Exhibit 10.3

GUARANTY AGREEMENT

THIS GUARANTY AGREEMENT (this “Guaranty” ) is executed as of February 2, 2007, by MORGANS GROUP LLC , a Delaware limited liability company, having an address at 475 Tenth Avenue, New York, New York 10018, Attention: Marc Gordon, Chief Investment Officer (“Morgans Guarantor”), and by DLJ MB IV HRH, LLC , a Delaware limited liability company, having an address c/o DLJ Merchant Banking Partners, 11 Madison Avenue, New York, New York 10010, Attention: Ryan Sprott ( “DLJ Guarantor” ; and collectively with Morgans Guarantor, each, individually, a “Guarantor” , and collectively, “Guarantors” ), jointly and severally, for the benefit of COLUMN FINANCIAL, INC. , a Delaware corporation, having an address at 11 Madison Avenue, New York, New York 10010 (together with its successors and assigns, “Lender” ).

RECITALS:

A.            Pursuant to that certain Promissory Note, dated of even date herewith, executed by HRHH HOTEL/CASINO, LLC, a Delaware limited liability company ( “Hotel/Casino Borrower” ), HRHH CAFE, LLC, a Delaware limited liability company ( “Café Borrower” ), HRHH DEVELOPMENT, LLC, a Delaware limited liability company ( “Adjacent Borrower” ), HRHH IP, LLC, a Delaware limited liability company ( “IP Borrower” ), and HRHH GAMING, LLC, a Nevada limited liability company ( “Gaming Borrower” ; and each of Hotel/Casino Borrower, Café Borrower, Adjacent Borrower, IP Borrower and Gaming Borrower, individually, a “Borrower” , and collectively, “Borrowers” ), and payable to the order of Lender in the original principal amount of up to One Billion Three Hundred Sixty Million and 00/100 Dollars ($1,360,000,000.00) (as the same may be amended, restated, replaced, supplemented, or otherwise modified from time to time, the “Note” ), Borrowers have become indebted, and may from time to time be further indebted, to Lender with respect to a loan (the “Loan” ) made pursuant to that certain Loan Agreement, dated as of the date hereof, among Borrowers and Lender (as the same may be amended, restated, replaced, supplemented, or otherwise modified from time to time, the “Loan Agreement” ), which Loan is secured by, among other things, that certain Construction Deed of Trust, Assignment of Leases and Rents, Security Agreement and Financing Statement (Fixture Filing), dated as of the date hereof (as the same may be amended, restated, replaced, supplemented, or otherwise modified from time to time, the “Security Instrument” ), and further evidenced, secured or governed by other instruments and documents executed in connection with the Loan (together with the Note, the Loan Agreement and the Security Instrument, collectively, the “Loan Documents” ).

B.            Lender is not willing to make the Loan, or otherwise extend credit, to Borrowers unless each Guarantor unconditionally guarantees payment and performance to Lender of the Guaranteed Obligations (as herein defined).

C.            Each Guarantor is the owner of a direct or indirect interest in each Borrower, and each Guarantor will directly benefit from Lender’s making the Loan to Borrowers.

D.            All capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Loan Agreement.

NOW, THEREFORE, as an inducement to Lender to make the Loan to Borrowers, and to extend such additional credit as Lender may from time to time extend under the Loan Documents, and for $10.00 and other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, the parties do hereby agree as follows:

ARTICLE 1

NATURE AND SCOPE OF GUARANTY

1.1          Guaranty of Obligation .  Each Guarantor hereby jointly and severally, irrevocably and unconditionally guarantees to Lender and its successors and assigns the payment and performance of the Guaranteed Obligations as and when the same shall be due and payable, whether by lapse of time, by acceleration of maturity or otherwise.  Each Guarantor hereby jointly and severally, irrevocably and unconditionally covenants and agrees that it is liable for the Guaranteed Obligations as a primary obligor.

1.2          Definition of Guaranteed Obligations .  As used herein, the term “Guaranteed Obligations” means (a) the obligations and liabilities of each Borrower to Lender for any actual loss, damage (excluding any lost revenue, diminution of value and consequential damages), reasonable cost, reasonable expense, liability, claim and any other obligation incurred by Lender (including attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:

(i)            fraud or intentional misrepresentation by any Borrower, HRHI, any Guarantor or any of their respective principals, officers, agents or employees in connection with the Loan;

(ii)           physical waste to any Property arising from the intentional misconduct or gross negligence of any Borrower, HRHI, any Guarantor or any of their respective principals, officers, agents or employees and/or any removal of any asset forming a part of any Property in violation of the Loan Agreement or the other Loan Documents;

(iii)          intentionally omitted;

(iv)          the misappropriation or conversion by any Borrower, by any Person Controlled by any Borrower (including, without limitation, any Affiliated Manager, Liquor Manager who is an Affiliate of any Borrower or Gaming Operator who is an Affiliate of any Borrower), by any agent of any Borrower, or by any other Person with whom any Borrower shall collude or cooperate, of (A) any Insurance Proceeds paid by reason of any Casualty, to the extent so misappropriated or converted; (B) any Awards received in connection with a Condemnation, to the extent so misappropriated or converted; (C) any Rents or other Gross Income from Operations not delivered to Lender following and during the continuance of an Event of Default and not otherwise used to pay actual, customary Operating Expenses reflected on the Approved Annual Budget then in effect, including, without limitation, (I) any income, proceeds or other

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amounts received by any Borrower under the Gaming Sublease, and/or (II) without duplication of the foregoing clause (I) , any income, proceeds or revenue generated from gaming activities at any Property, in each of the foregoing instances, to the extent so misappropriated or converted; (D) any Rents paid more than one (1) month in advance in violation of this Agreement or the other Loan Documents, to the extent so misappropriated or converted; and/or (E) any security deposits, to the extent so misappropriated or converted;

(v)           the failure to pay (or to deposit into the Reserve Funds amounts sufficient to pay) all Taxes and all other costs giving rise to any Lien on any portion of any Property or the IP with priority over or equal to the Lien of the Loan Documents in violation of the Loan Agreement or the other Loan Documents, to the extent that there is sufficient Gross Income from Operations to make such payments (or deposits, as applicable);

(vi)          if any Borrower fails to maintain its status as a Special Purpose Entity as required pursuant to the terms of the Loan Agreement;

(vii)         if Borrowers fail to obtain Lender’s consent to any subordinate financing, deed of trust, mortgage or other voluntary lien encumbering any Property or the IP other than Permitted Encumbrances and Permitted IP Encumbrances;

(viii)        the failure to maintain insurance coverage under blanket insurance policies to the extent permitted under the Loan Agreement;

(ix)           if any of the events set forth in clauses (a), (b) or (c) of Section 5.2.11 of the Loan Agreement shall occur without the prior approval of Lender;

(x)            if any of the restrictions to Transfer set forth in Section 5.2.10 of the Loan Agreement or in any of the other Loan Documents are violated;

(xi)           if Lender or any Affiliate thereof shall succeed to the interest of HRHI under the Gaming Sublease following a foreclosure, deed in lieu of foreclosure or similar transfer, any actual loss, cost, damage or expense (including, without limitation, reasonable attorneys’ fees expenses) suffered by Lender or such Affiliate as a result of: (A) any act, omission, neglect or default of HRHI under the Gaming Sublease, (B) any claim, defense, counterclaim or offset which the Gaming Operator may have under the Gaming Sublease against HRHI, (C) any obligation to make any payment to the Gaming Operator under the Gaming Sublease which was required to be made by or on behalf of HRHI prior to the time Lender or such Affiliate succeeded to HRHI’s interest under the Gaming Sublease, (D) any monies deposited with HRHI under the Gaming Sublease, except to the extent such monies are actually received by Lender or such Affiliate, (E) any obligation to complete or permit the construction of any improvements under the Gaming Sublease arising while HRHI was the

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sublandlord under the Gaming Sublease, and/or (F) any default by HRHI under the Gaming Lease beyond applicable notice and cure periods;

(xii)          if HRHI or any Affiliate thereof shall send a notice to Gaming Operator under Section 6(a), (c) or (d), as applicable, of the Gaming Recognition Agreement which conflicts with any notice theretofore sent by Lender to Gaming Operator under said Section 6(a), (c) or (d), as applicable, of the Gaming Recognition Agreement; provided , however , that the liability under this clause (xii) shall be limited to all fees and costs incurred by Gaming Operator in bringing and pursuing any interpleader action contemplated by said Section 6(a), (c) or (d), as applicable, and only to the extent that Gaming Operator seeks to recover and/or does recover such fees and expenses from Lender;

(xiii)         if HRHI shall fail to provide Gaming Employees for the operation of gaming activities at the Hotel/Casino Property as and to the extent required pursuant to Paragraph 7of the HRHI Gaming Agreement;

(xiv)        in the event that Gaming Borrower shall ever become the Gaming Operator pursuant to Article XII of the Loan Agreement, if Gaming Borrower thereafter shall fail to provide gaming operation services for the Hotel/Casino Property following an Event of Default or a foreclosure of the Security Instrument as and to the extent required pursuant to Section 12.1(e) of the Loan Agreement;

(xv)         in the event that HRHI, Gaming Borrower, any other Borrower or any Affiliate thereof shall be the Liquor Manager, if HRHI, Gaming Borrower, such other Borrower or such Affiliate thereof shall fail to provide liquor management services for the Hotel/Casino Property following an Event of Default or a foreclosure of the Security Instrument as and to the extent required (A) as to HRHI, pursuant to Sections 5(a) or 5(b) of the Assignment of Liquor Management Agreement, as applicable, and (B) as to Gaming Borrower, any other Borrower or any Affiliate thereof, pursuant to Section 5.1.23(c) of the Loan Agreement;

(xvi)        in connection with the $250,000 lease termination fee pursuant to Section 3.2(B) of that certain Lease by and between PM Realty, LLC and HRHI, as landlord, and Mr. Chow of Las Vegas, LLC, as tenant, dated December 24, 2004; and/or

(xvii)       as a result of the imposition of any tax provided in NRS §§375.020 and 375.023 with respect to the merger transaction contemplated under the Merger Agreement and/or the subsequent conveyance of the Hotel/Casino Property (i) to HRHH Gaming Junior Mezz, LLC, and then (ii) to HRHH Gaming Senior Mezz, LLC, and then (iii) to Hotel/Casino Borrower, provided, however, that any liability under this clause (xvii) shall terminate upon the payment in full of the Debt.

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(b)           the entire amount of the Debt in the event of:  (i) any Borrower, HRHI or both Guarantors filing a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; or (ii) the filing of an involuntary petition against any Borrower, HRHI or both Guarantors under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by or on behalf of any Person other than Lender and/or the Administrative Agent, and such petition is not dismissed within ninety (90) days after filing, or any Borrower, or any Affiliate of any of them who Controls any Borrower, or HRHI or both Guarantors, solicit or cause to be solicited petitioning creditors for any involuntary petition against any Borrower, HRHI or both Guarantors from any Person (other than if requested to do so by or on behalf of Lender and/or the Administrative Agent); (iii) any Borrower, HRHI or both Guarantors filing an answer consenting to, or any Borrower, HRHI or both Guarantors, or any Affiliate of any of them who Controls any Borrower, otherwise consenting to or acquiescing or joining in, any involuntary petition filed against any Borrower, HRHI or both Guarantors, by any other Person (other than if filed by or on behalf of Lender and/or the Administrative Agent) under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iv) any Borrower, HRHI or both Guarantors, or any Affiliate of any of them who Controls any Borrower, consenting to or acquiescing or joining in an application for the appointment of a custodian, receiver, trustee or examiner for any Borrower or any portion of any Property or any portion of the IP (other than any such appointment at the request or petition of Lender and/or the Administrative Agent); or (v) any Borrower, HRHI or both Guarantors voluntarily making an assignment for the benefit of creditors (other than Lender and/or the Administrative Agent), or admitting, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due; unless, in the case of any of the foregoing clauses (i), (ii), (iii), (iv) or (v) as it relates to or affects both Guarantors, one or more guarantors acceptable to Lender in its sole discretion remains or becomes a guarantor of the Loan.

1.3          Nature of Guaranty .  This Guaranty is an irrevocable, absolute, joint and several, continuing guaranty of payment and performance and not a guaranty of collection.  This Guaranty may not be revoked by any Guarantor and shall continue to be effective with respect to any Guaranteed Obligations arising or created after any attempted revocation by any Guarantor and after (if such Guarantor is a natural person) such Guarantor’s death (in which event this Guaranty shall be binding upon such Guarantor’s estate and such Guarantor’s legal representatives and heirs).  The fact that at any time or from time to time the Guaranteed Obligations may be increased or reduced shall not release or discharge the obligation of any Guarantor to Lender with respect to the Guaranteed Obligations.  This Guaranty may be enforced by Lender and any subsequent holder of the Note and shall not be discharged by the assignment or negotiation of all or part of the Note.

1.4          Guaranteed Obligations Not Reduced by Offset .  The Guaranteed Obligations and the liabilities and obligations of Guarantors to Lender hereunder, shall not be reduced, discharged or released because or by reason of any existing or future offset, claim or defense of any Borrower (except for the defense of the payment of the Guaranteed Obligations), or any other party, against Lender or against payment of the Guaranteed Obligations, whether such offset, claim or defense arises in connection with the Guaranteed Obligations (or the transactions creating the Guaranteed Obligations) or otherwise.

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1.5          Payment By Guarantors .  If all or any part of the Guaranteed Obligations shall not be punctually paid when due, whether at demand, maturity, acceleration or otherwise, Guarantors shall, immediately upon demand by Lender, and without presentment, protest, notice of protest, notice of non-payment, notice of intention to accelerate the maturity, notice of acceleration of the maturity, or any other notice whatsoever (except as otherwise provided herein), pay (and each agrees jointly and severally to pay) in lawful money of the United States of America, the amount due on the Guaranteed Obligations to Lender at Lender’s address as set forth herein.  Such demand(s) may be made at any time coincident with or after the time for payment of all or part of the Guaranteed Obligations, and may be made from time to time with respect to the same or different items of Guaranteed Obligations.  Such demand shall be deemed made, given and received in accordance with the notice provisions hereof.

1.6          No Duty To Pursue Others .  To the extent permitted by applicable law, it shall not be necessary for Lender (and each Guarantor hereby waives any rights which such Guarantor may have to require Lender), in order to enforce the obligations of any Guarantor hereunder, first to (a) institute suit or exhaust its remedies against any Borrower or others liable on the Loan or the Guaranteed Obligations or any other person, (b) enforce Lender’s rights against any collateral which shall ever have been given to secure the Loan, (c) enforce Lender’s rights against any other guarantors of the Guaranteed Obligations, (d) join any Borrower or any others liable on the Guaranteed Obligations in any action seeking to enforce this Guaranty, (e) exhaust any remedies available to Lender against any collateral which shall ever have been given to secure the Loan, or (f) resort to any other means of obtaining payment of the Guaranteed Obligations. Lender shall not be required to mitigate damages or take any other action to reduce, collect or enforce the Guaranteed Obligations.

1.7          Waivers .  Each Guarantor agrees to the provisions of the Loan Documents, and, to the extent permitted by applicable law, hereby waives notice of (a) any loans or advances made by Lender to any Borrower, (b) acceptance of this Guaranty, (c) any amendment or extension of the Note, the Loan Agreement or of any other Loan Documents, (d) the execution and delivery by any Borrower and Lender of any other loan or credit agreement or of any Borrower’s execution and delivery of any promissory notes or other documents arising under the Loan Documents or in connection with any Property, (e) the occurrence of any breach by any Borrower or an Event of Default, (f) Lender’s transfer or disposition of the Guaranteed Obligations, or any part thereof, (g) sale or foreclosure (or posting or advertising for sale or foreclosure) of any collateral for the Guaranteed Obligations, (h) protest, proof of non-payment or default by any Borrower, and (i) any other action at any time taken or omitted by Lender, and, generally, all demands and notices of every kind in connection with this Guaranty, the Loan Documents, any documents or agreements evidencing, securing or relating to any of the Guaranteed Obligations and/or the obligations hereby guaranteed.

1.8          Payment of Expenses .  In the event that any Guarantor should breach or fail to timely perform any provisions of this Guaranty, Guarantors jointly and severally agree to pay to Lender and shall promptly upon written demand by Lender, pay Lender all reasonable costs and expenses (including court costs and attorneys’ fees) incurred by Lender in the enforcement hereof or the preservation of Lender’s rights hereunder.  Notwithstanding the foregoing, in the event that (A) Lender employs counsel to enforce the provisions of this Guaranty and (B) Lender has sold or transferred any interests in the Note, then Guarantors shall only be responsible for the

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attorney’s fees and expenses of the counsel of only one Lender.  The covenant contained in this Section 1.8 shall survive the payment and performance of the Guaranteed Obligations.

1.9          Effect of Bankruptcy .  In the event that, pursuant to any insolvency, bankruptcy, reorganization, receivership or other debtor relief law, or any judgment, order or decision thereunder, Lender must rescind or restore any payment, or any part thereof, received by Lender in satisfaction of the Guaranteed Obligations, as set forth herein, any prior release or discharge from the terms of this Guaranty given to any Guarantor by Lender shall be without effect, and this Guaranty shall remain in full force and effect.  It is the intention of each Borrower and each Guarantor that none of Guarantors’ obligations hereunder shall be discharged except by Guarantors’ performance of such obligations and then only to the extent of such performance.

1.10        Waiver of Subrogation, Reimbursement and Contribution .  Notwithstanding anything to the contrary contained in this Guaranty, as long as the Debt remains outstanding and to the extent permitted by applicable law, each Guarantor hereby unconditionally and irrevocably waives, releases and abrogates any and all rights such Guarantor may now or hereafter have under any agreement, at law or in equity (including, without limitation, any law subrogating such Guarantor to the rights of Lender), to assert any claim against or seek contribution, indemnification or any other form of reimbursement from any Borrower or any other party liable for payment of any or all of the Guaranteed Obligations for any payment made by any Guarantor under or in connection with this Guaranty or otherwise.

1.11        Borrower .  The term “Borrower” as used herein shall include any new or successor corporation, association, partnership (general or limited), limited liability company, joint venture, trust or other individual or organization formed as a result of any merger, reorganization, sale, transfer, devise, gift or bequest of any Borrower or any interest in any Borrower.

ARTICLE 2

EVENTS AND CIRCUMSTANCES NOT REDUCING OR DISCHARGING GUARANTORS’ OBLIGATIONS

Each Guarantor hereby consents and agrees to each of the following, and agrees that such Guarantor’s obligations under this Guaranty shall not be released, diminished, impaired, reduced or adversely affected by any of the following, and, to the extent permitted by applicable law,  waives any common law, equitable, statutory or other rights (including, without limitation, rights to notice) which such Guarantor might otherwise have as a result of or in connection with any of the following even if any of the following is materially prejudicial to any or all Guarantors:

2.1          Modifications .  Any renewal, extension, increase, modification, alteration or rearrangement of all or any part of the Guaranteed Obligations, the Note, the Security Instrument, the Loan Agreement, the other Loan Documents, or any other document, instrument, contract or understanding between any Borrower and Lender, or any other parties, pertaining to the Guaranteed Obligations or any failure of Lender to notify any Guarantor of any such action.

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2.2          Adjustment .  Any adjustment, indulgence, forbearance or compromise that might be granted or given by Lender to any Borrower or any Guarantor or any other Person.

2.3          Condition of Borrowers or Guarantors .  The insolvency, bankruptcy, arrangement, adjustment, composition, liquidation, disability, dissolution or lack of power of any Borrower, any Guarantor or any other party at any time liable for the payment of all or part of the Guaranteed Obligations; or any dissolution of any Borrower or any Guarantor, or any sale, lease or transfer of any or all of the assets of any Borrower or any Guarantor, or any changes in the shareholders, partners or members of any Borrower or any Guarantor; or any reorganization of any Borrower or any Guarantor.

2.4          Invalidity of Guaranteed Obligations .  The invalidity, illegality or unenforceability of all or any part of the Guaranteed Obligations, or any document or agreement executed in connection with the Guaranteed Obligations, for any reason whatsoever, including, without limitation, the fact that (a) the Guaranteed Obligations, or any part thereof, exceed the amount permitted by law, (b) the act of creating the Guaranteed Obligations or any part thereof is ultra vires, (c) the officers or representatives executing the Note, the Security Instrument, the Loan Agreement or the other Loan Documents or otherwise creating the Guaranteed Obligations acted in excess of their authority, (d) the Guaranteed Obligations violate applicable usury laws, (e) any Borrower has valid defenses (other than the payment of the Guaranteed Obligations), claims or offsets (whether at law, in equity or by agreement) which render the Guaranteed Obligations wholly or partially uncollectible from any Borrower, (f) the creation, performance or repayment of the Guaranteed Obligations (or the execution, delivery and performance of any document or instrument representing part of the Guaranteed Obligations or executed in connection with the Guaranteed Obligations, or given to secure the repayment of the Guaranteed Obligations) is illegal, uncollectible or unenforceable, or (g) the Note, the Security Instrument, the Loan Agreement or any of the other Loan Documents have been forged or otherwise are irregular or not genuine or authentic, it being agreed that each Guarantor shall remain jointly and severally liable hereon regardless of whether any Borrower, any other Guarantor or any other Person be found not liable on the Guaranteed Obligations or any part thereof for any reason.

2.5          Release of Obligors .  Any full or partial release of the liability of any Borrower on the Guaranteed Obligations, or any part thereof, or of any co-guarantors, or any other Person now or hereafter liable, whether directly or indirectly, jointly, severally, or jointly and severally, to pay, perform, guarantee or assure the payment of the Guaranteed Obligations, or any part thereof, it being recognized, acknowledged and agreed by each Guarantor that such Guarantor may be required to pay the Guaranteed Obligations in full without assistance or support of any other party, and such Guarantor has not been induced to enter into this Guaranty on the basis of a contemplation, belief, understanding or agreement that any other Person (including any other Guarantor) will be liable to pay or perform the Guaranteed Obligations, or that Lender will look to any other Person (including any other Guarantor) to pay or perform the Guaranteed Obligations.

2.6          Other Collateral .  The taking or accepting of any other security, collateral or guaranty, or other assurance of payment, for all or any part of the Guaranteed Obligations.

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2.7          Release of Collateral .  Any release, surrender, exchange, subordination, deterioration, waste, loss or impairment (including, without limitation, negligent, willful, unreasonable or unjustifiable impairment) of any collateral, property or security at any time existing in connection with, or assuring or securing payment of, all or any part of the Guaranteed Obligations.

2.8          Care and Diligence .  The failure of Lender or any other party to exercise diligence or reasonable care in the preservation, protection, enforcement, sale or other handling or treatment of all or any part of such collateral, property or security, including, but not limited to, any neglect, delay, omission, failure or refusal of Lender (a) to take or prosecute any action for the collection of any of the Guaranteed Obligations or (b) to foreclose, or initiate any action to foreclose, or, once commenced, prosecute to completion any action to foreclose upon any security therefor, or (c) to take or prosecute any action in connection with any instrument or agreement evidencing or securing all or any part of the Guaranteed Obligations.

2.9          Unenforceability .  The f