a06-5838_1ex99d5.htm EXHIBIT 99

Exhibit 99.5

LOCK-UP LETTER AGREEMENT

January , 2006

Morgan Stanley & Co. Incorporated
Merrill Lynch, Pierce, Fenner & Smith Incorporated

c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, NY 10036

Dear Sirs and Mesdames:

The foregoing paragraph shall not apply to (a) transactions relating to MHG Co. Securities acquired in open market transactions after the completion of

the Public Offering, provided that no filing under Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) shall be required or shall be voluntarily made in connection with subsequent sales of MHG Co. Securities acquired in such open market transactions, (b) transfers of MHG Co. Securities as a bona fide gift, (c) distributions of MHG Co. Securities to holders of ownership interests in the undersigned, or (d) pledges of MHG Co. Securities in favor of Allianz Risk Transfer (“ART”); provided that throughout the duration of this agreement, ART is bound by a lock-up agreement delivered to the Underwriters as a condition to the closing of the Public Offering, to the extent ART continues to have a pledge of MHG Co. Securities. In addition, the undersigned agrees that, without the prior written consent of Morgan Stanley and Merrill Lynch on behalf of the Underwriters, it will not, during the period commencing on the date of the Preliminary Prospectus and ending 180 days after the date of the Prospectus, make any demand for or exercise any right with respect to, the registration of any MHG Co. Securities. The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the undersigned’s shares of Common Stock except in compliance with the foregoing restrictions.

Very truly yours,

NORTHSTAR PARTNERSHIP, L.P.

By:	Northstar Capital Investment Corp.,
	its general partner

	By:	/s/ Richard J. McCready
			Name: Richard J. McCready
			Title: President

[LOCK-UP LETTER AGREEMENT]

EX-99.6 6 a06-5838_1ex99d6.htm EXHIBIT 99

Exhibit 99.6

LOCK-UP LETTER AGREEMENT

, 2006

Morgan Stanley & Co. Incorporated
Merrill Lynch, Pierce, Fenner & Smith Incorporated
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, NY 10036

Dear Sirs and Mesdames:

The foregoing paragraph shall not apply to (a) transactions relating to MHG Co. Securities acquired in open market transactions after the completion of

the Public Offering, provided that no filing under Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) shall be required or shall be voluntarily made in connection with subsequent sales of MHG Co. Securities acquired in such open market transactions, (b) transfers of MHG Co. Securities as a bona fide gift, (c) distributions of MHG Co. Securities to holders of ownership interests in the undersigned; provided that in the case of any transfer or distribution pursuant to clause (b) or (c), (i) each donee or distributee shall agree to be bound by the lock-up restrictions set forth in this letter as if a party hereto and (ii) no filing under Section 16(a) of the Exchange Act, reporting a reduction in beneficial ownership of shares of Common Stock, shall be required or shall be voluntarily made during the restricted period referred to in the foregoing paragraph, or (d) pledges permitted pursuant to, and subject to the provisions set forth in, the lock-up agreement signed by Northstar Partnership L.P. in connection with the Public Offering. In addition, the undersigned agrees that, without the prior written consent of Morgan Stanley and Merrill Lynch on behalf of the Underwriters, it will not, during the period commencing on the date of the Preliminary Prospectus and ending 180 days after the date of the Prospectus, make any demand for or exercise any right with respect to, the registration of any MHG Co. Securities. The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the undersigned’s shares of Common Stock except in compliance with the foregoing restrictions.

	Very truly yours,


	/s/ W. Edward Scheetz
	(Name)



	(Address)

[LOCK-UP LETTER AGREEMENT]

EX-99.7 7 a06-5838_1ex99d7.htm EXHIBIT 99

Exhibit 99.7

LOCK-UP LETTER AGREEMENT

, 2006

Morgan Stanley & Co. Incorporated
Merrill Lynch, Pierce, Fenner & Smith Incorporated
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, NY 10036

Dear Sirs and Mesdames:

The foregoing paragraph shall not apply to (a) transactions relating to MHG Co. Securities acquired in open market transactions after the completion of

the Public Offering, provided that no filing under Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) shall be required or shall be voluntarily made in connection with subsequent sales of MHG Co. Securities acquired in such open market transactions, (b) transfers of MHG Co. Securities as a bona fide gift, (c) distributions of MHG Co. Securities to holders of ownership interests in the undersigned; provided that in the case of any transfer or distribution pursuant to clause (b) or (c), (i) each donee or distributee shall agree to be bound by the lock-up restrictions set forth in this letter as if a party hereto and (ii) no filing under Section 16(a) of the Exchange Act, reporting a reduction in beneficial ownership of shares of Common Stock, shall be required or shall be voluntarily made during the restricted period referred to in the foregoing paragraph, or (d) pledges permitted pursuant to, and subject to the provisions set forth in, the lock-up agreement signed by Northstar Partnership L.P. in connection with the Public Offering. In addition, the undersigned agrees that, without the prior written consent of Morgan Stanley and Merrill Lynch on behalf of the Underwriters, it will not, during the period commencing on the date of the Preliminary Prospectus and ending 180 days after the date of the Prospectus, make any demand for or exercise any right with respect to, the registration of any MHG Co. Securities. The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the undersigned’s shares of Common Stock except in compliance with the foregoing restrictions.

	Very truly yours,


	/s/ David T. Hamamoto
	(Name)



	(Address)

[LOCK-UP LETTER AGREEMENT]

EX-99.8 8 a06-5838_1ex99d8.htm EXHIBIT 99

Exhibit 99.8

LOCK-UP LETTER AGREEMENT

, 2006

Morgan Stanley & Co. Incorporated
Merrill Lynch, Pierce, Fenner & Smith Incorporated
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, NY 10036

Dear Sirs and Mesdames:

The foregoing paragraph shall not apply to (a) transactions relating to MHG Co. Securities acquired in open market transactions after the completion of

the Public Offering, provided that no filing under Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) shall be required or shall be voluntarily made in connection with subsequent sales of MHG Co. Securities acquired in such open market transactions, (b) transfers of MHG Co. Securities as a bona fide gift, (c) distributions of MHG Co. Securities to holders of ownership interests in the undersigned; provided that in the case of any transfer or distribution pursuant to clause (b) or (c), (i) each donee or distributee shall agree to be bound by the lock-up restrictions set forth in this letter as if a party hereto and (ii) no filing under Section 16(a) of the Exchange Act, reporting a reduction in beneficial ownership of shares of Common Stock, shall be required or shall be voluntarily made during the restricted period referred to in the foregoing paragraph, or (d) pledges permitted pursuant to, and subject to the provisions set forth in, the lock-up agreement signed by Northstar Partnership L.P. in connection with the Public Offering. In addition, the undersigned agrees that, without the prior written consent of Morgan Stanley and Merrill Lynch on behalf of the Underwriters, it will not, during the period commencing on the date of the Preliminary Prospectus and ending 180 days after the date of the Prospectus, make any demand for or exercise any right with respect to, the registration of any MHG Co. Securities. The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the undersigned’s shares of Common Stock except in compliance with the foregoing restrictions.

	Very truly yours,


	/s/ Richard J. McCready
	(Name)



	(Address)

[LOCK-UP LETTER AGREEMENT]

EX-99.9 9 a06-5838_1ex99d9.htm EXHIBIT 99

Exhibit 99.9

REGISTRATION RIGHTS AGREEMENT

by and between

MORGANS HOTEL GROUP CO.

and

NORTHSTAR PARTNERSHIP, L.P.

Dated as of February 17, 2006

TABLE OF CONTENTS

1.	Certain Definitions		1

2.	Demand Registrations		4
	(a)	Right to Request Registration	4
	(b)	Number of Demand Registrations	4
	(c)	Participation Rights of Holders	4
	(d)	Priority on Demand Registrations	4
	(e)	Restrictions on Demand Registrations	5
	(f)	Selection of Underwriters	6
	(g)	Other Registration Rights	6
	(h)	Effective Period of Demand Registrations	6

3.	Piggyback Registrations		6
	(a)	Right to Piggyback	6
	(b)	Priority on Piggyback Registrations	7
	(c)	Selection of Underwriters	8
	(d)	Other Registration Rights	8

4.	S-3 Registrations		8
	(a)	Right to Request Registration	8
	(b)	Priority on Shelf Takedowns	8
	(c)	Selection of Underwriters	9
	(d)	Other Registration Rights	9

5.	Holdback Agreements		9

6.	Registration Procedures		10

7.	Registration Expenses		14

8.	Indemnification		15

9.	Participation in Underwritten Registrations		17

10.	Rule 144		17

11.	Miscellaneous		18
	(a)	Notices	18
	(b)	No Waivers	18
	(c)	Expenses	19
	(d)	Successors and Assigns	19
	(e)	Governing Law	19
	(f)	Jurisdiction	19
	(g)	Waiver of Jury Trial	19
	(h)	Counterparts; Effectiveness	19
	(i)	Entire Agreement	19

(j)	Captions	20
(k)	Severability	20
(l)	Amendments	20
(m)	Equitable Relief	20

iii

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”), is made and entered into as of February 17, 2006, by and between Morgans Hotel Group Co., a Delaware corporation (the “Company”), and NorthStar Partnership, L.P., a Delaware limited partnership (the “Initial Securityholder”).

In consideration of the mutual covenants and agreements herein contained and other good and valid consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement hereby agree as follows:

1. Certain Definitions.

In addition to the terms defined elsewhere in this Agreement, the following terms shall have the following meanings:

“Affiliate” of any Person means any other Person which directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person. The term “control” (including the terms “controlling,” “controlled by” and “under common control with”) as used with respect to any Person means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

“Agreement” means this Registration Rights Agreement, including all amendments, modifications and supplements and any exhibits or schedules to any of the foregoing, and shall refer to this Registration Rights Agreement as the same may be in effect at the time such reference becomes operative.

“Blackout Period” has the meaning set forth in Section 6(f) hereof.

“Common Stock” means any shares of common stock issued by the Company.

“Company” has the meaning set forth in the introductory paragraph.

“Delay Period” has the meaning set forth in Section 2(e) hereof.

“Demand Registration” has the meaning set forth in Section 2(a) hereof.

“Demand Registration Statement” has the meaning set forth in Section 2(a) hereof.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Form S-3” means a registration statement on Form S-3 under the Securities Act or such successor form thereto permitting registration of securities under the Securities Act.

“Governmental Entity” means any national, federal, state, municipal, local, territorial, foreign or other government or any department, commission, board, bureau, agency, regulatory authority or instrumentality thereof, or any court, judicial, administrative or arbitral body or public or private tribunal.

“Holder” means a Securityholder to the extent that such Securityholder is a holder of record of (1) Registrable Common Stock or (2) OP Units. For purposes of this Agreement, the Company may deem and treat the registered holder of Registrable Common Stock and OP Units as the absolute owner thereof, and the Company shall not be affected by any notice to the contrary. In order to determine the number of shares of Registrable Common Stock held by a Holder and the number of shares of Registrable Common Stock outstanding, the OP Units held by a Securityholder shall be deemed to have been redeemed for or exchanged into shares of Common Stock.

“Initial Securityholder” means NorthStar Partnership, L.P., a Delaware limited liability company.

“Morgans” means Morgans Hotel Group LLC.

“Morgans Group LLC” means Morgans Group LLC, a Delaware limited liability company, or the other entity through which the Company owns its hotel properties.

“Nasdaq” means The Nasdaq Stock Market, Inc. or any successor reporting system.

“NorthStar Group” means the Initial Securityholder and any Affiliate of the Initial Securityholder, including, without limitation, NorthStar Capital Investment Corp.

“OP Units” means any units of membership interest in Morgans Group LLC that are issued to a Securityholder.

“Person” means any individual, sole proprietorship, partnership, limited liability company, joint venture, trust, incorporated organization, association, corporation, institution, public benefit corporation, Governmental Entity or any other entity.

“Piggyback Registration” has the meaning set forth in Section 3(a) hereof.

“Prospectus” means the prospectus or prospectuses included in any Registration Statement, as amended or supplemented by any prospectus supplement with respect to the terms of the offering of any portion of the Registrable Common Stock covered by such Registration Statement and by all other amendments and supplements to the prospectus, including post-effective amendments and all material incorporated by reference in such prospectus or prospectuses.

“Registrable Common Stock” means (1) any shares of Common Stock held of record by the Initial Securityholder as of the date hereof, (2) any shares of Common

Stock held of record by Morgans as of the date hereof that may be directly or indirectly issued or distributed to the Initial Securityholder by Morgans, (3) any shares of Common Stock that may be issued to the Initial Securityholder upon redemption or exchange of OP Units held of record by the Initial Securityholder as of the date hereof, (4) any shares of Common Stock that may be issued upon redemption or exchange of OP Units held of record by Morgans as of the date hereof to the extent such OP Units may be issued or distributed to the Securityholders by Morgans, (5) any shares of Common Stock held by a Holder from time to time, and (6) any securities of the Company issued or issuable with respect to the shares of Common Stock referred to in clause (1) through (5) above by way of stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise.

“Registration Expenses” has the meaning set forth in Section 7(a) hereof.

“Registration Statement” means any registration statement of the Company which covers any of the Registrable Common Stock pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all materials incorporated by reference in such Registration Statement.

“S-3 Registration” has the meaning set forth in Section 4 hereof.

“SEC” means the Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended.

“Securityholder” means each member of the NorthStar Group; provided that if (i) any direct or indirect member, investor or beneficial owner of any equity interest in any member of the NorthStar Group receives Registrable Common Stock initially held by the Initial Securityholder, whether by distribution, redemption, exchange or otherwise (a “recipient”), and (ii) such recipient can not distribute Registrable Common Stock without being subject to restrictions on transfer under the Securities Act, then such recipient shall be included in the definition of “Securityholder” hereunder.

“Suspension Notice” has the meaning set forth in Section 6(f) hereof.

“Termination Date” means, as to any Holder, the date upon which all the Registrable Common Stock owned by such Holder may be sold in any three-month period without registration under the Securities Act.

“underwritten offering” means a registered offering in which securities of the Company are sold to underwriters for reoffering to the public.

2. Demand Registrations.

(a) Right to Request Registration. Subject to the provisions hereof, beginning six months after the date hereof and continuing until the Termination Date, one or more Holders may at any time request registration for resale under the Securities Act of all or part of the Registrable Common Stock separate from an S-3 Registration (a “Demand Registration”); provided, that (based on then current market prices) the number of shares of Registrable Common Stock included in the Demand Registration would yield gross proceeds to the Holders requesting such Demand Registration of at least $25,000,000 unless the aggregate value (based on then current market prices) of the Registrable Common Stock held by the Holders requesting such Demand Registration is less than $25,000,000 but greater than $15,000,000, in which case the Demand Registration shall be for all of the Registrable Common Stock of the Holders requesting such Demand Registration (other than Registrable Common Stock which, as of the date of such demand, are in the form of OP Units and either held directly by a Securityholder or that a Securityholder may be entitled to receive from Morgans in a pro rata distribution of its OP Units, which such Holders shall not be required to include in such Demand Registration). Subject to Section 2(e) below, the Company shall use its reasonable best efforts (i) to file a Registration Statement (a “Demand Registration Statement”) registering for resale such number of shares of Registrable Common Stock as requested to be so registered within 30 days of a Holder’s request therefor and (ii) to cause such Demand Registration Statement to be declared effective by the SEC as soon as practicable thereafter.

(b) Number of Demand Registrations. Subject to the limitations of Section 2(a), the Holders shall be entitled to request three (3) Demand Registrations. A Registration Statement shall not count as a permitted Demand Registration unless and until it has become effective and the Holders are able to register and sell at least 50% of the Registrable Common Stock requested to be included in such registration.

(c) Participation Rights of Holders. Whenever the Company shall be requested by one or more Holders to effect a Demand Registration pursuant to Section 2(a) hereof, the Company shall promptly (but not later than 5 days after receiving such request) give written notice of such requested Demand Registration to each other Holder that has provided contact information to the Company prior thereto. Such notice shall inform Holders that they have 10 days to notify the Company in writing as provided in Section 11 hereof that they wish to participate in such proposed Demand Registration. The Company shall include in such Demand Registration the shares of Common Stock of any Holder who irrevocably notifies the Company that the Holder has elected to include such shares of Common Stock in such Demand Registration.

(d) Priority on Demand Registrations. The Company may include Common Stock other than Registrable Common Stock in a Demand Registration on the terms provided below and in Section 2(h) hereof, and, if such Demand Registration is an underwritten offering, only with the consent of the managing underwriters of such

offering. If the managing underwriters of the requested Demand Registration advise the Company and the Holders requesting such Demand Registration that in their opinion the number of shares of Common Stock proposed to be included in the Demand Registration exceeds the number of shares of Common Stock which can be sold in such underwritten offering and/or the number of shares of Common Stock proposed to be included in such registration would adversely affect the price per share of the Registrable Common Stock proposed to be sold in such underwritten offering, the Company shall include in such Demand Registration (i) first, the number of shares of Common Stock that the Holders propose to sell, and (ii) second, the number of shares of Common Stock proposed to be included therein by any other Persons (including shares of Common Stock to be sold for the account of the Company and/or other Holders) allocated among such Persons in such manner as they may agree. If the number of shares of Common Stock which can be sold is less than the number of shares of Common Stock proposed to be registered pursuant to clause (i) above by all the Holders proposing to sell, the amount of Common Stock to be so sold shall be allocated pro rata among the holders of Common Stock desiring to participate in such Demand Registration on the basis of the number of shares of Common Stock initially proposed to be registered by such holders or as such holders may otherwise agree; provided, that, if such Demand Registration is requested prior to the first anniversary of the date hereof, the amount of Common Stock to be so sold shall be allocated (1) first, to the shares of Registrable Common Stock requested to be registered by the Holders requesting such Demand Registration and (2) second, pro rata among the other holders of Common Stock desiring to participate in such Demand Registration on the basis of the number of shares of Common Stock initially proposed to be registered by such holders or as such holders may otherwise agree.

(e) Restrictions on Demand Registrations. The Company shall not be obligated to effect any Demand Registration on behalf of a Holder within six months after the effective date of any Demand Registration, Piggyback Registration wherein such Holder was permitted to register, and actually sold, at least 50% of the shares of Registrable Common Stock requested to be included therein or S-3 Registration. The Company may (i) withdraw a Registration Statement previously filed (but not declared effective) pursuant to a Demand Registration or postpone for up to ninety (90) days the filing of a Registration Statement for a Demand Registration if, based on the good faith judgment of the Company, such postponement or withdrawal would avoid premature disclosure of a matter the Company has determined would not be in the best interest of the Company to be disclosed at such time or (ii) postpone the filing of a Demand Registration in the event the Company shall be required to prepare (A) audited financial statements as of a date other than its fiscal year end (unless the Holders requesting such registration agree to pay the expenses of such an audit) or (B) pro forma financial statements that are required to be included in the Registration Statement; provided, however, that in no event shall the Company withdraw a Registration Statement under clause (i) after such Registration Statement has been declared effective; and provided, further, however, that in any of the events described in clause (i) or (ii) above, the Holders requesting such Demand Registration shall be entitled to withdraw such request and, if such request is withdrawn, such Demand Registration shall not count as one of the

permitted Demand Registrations. The Company shall provide written notice to the Holders requesting a Demand Registration of (x) any postponement or withdrawal of the filing or effectiveness of a Registration Statement pursuant to this Section 2(e), (y) the Company’s decision to file or seek effectiveness of such Registration Statement following such withdrawal or postponement and (z) the effectiveness of such Registration Statement, which notice, if it relates to clause (x), shall include the reasons therefor if the Holders requesting such Demand Registration shall have previously executed a confidentiality agreement satisfactory to the Company in respect thereof. The Company may defer the filing of a particular Registration Statement pursuant to this Section 2(e) only once during any six-month period. The period during which filing or effectiveness is so postponed hereunder is referred to as a “Delay Period”.

(f) Selection of Underwriters. If any of the Registrable Common Stock covered by a Demand Registration is to be sold in an underwritten offering, the Company shall have the right to select one of the co-managing underwriters and the Holders requesting such Demand Registration shall have the right to select one of the co-managing underwriters to administer the offering subject to the consent of the other for the book-running or lead managing underwriter, in its sole discretion.

(g) Other Registration Rights. The Company shall not grant to any Person the right to request the Company (i) to register any shares of Common Stock in a Demand Registration unless such rights are consistent with the provisions hereof, or (ii) to register any securities of the Company (other than shares of Common Stock) in a Demand Registration.

(h) Effective Period of Demand Registrations. Upon the date of effectiveness of any Demand Registration for an underwritten offering contemplated to be consummated at the time of effectiveness of the Demand Registration, the Company shall use its reasonable best efforts to keep such Demand Registration Statement effective for a period equal to 15 business days from such date or such shorter period which shall terminate when all of the Registrable Common Stock covered by such Demand Registration has been sold pursuant to such Demand Registration. If the Company shall withdraw any Demand Registration pursuant to Section 2(e) or issue a Suspension Notice pursuant to Section 6(f) within such 15 business day period and before all of the Registrable Common Stock covered by such Demand Registration has been sold pursuant thereto, the Holders requesting such Demand Registration shall be entitled to a replacement Demand Registration which shall be subject to all of the provisions of this Agreement.

3. Piggyback Registrations.

(a) Right to Piggyback. Beginning six months after the date hereof, whenever the Company proposes to register any of its Common Stock under the Securities Act (other than a registration statement on Form S-8 or on Form S-4 or any similar successor forms thereto), whether for its own account or for the account of one or more

stockholders of the Company and the form of registration statement to be used may be used for any registration of Registrable Common Stock (a “Piggyback Registration”), the Company shall give prompt written notice (in any event no later than 10 days prior to the filing of such registration statement) to the Holders of its intention to effect such a registration and, subject to Section 3(b), shall include in such registration statement all Registrable Common Stock with respect to which the Company has received written requests for inclusion therein from the Holders within 8 days after the Holders’ receipt of the Company’s notice. The Company may postpone or withdraw the filing or the effectiveness of a Piggyback Registration at any time in its sole discretion. A Piggyback Registration shall not be considered a Demand Registration for purposes of Section 2 of this Agreement or a S-3 Registration for purposes of Section 4 of this Agreement.

(b) Priority on Primary Piggyback Registrations. If a Piggyback Registration is initiated as a primary underwritten offering on behalf of the Company and the managing underwriters advise the Company and the Holders (if any of the Holders have elected to include Registrable Common Stock in such Piggyback Registration) that in their opinion the number of shares of Common Stock proposed to be included in such registration exceeds the number of shares of Common Stock which can be sold in such offering and/or that the number of shares of Common Stock proposed to be included in any such registration would adversely affect the price per share of the Common Stock to be sold in such offering, the Company shall include in such registration (i) first, the number of shares of Common Stock that the Company proposes to sell, and (ii) second, the number of shares of Common Stock requested to be included therein by holders of Common Stock, including the Holders (if any of the Holders have elected to include Registrable Common Stock in such Piggyback Registration), pro rata among all such holders on the basis of the number of shares of Common Stock requested to be included therein by all such holders or as such holders may otherwise agree.

(c) Priority on Secondary Registrations. If a Piggyback Registration is initiated as an underwritten registration on behalf of a holder of Common Stock other than Registrable Common Stock, and the managing underwriters advise the Company that in their opinion the number of shares of Common Stock proposed to be included in such registration exceeds the number of shares of Common Stock which can be sold in such offering and/or that the number of shares of Common Stock proposed to be included in any such registration would adversely affect the price per share of the Common Stock to be sold in such offering, then the Company shall include in such registration (i) first, the number of shares of Common Stock requested to be included therein by the holder(s) requesting such registration, (ii) second, the number of shares of Common Stock requested to be included therein by other holders of Common Stock including the Holders (if any of the Holders have elected to include Registrable Common Stock in such Piggyback Registration), pro rata among such holders on the basis of the number of shares of Common Stock requested to be included therein by such holders or as such holders may otherwise agree, and (iii) third, the number of shares of Common Stock that the Company proposes to sell.

(d) Selection of Underwriters. If any Piggyback Registration is a primary underwritten offering, the Company shall have the right to select the managing underwriter or underwriters to administer any such offering.

(e) Other Registration Rights. The Company shall not grant to any Person the right to request the Company (i) to register any shares of Common Stock in a Piggyback Registration unless such rights are consistent with the provisions hereof, or (ii) to register any securities of the Company (other than shares of Common Stock) in a Piggyback Registration.

4. S-3 Registrations.

(a) Right to Request Registration. At any time that the Company is eligible to use Form S-3 or any successor thereto, any of the Holders shall be entitled to request that the Company file a Registration Statement on Form S-3 or any successor thereto for a public offering of all or any portion of the Registrable Common Stock pursuant to Rule 415 promulgated under the Securities Act or otherwise. Upon such request, the Company shall use its reasonable best efforts (i) to file a Registration Statement covering the number of shares of Registrable Common Stock specified in such request under the Securities Act on Form S-3 or any successor thereto (an “S-3 Registration”) for public sale in accordance with the method of disposition specified in such request within 30 days of the Holders’ request therefor and (ii) to cause such S-3 Registration to be declared effective by the SEC as soon as reasonably practicable thereafter. A Holder shall be entitled, upon not less than 24 hours (given on a business day and effect at the same time on the next business day) prior written notice to the Company in the manner provided below, to sell such Registrable Common Stock as are then registered pursuant to such Registration Statement (each, a “Shelf Takedown”). The Holders shall be entitled to request that a Shelf Takedown shall be an underwritten offering; provided, that (based on then current market prices) the number of shares of Registrable Common Stock included in such Shelf Takedown would yield gross proceeds to the Holders requesting such Shelf Takedown of at least $25,000,000. Each Holder shall also give the Company prompt written notice of the consummation of such Shelf Takedown by such Holder. A notice of a proposed Shelf Takedown pursuant to this Section shall be given by e-mail and facsimile transmission to the Company’s Chief Financial Officer, with a copy to designated counsel, as provided in Section 11(a) hereof, and shall be effective when receipt of such notice has been confirmed telephonically. The Company agrees to waive such 24-hour notice period if at the time such notice is effective, the Prospectus included in the Registration Statement related to the Registrable Common Stock proposed to be sold in the Shelf Takedown does not contain an untrue statement of a material fact and does not omit any material fact necessary to make the statements therein not misleading.

(b) Priority on Shelf Takedowns. The Company may include Common Stock other than Registrable Common Stock in a Shelf Takedown on the terms provided below, and, if such Shelf Takedown is an underwritten offering, only with the consent of the managing underwriters of such offering. If the managing underwriters of the requested

Shelf Takedown advise the Company and the Holders participating in such Shelf Takedown that in their opinion the number of shares of Common Stock proposed to be included in any Shelf Takedown (1) exceeds the number of shares of Common Stock which can be sold in such underwritten offering or (2) would adversely affect the price per share of the Registrable Common Stock proposed to be sold in such underwritten offering, the Company shall include in such Shelf Takedown only the number of shares of Common Stock which in the opinion of such managing underwriters can be sold. If the number of shares of Common Stock which can be sold is less than the number of shares of Common Stock proposed to be registered, the amount of Common Stock to be so sold shall be allocated pro rata among the holders of Common Stock desiring to participate in such Shelf Takedown on the basis of the number of shares of Common Stock initially proposed to be registered by such holders or as such holders may otherwise agree.

(c) Selection of Underwriters. If any of the Registrable Common Stock covered by an S-3 Registration is to be sold in an underwritten offering, the Company shall have the right to select one of the co-managing underwriters and the Holders requesting such S-3 Registration shall have the right to select one of the co-managing underwriters to administer the offering subject to the consent of the other for the book-running or lead managing underwriter, in its sole discretion.

(d) Other Registration Rights. The Company shall not grant to any Person the right to request the Company (i) to register any shares of Common Stock in an S-3 Registration unless such rights are consistent with the provisions hereof, or (ii) to register any securities of the Company (other than shares of Common Stock) in an S-3 Registration.

5. Holdback Agreements.

As long as any Holder is the beneficial owner of five percent or more of the outstanding Common Stock of the Company, such Holder agrees not to sell, transfer, hedge the beneficial ownership of or otherwise dispose of any shares of Common Stock (or other securities of the Company) held by it for a period equal to the lesser of (i) ninety (90) days following the date of a prospectus or prospectus supplement, as applicable, relating to a sale of shares of Common Stock (or other securities of the Company) in an underwritten offering registered under the Securities Act or (ii) such shorter period as the managing underwriters of such underwritten offering shall agree to. Such agreement shall be in writing in form satisfactory to the Company and the managing underwriters. The Company may impose stop-transfer instructions with respect to the shares of Registrable Common Stock (or other securities) subject to the foregoing restriction until the end of said period. The foregoing restrictions shall not apply to (i) the exercise of any warrants or stock options to purchase shares of capital stock of the Company (provided that such limitation does not affect limitations on any actions specified in the first sentence of this Section 5 with respect to the shares issuable upon such exercise), (ii) transfers to Affiliates where the transferee agrees to be bound by the terms hereof, (iii) the participation in the filing of a registration statement with the Securities and Exchange

Commission, including, without limitation, any S-3 Registration hereunder, or (iv) the shares of Registrable Common Stock included in the underwritten offering giving rise to the application of this Section 5. Notwithstanding the foregoing, the holdback arrangement set forth in this Section 5 shall not apply to sale shares of Common Stock that is registered on Form S-8 or Form S-4.

6. Registration Procedures.

(a) Whenever a Holder requests that any Registrable Common Stock be registered pursuant to this Agreement, the Company shall use its reasonable best efforts to effect the registration and the sale of such Registrable Common Stock in accordance with the intended methods of disposition thereof, and, pursuant thereto, the Company shall as soon as reasonably practicable use its reasonable best efforts to:

(i) subject to Section 2(a) and Section 4, prepare and file with the SEC a Registration Statement with respect to such Registrable Common Stock and cause such Registration Statement to become effective as soon as reasonably practicable thereafter; and before filing a Registration Statement or Prospectus or any amendments or supplements thereto, furnish to the Holders and the underwriter or underwriters, if any, copies of all such documents proposed to be filed, including documents incorporated by reference in the Prospectus and, if requested by the Holders, the exhibits incorporated by reference, and the Holders shall have the opportunity to object to any information pertaining to the Holders that is contained therein and the Company will make the corrections reasonably requested by the Holders with respect to such information prior to filing any Registration Statement or amendment thereto or any Prospectus or any supplement thereto;

(ii) prepare and file with the SEC such amendments and supplements to such Registration Statement and the Prospectus used in connection therewith as may be necessary to keep such Registration Statement effective for a period of not less than (A) 15 business days, in the case of a Demand Registration, or (B) the earlier of 2 years or the Termination Date in the case of an S-3 Registration, and no longer than is necessary to complete the distribution of the Common Stock covered by such Registration Statement and comply with the provisions of the Securities Act with respect to the disposition of all the Common Stock covered by such Registration Statement during such period in accordance with the intended methods of disposition by the sellers thereof set forth in such Registration Statement;

(iii) furnish to each seller of Registrable Common Stock the Prospectus included in such Registration Statement (including each preliminary Prospectus) and any supplement thereto and such other

documents as such seller may reasonably request in order to facilitate the disposition of the Registrable Common Stock owned by such seller;

(iv) register or qualify such Registrable Common Stock under such other securities or blue sky laws of such jurisdictions as any seller reasonably requests and do any and all other acts and things which may be reasonably necessary or advisable to enable such seller to consummate the disposition in such jurisdictions of the Registrable Common Stock owned by such seller (provided, that the Company will not be required to (I) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this subparagraph (iv), (II) subject itself to taxation in any such jurisdiction or (III) consent to general service of process in any such jurisdiction);

(v) notify each seller of such Registrable Common Stock, at any time when a Prospectus relating thereto is required to be delivered under the Securities Act, of the occurrence of any event as a result of which the Prospectus included in such Registration Statement contains an untrue statement of a material fact or omits any fact necessary to make the statements therein not misleading, and, at the request of any such seller, the Company shall prepare a supplement or amendment to such Prospectus so that, as thereafter delivered to the purchasers of such Registrable Common Stock, such Prospectus shall not contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading;

(vi) in the case of an underwritten offering on behalf of a Holder pursuant to a Demand Registration, Piggyback Registration or an S-3 Registration, enter into such customary agreements (including underwriting and lock-up agreements in customary form) and take all such other customary actions as the Holders or the managing underwriters of such offering reasonably request in order to expedite or facilitate the disposition of such Registrable Common Stock (including, without limitation, making members of senior management of the Company available to participate in “road-show” and other customary marketing activities (including one-on-one meetings with prospective purchasers of the Registrable Common Stock)) and cause to be delivered to the underwriters opinions of counsel to the Company in customary form, covering such matters as are customarily covered by opinions for an underwritten public offering as the managing underwriters may request and addressed to the underwriters;

(vii) to the extent not prohibited by applicable law or pre-existing applicable contractual restrictions, (A) make available, for inspection by the Holders, any underwriter participating in any disposition

pursuant to such Registration Statement, and any attorney retained by any such underwriter, all financial and other records, pertinent corporate documents and properties of the Company, (B) cause the Company’s officers and employees to supply all information reasonably requested by the Holders or such underwriter or attorney in connection with such Registration Statement, and (C) make the Company’s independent accountants available for any such underwriter’s due diligence;

(viii) cause all such Registrable Common Stock to be listed on each securities exchange on which securities of the same class issued by the Company are then listed or, if no such similar securities are then listed, on Nasdaq or a national securities exchange selected by the Company;

(ix) provide a transfer agent and registrar for all such Registrable Common Stock not later than the effective date of such Registration Statement;

(x) if requested, cause to be delivered at the time of delivery of any Registrable Common Stock sold pursuant to a Registration Statement, letters from the Company’s independent certified public accountants addressed to each selling Holder (unless such selling Holder does not provide to such accountants the appropriate representation letter required by rules governing the accounting profession) and each underwriter, if any, stating that such accountants are independent public accountants within the meaning of the Securities Act and the applicable rules and regulations adopted by the SEC thereunder, and otherwise in customary form and covering such financial and accounting matters as are customarily covered by letters of the independent certified public accountants delivered in connection with primary or secondary underwritten public offerings, as the case may be;

(xi) make generally available to its stockholders a consolidated earnings statement (which need not be audited) for the 12 months beginning after the effective date of a Registration Statement as soon as reasonably practicable after the end of such period, which earnings statement shall satisfy the requirements of an earning statement under Section 11(a) of the Securities Act; and

(xii) promptly notify the Holders and the underwriter or underwriters, if any:

(1) when the Registration Statement, any pre-effective amendment, the Prospectus or any Prospectus supplement or post-effective amendment to the Registration Statement has been filed and, with respect to the Registration Statement or any post-effective amendment, when the same has become effective;

(2) of the notification to the Company by the SEC of its initiation of any proceeding with respect to the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement; and

(3) of the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Common Stock for sale under the applicable securities or blue sky laws of any jurisdiction.

(b) No Registration Statement (including any amendments thereto) shall contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein not misleading, and no Prospectus (including any supplements thereto) shall contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, in each case, except for any untrue statement or alleged untrue statement of a material fact or omission or alleged omission of a material fact made in reliance on and in conformity with written information furnished to the Company by or on behalf of the Holders specifically for use therein.

(c) The Company shall make available to the Holders such number of copies of a Prospectus, including a preliminary Prospectus, and all amendments and supplements thereto and such other documents as the Holders may reasonably request in order to facilitate the disposition of the Registrable Common Stock owned by the Holders. The Company will promptly notify the Holders requesting registration of Registrable Common Stock of the effectiveness of each Registration Statement or any post-effective amendment. The Company will promptly respond to any and all comments received from the SEC, with a view towards causing each Registration Statement or any amendment thereto to be declared effective by the SEC as soon as reasonably practicable and shall file an acceleration request as soon as reasonably practicable following the resolution or clearance of all SEC comments or, if applicable, following notification by the SEC that any such Registration Statement or any amendment thereto will not be subject to review.

(d) At all times after the Company has filed a registration statement with the SEC pursuant to the requirements of the Securities Act, the Company shall use its reasonable best efforts to file all reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder, and use its reasonable best efforts to take such further action as the Holders may reasonably request, all to the extent required to enable the Holders to be eligible to sell Registrable Common Stock pursuant to Rule 144 (or any similar rule then in effect).

(e) The Company may require each seller of Registrable Common Stock as to which any registration is being effected to furnish to the Company any other information

regarding such seller and the distribution of such securities as the Company may from time to time reasonably request in writing.

(f) Each seller of Registrable Common Stock agrees by having its stock treated as Registrable Common Stock hereunder that, upon notice of the happening of any event as a result of which the Prospectus included in such Registration Statement contains an untrue statement of a material fact or omits any material fact necessary to make the statements therein not misleading (a “Suspension Notice”), such seller will forthwith discontinue disposition of Registrable Common Stock for a reasonable length of time not to exceed 60 days until such seller is advised in writing by the Company that the use of the Prospectus may be resumed and is furnished with a supplemented or amended Prospectus as contemplated by Section 6(a)(v) hereof, and, if so directed by the Company, such seller will deliver to the Company (at the Company’s expense) all copies, other than permanent file copies then in such seller’s possession, of the Prospectus covering such Registrable Common Stock current at the time of receipt of such notice; provided, however, that such postponement of sales of Registrable Common Stock by any Holder shall not exceed one hundred and fifty (150) days in the aggregate in any one year. If the Company shall give any notice to suspend the disposition of Registrable Common Stock pursuant to a Prospectus, the Company shall extend the period of time during which the Company is required to maintain the Registration Statement effective pursuant to this Agreement by the number of days during the period from and including the date of the giving of such notice to and including the date such seller either is advised by the Company that the use of the Prospectus may be resumed or receives the copies of the supplemented or amended Prospectus contemplated by Section 6(a)(v) (a “Blackout Period”). In any event, the Company shall not be entitled to deliver more than four (4) Suspension Notices in any one year.

7. Registration Expenses.

(a) All expenses incident to the Company’s performance of or compliance with this Agreement, including, without limitation, all registration and filing fees, fees and expenses of compliance with securities or blue sky laws, listing application fees, printing expenses, transfer agent’s and registrar’s fees, cost of distributing Prospectuses in preliminary and final form as well as any supplements thereto, and fees and disbursements of counsel for the Company and all independent certified public accountants and other Persons retained by the Company (all such expenses being herein called “Registration Expenses”) (but not including any underwriting discounts or commissions attributable to the sale of Registrable Common Stock or fees and expenses of more than one counsel representing the Holders), shall be borne by the Company. In addition, the Company shall pay its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit or quarterly review, the expense of any liability insurance and the expenses and fees for listing the securities to be registered on each securities exchange on which they are to be listed.

(b) In connection with one underwritten offering initiated by the Holders pursuant to the Demand Registration or the S-3 Registration, the Company shall reimburse the Holders covered by such registration or sale for the reasonable fees and disbursements of one law firm chosen by the Holders of a majority of the number of shares of Registrable Common Stock included in such registration or sale, subject to a maximum of $15,000.

(c) The obligation of the Company to bear the expenses described in Section 7(a) and to reimburse the Holders for the expenses described in Section 7(b) shall apply irrespective of whether a registration, once properly demanded, if applicable, becomes effective, is withdrawn or suspended, is converted to another form of registration and irrespective of when any of the foregoing shall occur; provided, however, that Registration Expenses for any Registration Statement withdrawn solely at the request of the Holders (unless withdrawn following postponement of filing by the Company in accordance with Section 2(e) or Section 3(a)) or any supplements or amendments to a Registration Statement or Prospectus resulting from a misstatement furnished to the Company by a Holder shall be borne by such Holder. In addition to the Company’s expense reimbursement obligation under Section 7(b), if any Registration Statement is withdrawn (unless such withdrawal is solely at the request of a Holder), the Company shall reimburse the Holders for their reasonable legal fees and related disbursements in connection with such withdrawn Registration Statement.

8. Indemnification.

(a) The Company shall indemnify, to the fullest extent permitted by law, the Holders and each Person who controls a Holder (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and expenses arising out of or based upon any untrue or alleged untrue statement of material fact contained in any Registration Statement, Prospectus, free writing prospectus (as defined in Rule 405 promulgated under the Securities Act) or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are made in reliance and in conformity with information furnished in writing to the Company by a Holder expressly for use therein or caused by a Holder’s failure to deliver to the Holder’s immediate purchaser a copy of the Registration Statement, Prospectus, free writing prospectus (as defined in Rule 405 promulgated under the Securities Act) or any amendments or supplements thereto (if the same was required by applicable law to be so delivered) after the Company has furnished the Holders with a sufficient number of copies of the same prior to any written confirmation of the sale of Registrable Common Stock. In connection with an underwritten offering, the Company shall indemnify such underwriters and each Person who controls such underwriters (within the meaning of the Securities Act) to the same extent as provided above with respect to the indemnification of the Holders.

(b) In connection with any Registration Statement in which a Holder is participating, each Holder shall furnish to the Company in writing such information and affidavits as the Company reasonably requests for use in connection with any such Registration Statement or Prospectus or free writing prospectus (as defined in Rule 405 promulgated under the Securities Act) and, shall severally indemnify, to the fullest extent permitted by law, the Company, its officers, directors and each Person who controls the Company (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and expenses arising out of or based upon any untrue or alleged untrue statement of material fact contained in the Registration Statement, Prospectus, free writing prospectus (as defined in Rule 405 promulgated under the Securities Act) or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that the same are made in reliance and in conformity with information furnished in writing to the Company by such Holder expressly for use therein or caused by such Holder’s failure to deliver to such Holder’s immediate purchaser a copy of the Registration Statement, Prospectus, free writing prospectus (as defined in Rule 405 promulgated under the Securities Act) or any amendments or supplements thereto (if the same was required by applicable law to be so delivered) after the Company has furnished such Holder with a sufficient number of copies of the same prior to any written confirmation of the sale of Registrable Common Stock; provided, however, that the liability of each Holder shall be in proportion to and limited to the net amount received by such Holder from the sale of Registrable Common Stock pursuant to such Registration Statement.

(c) Any Person entitled to indemnification hereunder shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent will not be unreasonably withheld). An indemnifying party who is entitled to, and elects to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party there may be one or more legal or equitable defenses available to such indemnified party which are in addition to or may conflict with those available to another indemnified party with respect to such claim. Failure to give prompt written notice shall not release the indemnifying party from its obligations hereunder.

(d) The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling Person of such indemnified party and shall survive the transfer of securities.

(e) If the indemnification provided for in or pursuant to this Section 8 is due in accordance with the terms hereof, but is held by a court to be unavailable or unenforceable in respect of any losses, claims, damages, liabilities or expenses referred to herein, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified Person as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions which result in such losses, claims, damages, liabilities or expenses as well as any other relevant equitable considerations. The relative fault of the indemnifying party on the one hand and of the indemnified Person on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party, and by such party’s relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. In no event shall the liability of a Holder be greater in amount than the amount of net proceeds received by such Holder upon such sale or the amount for which such indemnifying party would have been obligated to pay by way of indemnification if the indemnification provided for under Section 8(a) or 8(b) hereof had been available under the circumstances.

9. Participation in Underwritten Registrations.

No Person may participate in any registration hereunder which is underwritten unless such Person (a) agrees to sell such Person’s securities on the basis provided in any underwriting arrangements approved by the Person or Persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements.

10. Rule 144.

The Company shall use its reasonable best efforts to file the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder, and use its reasonable best efforts to take such further action as a Holder may reasonably request to make available adequate current public information with respect to the Company meeting the current public information requirements of Rule 144(c) under the Securities Act, to the extent required to enable the Holders to sell Registrable Common Stock without registration under the Securities Act within the limitation of the exemptions provided by (i) Rule 144 under the Securities Act, as such Rule may be amended from time to time, or (ii) any similar rule or regulation hereafter adopted by the SEC. Upon the request of a Holder, the Company will deliver to such Holder a written statement as to whether it has complied with such information and requirements.

11. Miscellaneous.

(a) Notices. Except as otherwise provided herein, all notices, requests, consents and other communications required or permitted hereunder shall be in writing and shall be hand delivered or mailed postage prepaid by registered or certified mail or by facsimile transmission (with immediate telephone confirmation thereafter),

If to the Company:

Morgans Hotel Group Co.
475 Tenth Avenue
New York, New York 10018
Attention: Chief Financial Officer
Facsimile: (212) 277-4201
E-mail: richard.szymanski@morganshotelgroup.com

with a copy to (which shall not constitute notice):

Sullivan & Cromwell LLP
125 Broad Street
New York, NY 10004
Attention: Robert W. Downes, Esq.

Facsimile: (212) 558-3588

E-mail: downesr@sullcrom.com

If to the Initial Securityholder:

NorthStar Partnership, L.P.
527 Madison Avenue
New York, New York
Attention: Richard McCready
Facsimile: (212) 319-4557

or at such other address as such party each may specify by written notice to the others, and, except as otherwise provided herein, each such notice, request, consent and other communication shall for all purposes of the Agreement be treated as being effective or having been given when delivered personally, upon receipt of facsimile confirmation if transmitted by facsimile, or, if sent by mail, at the earlier of its receipt or 72 hours after the same has been deposited in a regularly maintained receptacle for the deposit of United States mail, addressed and postage prepaid as aforesaid.

(b) No Waivers. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of

any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

(c) Expenses. Except as otherwise provided for herein or otherwise agreed to in writing by the parties, all costs and expenses incurred in connection with the preparation of this Agreement shall be paid by the Company.

(d) Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, it being understood that Holders (as defined) are intended third party beneficiaries hereof.

(e) Governing Law. The internal laws of the State of New York shall govern the enforceability and validity of this Agreement, the construction of its terms and the interpretation of the rights and duties of the parties.

(f) Jurisdiction. Any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby must be brought in any federal or state court located in the County and State of New York, and each of the parties hereby consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 11(a) shall be deemed effective service of process on such party.

(g) Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

(h) Counterparts; Effectiveness. This Agreement may be executed in any number of counterparts (including by facsimile) and by different parties hereto in separate counterparts, with the same effect as if all parties had signed the same document. All such counterparts shall be deemed an original, shall be construed together and shall constitute one and the same instrument. This Agreement shall become effective when each party hereto shall have received counterparts hereof signed by all of the other parties hereto.

(i) Entire Agreement. This Agreement contains the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes and replaces all

other prior agreements, written or oral, among the parties hereto with respect to the subject matter hereof.

(j) Captions. The headings and other captions in this Agreement are for convenience and reference only and shall not be used in interpreting, construing or enforcing any provision of this Agreement.

(k) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such a determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.

(l) Amendments. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given without the prior written consent of the Company and the Initial Securityholder.

(m) Equitable Relief. The parties hereto agree that legal remedies may be inadequate to enforce the provisions of this Agreement and that equitable relief, including specific performance and injunctive relief, may be used to enforce the provisions of this Agreement.

[Execution Page Follows]

IN WITNESS WHEREOF, this Registration Rights Agreement has been duly executed by each of the parties hereto as of the date first written above.

NORTHSTAR PARTNERSHIP, L.P.


By:	/s/ W. Edward Scheetz
	Name:		W. Edward Scheetz
	Title:		Authorized Person


MORGANS HOTEL GROUP CO.


By:	/s/ W. Edward Scheetz
	Name:	W. Edward Scheetz
	Title:	Chief Executive Officer

EX-99.10 10 a06-5838_1ex99d10.htm EXHIBIT 99

EXHIBIT 99.10

JOINT FILING AGREEMENT

In accordance with Rule 13d-1(k)(1) promulgated under the Securities Exchange Act of 1934, as amended, the undersigned agree to the joint filing of a Statement on Schedule 13D (including any and all amendments thereto) with respect to the Common Stock of Morgans Hotel Group Co. and further agree to the filing of this agreement as an Exhibit thereto. In addition, each party to this Agreement expressly authorizes each other party to this Agreement to file on its behalf any and all amendments to such Statement on Schedule 13D.

Dated: February 22, 2006

NORTHSTAR CAPITAL INVESTMENT CORP.


By:	/s/ Richard J. McCready
Name: Richard J. McCready
Title: Chief Operating Officer and Secretary


NCIC MHG SUBSIDIARY LLC

By: NorthStar Capital Investment Corp.,
Its Managing Member


By:	/s/ Richard J. McCready
Name: Richard J. McCready
Title: Chief Operating Officer and Secretary


NORTHSTAR PARTNERSHIP, L.P.

By: NorthStar Capital Investment Corp.,
Its General Partner


By:	/s/ Richard J. McCready
Name: Richard J. McCready
Title: Chief Operating Officer and Secretary


/s/ W. Edward Scheetz
W. Edward Scheetz


/s/ David T. Hamamoto
David T. Hamamoto

EX-99.11 11 a06-5838_1ex99d11.htm EXHIBIT 99

EXHIBIT 99.11

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS that NORTHSTAR CAPITAL INVESTMENT CORP. (the”Company”) does hereby make, constitute and appoint each of David T. Hamamoto, W. Edward Scheetz, Richard J. McCready and Steven Kauff (and any other employee of the Company designated in writing by one of the attorneys-in-fact), acting individually, its true and lawful attorney-in-fact, to execute and deliver in its name and on its behalf whether the Company is acting individually or as representative of others, any and all filings required to be made by the Company under the Securities Exchange Act of 1934, (as amended, the “Act”), with respect to securities which may be deemed to be beneficially owned by the Company under the Act, giving and granting unto each said attorney-in-fact power and authority to act in the premises as fully and to all intents and purposes as the Company might or could do if personally present by one of its authorized signatories, hereby ratifying and confirming all that said attorney-in-fact shall lawfully do or cause to be done by virtue hereof.

THIS POWER OF ATTORNEY shall remain in full force and effect until either revoked in writing by the undersigned or until such time as the person or persons to whom power of attorney has been hereby granted cease(s) to be an employee of the Company.

IN WITNESS WHEREOF, the undersigned has duly subscribed these presents as of February 22, 2005.

NORTHSTAR CAPITAL INVESTMENT CORP.


By:	/s/ Richard J. McCready
Name: Richard J. McCready
Title: President

EX-99.12 12 a06-5838_1ex99d12.htm EXHIBIT 99

EXHIBIT 99.12

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS that NORTHSTAR CAPITAL INVESTMEST CORP. (the “Company”), as general partner of NORTHSTAR PARTNERSHIP, L.P. (the “Partnership”) does hereby make, constitute and appoint each of David T. Hamamoto, W. Edward Scheetz and Richard J. McCready (and any other employee of the Company designated in writing by one of the attorneys-in-fact), acting individually, its true and lawful attorney-in-fact, to execute and deliver in its name and on its behalf whether the Partnership is acting individually or as representative of others, any and all filings required to be made by the Partnership under the Securities Exchange Act of 1934, (as amended, the “Act”), with respect to securities which may be deemed to be beneficially owned by the Partnership under the Act, giving and granting unto each said attorney-in-fact power and authority to act in the premises as fully and to all intents and purposes as the Partnership might or could do if personally present by one of its authorized signatories, hereby ratifying and confirming all that said attorney-in-fact shall lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has duly subscribed these presents as of February 22, 2005.

NORTHSTAR PARTNERSHIP, L.P.


By:		NorthStar Capital Investment Corp.,
		Its General Partner

By:	/s/ Richard J. McCready
Name:		Richard J. McCready
Title:		President

EX-99.13 13 a06-5838_1ex99d13.htm EXHIBIT 99

EXHIBIT 99.13

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS that NORTHSTAR CAPITAL INVESTMEST CORP. (the “NCIC”), as managing member of NCIC MHG Subsidiary LLC (the “Company”) does hereby make, constitute and appoint each of David T. Hamamoto, W. Edward Scheetz and Richard J. McCready (and any other employee of the NCIC designated in writing by one of the attorneys-in-fact), acting individually, its true and lawful attorney-in-fact, to execute and deliver in its name and on its behalf whether the Company is acting individually or as representative of others, any and all filings required to be made by the Company under the Securities Exchange Act of 1934, (as amended, the “Act”), with respect to securities which may be deemed to be beneficially owned by the Company under the Act, giving and granting unto each said attorney-in-fact power and authority to act in the premises as fully and to all intents and purposes as the Company might or could do if personally present by one of its authorized signatories, hereby ratifying and confirming all that said attorney-in-fact shall lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has duly subscribed these presents as of February 22, 2005.

NCIC MHG SUBSIDIARY LLC.


By:		NorthStar Capital Investment Corp.,
		Its Managing Member

By:	/s/ Richard J. McCready
Name:			Richard J. McCready
Title:			President

EX-99.14 14 a06-5838_1ex99d14.htm EXHIBIT 99

EXHIBIT 99.14

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS that I, DAVID T. HAMAMOTO, do hereby make, constitute and appoint each of W. Edward Scheetz, Marc Gordon, Richard Szymanski and Richard J. McCready, acting individually, my true and lawful attorney-in-fact, to execute and deliver in my name and on my behalf whether I am acting individually or as representative of others, any and all filings required to be made by me under the Securities Exchange Act of 1934, (as amended, the “Act”), with respect to securities which may be deemed to be beneficially owned by me under the Act, giving and granting unto each said attorney-in-fact power and authority to act in the premises as fully and to all intents and purposes as I might or could do if personally present by one of my authorized signatories, hereby ratifying and confirming all that said attorney-in-fact shall lawfully do or cause to be done by virtue hereof.

THIS POWER OF ATTORNEY shall remain in full force and effect until either revoked in writing by the undersigned or until such time as the undersigned is no longer required to make filings under the Act with respect to securities which may be deemed to be beneficially owned by the undersigned under the Act.

IN WITNESS WHEREOF, the undersigned has duly subscribed these presents as of February 22, 2005.

/s/ David T. Hamamoto
Signature

David T. Hamamoto
Print Name

EX-99.15 15 a06-5838_1ex99d15.htm EXHIBIT 99

EXHIBIT 99.15

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS that I, W. EDWARD SCHEETZ, do hereby make, constitute and appoint each of David T. Hamamoto, Marc Gordon, Richard Szymanski and Richard J. McCready, acting individually, my true and lawful attorney-in-fact, to execute and deliver in my name and on my behalf whether I am acting individually or as representative of others, any and all filings required to be made by me under the Securities Exchange Act of 1934, (as amended, the “Act”), with respect to securities which may be deemed to be beneficially owned by me under the Act, giving and granting unto each said attorney-in-fact power and authority to act in the premises as fully and to all intents and purposes as I might or could do if personally present by one of my authorized signatories, hereby ratifying and confirming all that said attorney-in-fact shall lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has duly subscribed these presents as of February 22, 2005.

/s/ W. Edward Scheetz
Signature

W. Edward Scheetz
Print Name

-----END PRIVACY-ENHANCED MESSAGE-----

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

1. Representations and Warranties of the Company and the Operating Company. The Company and the Operating Company jointly and severally represent and warrant to and agree with each of the Underwriters that:

(a) The Registration Statement has become effective; no stop order suspending the effectiveness of the Registration Statement is in effect, and no proceedings for such purpose are pending before or, to the knowledge of the Company or the Operating Company, threatened by the Commission.

(c) Any statistical and market-related data included in the Registration Statement, the Time of Sale Prospectus or the Prospectus are in all material respects based on or derived from sources that the Company believes to be reliable and accurate.

(d) Prior to the date of this Agreement, neither the Company nor the Operating Company has conducted any material business other than in connection with the Formation Transactions.

(k) The authorized capital stock of the Company conforms as to legal matters in all material respects to the description thereof contained in each of the Time of Sale Prospectus and the Prospectus.

(n) Each of the Company and the Operating Company has the power and authority to execute and deliver this Agreement, each Formation Agreement and the Revolving Credit Loan Documents to which it is a party and to consummate the transactions described herein and therein.

(o) This Agreement has been duly authorized, executed and delivered by each of the Company and the Operating Company.

(z) There has not occurred any material adverse change, or any development involving a prospective material adverse change, in the financial condition, or in the earnings, business or operations of the Morgans Hotel Business from that set forth in the Time of Sale Prospectus.

(ff) The Company and the Subsidiaries (i) are in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the

(kk) The Company and the Subsidiaries own or possess, or can acquire on reasonable terms, all material licenses, inventions, copyrights, know-how (including trade secrets and other confidential information, systems or procedures), trademarks, service marks and trade names currently employed by

2. Representations and Warranties of MHG. MHG represents and warrants to and agrees with each of the Underwriters that:

(b) This Agreement has been duly authorized, executed and delivered by MHG.

3. Representations and Warranties of the Selling Shareholders. Each Selling Shareholder, severally and not jointly, represents and warrants to and agrees with each of the Underwriters that:

6. Payment and Delivery. Payment for the Firm Shares to be sold by each Seller shall be made to such Seller in Federal or other funds immediately available in New York City against delivery of such Firm Shares for the

(a) Subsequent to the execution and delivery of this Agreement and prior to the Closing Date:

judgment, impracticable to market the Shares on the terms and in the manner contemplated in the Time of Sale Prospectus.

(c) The Underwriters shall have received on the Closing Date an opinion of Sullivan & Cromwell LLP, special counsel for the Company and the Operating Company, dated the Closing Date, substantially in the form attached hereto as Exhibit A.

(d) The Underwriters shall have received on the Closing Date an opinion of counsel for each Selling Shareholder, dated the Closing Date, substantially in the form attached hereto as Exhibit B.

(e) The Underwriters shall have received on the Closing Date an opinion, in form and substance satisfactory to the Underwriters, of Cravath, Swaine & Moore LLP, counsel for the Underwriters, dated the Closing Date.

(f) The Underwriters shall have received, on the date hereof a letter dated the date hereof from BDO Seidman, LLP, independent public accountants, substantially in the form attached hereto as Exhibit C.

(g) The Underwriters shall have received, on the Closing Date, a “bring-down” letter dated the Closing Date of BDO Seidman, LLP that shall use a “cut-off date” not earlier than the date hereof, and that is substantially in the form attached hereto as Exhibit D.

8. Covenants of the Company. In further consideration of the agreements of the Underwriters herein contained, the Company covenants with each Underwriter as follows:

(c) To furnish to you a copy of each proposed free writing prospectus to be prepared by or on behalf of, used by, or referred to by the Company and not to use or refer to any proposed free writing prospectus to which you reasonably object.

(g) To endeavor to qualify the Shares for offer and sale under the securities or “blue sky” laws of such jurisdictions as you shall reasonably request.

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