LOAN AGREEMENT

Exhibit 10.1

LOAN AGREEMENT

Dated as of August 1, 2008

Between

HRHH DEVELOPMENT TRANSFEREE, LLC,
as Borrower

and

COLUMN FINANCIAL, INC.,
as Lender

TABLE OF CONTENTS

EXHIBITS AND SCHEDULES

LOAN AGREEMENT

           THIS LOAN AGREEMENT , dated as of August 1, 2008 (as amended, restated, replaced, supplemented or otherwise modified from time to time, this “ Agreement ”), between 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 ”), and HRHH DEVELOPMENT TRANSFEREE, LLC , a Delaware limited liability company, having its principal place of business c/o Morgans Hotel Group Co., 475 Tenth Avenue, New York, New York 10018, Attention: Marc Gordon, Chief Investment Officer (“ Borrower ”).

W I T N E S S E T H :

           WHEREAS , Borrower desires to obtain the Loan (as hereinafter defined) from Lender; and

           WHEREAS , Lender is willing to make the Loan to Borrower, subject to and in accordance with the terms and conditions of this Agreement and the other Loan Documents (as hereinafter defined);

           NOW, THEREFORE , in consideration of the making of the Loan by Lender and the covenants, agreements, representations and warranties set forth in this Agreement, and for Ten Dollars ($10.00) and other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, the parties hereto hereby covenant, agree, represent and warrant as follows:

ARTICLE I.
DEFINITIONS; PRINCIPLES OF CONSTRUCTION

           Section 1.1 Definitions For all purposes of this Agreement, except as otherwise expressly required or unless the context clearly indicates a contrary intent:

          “ Acceptable Counterparty ” shall mean any (i) counterparty to the Interest Rate Cap Agreement that has and shall maintain, until the expiration of the applicable Interest Rate Cap Agreement, a long-term unsecured debt rating of at least “AA-” by S&P and “Aa3” from Moody’s, which rating shall not include a “t” or otherwise reflect a termination risk, or (ii) Credit Suisse or any Affiliate of Credit Suisse that is in the business of issuing interest rate caps.

          “ Additional Insolvency Opinion ” shall have the meaning set forth in Section 4.1.30(d) hereof.

          “ Affiliate ” shall mean, as to any Person, any other Person that, directly or indirectly, is in Control of, is Controlled by or is under common Control with such Person or is a director or officer of such Person or of an Affiliate of such Person.

          “ Affiliated Manager ” shall mean any Manager in which Borrower or any Guarantor has, directly or indirectly, any legal, beneficial or economic interest.

          “ Annual Budget ” shall mean the operating budget, including all planned Capital Expenditures, for the Property, prepared by Borrower or Manager (if applicable) for the applicable Fiscal Year or other period.

          “ Applicable A Interest Rate ” shall have the meaning set forth in the definition of “Spread” set forth below..

          “ Applicable Interest Rate ” shall mean the rate or rates at which the Outstanding Principal Balance bears interest from time to time in accordance with the provisions of Section 2.2.3 hereof, subject to the terms of Section 5.2.11(b)(ii) hereof.

          “ Approved Annual Budget ” shall have the meaning set forth in Section 5.1.11(d) hereof.

          “ Asbestos Survey ” shall have the meaning set forth in Section 5.1.21 hereof.

          “ Assignment of Leases ” shall mean that certain first priority Assignment of Leases and Rents, dated as of the date hereof, from Borrower, as assignor, to Lender, as assignee, assigning to Lender all of Borrower’s right, title and interest in and to the Leases and Rents of the Property as security for the Loan, as the same hereafter may be amended, restated, replaced, supplemented or otherwise modified from time to time.

          “ Assignment of Management Agreement ” shall mean, if at any time the Property is being managed by a Manager, an assignment of management agreement and subordination of management fees among Lender, Borrower and such Manager of the Property, substantially in the form of Schedule IX attached hereto and made a part hereof, with such changes thereto as shall be reasonably acceptable to Lender, Borrower and such Manager, or in such other form as shall be reasonably acceptable to Lender, Borrower and such Manager, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

           “Assumption” shall have the meaning set forth in Section 5.2.11 hereof.

           “Assumption Fee” shall have the meaning set forth in Section 5.2.11 hereof.

          “ Assumption Prepayment Fee ” shall mean an amount equal to (a) the Outstanding Principal Balance being assumed by Gansevoort Borrower pursuant to the Assumption, multiplied by (b) LIBOR on the date of the Assumption, then (c) divided by 360, then (d) multiplied by the number of days between the date of the Assumption and the original Initial Maturity Date.

          “ Award ” shall mean any compensation paid by any Governmental Authority in connection with a Condemnation of all or any part of the Property.

          “ Bankruptcy Action ” shall mean with respect to any Person (a) such Person filing a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (b) the filing of an involuntary petition against such Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (c) such Person filing an answer consenting to or otherwise acquiescing in or joining in any involuntary petition

filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or soliciting or causing to be solicited petitioning creditors for any involuntary petition from any Person; (d) such Person consenting to or acquiescing in or joining in an application for the appointment of a custodian, receiver, trustee, or examiner for such Person or any portion of the Property; or (e) such Person making an assignment for the benefit of creditors, or admitting, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due.

          “ Bankruptcy Code ” shall mean 11 U.S.C. § 101 et seq. , as the same may be amended from time to time.

          “ Basic Carrying Costs ” shall mean, for any period, the sum of the following costs associated with the Property: (a) Taxes, (b) Other Charges, and (c) Insurance Premiums.

          “ Borrower ” shall have the meaning set forth in the introductory paragraph hereto, together with its successors and assigns.

          “ Breakage Costs ” shall have the meaning set forth in Section 2.2.3(h) hereof.

          “ Business Day ” shall mean any day other than a Saturday, Sunday or any other day on which national banks in New York, New York are not open for business.

          “ Capital Expenditures ” shall mean, for any period, the amount expended for items capitalized under GAAP (including expenditures for building improvements or major repairs, leasing commissions and tenant improvements, but excluding capitalized interest).

          “ Cash Management Account ” shall have the meaning set forth in Section 2.6.2(a) hereof.

          “ Cash Management Agreement ” shall mean that certain Cash Management Agreement, dated as of the date hereof, between Lender and Borrower, as the same hereafter may be amended, restated, replaced, supplemented or otherwise modified from time to time.

          “ Casualty ” shall have the meaning set forth in Section 6.2 hereof.

          “ Closing Date ” shall mean August 1, 2008.

          “ Code ” shall mean the Internal Revenue Code of 1986, as amended, as it may be further amended from time to time, and any successor statutes thereto, and applicable U.S. Department of Treasury regulations issued pursuant thereto in temporary or final form.

          “ Collateral Assignment of Hard Rock Pool License ” shall mean that certain Collateral Assignment of Hard Rock Pool License, dated as of the date hereof, executed by Borrower in connection with the Loan for the benefit of Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

          “ Collateral Assignment of Intellectual Property License Agreement ” shall mean that certain Collateral Assignment of Intellectual Property License Agreement, dated as of the date

hereof, executed by Borrower in connection with the Loan for the benefit of Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

          “ Collateral Assignment of Interest Rate Cap ” shall mean that certain Collateral Assignment of Interest Rate Cap Agreement, dated as of the date hereof, executed by Borrower in connection with the Loan for the benefit of Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

          “ Condemnation ” shall mean a temporary or permanent taking by any Governmental Authority as the result or in lieu or in anticipation of the exercise of the right of condemnation or eminent domain, of all or any part of the Property, or any interest therein or right accruing thereto, including any right of access thereto or any change of grade affecting the Property or any part thereof.

          “ Confidential Information ” shall have the meaning set forth in Section 10.17(b) hereof.

          “ Constituent Member ” shall mean any direct member or partner in Borrower or any Guarantor and any Person that, directly or indirectly through one or more other partnerships, limited liability companies, corporations or other entities is a stockholder, member or partner in Borrower or any Guarantor.

          “ Control ” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of management, policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. “ Controlled ” and “ Controlling ” shall have correlative meanings.

          “ Counterparty ” shall mean, with respect to the Interest Rate Cap Agreement, SMBC Derivative Products Limited, and with respect to any Replacement Interest Rate Cap Agreement, any substitute Acceptable Counterparty.

          “ Credit Suisse ” shall mean Credit Suisse Securities (USA) LLC and its successors in interest.

          “ Debt ” shall mean the aggregate outstanding principal amount set forth in, and evidenced by, this Agreement and the Note together with all interest accrued and unpaid thereon and all other sums (including, if applicable, any Breakage Costs and/or Prepayment Premium) due to Lender in respect of the Loan under the Note, this Agreement, the Mortgage and the other Loan Documents.

          “ Debt Service ” shall mean, with respect to any particular period of time, scheduled interest payments due under this Agreement and the Note.

          “ Default ” shall mean the occurrence of any event hereunder or under any other Loan Document which, but for the giving of notice or passage of time, or both, would be an Event of Default.

          “ Default Rate ” shall mean a rate per annum equal to the lesser of (a) the Maximum Legal Rate and (b) four percent (4%) above the Applicable Interest Rate.

          “ Determination Date ” shall mean, with respect to any Interest Period, the date that is two (2) London Business Days prior to the fifteenth (15th) day of the calendar month in which such Interest Period commences; provided , that with respect to the initial Interest Period, the Determination Date was two (2) London Business Days prior to the Closing Date.

          “ Development Agreement ” shall mean that certain Hard Rock Hotel Project Development Agreement by and between the County of Clark, State of Nevada, HRHH Development, and Hotel/Casino Property Owner, recorded January 30, 2008 in the Official Records of Clark County, Nevada in Book 20080130, Inst. 04074 of Official Records.

          “ Disclosure Document ” shall mean a prospectus, prospectus supplement, private placement memorandum, offering memorandum, offering circular or other offering documents, in each case in preliminary or final form, used to offer Securities in connection with a Securitization.

          “ DLJ Entities ” shall have the meaning set forth in Section 10.16(c) hereof.

          “ DLJ Guarantor ” shall mean DLJ MB IV HRH, LLC, a Delaware limited liability company, together with its successors and permitted assigns.

          “ DLJMB Parties ” shall have the meaning set forth in Section 9.4 hereof.

          “ Eligible Account ” shall mean a separate and identifiable “deposit account”, as such term is defined in any applicable Uniform Commercial Code, from all other funds held by the holding institution that is either (a) an account or accounts maintained with a federal or state-chartered depository institution or trust company which complies with the definition of Eligible Institution or (b) a segregated trust account or accounts maintained with a federal or state chartered depository institution or trust company acting in its fiduciary capacity which, in the case of a state chartered depository institution or trust company, is subject to regulations substantially similar to 12 C.F.R. §9.10(b), having in either case a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by federal and state authority. An Eligible Account will not be evidenced by a certificate of deposit, passbook or other instrument.

          “ Eligible Institution ” shall mean a depository institution or trust company, the short term unsecured debt obligations or commercial paper of which are rated at least “A-1+” by S&P, “P-1” by Moody’s and “F-1+” by Fitch in the case of accounts in which funds are held for thirty (30) days or less (or, in the case of accounts in which funds are held for more than thirty (30) days, the long term unsecured debt obligations of which are rated at least “AA” by Fitch and S&P and “Aa2” by Moody’s).

          “ Embargoed Person ” shall have the meaning set forth in Section 4.1.35 hereof.

          “ Environmental Indemnity ” shall mean that certain Borrower Environmental Indemnity Agreement, dated as of the date hereof, executed by Borrower in connection with the Loan for the benefit of Lender, as the same hereafter may be amended, restated, replaced, supplemented or otherwise modified from time to time.

          “ ERISA ” shall mean the Employee Retirement Income Security Act of 1974, as amended.

          “ Event of Default ” shall have the meaning set forth in Section 8.1(a) hereof.

          “ Excess Cash Flow ” shall have the meaning set forth in Section 2.6.2(b) hereof.

          “ Exchange Act ” shall have the meaning set forth in Section 9.3 hereof.

          “ Exchange Act Filing ” shall have the meaning set forth in Section 5.1.11(f) hereof.

          “ Excluded Taxes ” shall mean, with respect to any Lender or any other recipient of any payment to be made by or on account of any obligation of Borrower hereunder, (a) income or franchise taxes imposed on (or measured by reference to) its net income by the United States of America, or by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, or any other jurisdiction in which it is subject to tax solely as a result of any present or former connection between such Lender or other recipient, as applicable, and the jurisdiction imposing such tax other than a present or former connection solely as a result of the activities and transactions specifically contemplated by this Agreement, (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction described in clause (a) of this definition, and (c) in the case of a Non-U.S. Lender, any withholding tax that is imposed on amounts payable to such Non-U.S. Lender at the time such Non-U.S. Lender designates a new lending office, unless the designation of such new lending office was at the request of Borrower, or is attributable to such Non-U.S. Lender’s failure to comply with Section 2.2.3(e)(iii) hereof, except to the extent that such Non-U.S. Lender was entitled, at the time of designation of a new lending office, to receive additional amounts from Borrower with respect to such withholding tax pursuant to Section 2.2.3(e) hereof.

          “ Excusable Delay ” shall mean a delay due to acts of god, governmental restrictions, stays, judgments, orders, decrees, enemy actions, civil commotion, fire, casualty, strikes, work stoppages, shortages of labor or materials or other causes beyond the reasonable control of Borrower and not arising out of (a) the negligence, willful misconduct or illegal act of Borrower or any Affiliate of Borrower, or (b) any cause or circumstance resulting from the insolvency, bankruptcy or lack of funds of Borrower, any Guarantor or any Affiliate of Borrower or any Guarantor.

          “ Extended Maturity Date ” shall have the meaning set forth in Section 2.7 hereof.

          “ Extension Option ” shall have the meaning set forth in Section 2.7 hereof.

          “ Extension Term ” have the meaning set forth in Section 2.7 hereof.

          “ Extra Non-Accrued Interest ” shall have the meaning set forth in Section 2.4.5 hereof.

          “ Extraordinary Expense ” shall have the meaning set forth in Section 5.1.11(e) hereof.

          “ FF&E ” shall mean all furniture, furnishings, fixtures, equipment, apparatus and personal property required for the operation of the Property.

          “ First Extended Maturity Date ” shall mean February 9, 2010, as the same may be extended pursuant to Section 5.2.11(b)(iii) hereof.

          “ First Extension Option ” shall have the meaning set forth in Section 2.7.1 hereof.

          “ First Extension Term ” shall have the meaning set forth in Section 2.7.1 hereof.

          “ Fiscal Year ” shall mean each twelve (12) month period commencing on January 1 and ending on December 31 during each year of the term of the Loan.

          “ Fitch ” shall mean Fitch, Inc.

          “ Five Acre Parcel ” shall mean that certain approximately five (5) acre portion of the Property more specifically identified on Schedule X attached hereto and made a part hereof.

           “Five Acre Prepayment Premium” shall mean, with respect to the payment of the Five Acre Release Price prior to the Initial Maturity Date, an amount equal to the product of (a) the Five Acre Release Price, (b) the Applicable A Interest Rate on the date of the payment of the Five Acre Release Price, and (c) a fraction, the numerator of which shall equal the actual number of days from the date of the payment of the Five Acre Release Price through the Initial Maturity Date and the denominator of which is 360.

          “ Five Acre Release Price ” shall mean, in connection with the Assumption and the Transfer of the Six Acre Parcel, $20,000,000.00 for the release of the Five Acre Parcel.

          “ Five Acre Release ” shall have the meaning set forth in Section 2.5.1(a) hereof.

          “ GAAP ” shall mean generally accepted accounting principles in the United States of America as of the date of the applicable financial report.

          “ Gansevoort Borrower ” shall mean a newly-formed Special Purpose Entity owned and controlled by one or more entities comprising the Gansevoort Group.

           “Gansevoort Group” shall mean those entities identified on the organizational chart attached hereto and made a part hereof as Schedule XII .

          “ Gansevoort Guarantor ” shall mean William Achenbaum.

          “ Governmental Authority ” shall mean any court, board, agency, commission, office or other authority of any nature whatsoever for any governmental unit (federal, state, county, district, municipal, city or otherwise) whether now or hereafter in existence.

          “ Gross Income from Operations ” shall mean, for any period, all Rents and all other income and proceeds (whether in cash or on credit, and computed in accordance with GAAP), received by Borrower or by Manager (if applicable) (on behalf of Borrower) for the use,

occupancy or enjoyment of the Property, or any part thereof, or received by Borrower or Manager (if applicable) for the sale of any goods, services or other items sold on or provided from the Property in the ordinary course of the Property’s operation, including, without limitation: (a) all income and proceeds received under Leases; (b) all income and proceeds from business interruption, rental interruption and use and occupancy insurance with respect to the operation of the Property (after deducting therefrom all necessary costs and expenses incurred in the adjustment or collection thereof); (c) all Awards for temporary use (after deducting therefrom all costs incurred in the adjustment or collection thereof); (d) all income and proceeds from judgments, settlements and other resolutions of disputes with respect to matters which would be includable in this definition of “Gross Income from Operations” if received in the ordinary course of the Property’s operation (after deducting therefrom all necessary costs and expenses incurred in the adjustment or collection thereof); and (e) interest on credit accounts, rent concessions or credits, and other required pass-throughs and interest on Reserve Funds; but “Gross Income from Operations” shall exclude (1) gross receipts received by lessees, licensees or concessionaires of the Property (but not any percentage rents or similar payments derived therefrom); (2) income and proceeds from the sale or other disposition of goods, FF&E, capital assets and other items not in the ordinary course of the operation of the Property; (3) federal, state and municipal excise, sales and use taxes collected directly from customers, patrons or guests of the Property as a part of or based on the sales price of any goods, services or other items, such as gross receipts or equivalent taxes; (4) Awards (except to the extent provided in clause (c) above); (5) refunds, rebates, discounts and other similar credits of amounts not included in Operating Expenses at any time and uncollectible accounts; (6) the proceeds of any financing, refinancing or sale of the Property (or all of the membership interests in Borrower) or the FF&E; (7) other non-recurring income or proceeds resulting other than from the use or occupancy of the Property, or any part thereof, or other than from the sale of goods, services or other items sold on or provided from the Property in the ordinary course of business; (8) security deposits received under any Leases, unless and until the same shall be applied in accordance with the terms of the applicable Lease(s); (9) all proceeds from insurance to the extent not included in income pursuant to clause (b) above; and (10) any disbursements to Borrower from any of the Reserve Funds and any interest earned thereon.

          “ Guarantor ” shall mean each of the Morgans Guarantor and the DLJ Guarantor.

          “ Guarantor Transfer ” shall have the meaning set forth in Section 5.2.10(c)(D) hereof.

          “ Hard Rock Resort Hotel Project ” shall have the meaning set forth in the Development Agreement.

          “ Harmon/Lamar Pedestrian Bridge ” shall have the meaning set forth in the Development Agreement.

          “ Hotel/Casino Property ” shall mean the property adjacent to the Property’s eastern boundary line on which is located the Hard Rock Hotel and Casino.

          “ Hotel/Casino Property Owner ” shall mean HRHH Hotel/Casino, LLC, a Delaware limited liability company, the owner of the Hotel/Casino Property.

          “ HRHH Development ” shall mean HRHH Development, LLC, a Delaware limited liability company.

          “ HR Holdings ” shall mean Hard Rock Hotel Holdings, LLC, a Delaware limited liability company.

          “ Improvements ” shall have the meaning set forth in the granting clause of the Mortgage.

          “ Indebtedness ” of a Person, at a particular date, means the sum (without duplication) at such date of (a) all indebtedness or liability of such Person (including, without limitation, amounts for borrowed money and indebtedness in the form of mezzanine debt and preferred equity); (b) obligations evidenced by bonds, debentures, notes, or other similar instruments; (c) obligations for the deferred purchase price of property or services (including trade obligations for which such Person or its assets are liable); (d) obligations under letters of credit (for which such Person is liable if such amounts were advanced thereunder or for which such Person is liable to reimburse); (e) obligations under acceptance facilities; (f) all guaranties, endorsements (other than for collection or deposit in the ordinary course of business) and other contingent obligations to purchase, to provide funds for payment, to supply funds, to invest in any Person or entity, or otherwise to assure a creditor against loss for which funds are required to be paid; and (g) obligations secured by any Liens, for which such Person or its assets are liable.

          “ Indemnified Liabilities ” shall have the meaning set forth in Section 10.13(b) hereof.

          “ Indemnified Persons ” shall have the meaning set forth in Section 9.3 hereof.

          “ Indemnified Taxes ” shall mean taxes other than Excluded Taxes.

          “ Independent Director ” or “ Independent Manager ” shall mean a Person who is not at the time of initial appointment, or at any time while serving as a director or manager, as applicable, and has not been at any time during the preceding five (5) years: (a) a stockholder, director (with the exception of serving as the Independent Director or Independent Manager of Borrower), officer, employee, partner, member (other than a “special member” or “springing member”), manager, attorney or counsel of Borrower or any Affiliate thereof; (b) a customer, supplier or other Person who derives any of its purchases or revenues from its activities with Borrower or any Affiliate thereof; (c) a Person Controlling or under common Control with any such stockholder, director, officer, employee, partner, member, manager, customer, supplier or other Person; or (d) a member of the immediate family of any such stockholder, director, officer, employee, partner, member, manager, customer, supplier or other Person. A natural Person who satisfies the foregoing definition other than subparagraph (b) shall not be disqualified from serving as an Independent Director or Independent Manager of Borrower if such natural Person is an independent director or independent manager provided by a nationally recognized company that provides professional independent directors or independent managers and that also provides other corporate services in the ordinary course of its business. A natural Person who otherwise satisfies the foregoing definition except for being the independent director or independent manager of a “special purpose entity” affiliated with Borrower that does not own a direct or indirect equity interest in Borrower shall not be disqualified from serving as an Independent Director or Independent Manager of Borrower if such individual is at the time of initial

appointment, or at any time while serving as a Independent Director of Borrower, an Independent Director or Independent Manager of a “special purpose entity” affiliated with Borrower (other than any Person that owns a direct or indirect equity interest in Borrower) if such natural Person is an independent director or independent manager provided by a nationally-recognized company that provides professional independent directors or independent managers.

          “ Initial Maturity Date ” shall mean August 9, 2009, as the same may be extended pursuant to Section 5.2.11(b)(i) hereof.

          “ Insolvency Opinion ” shall mean that certain non-consolidation opinion letter dated as of the date hereof delivered by Richards, Layton & Finger, LLP in connection with the Loan.

           “Insurance Agreement” shall mean that certain letter agreement regarding allocation of insurance costs and proceeds, dated as of the date hereof, from Borrower and accepted and agreed to by HR Holdings, HRHH Development and Hotel/Casino Property Owner.

          “ Insurance Premiums ” shall have the meaning set forth in Section 6.1(b) hereof.

          “ Insurance Proceeds ” shall mean all insurance proceeds to which Lender is entitled from time to time under any of the Policies required to be maintained by Borrower pursuant to Section 6.1(a) hereof.

          “ Interest Period ” shall mean, with respect to any Payment Date, the period commencing on the ninth (9th) day of the preceding calendar month and terminating on and including the eighth (8th) day of the calendar month in which such Payment Date occurs; provided , however , that no Interest Period shall end later than the Maturity Date (other than for purposes of calculating interest at the Default Rate), and the initial Interest Period began on and included the Closing Date and shall end on and include August 8, 2008.

          “ Interest Rate Cap Agreement ” shall mean, as applicable, an interest rate cap agreement (together with the confirmation and schedules relating thereto) in form and substance reasonably satisfactory to Lender by and between Borrower and an Acceptable Counterparty or a Replacement Interest Rate Cap Agreement.

          “ Interest Reserve Account ” shall have the meaning set forth in Section 7.2.1 hereof.

          “ Interest Reserve Fund ” shall have the meaning set forth in Section 7.2.1 hereof.

          “ Internal Approvals ” shall have the meaning set forth in Section 12.2(b) hereof.

          “ IP Sublicense Agreement ” shall mean that certain Intellectual Property License Agreement, dated as of the date hereof, by and between HRHH IP, LLC, a Delaware limited liability company, as licensor, and Borrower, as owner.

          “ Lease ” shall mean any lease, sublease or subsublease, easement, letting, license, concession or other agreement (whether written or oral and whether now or hereafter in effect) pursuant to which any Person is granted a possessory interest in, or right to use or occupy all or any portion of any space in the Property, and (a) every modification, amendment or other

agreement relating to such lease, sublease, subsublease, easement or other agreement entered into in connection with such lease, sublease, subsublease, easement or other agreement, and (b) every guarantee of the performance and observance of the covenants, conditions and agreements to be performed and observed by the other party thereto.

          “ Legal Requirements ” shall mean, with respect to the Property, all federal, state, county, municipal and other governmental statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and injunctions of Governmental Authorities affecting the Property or any part thereof, or the construction, use, alteration or operation thereof, or any part thereof, whether now or hereafter enacted and in force, including, without limitation, the Americans with Disabilities Act of 1990, as amended, and all permits, licenses and authorizations and regulations relating thereto, and all covenants, agreements, restrictions and encumbrances contained in any instruments, either of record or known to Borrower, at any time in force affecting the Property or any part thereof, including, without limitation, any which may (a) require repairs, modifications or alterations in or to the Property or any part thereof, or (b) in any way limit the use and enjoyment thereof.

          “ Lender ” shall have the meaning set forth in the introductory paragraph hereto.

          “ Lender’s Rejection Notice ” shall have the meaning set forth in Section 12.2(c) hereof.

          “ Liabilities ” shall have the meaning set forth in Section 9.3 hereof.

          “ LIBOR ” shall mean, with respect to each Interest Period, the rate (expressed as a percentage per annum and rounded upward, if necessary, to the next nearest 1/100,000th of 1% (0.00001%)) for deposits in U.S. dollars, for a one-month period, that appears on Telerate Page 3750 (or the successor thereto) as of 11:00 a.m., London time, on the related Determination Date. If such rate does not appear on Telerate Page 3750 as of 11:00 a.m., London time, on such Determination Date, LIBOR shall be the arithmetic mean of the offered rates (expressed as a percentage per annum) for deposits in U.S. dollars for a one-month period that appear on the Reuters Screen Libor Page as of 11:00 a.m., London time, on such Determination Date, if at least two such offered rates so appear. If fewer than two such offered rates appear on the Reuters Screen Libor Page as of 11:00 a.m., London time, on such Determination Date, Lender shall request the principal London office of any four major reference banks in the London interbank market selected by Lender in its reasonable discretion to provide such bank’s offered quotation (expressed as a percentage per annum) to prime banks in the London interbank market for deposits in U.S. dollars for a one-month period as of 11:00 a.m., London time, on such Determination Date for amounts of not less than U.S. $1,000,000. If at least two such offered quotations are so provided, LIBOR shall be the arithmetic mean of such quotations. If fewer than two such quotations are so provided, Lender shall request any three major banks in New York City selected by Lender in its reasonable discretion to provide such bank’s rate (expressed as a percentage per annum) for loans in U.S. dollars to leading European banks for a one-month period as of approximately 11:00 a.m., New York City time on the applicable Determination Date for amounts of not less than U.S. $1,000,000. If at least two such rates are so provided, LIBOR shall be the arithmetic mean of such rates. LIBOR shall be determined conclusively by Lender or its agent, absent manifest error.

          “ LIBOR Loan ” shall mean the Loan at such time as interest thereon accrues at a rate of interest based upon LIBOR.

          “ Lien ” shall mean any mortgage, deed of trust, lien, pledge, hypothecation, assignment, security interest, or any other easement, restriction, covenant, encumbrance, charge or transfer of, on or affecting Borrower, the Property, any portion thereof or any interest therein, including, without limitation, any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, the filing of any financing statement, and mechanic’s, materialmen’s and other similar liens and encumbrances.

          “ Loan ” shall mean the loan made by Lender to Borrower pursuant to this Agreement in the principal amount of FIFTY MILLION AND NO/100 DOLLARS ($50,000,000.00), which shall be evidenced by the Note.

          “ Loan Documents ” shall mean, collectively, this Agreement, the Note, the Mortgage, the Assignment of Leases, the Environmental Indemnity, the O&M Agreement, the Assignment of Management Agreement, if applicable, the Non-Recourse Guaranty, the Cash Management Agreement, the Collateral Assignment of Interest Rate Cap, the Insurance Agreement, the Collateral Assignment of Hard Rock Pool License, the Collateral Assignment of Intellectual Property License Agreement, the Option Agreement and all other documents executed and/or delivered in connection with the Loan, as any of the foregoing hereafter may be amended, restated, replaced, supplemented or otherwise modified from time to time.

          “ Lockbox Account ” shall have the meaning set forth in Section 2.6.1(a) hereof.

          “ Lockbox Bank ” shall mean Wells Fargo Bank, National Association, or any successor or permitted assigns thereof.

           “Lockbox Implementation Date” shall have the meaning set forth in Section 2.6.1(d) .

          “ London Business Day ” shall mean any day other than a Saturday, Sunday or any other day on which commercial banks in London, England are not open for business.

          “ Management Agreement ” shall mean, as applicable, (i) a management agreement with a Qualified Manager which shall be reasonably acceptable to Lender in form and substance, or (ii) a management agreement with a Qualified Manager substantially in the same form and substance as a Management Agreement being replaced, provided , with respect to the foregoing subclause (i) , after the occurrence of a Securitization, Lender, at its option, may require that Borrower obtain confirmation from the applicable Rating Agencies that such management agreement will not cause a downgrade, withdrawal or qualification of the then current rating of the Securities or any class thereof.

          “ Manager ” shall mean a Qualified Manager who is managing the Property.

          “ Material Economic Terms ” shall have the meaning set forth in Section 12.1 hereof.

          “ Maturity Date ” shall mean the Initial Maturity Date or, if applicable, the Extended Maturity Date, or such other date on which the final payment of principal of the Note becomes

due and payable as therein or herein provided, whether at such stated maturity date, by declaration of acceleration, or otherwise.

          “ Maximum Legal Rate ” shall mean the maximum non-usurious interest rate, if any, that at any time or from time to time may be contracted for, taken, reserved, charged or received on the indebtedness evidenced by the Note and as provided for herein or the other Loan Documents, under the laws of such state or states whose laws are held by any court of competent jurisdiction to govern the interest rate provisions of the Loan.

          “ Moody’s ” shall mean Moody’s Investors Service, Inc.

          “ Monthly Interest Payment ” shall have the meaning set forth in Section 2.3.1 hereof.

          “ Morgans Guarantor ” shall mean Morgans Group LLC, a Delaware limited liability company, together with its successors and permitted assigns.

          “ Mortgage ” shall mean that certain first priority Deed of Trust, Assignment of Leases and Rents, Security Agreement and Financing Statement (Fixture Filing), dated as of the date hereof, executed and delivered by Borrower as security for the Loan and encumbering the Property, as the same hereafter may be amended, restated, replaced, supplemented or otherwise modified from time to time.

          “ Named Knowledge Parties ” shall have the meaning set forth in Section 4.3 hereof.

          “ Net Operating Income ” shall mean, for any period, the amount obtained by subtracting Operating Expenses for the Property for such period from Gross Income from Operations for such period.

          “ Net Proceeds ” shall mean the proceeds of any Award after deduction of Lender’s reasonable costs and expenses (including, but not limited to, reasonable counsel fees), if any, in collecting same.

           “Net Worth Requirements ” shall mean those requirements set forth on Schedule V attached hereto and made a part hereof.

          “ New Mezzanine Loan ” shall have the meaning set forth in Section 9.7 hereof.

          “ Non-Recourse Guaranty ” shall mean that certain Guaranty Agreement, dated as of the date hereof, from Guarantors to Lender, as the same hereafter may be amended, restated, replaced, supplemented or otherwise modified from time to time.

          “ Non-U.S. Lender ” shall mean any Lender that is organized under the laws of a jurisdiction other than laws of the United States of America, any State thereof or the District of Columbia.

          “ Note ” shall mean that certain Promissory Note of even date herewith in the principal amount of FIFTY MILLION AND NO/100 DOLLARS ($50,000,000.00), made by Borrower in

favor of Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

          “ Notice ” shall have the meaning set forth in Section 10.6 hereof.

          “ NRS ” shall mean the Nevada Revised Statutes.

          “ O&M Agreement ” shall mean that certain Operations and Maintenance Agreement, dated as of the date hereof, between Borrower and Lender given in connection with the Loan, as the same hereafter may be amended, restated, replaced, supplemented or otherwise modified from time to time.

          “ Obligations ” shall mean, collectively, Borrower’s obligations for the payment of the Debt and the performance of the Other Obligations.

          “ Officer’s Certificate ” shall mean a certificate delivered to Lender by Borrower or a Guarantor, as applicable, which is signed by an authorized officer or manager of Borrower or such Guarantor or a Constituent Member thereof, as applicable, which shall in all events be subject to Section 9.4 hereof.

          “ Operating Expenses ” shall mean, for any period, the total of all expenditures, computed in accordance with GAAP, of whatever kind during such period relating to the operation, maintenance and/or management of the Property that are incurred on a regular monthly or other periodic basis, including without limitation, utilities, ordinary repairs, maintenance, environmental and engineering (but excluding utilities), insurance, license fees, property taxes and assessments, advertising expenses, management fees payable to a third party Manager, if any, payroll and related taxes, computer processing charges, tenant improvements and leasing commissions, operational equipment or other lease payments as approved by Lender, and other similar costs, but excluding depreciation and amortization with respect to the Property, Debt Service, Capital Expenditures, Extraordinary Expenses, the cost of any items incurred at a Manager’s expense pursuant to its Management Agreement (if applicable), non-recurring expenses and contributions to any reserves required under the Loan Documents.

          “ Operating Permits ” shall have the meaning set forth in Section 4.1.22 hereof.

           “Option Agreement” shall mean that certain Option Agreement , dated as of the date hereof, given by HRHH Development in favor of Lender for the purchase by Lender of the Option Parcel, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

          “ Option Parcel ” shall mean a certain approximately four (4) acre parcel more specifically identified in the Option Agreement and owned by HRHH Development.

          “ Other Charges ” shall mean all ground rents, maintenance charges, impositions other than Taxes, and any other charges, including, without limitation, vault charges and license fees for the use of vaults, chutes and similar areas adjoining the Property, now or hereafter levied or assessed or imposed against the Property or any part thereof.

          “ Other Obligations ” shall mean (a) the performance of all obligations of Borrower contained herein; (b) the performance of each obligation of Borrower contained in any other Loan Document; and (c) the performance of each obligation of Borrower contained in any renewal, extension, amendment, modification, consolidation, change of, or substitution or replacement for, all or any part of this Agreement, the Note or any other Loan Documents.

          “ Other Taxes ” means any and all stamp or documentary taxes or any other excise or property taxes, or similar governmental charges or levies imposed, enacted or to become effective after the date hereof, arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement. Other Taxes shall not include Excluded Taxes.

          “ Outstanding Principal Balance ” shall mean, as of any date, the outstanding principal balance of the Loan.

          “ Payment Date ” shall mean the ninth (9th) day of each calendar month during the term of the Loan or, if such day is not a Business Day, the immediately preceding Business Day. The first Payment Date shall be September 9, 2008.

          “ Pedestrian Grade Separation System ” shall have the meaning set forth in the Development Agreement.

          “ Permitted Encumbrances ” shall mean, with respect to the Property, collectively (a) the Liens and security interests created by the Loan Documents, (b) all Liens, encumbrances and other matters disclosed in the Title Insurance Policy relating to the Property, (c) Liens, if any, for Taxes imposed by any Governmental Authority not yet delinquent, (d) such other title and survey exceptions, documents, agreements or instruments as Lender has approved or may approve in writing in Lender’s reasonable discretion, (e) easements, restrictions, covenants and/or reservations which are necessary for the operation of the Property that do not and would not have a material adverse effect on (i) the business operations, economic performance, assets, financial condition, equity, contingent liabilities, material agreements or results of operations of Borrower, any Guarantor or the Property or (ii) the value of, or cash flow from, the Property, (f) zoning restrictions and/or laws affecting the Property that do not and would not have a material adverse effect on (i) the business operations, economic performance, assets, financial condition, equity, contingent liabilities, material agreements or results of operations of Borrower, any Guarantor or the Property or (ii) the value of, or cash flow from, the Property, and (g) any other Liens which are being duly contested in accordance with the provisions of Section 5.1.1 or 5.1.2 hereof or Section 3.6(b) of the Mortgage, but only for so long as such contest shall be permitted pursuant to said Section 5.1.1 or 5.1.2 hereof or Section 3.6(b) of the Mortgage, as applicable.

          “ Permitted Investments ” shall have the meaning set forth in the Cash Management Agreement.

          “ Permitted Temporary Improvements ” shall mean those temporary improvements described on Schedule VIII attached hereto and made a part hereof, together with any other temporary improvements approved by Lender in its reasonable opinion from time to time, which are permitted to be erected or constructed on the Property for staging purposes in connection

with the construction being performed at the Hard Rock Hotel and Casino on the Hotel/Casino Property.

          “ Person ” shall mean any individual, corporation, partnership, joint venture, limited liability company, estate, trust, unincorporated association, any federal, state, county or municipal government or any bureau, department or agency thereof and any fiduciary acting in such capacity on behalf of any of the foregoing.

          “ Policy ” and “ Policies ” shall have the meaning specified in Section 6.1(b) hereof.

           “Premium Generating Prepayment” shall have the meaning set forth in Section 2.4.6 hereof.

           “Prepayment Premium” shall mean, with respect to any prepayment of the Loan prior to the Initial Maturity Date (other than from the proceeds of the Five Acre Release Price), an amount equal to the product of (a) the principal amount of such prepayment, (b) the Applicable Interest Rate on the date of prepayment, and (c) a fraction, the numerator of which shall equal the actual number of days from the date of such prepayment through the Initial Maturity Date and the denominator of which is 360.

          “ Prescribed Laws ” shall mean, collectively, (a) the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56) (The USA PATRIOT Act), (b) Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, and relating to Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism, (c) the International Emergency Economic Power Act, 50 U.S.C. §1701 et. seq., and (d) all other Legal Requirements relating to money laundering or terrorism.

          “ Prime Rate ” shall mean the annual rate of interest publicly announced by Citibank, N.A. in New York, New York, as its base rate, as such rate shall change from time to time. If Citibank, N.A. ceases to announce a base rate, Prime Rate shall mean the rate of interest published in The Wall Street Journal from time to time as the “Prime Rate”. If more than one “Prime Rate” is published in The Wall Street Journal for a day, the average of such “Prime Rates” shall be used, and such average shall be rounded up to the nearest one-hundredth (100th) of one percent (1%). If The Wall Street Journal ceases to publish the “Prime Rate”, Lender shall select an equivalent publication that publishes such “Prime Rate”, and if such “Prime Rates” are no longer generally published or are limited, regulated or administered by a governmental or quasigovernmental body, then Lender shall select a comparable interest rate index.

          “ Prime Rate Loan ” shall mean the Loan at such time as interest thereon accrues at a rate of interest based upon the Prime Rate.

          “ Prime Rate Spread ” shall mean the difference (expressed as the number of basis points) between (a) LIBOR plus the Spread on the date LIBOR was last applicable to the Loan and (b) the Prime Rate on the date that LIBOR was last applicable to the Loan; provided , however , in no event shall such difference be a negative number.

          “ Property ” shall mean that or those certain parcel(s) of real property more particularly described on Schedule I attached hereto and made a part hereof, the Improvements thereon (including any Permitted Temporary Improvements) and all personal property owned by Borrower and encumbered by the Mortgage, together with all rights pertaining to such property and Improvements (including any Permitted Temporary Improvements), as more particularly described in the granting clause of the Mortgage and referred to therein as the “Property”.

          “ Provided Information ” shall mean any and all financial and other information prepared and provided by Borrower, any Manager (if applicable) or any Guarantor or under the supervision or control of Borrower, any Manager (if applicable) or any Guarantor (but excluding third party independent reports) with respect to the Property, Borrower, any Manager (if applicable) and/or any Guarantor.

          “ Publicly Traded Company ” shall mean any Person with a class of securities traded on a national or international securities exchange and/or registered under Section 12(b) or 12(g) of the Securities Exchange Act or 1934.

          “ Qualified Guarantor Transferee ” shall mean any one or more of the following:

          (i) an investment trust, bank, saving and loan association, insurance company, trust company, commercial credit corporation, pension plan, pension fund or pension advisory firm, mutual fund, government entity or plan;

          (ii) an investment company, money management firm or “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act, as amended, or an entity that is an “accredited investor” within the meaning of Regulation D under the Securities Act, as amended;

          (iii) an institution substantially similar to any of the entities described in the foregoing clause (i) or (ii) ;

          (iv) any entity Controlling or Controlled by or under common Control with any of the entities described in the foregoing clause (i) or (ii) ;

          (v) any Person (a) with a long-term unsecured debt rating from the Rating Agencies of at least “BBB” by S&P and “Baa” from Moody’s or (b) who, together with its Affiliates, (x) owns in its entirety, or (y) owns a general partnership interest, managing membership interest or other equivalent ownership and management interest in, an entity that owns, or (z) operates, at least ten (10) commercial properties or other parcels of land acquired for commercial development; or

          (vi) any other Person (including opportunity funds) that has been approved as a Qualified Guarantor Transferee by the Rating Agencies.

          “ Qualified Manager ” shall mean, in the reasonable judgment of Lender, a reputable and experienced property management organization (which may be an Affiliate of Borrower or any Guarantor) possessing experience in managing properties similar in size, scope, use and value as the Property, provided , that (i) after a Securitization has occurred, Borrower shall have obtained

prior written confirmation from the applicable Rating Agencies that management of the Property by such Person will not cause a downgrade, withdrawal or qualification of the then current ratings of the Securities or any class thereof, and (ii) if such Person is an Affiliate of Borrower, (A) if such Affiliate was covered in the Insolvency Opinion or in any subsequent Additional Insolvency Opinion, Borrower shall have obtained and delivered to Lender an update of such Insolvency Opinion or Additional Insolvency Opinion, as applicable, which addresses the new relationship between such Affiliate and Borrower, or (B) if such Affiliate was not covered in the Insolvency Opinion or in any subsequent Additional Insolvency Opinion, Borrower shall have obtained and delivered to Lender an Additional Insolvency Opinion with respect to such Affiliate and Borrower.

          “ Qualified Real Estate Guarantor ” shall mean (i) Morgans Group LLC or (ii) a Qualified Guarantor Transferee that (i) is regularly engaged in the business of making or owning commercial real estate loans (including mezzanine loans with respect to commercial real estate), (ii) operating hospitality or other commercial properties, or (iii) employing executive level employees with at least ten (10) years of experience with regard to the same as part of a business segment or business sector of a Qualified Guarantor Transferee.

          “ Rating Agencies ” shall mean, prior to the final Securitization of the Loan, each of S&P, Moody’s and Fitch, or any other nationally recognized statistical rating agency which has been designated by Lender and, after the final Securitization of the Loan, shall mean any of the foregoing that have rated any of the Securities.

          “ Re-Dating ” shall have the meaning set forth in Section 9.2 hereof.

          “ Refinancing Loan ” shall mean a loan or loans (i) the proceeds of which is/are used in whole or in part to refinance the Loan, and/or (ii) is/are secured by a lien on the Property and/or the direct or indirect ownership interests in Borrower.

          “ Register ” shall have the meaning set forth in Section 10.24 hereof.

          “ Regulation AB ” shall mean Regulation AB under the Securities Act and the Exchange Act, as such Regulation may be amended from time to time.

          “ Related Loan ” shall mean a loan to an Affiliate of Borrower or secured by a Related Property, that is included in a Securitization with the Loan.

          “ Related Property ” shall mean a parcel of real property, together with improvements thereon and personal property related thereto, that is “related” within the meaning of the definition of Significant Obligor, to the Property.

          “ Release Request ” shall have the meaning set forth in Section 2.5.1(a) hereof.

          “ Rents ” shall mean all rents (including, without limitation, percentage rents), rent equivalents, moneys payable as damages (including payments by reason of the rejection of a Lease in a Bankruptcy Action) or in lieu of rent or rent equivalents, royalties (including, without limitation, all oil and gas or other mineral royalties and bonuses), income, receivables, receipts, revenues, deposits (including, without limitation, security deposits and utility deposits),

accounts, cash, issues, profits, charges for services rendered, all other amounts payable as rent under any Lease or other agreement relating to the Property, and all other payments and consideration of whatever form or nature received by or paid to or for the account of or benefit of Borrower, any Manager (if applicable) or any of their respective agents or employees from any and all sources arising from or attributable to the Property, and proceeds, if any, from business interruption or other loss of income insurance.

          “ Replacement Interest Rate Cap Agreement ” shall mean an interest rate cap agreement from an Acceptable Counterparty with terms substantially identical to the Interest Rate Cap Agreement except that the same shall be effective in connection with replacement of the Interest Rate Cap Agreement following a downgrade of the long-term unsecured debt rating of the Counterparty; provided , that with respect to any Replacement Interest Rate Cap Agreement to be delivered by Borrower to Lender in connection with Borrower’s exercise of any Extension Option, the strike price shall be the Strike Price applicable to such Extension Option being exercised; and, provided , further , that to the extent any such interest rate cap agreement does not meet the foregoing requirements, a “Replacement Interest Rate Cap Agreement” shall be such interest rate cap agreement reasonably approved in writing by Lender.

          “ Reserve Funds ” shall mean, collectively, the Tax and Insurance Escrow Fund, the Interest Reserve Fund and any other escrow fund established pursuant to the Loan Documents.

          “ Restoration ” shall mean the repair and restoration of any Permitted Temporary Improvement on the Property after a Casualty.

          “ Restricted Party ” shall mean, collectively, Borrower, HR Holdings and each Guarantor.

          “ Right of First Offer ” shall have the meaning set forth in Section 12.1 hereof.

          “ Right of First Offer Notice ” shall have the meaning set forth in Section 12.1 hereof.

          “ Right of First Offer Information and Materials ” shall have the meaning set forth in Section 12.2(b) hereof.

          “ ROFO Term Sheet ” shall have the meaning set forth in Section 12.2(d) hereof.

          “ S&P ” shall mean Standard & Poor’s Ratings Group, a division of the McGraw-Hill Companies.

          “ Sale or Pledge ” shall mean a voluntary or involuntary sale, conveyance, assignment, transfer, encumbrance or pledge of, or a grant of option with respect to, a legal or beneficial interest.

          “ Second Extended Maturity Date ” shall mean August 9, 2010, as the same may be extended pursuant to Section 5.2.11(b)(iii) hereof.

          “ Second Extension Option ” shall have the meaning set forth in Section 2.7.2 hereof.

          “ Second Extension Term ” shall have the meaning set forth in Section 2.7.2 hereof.

          “ Securities ” shall have the meaning set forth in Section 9.1(a) hereof.

          “ Securities Act ” shall have the meaning set forth in Section 9.3 hereof.

          “ Securitization ” shall have the meaning set forth in Section 9.1(a) hereof.

          “ Servicer ” shall have the meaning set forth in Section 9.6 hereof.

          “ Servicing Agreement ” shall have the meaning set forth in Section 9.6 hereof.

          “ Severed Loan Documents ” shall have the meaning set forth in Section 8.2(c) hereof.

          “ Significant Obligor ” shall have the meaning set forth in Item 1101(k) of Regulation AB under the Securities Act.

          “ Site Work ” shall mean certain work necessary to prepare the Six Acre Parcel for construction, including grading, grubbing and clearing the Six Acre Parcel of all debris to a smooth and safe surface, but excluding any permanent improvement, excavation of foundations or erection of any structure.

          “ Six Acre Parcel ” shall mean that certain approximately six (6) acre portion of the Property more specifically identified on Schedule XI attached hereto and made a part hereof.

          “ Special Purpose Entity ” shall mean a limited partnership or limited liability company that since the date of its formation and at all times on and after the date thereof, has complied with and shall at all times comply with the following requirements:

          (a) was, is and will be organized solely for the purpose of (i) (A) acquiring, developing, constructing, owning, holding, selling, leasing, transferring, exchanging, managing and operating the Property and incidental personal and intangible property related thereto, (B) owning all of the membership interests in one or more Subsidiary Transferees, (C) refinancing the Property in connection with repayment of the Loan, and/or (D) transacting lawful business that is incident, necessary and appropriate to accomplish any of the foregoing; or (ii) acting as a general partner of the limited partnership that owns the Property or managing member of the limited liability company that owns the Property;

          (b) has not been and is not engaged in, and will not engage in, any business unrelated to (i) (A) the construction, financing, acquisition, development, ownership, management or operation of the Property and incidental personal and intangible property related thereto, or (B) owning all of the membership interests in one or more Subsidiary Transferees, (ii) acting as general partner of the limited partnership that owns the Property, or (iii) acting as managing member of the limited liability company that owns the Property;

          (c) has not had, does not have and will not have any assets other than those related to the Property or the membership interests in one or more Subsidiary Transferees, or, if such entity is a general partner in a limited partnership, its general partnership interest in the limited

partnership that owns the Property, or, if such entity is a managing member of a limited liability company, its membership interest in the limited liability company that owns the Property;

          (d) has not engaged, sought or consented to, and to the fullest extent permitted by law, will not engage in, seek or consent to, any: (i) dissolution, winding up, liquidation, consolidation, merger or sale of all or substantially all of its assets outside of its ordinary course of business and other than as expressly permitted in this Agreement; (ii) other than as expressly permitted in this Agreement, transfer of partnership or membership interests (if such entity is a general partner in a limited partnership or a managing member in a limited liability company); or (iii) amendment of its limited partnership agreement, articles of organization, certificate of formation or operating agreement (as applicable) with respect to the matters set forth in this definition unless Lender issues its prior written consent, which consent shall not be unreasonably withheld, and, after the occurrence of a Securitization, the confirmation in writing from the applicable Rating Agencies that such amendment will not, in and of itself, result in a downgrade, withdrawal or qualification of the then current ratings assigned to any Securities or any class thereof in connection with any Securitization;

          (e) if such entity is a limited partnership, has had, now has, and will have, as its only general partners, Special Purpose Entities that are limited liability companies;

          (f) if such entity is a limited liability company with more than one member, has had, now has and will have at least one member that is a Special Purpose Entity that is a corporation that has at least two (2) Independent Directors or a limited liability company that has at least two (2) Independent Managers and that, in either instance, owns at least one-tenth of one percent (.10%) of the equity of the limited liability company;

          (g) if such entity is a limited liability company with only one member, has been, now is, and will be, a limited liability company organized in the State of Delaware that (i) has as its only member a non-managing member; (ii) has at least two (2) Independent Managers and has not caused or allowed and will not cause or allow the taking of any “Material Action” (as defined in such entity’s operating agreement) without the unanimous affirmative vote of one hundred percent (100%) of the member and such entity’s two (2) Independent Managers; (iii) at least one (1) springing member (or two (2) springing members if such springing members are natural persons who will replace a member of such entity seriatim not simultaneously) that will become a member of such entity upon the occurrence of an event causing the member to cease to be a member of such limited liability company; and (iv) whose membership interests constitute and will constitute “certificated securities” (as defined in the Uniform Commercial Code of the States of New York and Delaware);

          (h) if such entity is (i) a limited liability company, has had, now has and will have an operating agreement, or (ii) a limited partnership, has had, now has and will have a limited partnership agreement, that, in each case, provides that such entity will not: (A) to the fullest extent permitted by law, take any actions described in Subsection (d)(i) above; (B) engage in any other business activity, or amend its organizational documents with respect to the matters set forth in this definition, in each instance, without the prior written consent of Lender, which consent shall not be unreasonably withheld, and, after the occurrence of a Securitization, confirmation in writing from the applicable Rating Agencies that engaging in such other business

activity or such amendment, as applicable, will not, in and of itself, result in a downgrade, withdrawal or qualification of the then current ratings assigned to any Securities or any class thereof in connection with any Securitization; or (C) without the affirmative vote of two (2) Independent Managers and of all the partners or members of such entity, as applicable (or the vote of two (2) Independent Managers of its general partner or managing member, if applicable), file a bankruptcy or insolvency petition or otherwise institute insolvency proceedings with respect to itself or to any other entity in which it has a direct or indirect legal or beneficial ownership interest;

          (i) has been, is and intends to remain solvent and has paid and will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same have or shall become due, and has maintained, is maintaining and intends to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations; provided , however , this provision shall not require the equity owner(s) of such entity to make any additional capital contributions;

          (j) has not failed and will not fail to correct any known misunderstanding regarding the separate identity of such entity;

          (k) other than as provided in the Cash Management Agreement or in any Management Agreement, has maintained and will maintain its accounts, books and records separate from any other Person and has filed and will file its own tax returns, except to the extent that it has been or is (i) required to file consolidated tax returns by law; or (ii) treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law;

          (l) has maintained and will maintain its own records, books, resolutions (if any) and agreements;

          (m) other than as provided in the Cash Management Agreement or in any Management Agreement, (i) has not commingled and will not commingle its funds or assets with those of any other Person; and (ii) has not participated and will not participate in any cash management system with any other Person;

          (n) has held and will hold its assets in its own name;

          (o) has conducted and will conduct its business in its name or in a name franchised or licensed to it by an entity other than an Affiliate, except for services rendered under a business management services agreement with an Affiliate that complies with the terms contained in Subsection (cc) below, so long as the manager, or equivalent thereof, under such business management services agreement holds itself out as an agent of such Special Purpose Entity;

          (p) has maintained and will maintain its financial statements, accounting records and other entity documents separate from any other Person and has not permitted and will not permit its assets to be listed as assets on the financial statement of any other entity except as required by GAAP (or such other accounting basis acceptable to Lender); provided , however , that Borrower’s assets may be included in a consolidated financial statement of its Affiliate, provided that such assets shall also be listed on such Special Purpose Entity’s own separate balance sheet;

          (q) has paid and will pay its own liabilities and expenses, including the salaries of its own employees (if any), out of its own funds and assets, and has maintained and will maintain, or will enter into a contract with an Affiliate to maintain, which contract shall be reasonably satisfactory to Lender in form and substance and shall be subject to the requirements of clause (cc) below, a sufficient number of employees (if any) in light of its contemplated business operations; provided , however , this provision shall not require the equity owner(s) of such entity to make any additional capital contributions;

          (r) has observed and will observe all Delaware partnership or limited liability company formalities, as applicable;

          (s) has not incurred and will not incur any Indebtedness other than (i) the Debt, Taxes and Other Charges, and (ii) unsecured trade payables and operational debt not evidenced by a note and in an aggregate amount not exceeding $25,000.00; provided that any Indebtedness incurred pursuant to subclause (ii) shall be (A) paid within sixty (60) days of the date incurred (other than attorneys’ and other professional fees) and (B) incurred in the ordinary course of business;

          (t) has not assumed or guaranteed or become obligated for, and will not assume or guarantee or become obligated for, the debts of any other Person and has not held out and will not hold out its credit as being available to satisfy the obligations of any other Person except as permitted pursuant to this Agreement; except, if such entity is a general partner of a limited partnership, in such entity’s capacity as general partner of such limited partnership or a member of a limited liability company, in such entity’s capacity as a member of such limited liability company;

          (u) has not acquired and will not acquire obligations or securities of its partners, members or shareholders or any other Affiliate;

          (v) has allocated and will allocate fairly and reasonably any overhead expenses that are shared with any Affiliate, including, but not limited to, paying for shared office space and services performed by any employee of an Affiliate; provided , however , to the extent invoices for such services are not allocated and separately billed to each entity, there is a system in place that provides that the amount thereof that is to be allocated among the relevant parties will be reasonably related to the services provided to each such party;

          (w) has maintained and used, now maintains and uses and will maintain and use separate invoices and checks bearing its name. The invoices and checks utilized by the Special Purpose Entity or utilized to collect its funds or pay its expenses have borne and shall bear its own name and have not borne and shall not bear the name of any other entity unless such entity is clearly designated as being the Special Purpose Entity’s agent;

          (x) except as provided in the Loan Documents, has not pledged and will not pledge its assets to secure the obligations of any other Person;

          (y) has held itself out and identified itself and will hold itself out and identify itself as a separate and distinct entity under its own name or in a name franchised or licensed to it by an entity other than an Affiliate and not as a division or part of any other Person, except for services

rendered under a business management services agreement with an Affiliate that complies with the terms contained in Subsection (cc) below, so long as the manager, or equivalent thereof, under such business management services agreement holds itself out as an agent of such Special Purpose Entity;

          (z) except as provided in the Cash Management Agreement or in any Management Agreement, if applicable, has maintained and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any other Person;

          (aa) has not made and will not make loans to any Person or hold evidence of indebtedness issued by any other Person or entity (other than cash and investment grade securities issued by an entity that is not an Affiliate of or subject to common ownership with such entity);

          (bb) has not identified and will not identify its partners, members or shareholders, or any Affiliate of any of them, as a division or part of it, and has not identified itself and shall not identify itself as a division of any other Person;

          (cc) except for capital contributions and capital distributions expressly permitted under the terms and conditions of its organizational documents and properly reflected in its books and records, has not entered into or been a party to and will not enter into or be a party to, any transaction with its partners, members, shareholders or Affiliates except in the ordinary course of its business and on terms which are commercially reasonable and are no less favorable to it than would be obtained in a comparable arm’s length transaction with an unrelated third party;

          (dd) except with respect to the Independent Managers, has not had and will not have any obligation to indemnify, and has not indemnified and will not indemnify, its partners, officers, directors or members, as the case may be, unless such an obligation was and is fully subordinated to the Debt and will not constitute a claim against it in the event that cash flow in excess of the amount required to pay the Debt is insufficient to pay such obligation;

          (ee) does not and will not have any of its obligations guaranteed by any Affiliate except for Guarantors pursuant to the Non-Recourse Guaranty; provided , that if such entity is a limited partnership, such entity’s general partner will be generally liable for its obligations; and

          (ff) has complied and will comply with all of the terms and provisions contained in its organizational documents.

          “ Spread ” shall mean, subject to application of the Default Rate, 15.9%, it being acknowledged and agreed that the Spread represents the blend of a 6.00% spread over LIBOR on $20,000,000 of the Loan (such spread plus LIBOR being referred to herein as the “Applicable A Interest Rate” ) and a 22.50% spread over LIBOR on the remaining $30,000,000 of the Loan.

          “ State ” shall mean the State of Nevada.

          “ Strike Price ” shall mean, as applicable, with respect to:

          (i) the period commencing on the Closing Date through and including the Initial Maturity Date, two and one-half percent (2.5%) per annum; and

          (ii) for each Extension Term, a rate to be selected by Borrower no later than ten (10) days prior to the first (1 ^st ) day of such Extension Term, which shall in no event exceed the greater of (a) six and one-half percent (6.5%), and (b) one percent (1%) in excess of LIBOR as of the most recent Determination Date.

          “ Subsidiary Transferee ” shall have the meaning set forth in Section 5.2.11(d) hereof.

          “ Survey ” shall mean a current ALTA survey of the Property, certified to the Title Company and Lender and their successors and assigns, in form and content reasonably satisfactory to Lender.

          “ Tax and Insurance Escrow Account ” shall have the meaning set forth in Section 7.1 hereof.

          “ Tax and Insurance Escrow Fund ” shall have the meaning set forth in Section 7.1 hereof.

          “ Taxes ” shall mean all real estate and personal property taxes, assessments, water rates or sewer rents, now or hereafter levied or assessed or imposed against the Property or part thereof, together with all interest and penalties thereon.

           “Temporary Easement” shall have the meaning set forth in Section 5.1.20(b) hereof.

          “ Temporary REA ” shall mean that certain temporary Easement Agreement dated as of the date hereof by and among HRHH Development, Borrower and the Hotel/Casino Property Owner (as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time in accordance with the terms thereof).

          “ Termination Date ” shall have the meaning set forth in the Temporary REA.

          “ Third Party Lenders ” shall mean third party institutional lenders which are in the business of providing loans similar to the Refinancing Loan.

          “ Title Company ” shall mean First American Title Insurance Company, or any successor title company reasonably acceptable to Lender and licensed to issue title insurance in the State of Nevada.

          “ Title Insurance Policy ” shall mean an ALTA mortgagee title insurance policy in a form reasonably acceptable to Lender (or, if the Property is in a State which does not permit the issuance of such ALTA policy, such form as shall be permitted in such State and reasonably acceptable to Lender) issued with respect to the Property in the amount of the Loan and insuring the lien of the Mortgage as against the Property.

          “ Transfer ” shall have the meaning set forth in Section 5.2.10(a) hereof.

          “ Transfer Restricted Party ” shall mean, collectively, Borrower, each Constituent Member of Borrower, HR Holdings and each Guarantor.

          “ U.S. Obligations ” shall mean non-redeemable securities evidencing an obligation to timely pay principal and/or interest in a full and timely manner that are direct obligations of the United States of America for the payment of which its full faith and credit is pledged.

          “ Zoning Report ” shall mean the zoning report regarding the Property obtained by Lender from The Planning & Zoning Resource Corp. in connection with making the Loan.

           Section 1.2 Principles of Construction . All references to sections, subsections, clauses, exhibits and schedules are to sections, subsections, clauses, exhibits and schedules in or to this Agreement unless otherwise specified. All uses of the word “including” shall mean “including, without limitation” unless the context shall indicate otherwise. Unless otherwise specified, the words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. Unless otherwise specified, all meanings attributed to defined terms herein shall be equally applicable to both the singular and plural forms of the terms so defined.

ARTICLE II.
GENERAL TERMS

           Section 2.1 Loan Commitment; Disbursement to Borrower .

                2.1.1 Agreement to Lend and Borrow . Subject to and upon the terms and conditions set forth herein, Lender hereby agrees to make, and Borrower hereby agrees to accept, the Loan on the Closing Date.

                2.1.2 Single Disbursement to Borrower . Borrower will receive only one borrowing hereunder in respect of the Loan and any amount borrowed and repaid hereunder in respect of the Loan may not be reborrowed. Lender is not funding any portion of the Loan from any account holding “plan assets” of one or more plans within the meaning of 29 C.F.R. 2510.3-101 unless the Loan does not constitute a non-exempt prohibited transaction under ERISA.

                2.1.3 The Note, Mortgage and Other Loan Documents . The Loan shall be evidenced by the Note and secured by the Mortgage, the Assignment of Leases and the other Loan Documents.

                2.1.4 Use of Proceeds . Borrower shall use the proceeds of the Loan to (a) acquire the Property, (b) repay and discharge existing loans relating to the Property, (c) make deposits into the Reserve Funds on the Closing Date in the amounts provided herein, (d) pay costs and expenses incurred in connection with the closing of the Loan, as reasonably approved by Lender, as set forth on a sources and uses of funds schedule executed by Borrower and Lender on the Closing Date, and (e) for such other purposes as are reasonably approved by Lender, as set forth on a sources and uses of funds schedule executed by Borrower and Lender on the Closing Date.

           Section 2.2 Interest Rate .

                2.2.1 Interest Generally . Interest on the Outstanding Principal Balance shall accrue from the Closing Date to but excluding the Maturity Date at the Applicable Interest Rate. Borrower shall pay to Lender on each Payment Date the interest accrued on the Loan for the preceding Interest Period.

                2.2.2 Interest Calculation . Interest on the Outstanding Principal Balance shall be calculated by multiplying (a) the actual number of days elapsed in the period for which the calculation is being made by (b) a daily rate based on a three hundred sixty (360) day year by (c) the Outstanding Principal Balance. If, at any time, Lender or Borrower determines that Lender has miscalculated any Applicable Interest Rate (whether because of a miscalculation of LIBOR or otherwise), such party shall notify the other of the necessary correction. Upon the agreement of the parties as to the correction, if the corrected Applicable Interest Rate represents an increase in the applicable monthly payment, Borrower shall, within ten (10) days after receipt of notice from Lender, pay to Lender the corrected amount. Upon the agreement of the parties as to the correction, if the corrected Applicable Interest Rate represents an overpayment by Borrower to Lender and no Event of Default then exists, Lender shall promptly refund the overpayment to Borrower or, at Borrower’s option, credit such amounts against Borrower’s payment next due hereunder.

                2.2.3 Determination of Interest Rate . (a) The Applicable Interest Rate shall be: (i) LIBOR plus the Spread with respect to the applicable Interest Period for a LIBOR Loan or (ii) the Prime Rate plus the Prime Rate Spread for a Prime Rate Loan if the Loan is converted to a Prime Rate Loan pursuant to the provisions of Section 2.2.3(c) or (f) hereof, subject in both of the foregoing instances to the terms of Section 5.2.11(b)(ii) hereof.

                    (b) Subject to the terms and conditions of this Section 2.2.3 , the Loan shall be a LIBOR Loan and Borrower shall pay interest on the Outstanding Principal Balance at LIBOR plus the Spread for the applicable Interest Period. Any change in the Applicable Interest Rate hereunder due to a change in LIBOR shall become effective as of the opening of business on the first day of the applicable Interest Period.

                    (c) In the event that Lender shall have determined in good faith (which determination shall be conclusive and binding upon Borrower absent manifest error) that by reason of circumstances affecting the interbank eurodollar market, adequate and reasonable means do not exist for ascertaining LIBOR, then Lender shall forthwith give notice by telephone of such determination, confirmed in writing, to Borrower at least one (1) Business Day prior to the last day of the related Interest Period. If such notice is given, any related outstanding LIBOR Loan shall be converted, on the first day of the next occurring Interest Period, to a Prime Rate Loan.

                    (d) If, pursuant to the terms of this Agreement, any portion of the Loan has been converted to a Prime Rate Loan and Lender shall determine in good faith (which determination shall be conclusive and binding upon Borrower absent manifest error) that the event(s) or circumstance(s) which resulted in such conversion shall no longer be applicable, Lender shall give notice by telephone of such determination, confirmed in writing, to Borrower

at least one (1) Business Day prior to the last day of the related Interest Period. If such notice is given, each related outstanding Prime Rate Loan shall be converted to a LIBOR Loan on the first day of the next occurring Interest Period.

                    (e) (i) Except as otherwise expressly provided in this Section 2.2.3(e) , with respect to a LIBOR Loan, all payments made by Borrower hereunder shall be made free and clear of, and without reduction for or on account of, any Indemnified Taxes or Other Taxes; provided that if Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (A) the sum payable shall be increased as necessary so that after making all such required deductions (including deductions applicable to additional sums payable under this Section 2.2.3 ) Lender receives an amount equal to the sum it would have received had no such deductions been made, (B) Borrower shall make such deductions, and (C) Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law. If Lender gives Borrower written notice that any such amounts are payable by Borrower, Borrower shall pay all such amounts to the relevant Governmental Authority in accordance with applicable Legal Requirements by the later of (1) five (5) Business Days after receipt of demand from Lender and (2) their due date, and, as promptly as possible thereafter, Borrower shall send to Lender an original official receipt, if available, or certified copy thereof showing payment of such Indemnified Taxes or Other Taxes.

                              (ii) Without duplication of any additional amounts paid pursuant to this Section 2.2.3(e) , Borrower shall indemnify Lender, within ten (10) days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) paid by Lender and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority, provided that, if Borrower determines that any such Indemnified Taxes or Other Taxes were not correctly or legally imposed or asserted, Lender shall, upon payment by Borrower of the full amount of any Indemnified Taxes or Other Taxes, allow Borrower to contest (and shall cooperate in such contest), the imposition of such tax upon the reasonable request of Borrower and at Borrower’s expense; provided , however , that Lender shall not be required to participate in any contest that would, in its reasonable judgment, expose it to a material commercial disadvantage or require it to disclose any information it considers confidential or proprietary. A certificate as to the amount of such payment or liability delivered to Borrower by a Lender (together with any supporting detail reasonably requested by Borrower), shall be conclusive, provided that such amounts are determined on a reasonable basis.

                              (iii) Any Non-U.S. Lender that is entitled to an exemption from or reduction of withholding tax under U.S. law, the law of the jurisdiction in which Borrower is located (if other than the U.S.), or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to Borrower, at the time or times prescribed by applicable law, or as reasonably requested by Borrower, such properly completed and executed documentation prescribed by applicable law or reasonably requested by Borrower as will permit such payments to be made without withholding or at a reduced rate of withholding. Each Non-U.S. Lender shall deliver to Borrower (or, in the case of a participant, to the Lender from which the related participation shall have been purchased), on or before the date

that such Non-U.S. Lender becomes a party to this Agreement, two (2) properly completed and duly executed copies of U.S. Internal Revenue Service Form W-8BEN, Form W-8IMY, Form W-8EXP or Form W-8ECI, as applicable, (or successor forms thereto), claiming a complete exemption from, or reduction of, U.S. federal withholding tax on all payments by Borrower under this Agreement. Each Non-U.S. Lender shall promptly provide such forms upon becoming aware of the obsolescence, expiration or invalidity of any form previously delivered by such Non-U.S. Lender (unless it is legally unable to do so as a result of a change in law) and shall promptly notify Borrower at any time it determines that any previously delivered forms are no longer valid.

                              (iv) Lender or any successor and/or assign of Lender that is incorporated under the laws of the United States of America or a state thereof agrees that, on or before it becomes a party to this Agreement and from time to time thereafter before the expiration or obsolescence of the previously delivered form, it will deliver to Borrower a United States Internal Revenue Service Form W-9 or successor applicable form, as the case may be, to establish exemption from United States backup withholding tax. If required by applicable law, Borrower is hereby authorized to deduct from any payments due to Lender pursuant to Section 2.2.3 hereof the amount of any withholding taxes resulting from Lender’s failure to comply with this Section 2.2.3(e)(iv) .

                              (v) If a Lender determines, in its reasonable discretion, that it has received a refund of or will receive a credit for Indemnified Taxes or Other Taxes with respect to which Borrower has paid additional amounts pursuant to this Section 2.2.3(e) , it shall pay over to Borrower an amount equal to the additional amounts paid by Borrower under this Section 2.2.3(e) (with respect to the Indemnified Taxes or Other Taxes giving rise to such refund or credit), net of all out-of-pocket expenses of such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided that Borrower, upon the request of such Lender, agrees to repay the amount paid over to Borrower (plus any interest to the extent accrued from the date such refund is paid over to Borrower) to such Lender in the event such Lender is required to repay such refund to such Governmental Authority or is unable to claim the credit. This Section 2.2.3(e)(v) shall not be construed to require any Lender to make available its tax returns (or any other information relating to its taxes which it deems confidential) to Borrower or any other Person.

                    (f) Except as otherwise expressly provided in Section 2.2.3(e) hereof, if any requirement of law or any change therein or in the interpretation or application thereof, shall hereafter make it unlawful for Lender to make or maintain a LIBOR Loan as contemplated hereunder (i) the obligation of Lender hereunder to make a LIBOR Loan or to convert a Prime Rate Loan to a LIBOR Loan shall be canceled forthwith and (ii) any outstanding LIBOR Loan shall be converted automatically to a Prime Rate Loan on the next succeeding Payment Date or within such earlier period as required by law. Borrower hereby agrees promptly to pay Lender, upon demand, any additional amounts necessary to compensate Lender for any actual out-of-pocket costs incurred by Lender in making any conversion in accordance with this Agreement, including, without limitation, any interest or fees payable by Lender to lenders of funds obtained by it in order to make or maintain any LIBOR Loan hereunder; provided that such additional amount is generally charged by Lender to other borrowers with loans similar to the Loan.

                   (g) Except as otherwise expressly provided in Section 2.2.3(e) hereof, in the event that any change in any requirement of law or in the interpretation or application thereof, or compliance by Lender with any request or directive having the force of law hereafter issued from any central bank or other Governmental Authority:

     (i) shall hereafter impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, or deposits or other liabilities in or for the account of, advances or loans by, or other credit extended by, or any other acquisition of funds by, any office of Lender which is not otherwise included in the determination of LIBOR hereunder;

     (ii) shall hereafter have the effect of reducing the rate of return on Lender’s capital as a consequence of its obligations hereunder to a level below that which Lender could have achieved but for such adoption, change or compliance (taking into consideration Lender’s policies with respect to capital adequacy) by any material amount; or

     (iii) shall hereafter impose on Lender any other condition and the result of any of the foregoing is to increase the actual out-of-pocket cost to Lender of maintaining loans or extensions of credit or to reduce any amount receivable hereunder;

then, in any such case, Borrower shall promptly pay Lender, upon demand, any additional amounts necessary to compensate Lender for such additional cost or reduced amount receivable; provided that such additional amount is generally charged by Lender to other borrowers with loans similar to the Loan. If Lender becomes entitled to claim any additional amounts pursuant to this Section 2.2.3(g) , Lender shall provide Borrower with not less than ninety (90) days notice specifying in reasonable detail the event by reason of which it has become so entitled and the additional amount required to fully compensate Lender for such additional cost or reduced amount.

                    (h) Borrower agrees to pay to Lender and to hold Lender harmless from any actual out-of-pocket expense which Lender sustains or incurs as a consequence of (i) any default by Borrower in payment of the principal of or interest on any LIBOR Loan, including, without limitation, any such loss or expense arising from interest or fees payable by Lender to lenders of funds obtained by it in order to maintain any LIBOR Loan hereunder, (ii) any prepayment (whether voluntary or mandatory) of any LIBOR Loan on a day that (A) is not the Payment Date immediately following the last day of an Interest Period with respect thereto or (B) is the Payment Date immediately following the last day of an Interest Period with respect thereto if Borrower did not give the prior notice of such prepayment required pursuant to the terms of this Agreement, including, without limitation, such loss or expense arising from interest or fees payable by Lender to lenders of funds obtained by it in order to maintain any LIBOR Loan hereunder, and (iii) the conversion (for any reason whatsoever, whether voluntary or involuntary) of the Applicable Interest Rate from LIBOR plus the Spread to the Prime Rate plus the Prime Rate Spread with respect to any portion of the Outstanding Principal Balance then bearing interest at LIBOR plus the Spread on a date other than the Payment Date immediately following the last day of an Interest Period, including, without limitation, such actual out-of-

pocket expenses arising from interest or fees payable by Lender to lenders of funds obtained by it in order to maintain any LIBOR Loan hereunder (the amounts referred to in clauses (i), (ii) and (iii) are herein referred to collectively as the “ Breakage Costs ”); provided , however , that Borrower shall not indemnify Lender from any loss or expense arising from Lender’s willful misconduct, fraud, illegal acts or gross negligence. No Breakage Costs shall be due or payable if, in connection with any prepayment of the Loan by Borrower, Borrower pays interest through the next Payment Date as provided in Section 2.4.1 hereof.

                    (i) Subject to Section 2.2.3(e) above, Lender shall not be entitled to claim compensation pursuant to this Section 2.2.3 for any Indemnified Taxes or Other Taxes, increased cost or reduction in amounts received or receivable hereunder, or any reduced rate of return, which was incurred or which accrued more than ninety (90) days before the date Lender notified Borrower in writing of the change in law or other circumstance on which such claim of compensation is based and delivered to Borrower a written statement setting forth in reasonable detail the basis for calculating the additional amounts owed to Lender under this Section 2.2.3 , which statement, made in good faith, shall be conclusive and binding upon all parties hereto absent manifest error.

                2.2.4 Additional Costs . Lender will use reasonable efforts (consistent with legal and regulatory restrictions) to maintain the availability of all LIBOR Loans and to avoid or reduce any increased or additional costs payable by Borrower under Section 2.2.3 hereof, including, if requested by Borrower, a transfer or assignment of the Loan to a branch, office or Affiliate of Lender in another jurisdiction, or a redesignation of its lending office with respect to the Loan, in order to maintain the availability of all LIBOR Loans or to avoid or reduce such increased or additional costs, provided that the transfer or assignment or redesignation (a) would not result in any additional costs, expenses or risk to Lender that are not separately agreed to by Borrower to be reimbursed by Borrower and (b) would not be disadvantageous in any other material respect to Lender as determined by Lender in its reasonable discretion.

                2.2.5 Default Rate . In the event that, and for so long as, any Event of Default shall have occurred and be continuing, the Outstanding Principal Balance and, to the extent permitted by law, all accrued and unpaid interest in respect of the Loan and any other amounts due pursuant to the Loan Documents, shall accrue interest at the Default Rate, calculated from the date such payment was due without regard to any grace or cure periods contained herein.

                2.2.6 Usury Savings . This Agreement, the Note and the other Loan Documents are subject to the express condition that at no time shall Borrower be obligated or required to pay interest on any portion of the Outstanding Principal Balance at a rate which could subject Lender to either civil or criminal liability as a result of being in excess of the Maximum Legal Rate. If, by the terms of this Agreement or the other Loan Documents, Borrower is at any time required or obligated to pay interest on any portion of the Outstanding Principal Balance at a rate in excess of the Maximum Legal Rate, the Applicable Interest Rate or the Default Rate, as the case may be, shall be deemed to be immediately reduced to the Maximum Legal Rate and all previous payments in excess of the Maximum Legal Rate shall be deemed to have been payments in reduction of principal and not on account of the interest due hereunder. All sums paid or agreed to be paid to Lender for the use, forbearance, or detention of the sums due under the Loan, shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread

throughout the full stated term of the Loan until payment in full so that the rate or amount of interest on account of the Loan does not exceed the Maximum Legal Rate of interest from time to time in effect and applicable to the Loan for so long as the Loan is outstanding.

                2.2.7 Interest Rate Cap Agreement . (a) Prior to or contemporaneously with the date hereof, Borrower shall have entered into an Interest Rate Cap Agreement with a LIBOR strike price equal to the Strike Price. The Interest Rate Cap Agreement (i) shall be in a form and substance reasonably acceptable to Lender, (ii) shall be with an Acceptable Counterparty, (iii) shall direct such Acceptable Counterparty to deposit directly into the Lockbox Account, or if the Lockbox Account has not yet been established pursuant to the terms of this Agreement, the Cash Management Account, any amounts due Borrower under such Interest Rate Cap Agreement so long as any portion of the Debt exists, provided that the Debt shall be deemed to exist even if the Property is transferred by judicial or non-judicial foreclosure or deed-in-lieu thereof, (iv) shall be for a period equal to the current term of the Loan, and (v) shall have a notional amount which shall not at any time be less than the Outstanding Principal Balance. Borrower shall collaterally assign to Lender, pursuant to the Collateral Assignment of Interest Rate Cap, all of its right, title and interest to receive any and all payments under the Interest Rate Cap Agreement, and shall deliver to Lender an executed counterpart of the Interest Rate Cap Agreement (which shall, by its terms, authorize the assignment to Lender and require that payments be deposited directly into the Lockbox Account, or if the Lockbox Account has not yet been established pursuant to the terms of this Agreement, the Cash Management Account).

                    (b) Borrower shall comply with all of its obligations under the terms and provisions of the Interest Rate Cap Agreement. All amounts paid by the Counterparty under the Interest Rate Cap Agreement to Borrower or Lender shall be deposited immediately into the Lockbox Account, or if the Lockbox Account has not yet been established pursuant to the terms of this Agreement, the Cash Management Account. Borrower shall take all actions reasonably requested by Lender to enforce Lender’s rights under the Interest Rate Cap Agreement in the event of a default by the Counterparty and shall not waive, amend or otherwise modify any of its rights thereunder.

                    (c) In the event of any downgrade of the rating of the Acceptable Counterparty below “A” by S&P or “A2” by Moody’s, Borrower shall replace the Interest Rate Cap Agreement with a Replacement Interest Rate Cap Agreement not later than ten (10) Business Days following receipt of notice from Lender of such downgrade.

                    (d) In the event that Borrower fails to purchase and deliver to Lender an Interest Rate Cap Agreement or fails to maintain an Interest Rate Cap Agreement in accordance with the terms and provisions of this Agreement, after ten (10) Business Days notice to Borrower and Borrower’s failure to cure, Lender may purchase the required Interest Rate Cap Agreement and the actual out-of-pocket cost incurred by Lender in purchasing such Interest Rate Cap Agreement shall be paid by Borrower to Lender with interest thereon at the Default Rate from the date such cost was incurred by Lender until such actual out-of-pocket cost is reimbursed by Borrower to Lender.

                    (e) In connection with each Interest Rate Cap Agreement, Borrower shall obtain and deliver to Lender an opinion from counsel (which counsel may be in-house

counsel for the Counterparty) for the Counterparty (upon which Lender and its successors and assigns may rely) which shall provide, in relevant part, that:

     (i) the Counterparty is duly organized, validly existing, and in good standing under the laws of its jurisdiction of incorporation and has the organizational power and authority to execute and deliver, and to perform its obligations under, such Interest Rate Cap Agreement;

     (ii) the execution and delivery of such Interest Rate Cap Agreement by the Counterparty, and any other agreement which the Counterparty has executed and delivered pursuant thereto, and the performance of its obligations thereunder have been and remain duly authorized by all necessary action and do not contravene any provision of its certificate of incorporation or by-laws (or equivalent organizational documents) or any law, regulation or contractual restriction binding on or affecting it or its property;

     (iii) all consents, authorizations and approvals required for the execution and delivery by the Counterparty of such Interest Rate Cap Agreement, and any other agreement which the Counterparty has executed and delivered pursuant thereto, and the performance of its obligations thereunder have been obtained and remain in full force and effect, all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with any governmental authority or regulatory body is required for such execution, delivery or performance; and

     (iv) such Interest Rate Cap Agreement, and any other agreement which the Counterparty has executed and delivered pursuant thereto, has been duly executed and delivered by the Counterparty and constitutes the legal, valid and binding obligation of the Counterparty, enforceable against the Counterparty in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

                        (f) At such time as the Loan is repaid in full, all of Lender’s right, title and interest in the Interest Rate Cap Agreement shall terminate and Lender shall, at Borrower’s reasonable expense, promptly execute and deliver such documents as may be reasonably required and prepared by the Counterparty and/or Borrower to evidence release of the Interest Rate Cap Agreement.

           Section 2.3 Loan Payment .

                2.3.1 Payments Generally .

                         (a) Borrower shall pay to Lender on each Payment Date the interest accrued on the Loan for the preceding Interest Period (the “ Monthly Interest Payment ”), except that Borrower paid to Lender an amount equal to the interest accrued on the Outstanding Principal Balance for the initial Interest Period on the Closing Date. For purposes of making

payments hereunder, but not for purposes of calculating Interest Periods, if the day on which such payment is due is not a Business Day, then amounts due on such date shall be due on the immediately preceding Business Day. With respect to payments of principal due on the Maturity Date, interest shall be payable at the Applicable Interest Rate or the Default Rate, as the case may be, through and including the day immediately preceding such Maturity Date. All amounts due pursuant to this Agreement and the other Loan Documents shall be payable without setoff, counterclaim, defense or any other deduction whatsoever, except as otherwise expressly provided in Section 2.2.3(e) hereof.

                    (b) Lender shall have the right from time to time, in its sole discretion, upon not less than ten (10) days prior written notice to Borrower, to change the monthly Payment Date to a different calendar day and to correspondingly adjust the Interest Period and Lender and Borrower shall promptly execute an amendment to this Agreement to evidence any such changes.

                2.3.2 Payment on Maturity Date . Borrower shall pay to Lender on the Maturity Date the Outstanding Principal Balance, all accrued and unpaid interest and all other amounts due hereunder and under the Note, the Mortgage and the other Loan Documents.

                2.3.3 Late Payment Charge . If any principal, interest or any other sums due under the Loan Documents (other than the payment of principal due on the Maturity Date) is not paid by Borrower by the date on which it is due, Borrower shall pay to Lender upon demand an amount equal to the lesser of (a) four percent (4%) of such unpaid sum or (b) the maximum amount permitted by applicable law, in order to defray the expense incurred by Lender in handling and processing such delinquent payment and to compensate Lender for the loss of the use of such delinquent payment. Any such amount shall be secured by the Mortgage and the other Loan Documents to the extent permitted by applicable law.

                2.3.4 Method and Place of Payment . Except as otherwise specifically provided herein, all payments and prepayments under this Agreement and the Note shall be made to Lender not later than 2:00 P.M., New York City time, on the date when due and shall be made in lawful money of the United States of America in immediately available funds at Lender’s office at 11 Madison Avenue, New York, New York 10010, Attention: Edmund Taylor, or as otherwise directed by Lender, and any funds received by Lender after such time shall, for all purposes hereof, be deemed to have been paid on the next succeeding Business Day.

           Section 2.4 Prepayments .

                2.4.1 Voluntary Prepayments . From and after the date hereof, so long as no Event of Default shall have occurred and be continuing, Borrower may, at its option and upon at least ten (10) days prior written notice to Lender (or such shorter period as may be permitted by Lender), prepay the Debt in whole or in part, but in no event shall any partial prepayment be less than $5,000,000.00, provided that, other than with respect to a prepayment from the proceeds of the Five Acre Release Price, which shall be governed by the provisions of Section 2.5 hereof, any prepayment is accompanied by (i) if such prepayment occurs on a date other than a Payment

Date, all interest, at the Applicable Interest Rate, which would have accrued on the amount of the Outstanding Principal Balance prepaid (in accordance with Section 2.4.3(a) hereof) through, but not including, the next succeeding ninth (9th) day of a calendar month, or, if such prepayment occurs on a Payment Date, through and including the last day of the Interest Period immediately prior to the applicable Payment Date; (ii) if such prepayment occurs prior to the Initial Maturity Date, the Prepayment Premium due with respect to the amount prepaid, and (iii) all other sums due and payable under this Agreement, the Note and the other Loan Documents, including, but not limited to, the Breakage Costs, if any, and all of Lender’s costs and expenses (including reasonable attorney’s fees and disbursements) incurred by Lender in connection with such prepayment. If a notice of prepayment is given by Borrower to Lender pursuant to this Section 2.4.1 , the amount designated for prepayment and all other sums required under this Section 2.4 shall be due and payable on the proposed prepayment date; provided , however , Borrower shall have the right to postpone or revoke such prepayment upon written notice to Lender not less than two (2) Business Days prior to the date such prepayment is due so long as Borrower pays Lender and/or Servicer all actual out-of-pocket third party costs and expenses incurred by Lender and/or Servicer in connection with such postponement or revocation.

                2.4.2 Mandatory Prepayments . On the next occurring Payment Date following the date on which Lender actually receives any Net Proceeds, Borrower shall prepay, or authorize Lender to apply Net Proceeds as a prepayment of, the Outstanding Principal Balance in an amount equal to one hundred percent (100%) of such Net Proceeds. No Prepayment Premium or any other penalty or premium (other than Breakage Costs) shall be due in connection with any prepayment made pursuant to this Section 2.4.2 , whether occurring prior to or after the Initial Maturity Date. Any prepayment under this Section 2.4.2 shall be applied in accordance with Section 2.4.3(a) hereof. Any Net Proceeds in excess of the amount required to pay the Debt in full shall be disbursed to Borrower.

                2.4.3 Application of Payments of Principal .

                    (a) Notwithstanding anything to the contrary contained in this Agreement, all prepayments of the Loan, whether a voluntary prepayment, a prepayment from Net Proceeds, a prepayment from the application of Reserve Funds, a prepayment from the proceeds of the Five Acre Release Price, a prepayment from Rents received by Lender following the occurrence and during the continuance of an Event of Default, or otherwise, shall be applied first, to payment of the Debt, in any order, priority and proportions as Lender shall elect in its sole discretion from time to time, until the Debt is paid in full, and any remainder shall then be disbursed to Borrower.

                    (b) It is expressly agreed by Lender and Borrower that any Reserve Funds or other cash collateral held by or on behalf of Lender, whether in the Cash Management Account, the Tax and Insurance Escrow Account, the Interest Reserve Account or otherwise, including, without limitation, any Net Proceeds and/or any Excess Cash Flow then being held by Lender, shall, upon the occurrence and during the continuance of an Event of Default, be applied by Lender in accordance with the foregoing clause (a) or may continue to be held by Lender as additional collateral for the Loan, all in Lender’s sole discretion.

                    (c) It is expressly agreed by Lender and Borrower that, in Lender’s sole discretion, any Rents received by Lender upon the occurrence and during the continuance of an Event of Default pursuant to Section 3.1 of the Assignment of Leases may, prior to the application in accordance with the foregoing clause (a) , be applied by Lender to the expenses of managing and securing the Property, as contemplated by clause (a) of said Section 3.1 of the Assignment of Leases.

                2.4.4 Prepayments After Default . If during the continuance of an Event of Default payment of all or any part of the Debt is tendered by Borrower or otherwise recovered by Lender (including through application of any Reserve Funds or any Net Proceeds), (a) such tender or recovery shall be deemed made on the next occurring Payment Date together with the monthly Debt Service amount calculated at the Default Rate from and after the date of such Event of Default, (b) if such tender or recovery occurs on or prior to the Initial Maturity Date, Borrower shall pay, in addition to the Debt, the Prepayment Premium due on the amount of the Loan being prepaid or satisfied, (c) Borrower shall also pay an amount equal to one percent (1%) of the amount of the Loan being prepaid or satisfied, and (d) Borrower shall also pay the Breakage Costs, if any.

                2.4.5 Prepayments Made on Dates Other Than Payment Dates . With respect to any provision herein or in any other Loan Document providing that if a payment or prepayment of the Loan is made on a date other than a Payment Date such payment or prepayment shall be accompanied by all interest which would have accrued on the amount of the Loan so paid or prepaid through, but not including, the next succeeding ninth (9th) day of a calendar month, Borrower shall be entitled to a credit toward the following month’s Monthly Interest Payment or any other amounts due under the Loan in an amount equal to the amount of interest actually earned by Lender on the portion of such interest payment in excess of the amount of interest actually accrued on the date of such payment or prepayment (the “ Extra Non-Accrued Interest ”). In order to effectuate the foregoing, upon any prepayment resulting in any Extra Non-Accrued Interest pursuant to the terms hereof, Lender shall deposit such Extra Non-Accrued Interest in an interest-bearing account for the benefit of Lender until the next Payment Date in order to determine the credit against the next Monthly Interest Payment due to Borrower under this Section 2.4.5 , following which Payment Date (a) Lender may withdraw such Extra Non-Accrued Interest, together with all interest accrued thereon, from such account and apply the amount of the interest accrued on such Extra Non-Accrued Interest to amounts due and payable to Lender on such Payment Date, (b) such Extra Non-Accrued Interest, together with all interest accrued thereon, shall constitute the sole and exclusive property of Lender, and (c) Lender shall have no further obligations to Borrower with respect to such Extra Non-Accrued Interest and/or the interest accrued thereon. Lender shall not be responsible for obtaining any particular interest rate with respect to any Extra Non-Accrued Interest.

           Section 2.5 Release of Property . Except as set forth in this Section 2.5 , no repayment or prepayment of all or any portion of the Note shall cause, give rise to a right to require, or otherwise result in, the release of the Lien of the Mortgage or any other Loan Document on the Property.

                2.5.1 Releases of Five Acre Parcel .

                        (a)  Conditions for Release . Notwithstanding anything to the contrary set forth in this Agreement or the other Loan Documents, in connection with the Transfer of the Six Acre Parcel and the Assumption in accordance with Section 5.2.11 hereof, if applicable, Borrower shall have the right, without the prior consent of Lender and without violating the Loan Documents, to have the Five Acre Parcel released from the lien of the Mortgage and the other Loan Documents (the “ Five Acre Release ”), provided that all of the following conditions shall be satisfied with respect to the Five Acre Release:

     (i) At least ten (10) Business Days prior to the anticipated date of such Five Acre Release, Borrower shall have submitted to Lender a written request for release (a “ Release Request ”), which Release Request shall include an Officer’s Certificate providing a certification that as of the date of such Release Request, no monetary Default nor any Event of Default shall have occurred and be continuing;

     (ii) All accrued and unpaid interest and any unpaid or unreimbursed amounts in respect of the Loan and any other sum then due hereunder or under any of the other Loan Documents, including, without limitation, any applicable Breakage Costs, shall have been paid in full or shall have been arranged to be paid in full contemporaneously with the closing of such Five Acre Release; provided , however , if such Five Acre Release closes on a date which is not a Payment Date, Borrower shall also have paid or shall have arranged to be paid contemporaneously with the closing of such Five Acre Release, interest on the Five Acre Release Price to, but not including, the next succeeding ninth (9th) day of a calendar month;

     (iii) If the closing of such Five Acre Release shall occur prior to the Initial Maturity Date, Borrower shall have paid or shall have arranged to be paid contemporaneously with the closing of such Five Acre Release the Five Acre Prepayment Premium;

     (iv) In addition to the amounts set forth in the foregoing clauses (ii) and (iii) , Borrower shall have paid, or shall have arranged to be paid contemporaneously with the closing of such Five Acre Release, to Lender the Five Acre Release Price, which shall be applied as contemplated by Section 2.4.3 hereof;

     (v) Borrower shall have paid all of the actual out-of-pocket reasonable third party legal fees and actual out-of-pocket reasonable third party expenses incurred by Lender in connection with (A) reviewing and processing any Release Request, whether or not the Five Acre Release actually closes, (B) the satisfaction of any of the conditions set forth in this Section 2.5.1(a) , and (C) providing all release documents in connection with the Five Acre Release as provided in Section 2.5.1(d) hereof;

     (vi) No monetary Default nor any Event of Default shall have occurred and be continuing at the time of the submission by Borrower of a Release Request or at the time of the closing of such Five Acre Release;

     (vii) After giving effect to the sale and release of the Five Acre Parcel, the Six Acre Parcel will (A) comply, in all material respects, with all zoning ordinances, including, without limitation, those related to parking, lot size and density, (B) constitute one or more separate tax parcels, and not be subject to any lien for taxes due or not yet due attributable to the Five Acre Parcel, and (C) comply, in all material respects, with all applicable Legal Requirements, including, without limitation, those relating to subdivision and land use, except to the extent of any legal non-conforming use permitted as of the Closing Date;

     (viii) Borrower shall have certified to Lender that, with respect to the Six Acre Parcel, it continues to have or has obtained through one or more reciprocal easement or other agreements approved by Lender in its reasonable judgment, substantially the same (A) access for all of the Improvements (including any Permitted Temporary Improvements located on the Six Acre Parcel, unless no longer required by the Hotel/Casino Property Owner) or for any future Improvements which may be constructed on the Six Acre Parcel to parking, vehicular and pedestrian ingress and egress to and from (1) public roads, including, without limitation, Paradise Road and Harmon Avenue (subject to certain restrictions approved by Lender in its reasonable discretion), (2) common areas, including, without limitation, the pool area at the Hard Rock Hotel and Casino (subject to certain restrictions approved by Lender in its reasonable discretion), and (3) a pedestrian bridge to be constructed on the Property and the Hotel/Casino Property, and the right to connect and attach to such portions of the pedestrian bridge constructed on the Five Acre Parcel and on the Hotel/Casino Property (subject to certain restrictions approved by Lender in its reasonable discretion), (B) utility services for all of the Improvements or for any future Improvements which may be constructed on the Six Acre Parcel, (C) water flow and drainage pipes, detention ponds and other drainage infrastructure for all of the Improvements or for any future Improvements which may be constructed on the Six Acre Parcel, and (D) rights for monumentation and directional signage for all of the Improvements or for any future Improvements which may be constructed on the Six Acre Parcel to be generally located at the Harmon Avenue entrance to the Hotel/Casino Property and the Paradise Road entrance to the Property (subject to certain restrictions approved by Lender in its reasonable discretion), in each instance as exists as of the date immediately preceding such Five Acre Release, it being agreed that Lender will subordinate the lien of the Mortgage to any such reciprocal easement agreement or other agreement approved by Lender in its reasonable judgment;

     (ix) Borrower shall deliver to Lender or shall cause Gansevoort Borrower to deliver to Lender, at Borrower’s (or Gansevoort Borrower’s, as the case may be) sole cost and expense, a new or updated ALTA/ASCM survey of the

Six Acre Parcel, which survey shall substantially conform to Lender’s then-current requirements for surveys to be delivered in connection with its loans;

     (x) The Title Company shall issue an endorsement to the Title Insurance Policy regarding the validity of Lender’s lien on the Six Acre Parcel and any other endorsements reasonably requested by Lender in connection with the Five Acre Release; and

     (xi) Borrower shall have delivered to Lender (A) any amendments to the Loan Documents deemed reasonably necessary by Lender in order to effectuate the release of the Five Acre Parcel and/or to continue to retain all of its rights in the Six Acre Parcel, and (B) all documents and information reasonably requested by Lender in order to verify the satisfaction of the foregoing conditions.

                         (b) With respect to any proposed Five Acre Release that does not close for any reason, on the earlier to occur of (i) five (5) Business Days after the date on which Lender is notified that such Five Acre Release will not close, or (ii) the one hundred thirty-fifth (135th) day following the delivery to Lender of the related Release Request, Lender shall be reimbursed for all reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees) incurred in connection therewith.

                         (c) In the event that a Five Acre Release with respect to which a Release Request was submitted to Lender does not close within one hundred thirty-five (135) days after the date of such Release Request, if Borrower wishes to proceed with such Five Acre Release, Borrower shall be required to re-submit an updated Release Request to Lender and satisfy the conditions set forth in Section 2.5.1(a) hereof with respect to the Five Acre Release which is the subject of such resubmitted Release Request as of the date of such resubmission.

                         (d) With respect to a Five Acre Release, upon satisfaction of the conditions set forth in Section 2.5.1(a) hereof, Lender, at the sole cost and expense of Borrower, shall execute and deliver to Borrower releases, satisfactions, reconveyances, discharges, terminations and/or assignments, as applicable and as reasonably requested by Borrower, of the Mortgage and the other Loan Documents relating to the Five Acre Parcel.

                         (e) With respect to a Five Acre Release, upon the full execution, delivery and, as appropriate, recordation or filing of the applicable documents contemplated under Section 2.5.1(d) hereof, all references in this Agreement to the term “Property” shall be deemed to exclude the Five Acre Parcel for all purposes hereunder.

                2.5.2 Sale of Property during Event of Default . Notwithstanding the provisions of the foregoing Section 2.5.1 or any other provision to the contrary in this Agreement or the other Loan Documents, it is expressly acknowledged and agreed by Borrower that, upon the occurrence and during the continuance of an Event of Default: (i) Borrower shall not have any right to sell the Property or any portion thereof without, in each instance, Lender’s prior written consent, which consent may be given or withheld in Lender’s sole discretion, (ii) any such sale of the Property or any portion thereof shall be on such terms and conditions as to which Lender and Borrower shall agree, Lender, however, having the right to impose such terms and

conditions as it shall elect in its sole discretion, (iii) the provisions of this Section 2.5 (other than this Section 2.5.2 ) shall not be applicable to any such sale of the Property or any portion thereof consented to by Lender as aforesaid, and (iv) in the event that, following any such sale of the Property or any portion thereof, the Debt shall have been paid in full, Lender shall distribute any remaining proceeds to Borrower.

                2.5.3 Release on Payment in Full . Upon the written request and payment by Borrower of the customary recording fees and the actual out-of-pocket third-party costs and expenses of Lender and upon payment in full of all principal and interest due on the Loan and all other amounts due and payable under the Loan Documents in accordance with the terms and provisions of the Note and this Agreement, Lender shall release the Lien of the Mortgage and the other Loan Documents.

           Section 2.6 Cash Management .

                2.6.1 Lockbox Account . (a) Borrower shall establish and maintain a segregated Eligible Account (the “ Lockbox Account ”) with Lockbox Bank in trust for the benefit of Lender, which Lockbox Account shall be under the sole dominion and control of Lender. The Lockbox Account shall be entitled “HRHH Development Transferee, LLC, for the benefit of Column Financial, Inc., its successors and/or assigns — Lockbox Account” or such other title as shall be reasonably acceptable to Lender and the applicable Lockbox Bank. Borrower hereby grants to Lender a first priority security interest in the Lockbox Account and all deposits at any time contained therein and the proceeds thereof, and will take all actions requested by Lender that are necessary to maintain in favor of Lender a perfected first priority security interest in the Lockbox Account, including, without limitation, executing and filing UCC-1 Financing Statements and continuations thereof and entering into a deposit account control agreement with Lockbox Bank and Lender in a form or forms reasonably acceptable to Lender. Lender shall have the sole right to make withdrawals from the Lockbox Account for application pursuant to the terms of this Agreement and all reasonable costs and expenses for establishing and maintaining the Lockbox Account shall be paid by Borrower.

                    (b) Borrower shall, or shall cause Manager (if applicable) to, deliver irrevocable written instructions to all commercial tenants under Leases of space at the Property to deliver all Rents payable thereunder directly to the Lockbox Account. Borrower shall, and shall cause Manager (if applicable) to, deposit all amounts received by Borrower or Manager (if applicable) constituting Rents (including Rents from all non-commercial tenants under Leases of space at the Property) or any other Gross Income from Operations into the Lockbox Account within one (1) Business Day after receipt.

                    (c) Borrower shall obtain from Lockbox Bank its agreement to transfer to the Cash Management Account in immediately available funds by federal wire transfer all amounts on deposit in the Lockbox Account once every Business Day throughout the term of the Loan.

                    (d) Borrower and Lender agree that, notwithstanding the foregoing Sections 2.6.2 (a) , (b) and (c) , on the Closing Date Borrower shall not be obligated to establish or maintain the Lockbox Account, provided , however , Lender shall have the right, at any time

during the term of the Loan (including any Extension Term) either (x) following the occurrence and during the continuance of an Event of Default, or (y) following the commencement of a regular or recurring stream of Gross Income from Operations, upon five (5) Business Days prior notice to Borrower (the earlier of the date on which Borrower establishes the Lockbox Account or the fifth (5th) Business Day following such notice is hereinafter referred to as the “Lockbox Implementation Date” ) to require Borrower to establish and maintain the Lockbox Account, at Borrower’s sole cost and expense, as provided in this Section 2.6.1 . Notwithstanding the foregoing, Borrower shall, or shall cause Manager (if applicable) to deposit, on the date of receipt, or if received subsequent to 3:00 pm New York time, not later than the Business Day following receipt, (i) to the Cash Management Account at all times prior to the Lockbox Implementation Date, or (ii) to the Lockbox Account on and after the Lockbox Implementation Date, any and all income and proceeds from the Property of any kind or nature paid to or received by or on behalf of Borrower from any source.

                2.6.2 Cash Management Account . (a) There shall be established and maintained a segregated Eligible Account (the “ Cash Management Account ”), which Cash Management Account shall be under the sole dominion and control of Lender. The Cash Management Account shall be entitled “Column Financial, Inc., its successors and/or assigns — HRHH Development Transferee, LLC Cash Management Account” or such other title as shall be reasonably acceptable to Lender and the bank holding the Cash Management Account. Borrower hereby grants to Lender a first priority security interest in the Cash Management Account and all deposits at any time contained therein and the proceeds thereof, and will take all actions requested by Lender that are necessary to maintain in favor of Lender a perfected first priority security interest in the Cash Management Account, including, without limitation, executing and filing UCC-1 Financing Statements and continuations thereof and entering into a deposit control agreement with the bank holding the Cash Management Account and Lender in a form or forms reasonably acceptable to Lender. Lender shall have the sole right to make withdrawals from the Cash Management Account for application pursuant to the terms of this Agreement and the other Loan Documents and all reasonable costs and expenses for establishing and maintaining the Cash Management Account shall be paid by Borrower.

                    (b) Provided no Event of Default shall have occurred and be continuing, on the last Business Day of each calendar week during an Interest Period (or such other date as is expressly set forth in the Cash Management Agreement) all funds on deposit in the Cash Management Account shall be credited towards payment of the following items (but not disbursed) in the order indicated, it being acknowledged and agreed by Borrower and Lender, however, that (1) as soon as there are sufficient funds in the Cash Management Account to satisfy the amounts that will be due on the next Payment Date under clauses (i) and (ii) below, on the last Business Day of each calendar week thereafter during the remainder of such Interest Period, Lender shall disburse the funds on deposit in the Cash Management Account to Borrower until such time, if ever, during such Interest Period as the total amounts that will be due on the next Payment Date under clause (iii) and (iv) below shall have been fully disbursed, and (2) on each Payment Date, all remaining funds in the Cash Management Account shall be disbursed in accordance with the following in the order indicated, except to the extent already disbursed on account of clause (iii) and/or (iv) below:

     (i) First, payment to Lender of the Monthly Interest Payment computed at the Applicable Interest Rate;

     (ii) Second, payment to Lender of (or reimbursement of Lender for) any other amounts or reasonable miscellaneous fees or expenses (including, without limitation, any “protective advances” made by Lender in respect of the Loan) then due and payable pursuant to the terms of the Loan Documents;

     (iii) Third, payment to Borrower of an amount sufficient to pay the monthly Operating Expenses, excluding any management fees payable to any Manager, and Capital Expenditures pursuant to the Approved Annual Budget (other than (A) Taxes and Insurance Premiums to be paid for out of the Tax and Insurance Escrow Funds, and (B) and Operating Expenses, Capital Expenditures and/or other expenses to be paid for out of any other Reserve Funds) or if no Approved Annual Budget is then in effect, as reasonably approved by Lender;

     (iv) Fourth, payment to Borrower for Extraordinary Expenses approved by Lender, if any (such amounts as remain after application to items (i) through (iii) above and this item (iv) , collectively, the “Excess Cash Flow” ); and

     (v) Fifth, payment to Lender of all Excess Cash Flow for deposit into the Interest Reserve Fund.

                        (c) Subject to Sections 2.6.3 and 7.2.2 hereof, the insufficiency of funds on deposit in the Cash Management Account shall not relieve Borrower from the obligation to make any payments, as and when due pursuant to this Agreement and the other Loan Documents, including, without limitation, the payments set forth in clauses (i) through (iv) , inclusive, in Section 2.6.2(b) hereof, and such obligations shall be separate and independent, and not conditioned on any event or circumstance whatsoever.

                        (d) All funds on deposit in the Cash Management Account following the occurrence and during the continuation of an Event of Default may be applied by Lender to the Debt in any order, priority and proportions as Lender shall elect in its sole discretion from time to time until the Debt is paid in full, with any amounts remaining being disbursed to Borrower. Borrower and Lender hereby agree and acknowledge that if (A) all of the Obligations have been satisfied, and (B) there are funds remaining in any of the Reserve Funds, Lender shall deliver such funds to Borrower.

           Section 2.7 Extensions of the Initial Maturity Date . Borrower shall have the option (each, an “ Extension Option ”) to extend the term of the Loan beyond the Initial Maturity Date for two (2) successive terms (each, an “ Extension Term ”) of six (6) calendar months each (the Initial Maturity Date following the exercise of each Extension Option being the “ Extended Maturity Date ”).

                2.7.1 First Extension Option . Borrower shall have the right to extend the Initial Maturity Date to the First Extended Maturity Date (the “ First Extension Option ”; and the period commencing on the first (1st) day following the Initial Maturity Date and ending on the

First Extended Maturity Date being referred to herein as the “ First Extension Term ”), provided that all of the following conditions are satisfied:

                    (a) no monetary Default nor any Event of Default shall have occurred and be continuing at the time the First Extension Option is exercised or on the date that the First Extension Term commences;

                    (b) Borrower shall notify Lender of its irrevocable election to exercise the First Extension Option not earlier than six (6) months, and not later than thirty (30) days, prior to the Initial Maturity Date;

                    (c) if the Interest Rate Cap Agreement is scheduled to mature prior to the First Extended Maturity Date, Borrower shall obtain and deliver to Lender not later than one (1) Business Day immediately preceding the first (1 ^st ) day of the First Extension Term, a Replacement Interest Rate Cap Agreement (or extension of the existing Interest Rate Cap Agreement) from an Acceptable Counterparty, which Replacement Interest Rate Cap Agreement (or extension of the existing Interest Rate Cap Agreement) shall (i) be effective commencing on the first (1 ^st ) day of the First Extension Term, (ii) have a LIBOR strike price equal to the applicable Strike Price, and (iii) have a maturity date not earlier than the First Extended Maturity Date;

                    (d) not later than one (1) Business Day immediately preceding the first (1 ^st ) day of the First Extension Term, all accrued and unpaid interest and any unpaid or unreimbursed amounts in respect of the Loan and any other sums then due to Lender hereunder or under any of the other Loan Documents shall have been paid in full;

                    (e) not later than one (1) Business Day immediately preceding the first (1 ^st ) day of the First Extension Term, Borrower shall have deposited with Lender in immediately available funds, for deposit by Lender into the Interest Reserve Account, an amount equal to the difference between (i) the aggregate amount of Debt Service that Lender reasonably estimates will be due and payable during the First Extension Term calculated at an interest rate equal to the then applicable Strike Price plus the then applicable Spread, less (ii) the amount on deposit in the Interest Reserve Fund as of the day immediately preceding the first (1 ^st ) day of the First Extension Term, which amount thereafter shall constitute a part of the Interest Reserve Fund and shall be held and disbursed by Lender as set forth in Section 7.2 hereof;

                    (f) not later than one (1) Business Day immediately preceding the first (1 ^st ) day of the First Extension Term, Borrower shall have made a deposit to the Tax and Insurance Escrow Fund to cover Taxes and Insurance Premiums coming due following the first (1 ^st ) day of the First Extension Term through the duration of the First Extension Term, based on the same criteria used by Lender to determine the amount deposited to the Tax and Insurance Escrow Fund on the Closing Date, which amount thereafter shall constitute a part of the Tax and Insurance Escrow Fund and shall be held and disbursed by Lender as set forth in Section 7.1 hereof;

                    (g) Borrower shall have delivered to Lender a “110.5A” (extension of maturity date) endorsement to the Title Insurance Policy;

                    (h) Borrower shall have paid to Lender an extension fee equal to one percent (1.0%) of the Outstanding Principal Balance not later than one (1) Business Day immediately preceding the first (1 ^st ) day of the First Extension Term; and

                    (i) Borrower shall have reimbursed Lender for all costs reasonably incurred by Lender in processing the extension request, including, without limitation, reasonable legal fees and expenses; provided , however , that in no event shall Borrower be required to pay any such fees, costs or expenses in excess of Five Thousand Dollars ($5,000).

                2.7.2 Second Extension Option . Borrower shall have the right to extend the First Extended Maturity Date to the Second Extended Maturity Date (the “ Second Extension Option ”; and the period commencing on the first (1st) day following the First Extended Maturity Date and ending on the Second Extended Maturity Date being referred to herein as the “ Second Extension Term ”), provided that all of the following conditions are satisfied:

                    (a) no monetary Default nor any Event of Default shall have occurred and be continuing at the time the Second Extension Option is exercised or on the date that the Second Extension Term commences;

                    (b) Borrower shall notify Lender of its irrevocable election to exercise the Second Extension Option not earlier than six (6) months, and not later than thirty (30) days, prior to the First Extended Maturity Date;

                    (c) if the Interest Rate Cap Agreement is scheduled to mature prior to the Second Extended Maturity Date, Borrower shall obtain and deliver to Lender not later than one (1) Business Day immediately preceding the first (1 ^st ) day of the Second Extension Term, a Replacement Interest Rate Cap Agreement (or extension of the existing Interest Rate Cap Agreement) from an Acceptable Counterparty, which Replacement Interest Rate Cap Agreement (or extension of the existing Interest Rate Cap Agreement) shall (i) be effective commencing on the first (1 ^st ) day of the Second Extension Term, (ii) have a LIBOR strike price equal to the applicable Strike Price, and (iii) have a maturity date not earlier than the Second Extended Maturity Date;

                    (d) not later than one (1) Business Day immediately preceding the first (1 ^st ) day of the Second Extension Term, all accrued and unpaid interest and any unpaid or unreimbursed amounts in respect of the Loan and any other sums then due to Lender hereunder or under any of the other Loan Documents shall have been paid in full;

                    (e) not later than one (1) Business Day immediately preceding the first (1 ^st ) day of the Second Extension Term, Borrower shall have deposited with Lender in immediately available funds, for deposit by Lender into the Interest Reserve Account, an amount equal to the difference between (i) the aggregate amount of Debt Service that Lender reasonably estimates will be due and payable during the Second Extension Term calculated at an interest rate equal to the then applicable Strike Price plus the then applicable Spread, less (ii) the amount on deposit in the Interest Reserve Fund as of the day immediately preceding the first (1 ^st ) day of the Second Extension Term, which amount thereafter shall constitute a part of the Interest Reserve Fund and shall be held and disbursed by Lender as set forth in Section 7.2 hereof;

                    (f) not later than one (1) Business Day immediately preceding the first (1 ^st ) day of the Second Extension Term, Borrower shall have made a deposit to the Tax and Insurance Escrow Fund to cover Taxes and Insurance Premiums coming due following the first (1 ^st ) day of the Second Extension Term through the duration of the Second Extension Term, based on the same criteria used by Lender to determine the amount deposited to the Tax and Insurance Escrow Fund on the Closing Date, which amount thereafter shall constitute a part of the Tax and Insurance Escrow Fund and shall be held and disbursed by Lender as set forth in Section 7.1 hereof;

                    (g) Borrower shall have delivered to Lender a “110.5A” (extension of maturity date) endorsement to the Title Insurance Policy;

                    (h) Borrower shall have paid to Lender an extension fee equal to one percent (1.0%) of the Outstanding Principal Balance not later than one (1) Business Day immediately preceding the first (1 ^st ) day of the Second Extension Term; and

                    (i) Borrower shall have reimbursed Lender for all costs reasonably incurred by Lender in processing the extension request, including, without limitation, reasonable legal fees and expenses; provided , however , that in no event shall Borrower be required to pay any such fees, costs or expenses in excess of Five Thousand Dollars ($5,000).

ARTICLE III.
INTENTIONALLY OMITTED.

ARTICLE IV.
REPRESENTATIONS AND WARRANTIES.

           Section 4.1 Representations of Borrower . Borrower represents and warrants that as of the Closing Date:

                4.1.1 Organization . Borrower has been duly organized and is validly existing and in good standing with requisite power and authority to own its properties and to transact the businesses in which it is now engaged. Borrower is duly qualified to do business and is in good standing in each jurisdiction where it is required to be so qualified in connection with its properties, businesses and operations. Borrower possesses all material rights, licenses, permits and authorizations, governmental or otherwise, necessary to entitle it to own its properties and to transact the businesses in which it is now engaged, and the sole business of Borrower is the ownership, management and operation of the Property. The ownership interests of Borrower are as set forth on the organizational chart attached hereto as Schedule II .

                4.1.2 Proceedings . Borrower has taken all necessary action to authorize the execution, delivery and performance of this Agreement and the other Loan Documents. This Agreement and the other Loan Documents have been duly executed and delivered by or on behalf of Borrower and constitute legal, valid and binding obligations of Borrower enforceable

against Borrower in accordance with their respective terms, subject only to applicable bankruptcy, insolvency and similar laws affecting rights of creditors generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

                4.1.3 No Conflicts . The execution, delivery and performance of this Agreement and the other Loan Documents by Borrower will not materially conflict with or result in a material breach of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance (other than pursuant to the Loan Documents) upon any of the property or assets of Borrower pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement, partnership agreement, management agreement or other agreement or instrument to which Borrower is a party or by which any of Borrower’s property or assets is subject, nor will such action result in any violation of the provisions of any statute or any order, rule or regulation of any Governmental Authority having jurisdiction over Borrower or any of Borrower’s properties or assets, and any consent, approval, authorization, order, registration or qualification of or with any such Governmental Authority necessary to permit the execution, delivery and performance by Borrower of this Agreement or any other Loan Documents has been obtained and is in full force and effect.

                4.1.4 Litigation . Except as set forth on Schedule III attached hereto:

                    (a) There is no action, suit, claim, proceeding or investigation pending against Borrower or any Guarantor or the Property or, to Borrower’s actual knowledge, threatened in writing against Borrower or any Guarantor or the Property in any court or by or before any other Governmental Authority that would have a material adverse effect on (i) the business operations, economic performance, assets, financial co