AMENDED AND RESTATED LOAN AGREEMENT Dated as of November 6, 2007 Among HRHH HOTEL/CASINO, LLC, as Hotel/Casino Borrower and HRHH CAFE, LLC, as Café Borrower and HRHH DEVELOPMENT, LLC, as Adjacent Borrower and HRHH IP, LLC, as IP Borrower and HRHH...

Exhibit 10.1

AMENDED AND RESTATED LOAN AGREEMENT

Dated as of November 6, 2007

Among

HRHH HOTEL/CASINO, LLC,

as Hotel/Casino Borrower

and

HRHH CAFE, LLC,

as Café Borrower

and

HRHH DEVELOPMENT, LLC,

as Adjacent Borrower

and

HRHH IP, LLC,

as IP Borrower

and

HRHH GAMING, LLC,

as Gaming Borrower

and

COLUMN FINANCIAL, INC.,

as Lender

TABLE OF CONTENTS


		Page

ARTICLE I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION		2

Section 1.1	Definitions	2
Section 1.2	Principles of Construction	68

ARTICLE II. GENERAL TERMS		68

Section 2.1	Loan Commitment; Disbursement to Borrowers	68
Section 2.2	Interest Rate	69
Section 2.3	Loan Payment	76
Section 2.4	Prepayments	77
Section 2.5	Release of Property	91
Section 2.6	Cash Management	108
Section 2.7	Extensions of the Initial Maturity Date	115
Section 2.8	Exit Fee	125
Section 2.9	Unused Advance Fee	126

ARTICLE III. CONSTRUCTION LOAN		127

Section 3.1	Construction Loan Advances	127
Section 3.2	Conditions Precedent to Initial Construction Loan Advance	131
Section 3.3	Conditions Precedent to Subsequent Construction Loan Advances	139
Section 3.4	Conditions of Final Construction Loan Advance	142
Section 3.5	No Reliance	144
Section 3.6	Procedures for Loan Advances	144
Section 3.7	Direct Advances to Third Parties	145
Section 3.8	Loan Advances Do Not Constitute a Waiver	146
Section 3.9	Cost Overruns; Reallocation of Line Items	146
Section 3.10	Contingency Reallocations	147
Section 3.11	Stored Materials	148
Section 3.12	Loan Balancing and Shortfalls	149
Section 3.13	Quality of Work	149
Section 3.14	Imported Materials	149
Section 3.15	Approval of Change Orders	150
Section 3.16	Construction Covenants	151
Section 3.17	Pre-Construction Advances	155
Section 3.18	Work at Adjacent Property	163
Section 3.19	Administrative Agent	163
Section 3.20	Monthly Interest Payments During Construction	165
Section 3.21	Construction Loan Advances Once Construction Loan is Fully Advanced	167
Section 3.22	Right of Borrowers to Halt Construction and Restore	168



ARTICLE IV. REPRESENTATIONS AND WARRANTIES		173

Section 4.1	Representations of Borrowers	173
Section 4.2	Survival of Representations	187
Section 4.3	Definition of Borrowers’ Knowledge	187

ARTICLE V. COVENANTS OF BORROWERS		188

Section 5.1	Affirmative Covenants	188
Section 5.2	Negative Covenants	206

ARTICLE VI. INSURANCE; CASUALTY; CONDEMNATION; RESTORATION		214

Section 6.1	Insurance	214
Section 6.2	Casualty	220
Section 6.3	Condemnation	221
Section 6.4	Restoration	221

ARTICLE VII. RESERVE FUNDS		226

Section 7.1	Required Repair Fund	226
Section 7.2	Tax and Insurance Escrow Fund	229
Section 7.3	Replacements and Replacement Reserve	229
Section 7.4	Interest Reserve Fund	230
Section 7.5	Initial Renovation Reserve Fund	232
Section 7.6	General Reserve Fund	237
Section 7.7	Construction Loan Reserve Fund	237
Section 7.8	Reserve Funds, Generally	238

ARTICLE VIII. DEFAULTS		240

Section 8.1	Event of Default	240
Section 8.2	Remedies	245

ARTICLE IX. SPECIAL PROVISIONS		248

Section 9.1	Sale of Note and Securitization	248
Section 9.2	Securitization Indemnification	251
Section 9.3	Intentionally Omitted	251
Section 9.4	Exculpation	254
Section 9.5	Matters Concerning Managers and Liquor Manager	259
Section 9.6	Matters Concerning Gaming Operator	260
Section 9.7	Servicer	260
Section 9.8	Restructuring of Loan	260

ARTICLE X. MISCELLANEOUS		262

Section 10.1	Survival	262
Section 10.2	Lender’s Discretion	262
Section 10.3	Governing Law	262
Section 10.4	Modification, Waiver in Writing	264


Section 10.5	Delay Not a Waiver	264
Section 10.6	Notices	265
Section 10.7	Trial by Jury	266
Section 10.8	Headings	267
Section 10.9	Severability	267
Section 10.10	Preferences	267
Section 10.11	Waiver of Notice	267
Section 10.12	Remedies of Borrowers	267
Section 10.13	Expenses; Indemnity	267
Section 10.14	Schedules and Exhibits Incorporated	269
Section 10.15	Offsets, Counterclaims and Defenses	269
Section 10.16	No Joint Venture or Partnership; No Third Party Beneficiaries	269
Section 10.17	Publicity	271
Section 10.18	Waiver of Marshalling of Assets	271
Section 10.19	Waiver of Counterclaim	271
Section 10.20	Conflict; Construction of Documents; Reliance	271
Section 10.21	Brokers and Financial Advisors	272
Section 10.22	Prior Agreements	272
Section 10.23	Joint and Several Liability	272
Section 10.24	Certain Additional Rights of Lender (VCOC)	273
Section 10.25	Future Funding, Participations and Assignment	273

ARTICLE XI. MEZZANINE LOANS		274

Section 11.1	Mezzanine Loan Deliveries	274
Section 11.2	Mezzanine Loan Estoppels	275
Section 11.3	Intercreditor Agreement	276

ARTICLE XII. GAMING PROVISIONS		277

Section 12.1	Operation of Casino Component	277
Section 12.2	Gaming Liquidity Requirements	279

ARTICLE XIII. RIGHT OF FIRST OFFER		281

Section 13.1	Right of First Offer	281
Section 13.2	Right of First Offer Procedure	281
Section 13.3	Application to Credit Suisse	282

iii

EXHIBITS AND SCHEDULES


Schedule I-A	–	Legal Description of Hotel/Casino Property
Schedule I-B	–	Legal Description of Café Property
Schedule I-C	–	Legal Description of Adjacent Property
Schedule II	–	Description of Project
Schedule III	–	Intentionally Omitted
Schedule IV	–	Allocated Loan Amounts
Schedule V	–	FF&E, Capital & Equipment Leases
Schedule VI	–	Organizational Structure
Schedule VII	–	Approximate Release Parcel
Schedule VIII	–	Litigation
Schedule IX	–	Operating Permits
Schedule X	–	Rent Roll
Schedule XI	–	IP
Schedule XII	–	Required Repairs – Deadlines for Completion
Schedule XIII	–	Schedule and Budget for Initial Renovations
Schedule XIV	–	Projected Monthly Net Operating Income
Schedule XV	–	Net Worth Requirements
Schedule XVI	–	Uses of Working Capital Advance
Schedule XVII	–	Right of First Offer Terms for Affiliate Release Parcel Purchasers and Affiliate Adjacent Parcel Purchasers
Schedule XVIII	–	Right of Last Look Terms for Affiliate Release Parcel Purchasers and Affiliate Adjacent Parcel Purchasers
Schedule XIX	–	Minimum Advance Schedule
Schedule XX	–	Pre-Construction Budget
Schedule XXI	–	Targeted Minimum Balance Schedule
Exhibit A		Advance Request
Exhibit B		Anticipated Cost Report
Exhibit C		Architect’s Consent
Exhibit D		Construction Completion Guaranty
Exhibit E		Construction Manager’s Consent
Exhibit F		General Contractor’s Consent
Exhibit G		Major Contractor’s Consent
Exhibit H		Application and Certificate for Payment
Exhibit I		Architect’s Certificate
Exhibit J		Construction Manager’s Certificate
Exhibit K		Contractor’s Certificate
Exhibit X-0		Xxxx Xxxxxx – Progress Payment/Conditional
Exhibit X-0		Xxxx Xxxxxx – Progress Payment/Unconditional
Exhibit X-0		Xxxx Xxxxxx – Final Payment/Conditional
Exhibit X-0		Xxxx Xxxxxx – Final Payment/Unconditional
Exhibit M		Affirmation of Payment
Exhibit N		General Contractor’s Certificate
Exhibit O		Form of Casino Component Lease
Exhibit P		Letter of Credit Reduction Notice

AMENDED AND RESTATED LOAN AGREEMENT

THIS AMENDED AND RESTATED LOAN AGREEMENT, dated as of November 6, 2007 (as amended, restated, replaced, supplemented or otherwise modified from time to time, this “Agreement”), among COLUMN FINANCIAL, INC., a Delaware corporation, having an address at 00 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (together with its successors and assigns, “Lender”), and HRHH HOTEL/CASINO, LLC, a Delaware limited liability company, having its principal place of business c/o Morgans Hotel Group Co., 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx Xxxxxx, Chief Investment Officer (“Hotel/Casino Borrower”), HRHH CAFE, LLC, a Delaware limited liability company, having its principal place of business c/o Morgans Hotel Group Co., 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx Xxxxxx, Chief Investment Officer (“Café Borrower”), HRHH DEVELOPMENT, LLC, a Delaware limited liability company, having its principal place of business c/o Morgans Hotel Group Co., 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx Xxxxxx, Chief Investment Officer (“Adjacent Borrower”), HRHH IP, LLC, a Delaware limited liability company, having its principal place of business c/o Morgans Hotel Group Co., 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx Xxxxxx, Chief Investment Officer (“IP Borrower”), and HRHH GAMING, LLC, a Nevada limited liability company, having its principal place of business c/o Morgans Hotel Group Co., 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx Xxxxxx, Chief Investment Officer (“Gaming Borrower”; and each of Hotel/Casino Borrower, Café Borrower, Adjacent Borrower, IP Borrower and Gaming Borrower, individually, a “Borrower”, and collectively, “Borrowers”), jointly and severally.

W I T N E S S E T H:

WHEREAS, pursuant to that certain Loan Agreement dated as of February 2, 2007 by and between Borrowers and Lender (the “Original Loan Agreement”) and that certain Promissory Note dated as of February 2, 2007 in the principal amount of up to $1,360,000,000.00 made by Borrowers in favor of Lender (the “Original Note”), Borrowers obtained a loan in the original principal amount of up to $1,360,000,000.00 (the “Loan”); and

WHEREAS, Borrowers and Lender desire that (i) Borrowers prepay $350,000,000.00 of the Loan from the proceeds of three (3) mezzanine loans made to the direct and/or indirect owners of equity interests in Borrowers (each a “Mezzanine Prepayment”), and (ii) Lender increase the maximum amount of the Loan that may be funded in the future under the Construction Loan (as defined in the Original Loan Agreement) by $20,000,000.00, and, in connection with both of the foregoing, that (a) certain terms and conditions of the Original Loan Agreement be modified in accordance with the terms and conditions of this Agreement; (b) the Original Note be replaced by the following two (2) replacement promissory notes: (i) that certain Replacement Construction Loan Promissory Note of even date herewith in the principal amount of up to $620,000,000.00 made by Borrowers in favor of Lender, and (ii) that certain Replacement Reduced Acquisition Loan Promissory Note of even date herewith in the principal amount of $410,000,000.00 made by Borrowers in favor of Lender; (c) certain terms and conditions of the Loan Documents (as defined in the Original Loan Agreement) be modified in accordance with the terms and conditions of (i) that certain Modification of Construction Deed of Trust, Assignment of Leases and Rents, Security Agreement and Financing Statement (Fixture

Filing) and Other Loan Documents of even date herewith by and among Borrowers and Lender (the “Loan Document Modification Agreement”); (ii) that certain Modification of HRHI Loan Documents and Ratification of HRHI Guaranty of even date herewith by and among HRHI (as hereinafter defined) and Lender (the “HRHI Modification Agreement”); (iii) that certain Modification and Ratification of Guaranties of even date herewith by and among Guarantors (as hereinafter defined) and Lender (the “Guaranty Modification Agreement”); and (iv) that certain Amended and Restated Cash Management Agreement of even date herewith by and among Borrowers, HRHI and Lender and acknowledged and agreed to by Manager (as hereinafter defined) (as the same may hereafter be amended, restated, replaced, supplemented or otherwise modified from time to time, the “Cash Management Agreement”).

NOW, THEREFORE, in consideration of the making of the Loan by Lender and the covenants, agreements, representations and warranties set forth in the Original Loan Agreement and 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 that the Original Loan Agreement is hereby amended and restated in its entirety to read 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 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 Xxxxx’x, which rating shall not include a “t” or otherwise reflect a termination risk.

“Acquisition Costs” shall mean $932,576,584.29, representing the costs paid on the Closing Date directly or indirectly in connection with the acquisition of the Properties and the IP and/or in making the Loan (including, without limitation, required deposits to Reserve Funds).

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

“Additional Non-Qualified Mandatory Prepayment” shall have the meaning set forth in Section 2.4.2(d) hereof.

“Additional Non-Qualified Prepayment Date” shall mean July 1, 2008.

“Administrative Agent” shall have the meaning set forth in Section 3.19.1 hereof.

“Administrative Agent Fee” shall mean an annual fee payable to the Administrative Agent equal to $200,000.00, payable in equal quarterly installments, in advance.

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

“Adjacent Parcel Purchaser” shall have the meaning set forth in Section 2.5.2(a) hereof.

“Adjacent Parcel Release Price” shall have the meaning set forth in Section 2.5.2(a)(vi) hereof.

“Adjacent Parcel Sale” shall have the meaning set forth in Section 2.5.2(a) hereof.

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

“Adjacent Property IP License” shall have the meaning set forth in Section 5.1.26(b) hereof.

“Advance Request” shall mean that certain form of Advance Request attached hereto as Exhibit A.

“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.

“Affiliate Adjacent Parcel Purchaser” shall have the meaning set forth in Section 2.5.2(a).

“Affiliate Adjacent Parcel Release Price” shall have the meaning set forth in Section 2.5.2(a)(vi).

“Affiliate IP License” shall have the meaning set forth in Section 5.1.26(d) hereof.

“Affiliate IP Purchaser” shall have the meaning set forth in Section 2.5.3(a).

“Affiliate IP Release Price” shall have the meaning set forth in Section 2.5.3(a)(vi).

“Affiliate Joint Venture Counterparty” shall mean any party to an Affiliate Joint Venture who is a Restricted Party or any Affiliate thereof.

“Affiliate Release Parcel Purchaser” shall have the meaning set forth in Section 2.5.1(a).

“Affiliate Release Parcel Release Price” shall have the meaning set forth in Section 2.5.1(a)(vi).

“Affiliated IP Party” shall mean (i) any subsidiary of any Borrower hereafter formed with Lender’s consent, (ii) HRHI, but only from and after the consummation of the transactions

contemplated by the Merger Agreement, and (iii) any subsidiary of HRHI, but only from and after the consummation of the transactions contemplated by the Merger Agreement.

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

“Affirmation of Payment” shall have the meaning set forth in Section 3.3(b)(iii).

“Aggregate Outstanding Principal Balance” shall mean, as of any date, the sum of the Outstanding Principal Balance, the First Mezzanine Loan Outstanding Principal Balance, the Second Mezzanine Loan Outstanding Principal Balance and the Third Mezzanine Loan Outstanding Principal Balance.

“Aggregate Monthly Amount” shall have the meaning set forth in Section 2.6.2(b) hereof.

“Aggregate Monthly Interest Payment” shall have the meaning set forth in Section 3.20.1 hereof.

“Agreement Regarding Xxxxxx Indemnification and Escrow” shall mean that certain Collateral Assignment and Acknowledgment (Xxxxxx Indemnification), dated as of February 2, 2007, made by PM Realty, LLC, Red, White and Blue Pictures, Inc., Xxxxx X. Xxxxxx, 510 Development Corporation, Morgans Hotel Group Co., Morgans Group LLC and Chicago Title Agency of Nevada, Inc. in favor of Lender, (i) acknowledging that Lender is a third party beneficiary of the Xxxxxx Indemnification and the PWR/RWB Escrow Agreement, and (ii) consenting to Lender’s rights under Section 5.2.11 hereof.

“Allocated Loan Amount” shall mean, with respect to the Adjacent Property (on a per acre basis) and the IP, the aggregate amount of the Loan, the First Mezzanine Loan, the Second Mezzanine Loan and the Third Mezzanine Loan allocated to each of the Adjacent Property (on a per acre basis) and the IP as set forth on Schedule IV attached hereto and made a part hereof; provided, however, that throughout the term of the Loan, if applicable, the Allocated Loan Amounts shall be adjusted as follows: (a) in the event that any Borrower shall make a voluntary prepayment of the Loan (other than the Mezzanine Prepayments), the Allocated Loan Amount for the Adjacent Property (on a per acre basis) and/or the IP, to the extent any of the foregoing is then securing the Loan, shall be reduced by an amount equal to (i) the aggregate amount of such prepayment multiplied by (ii) the Allocated Loan Percentage for the Adjacent Property (on a per acre basis) or the IP, as applicable, (b) in the event that any First Mezzanine Borrower shall make a voluntary prepayment of the First Mezzanine Loan, the Allocated Loan Amount for the Adjacent Property (on a per acre basis) and/or the IP, to the extent any of the foregoing is then securing the Loan, shall be reduced by an amount equal to (i) the aggregate amount of such prepayment multiplied by (ii) the Allocated Loan Percentage for the Adjacent Property (on a per acre basis) or the IP, as applicable, (c) in the event that any Second Mezzanine Borrower shall make a voluntary prepayment of the Second Mezzanine Loan, the Allocated Loan Amount for the Adjacent Property (on a per acre basis) and/or the IP, to the extent any of the foregoing is then securing the Loan, shall be reduced by an amount equal to (i) the aggregate amount of such prepayment multiplied by (ii) the Allocated Loan Percentage for the Adjacent Property (on a per

acre basis) or the IP, as applicable, (d) in the event that any Third Mezzanine Borrower shall make a voluntary prepayment of the Third Mezzanine Loan, the Allocated Loan Amount for the Adjacent Property (on a per acre basis) and/or the IP, to the extent any of the foregoing is then securing the Loan, shall be reduced by an amount equal to (i) the aggregate amount of such prepayment multiplied by (ii) the Allocated Loan Percentage for the Adjacent Property (on a per acre basis) or the IP, as applicable, and (e) in the event of a Casualty or Condemnation to the Adjacent Property resulting in the application of Net Proceeds to the Loan and/or the First Mezzanine Loan and/or the Second Mezzanine Loan and/or the Third Mezzanine Loan in accordance with the provisions of this Agreement, the Allocated Loan Amount for the Adjacent Property shall be reduced by the amount of such Net Proceeds up to the amount of the Allocated Loan Amount for the Adjacent Property (on an aggregate basis), but any excess Net Proceeds over the Allocated Loan Amount for the Adjacent Property shall not reduce the Allocated Loan Amount for the IP, it being expressly acknowledged and agreed by Lender and Borrowers that under no circumstances other than the foregoing clauses (a) through (e), including the payment of any Release Parcel Release Price, Adjacent Parcel Release Price, IP Release Price or Mezzanine Prepayment, shall the payment of any principal of the Loan, the First Mezzanine Loan, the Second Mezzanine Loan and/or the Third Mezzanine Loan, or any other event, result in the reduction of the Allocated Loan Amount for the Adjacent Property (either on a per acre or aggregate basis) or the IP.

“Allocated Loan Percentage” shall mean, with respect to the Adjacent Property (on a per acre basis) or the IP, as applicable, as of any date of determination and calculated prior to the prepayment with respect to which the Allocated Loan Amount calculation is being made on such date of determination, a fraction, expressed as a percentage, (i) the numerator of which is the Allocated Loan Amount for the Adjacent Property (on a per acre basis) or the IP, as applicable, and (ii) the denominator of which is the difference between $1,395,000,000.00 less any principal prepayments (other than the Mezzanine Prepayments) made prior to the prepayment with respect to which the Allocated Loan Amount calculation is being made on such date of determination.

“Alteration Threshold Amount” shall mean (i) prior to Substantial Completion of the Project (but excluding any portion of the Project), Two Million and No/100 Dollars ($2,000,000.00), and (ii) following Substantial Completion of the Project, Three Million and No/100 Dollars ($3,000,000.00).

“Alternate Financing Percentages” shall mean the Reduced Acquisition Loan Percentage, the First Mezzanine Loan Percentage, the Second Mezzanine Loan Percentage and the Third Mezzanine Loan Percentage.

“Alternative Minimum Interest Reserve Amount” shall have the meaning set forth in Section 2.4.2(b)(ii) hereof.

“Alternative Minimum Mandatory Letter of Credit” shall have the meaning set forth in Section 2.4.2(b)(ii) hereof.

“Annual Budget” shall mean the operating budget, including all planned Capital Expenditures, for all of the Properties, collectively, prepared by Borrowers or the applicable Manager(s) for the applicable Fiscal Year or other period.

“Anticipated Cost Report” shall mean a report in the form set forth in Exhibit B executed by the Construction Manager which sets forth the anticipated costs to complete construction of the Project, after giving effect to costs incurred during the previous month and any anticipated Change Orders.

“Applicable Exit Fee Percentage” shall mean one percent (1%), unless Borrowers shall fully repay the Debt on or prior to the Maturity Date with the proceeds of a Refinancing Loan which is provided by Credit Suisse or an Affiliate thereof (whether or not it is Lender), in which case it shall mean one-half of one percent (0.50%). Borrowers expressly acknowledge and agree that neither Lender nor Credit Suisse nor any Affiliate thereof shall have any obligation to offer or to provide any Refinancing Loan and the failure to offer or to provide any Refinancing Loan shall not affect Borrowers’ obligation to pay the Exit Fee.

“Applicable Interest Rate” shall mean (i) with respect to the Reduced Acquisition Loan, the rate or rates at which the Reduced Acquisition Loan Outstanding Principal Balance bears interest from time to time in accordance with the provisions of Section 2.2.3 hereof, and (ii) with respect to the Construction Loan, the rate or rates at which the Construction Loan Outstanding Principal Balance bears interest from time to time in accordance with the provisions of Section 2.2.3 hereof.

“Appraised Value” shall mean the appraised value of the applicable Property or the applicable portion thereof based on one or more appraisals reasonably acceptable to Lender conducted by one or more licensed appraisers.

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

“Approved Bank” shall mean a bank or other financial institution which has a minimum long term unsecured debt rating of at least “AA” by S&P and Fitch and “Aa2” by Xxxxx’x.

“Approved Pre-Construction Expenses” shall have the meaning specified in Section 3.17.1(a) hereof.

“Architect” shall mean each of (i) Klai Juba Architects, the architect engaged by (or on behalf of) one or more Borrowers or an Affiliate thereof with respect to the Project on the date hereof, (ii) any other architect engaged by (or on behalf of) one or more Borrowers with respect to the Project after the date hereof and approved by Lender in its reasonable discretion, and (iii) any successor of any of the foregoing, in each case as approved by Lender in its reasonable discretion; provided, that in no event shall any Architect (a) be an Affiliate of any Restricted Party or (b) have any equity interest or any equivalent thereof in any of the Properties or in any Restricted Party.

“Architect’s Certificate” shall have the meaning set forth in Section 3.2(f)(xi).

“Architect’s Contract” shall mean a contract for architectural services to be entered into by and between one or more Borrowers and Architect in respect of the Project and approved by Lender in its reasonable discretion.

“Architect’s Consent” shall mean an Architect Certification and Consent Agreement executed and delivered by the Architect in favor of Lender and substantially in the form attached as Exhibit C.

“Asbestos Survey” shall have the meaning set forth in Section 3.18(b).

“Assignment Agreement” shall have the meaning set forth in Section 10.26.

“Assignment of Contracts” shall mean that certain Assignment of Contracts, Operating Permits and Construction Permits, dated as of February 2, 2007, from Borrowers to Lender, as modified by the Loan Document Modification Agreement and as the same hereafter may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Assignment of Leases” shall mean that certain first priority Assignment of Leases and Rents, dated as of February 2, 2007, from Hotel/Casino Borrower, Café Borrower, Adjacent Borrower and Gaming Borrower, as assignors, to Lender, as assignee, assigning to Lender all of each such Borrower’s right, title and interest in and to the Leases and Rents of its Property as security for the Loan, as modified by the Loan Document Modification Agreement and as the same hereafter may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Assignment of Liquor Management Agreement” shall mean that certain Assignment of Liquor Management Agreement and Subordination of Management Fees, dated as of February 2, 2007, among Lender, Hotel/Casino Borrower and HRHI, in its capacity as the Liquor Manager, as modified by the Loan Document Modification Agreement and the HRHI Modification Agreement and as the same hereafter may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Assignment of Management Agreement” shall mean either of the Assignment of Management Agreement (Adjacent Property) or the Assignment of Management Agreement (All Properties).

“Assignment of Management Agreement (Adjacent Property)” shall mean that certain Assignment of Management Agreement (Adjacent Property), dated as of February 2, 2007, among Lender, Adjacent Borrower and Sub-Manager, as modified by the Loan Document Modification Agreement and as the same hereafter may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Assignment of Management Agreement (All Properties)” shall mean that certain Assignment of Management Agreement and Subordination of Management Fees (All Properties), dated as of February 2, 2007, among Lender, Café Borrower, Hotel/Casino Borrower, Adjacent Borrower and the Affiliated Manager of such Properties, as modified by the Loan Document Modification Agreement and as the same hereafter may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Assignment of Restaurant Management Agreement” shall mean that certain Assignment of Restaurant Management Agreement, dated as of February 2, 2007, among Lender, Hotel/Casino Borrower, EGG, LLC and Xxxxx Xxxxx, the managers of Simon Kitchen

and Bar at the Hotel/Casino Property, as modified by the Loan Document Modification Agreement and as the same hereafter may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Award” shall mean any compensation paid by any Governmental Authority in connection with a Condemnation of all or any part of any 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 any 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, with respect to each Property, the sum of the following costs associated with such Property: (a) Taxes, (b) Other Charges, and (c) Insurance Premiums.

“Blended Spread” shall mean 4.25%.

“Bonafide Adjacent Parcel Purchaser” shall have the meaning set forth in Section 2.5.2(a).

“Bonafide Adjacent Parcel Release Price” shall have the meaning set forth in Section 2.5.2(a)(v).

“Bonafide IP Purchaser” shall have the meaning set forth in Section 2.5.3(a).

“Bonafide IP Release Price” shall have the meaning set forth in Section 2.5.3(a)(v).

“Bonafide Release Parcel Purchaser” shall have the meaning set forth in Section 2.5.1(a).

“Bonafide Release Parcel Release Price” shall have the meaning set forth in Section 2.5.1(a)(v).

“Borrower” and “Borrowers” shall have the meanings set forth in the introductory paragraph hereto, together with its or their successors and permitted assigns.

“Borrower Advance Date” shall have the meaning set forth in Section 3.21 hereof.

“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.

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

“Café Property” shall mean that or those certain parcel(s) of real property more particularly described on Schedule 1-B attached hereto and made a part hereof, the Improvements thereon and all personal property owned by Café Borrower and encumbered by the Mortgage, together with all rights pertaining to such property and Improvements, as more particularly described in the granting clause of the Mortgage and referred to therein as the “Cafe Property”.

“Capital Expenditures” shall mean, for any period, the amount expended for items capitalized under GAAP and the Uniform System of Accounts (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 have the meaning set forth in the recitals to this Agreement.

“Casino Account” shall mean, if and when Gaming Borrower becomes the Gaming Operator in accordance with the terms of this Agreement, individually or collectively, one or more accounts established and maintained from time to time by Gaming Borrower and reasonably approved by Lender; provided, however, that any such Casino Account shall be established and maintained pursuant to, and in accordance with, all applicable Gaming Laws and shall be subject to a security interest in favor of Lender pursuant to the Loan Documents.

“Casino Component” shall mean that portion of the Hotel/Casino Property devoted to the operation of a casino gaming operation and, as of February 2, 2007, leased to HRHI pursuant to the HRHI Lease and subleased to Gaming Operator pursuant to the Gaming Sublease, including, without limitation, those areas devoted to the conduct of games of chance, facilities associated directly with gaming operations, including, without limitation, casino support areas such as surveillance and security areas, cash cages, counting and accounting areas and gaming back-of-the-house areas, in each case, to the extent the operation thereof requires a Gaming License under applicable Gaming Laws, as more particularly described and set forth in the HRHI Lease and the Gaming Sublease as the “Premises”.

“Casino Component Lease” shall mean a lease substantially in the form attached hereto as Exhibit O, by and between Hotel/Casino Borrower, as lessor, and Gaming Borrower, as lessee, pursuant to which Hotel/Casino Borrower shall lease the Casino Component to Gaming

Borrower for the operation of the Casino Component as a casino, which, provided no monetary Default or any Event of Default has occurred and is continuing, shall be entered into upon (i) Gaming Borrower’s receipt of all necessary approvals from the Gaming Authorities, (ii) the termination of the Gaming Sublease pursuant to the terms thereof, (iii) the surrender of any Gaming Licenses by the existing licensee under applicable Gaming Laws, if required, (iv) the issuance to Gaming Borrower of all Gaming Licenses necessary to operate the Casino Component as a casino, and (v) the effectiveness of such Gaming Licenses.

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

“Casualty Consultant” shall have the meaning set forth in Section 6.4(c)(iii) hereof.

“Casualty Retainage” shall have the meaning set forth in Section 6.4(c)(iv) hereof.

“Certificate” shall have the meaning set forth in Section 7.1.2 hereof.

“Certificate of Occupancy” shall mean a permanent or temporary certificate of occupancy, in either case, for the portion of the Project specified in such certificate of occupancy issued by the applicable Governmental Authority pursuant to applicable Legal Requirements which permanent or temporary certificate of occupancy shall permit such portion of the Project covered thereby to be lawfully occupied and used for its intended purposes, shall be in full force and effect and, in the case of a temporary certificate of occupancy, shall permit full use and lawful occupancy of the portion(s) of the Project covered thereby, and if such temporary certificate of occupancy shall provide for an expiration date, any Punch List Items which must be completed in order for such temporary certificate of occupancy to be renewed or extended shall be completed no later than fifteen (15) days prior to the applicable expiration date thereof.

“Change Order” shall mean any change order, amendment, deviation, supplement, addition, deletion, revision or other modification in any respect to the Plans and Specifications, the Loan Budget, the Construction Schedule, the Architect’s Agreement, any Major Contract or any other contract or subcontract with a Trade Contractor, including minor departures from the Plans and Specifications pursuant to field orders.

“Closing Completion Guaranty” shall mean that certain Closing Guaranty of Completion, dated as of February 2, 2007, from Guarantors to Lender, as modified by the Guaranty Modification Agreement and as the same hereafter may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Closing Date” shall mean February 2, 2007.

“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 Assignments of Interest Rate Caps” shall mean, collectively, (i) that certain Collateral Assignment of Interest Rate Cap Agreement (Acquisition Mortgage Loan), dated as of the date hereof, executed by Borrowers 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, and (ii) that certain Collateral Assignment of Interest Rate Cap Agreement (Construction Mortgage Loan), dated as of the date hereof, executed by Borrowers 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.

“Comparable Hotel/Casinos” shall mean hotel and casino resorts in Las Vegas, Nevada which are of a similar nature, quality and scope as the hotel and casino resort being operated on the Hotel/Casino Property as of the Closing Date, including, without limitation, Mandalay Bay Resort and Casino, MGM Grand Hotel and Casino, The Palms Casino Resort and Caesars Palace, in each of the foregoing instances, as existing and being operated on the Closing Date.

“Component” shall mean each of the Reduced Acquisition Loan and the Construction Loan.

“Component Percentages” shall mean the Reduced Acquisition Loan Percentage and the Construction Loan Percentage.

“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 any Property, or any interest therein or right accruing thereto, including any right of access thereto or any change of grade affecting such Property or any part thereof.

“Condemnation Proceeds” shall have the meaning set forth in Section 6.4(c) hereof.

“Constituent Member” shall mean any direct member or partner in any 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 any Borrower or any Guarantor.

“Construction Completion Guaranty” shall mean a Construction Guaranty of Completion from Guarantors in favor of Lender in the form attached hereto as Exhibit D, as such agreement may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Construction Consultant” shall mean a Person engaged by Lender to inspect the Project and the Properties as construction progresses and to consult with and to provide advice to, and to render reports to, Lender which, at Lender’s option, may be either an officer or employee of Lender or a consulting architect, engineer or inspector appointed or engaged by Lender at the sole cost and expense of Borrowers. On the date hereof, the Construction Consultant is Inspection & Valuation International, Inc.

“Construction Consultant Approval” shall mean, with respect to any Advance Request delivered hereunder, a certificate or report of the Construction Consultant approving such Advance Request and confirming the satisfaction (or waiver in writing by Lender) of the conditions to the applicable Construction Loan Advance set forth in Section 3.2, 3.3 and/or 3.4, hereof, as applicable, based upon a site observation of the Project made by the Construction

Consultant not more than thirty (30) days prior to the applicable Requested Disbursement Date, which shall include, among other things, the following:

(a) a certification that the Construction Consultant has received and approved (i) with respect to the Initial Construction Loan Advance, all known Plans and Specifications, or (ii) with respect to all subsequent Construction Loan Advances, all known Change Orders;

(b) a certification, in the Construction Consultant’s reasonable professional opinion, that the work performed as of the date thereof is substantially in accordance with the Plans and Specifications, and the Construction Loan Advance requested pursuant to the Advance Request is substantially in accordance with the Loan Budget and the Construction Schedule;

(c) (i) verification of the portion of the Project completed as of the date of such site observation, and (ii) an estimate of (A) the percentage of the construction of the Project completed as of the date of such site observation on the basis of work in place as part of the Project and the approved Loan Budget and the value of such completed construction, (B) the Hard Costs actually incurred for work in place as part of the Project as of the date of such site observation, (C) the sum necessary to complete construction of the Project in accordance with the Plans and Specifications, and (D) the amount of time from the date of such site observation that will be required to achieve Substantial Completion of the Project;

(d) a certification that all amounts requested under the Advance Request that are for the payment of Hard Costs have been incurred for work and materials actually performed and delivered and consistent with the Plans and Specifications for such Project to date, except as set forth in Section 3.1.11 hereof;

(e) a certification that no Shortfall then exists;

(f) a certification that the Advance Request does not include any amounts in respect of Stored Materials or, if the Advance Request does include amounts in respect of Stored Materials, then a certification (i) as to the value of Stored Materials stored at the Hotel/Casino Property or the Adjacent Property, (ii) as to the value of Stored Materials stored off-site, and (iii) that the requirements of Section 3.1.11 hereof are satisfied with respect to all such Stored Materials;

(g) a certification, to the best knowledge of the Construction Consultant (for which purpose it has, to the extent reasonably appropriate in its professional judgment, relied upon observations, certifications and responses of the applicable Architect and Persons employed for the construction of the Project), that the construction of the Project to the date of the Advance Request has been performed in a good and workmanlike manner, in conformity with good construction and engineering practices and in compliance in all material respects with the Plans and Specifications and the Construction Schedule;

(h) a certification that the Construction Consultant has reviewed all Advance Requests made prior to the date thereof and compared the invoices or other documentation supporting such prior Construction Loan Advances with the Line Item categories

presently in effect and that the total advances to date in each such Line Item category do not exceed the budgeted amount for such category in any material respect, except as permitted pursuant to Sections 3.9, 3.10 and/or 3.15 hereof; and

(i) a certification that (i) the Loan Budget fairly represents in all material respects the Project Costs that it reasonably anticipates will be incurred through the date of Final Completion in the aggregate and for each Line Item substantially in accordance with the Plans and Specifications, and (ii) the Construction Consultant is not aware of any material costs that will be needed to be paid or incurred by Borrowers in order to cause Substantial Completion or Final Completion to occur other than the Project Costs identified in the Loan Budget.

“Construction Loan” shall mean that portion of the Loan previously made by Lender to Borrowers pursuant to the Original Loan Agreement and to be made by Lender to Borrowers pursuant to this Agreement in an aggregate principal amount not to exceed the Construction Loan Amount, which Construction Loan is evidenced by the Construction Loan Note.

“Construction Loan Advance” shall mean (a) any advance of any portion of the Construction Loan Amount pursuant to this Agreement, including, without limitation, (i) any Pre-Construction Advance once advanced in accordance with Section 3.17 hereof, (ii) the Second Anniversary Unfunded Construction Loan Advance, if applicable, (iii) any subsequent disbursement out of the Construction Loan Reserve Account of funds previously advanced into the Construction Loan Reserve Account pursuant to the Second Anniversary Unfunded Construction Loan Advance as contemplated under Section 3.1(d) hereof, if applicable, (iv) any Quarterly Deficiency Advance, if applicable, and (v) any subsequent disbursement out of the Construction Loan Reserve Account of funds previously advanced into the Construction Loan Reserve Account pursuant to any Quarterly Deficiency Advance as contemplated under Section 3.1(e) hereof, if applicable; and (b) any subsequent disbursement out of the Construction Loan Reserve Account of the Third Mezzanine Construction Funds previously advanced into the Construction Loan Reserve Account pursuant to Section 3.4.2 of the Third Mezzanine Loan Agreement, in each of the foregoing instances, in accordance with the terms hereof.

“Construction Loan Amount” shall mean, as of any date of determination, an amount equal to the lesser of (i) $620,000,000.00 or (ii) the amount that, when added to the sum of (a) $775,000,000.00 plus (b) the aggregate amount of all Construction Loan Advances made prior to such date of determination (other than (A) the Second Anniversary Unfunded Construction Loan Advance, if applicable, (B) any Quarterly Deficiency Advances, if applicable, and/or (C) any subsequent disbursement out of the Construction Loan Reserve Account of the Third Mezzanine Construction Funds previously advanced into the Construction Loan Reserve Account pursuant to Section 3.4.2 of the Third Mezzanine Loan Agreement), will cause the Total Cost Ratio to equal 81%, whichever of the foregoing clauses (i) or (ii) is less being the maximum aggregate amount of Construction Loan Advances that could be made hereunder as of such date of determination.

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

“Construction Loan Note” shall mean that certain Replacement Construction Loan Promissory Note of even date herewith in the principal amount of up to SIX HUNDRED TWENTY MILLION AND NO/100 DOLLARS ($620,000,000.00), made by Borrowers in favor of Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, which partially replaces, amends and restates the Original Note.

“Construction Loan Outstanding Principal Balance” shall mean, as of any date, the outstanding principal balance of the Construction Loan, including, without limitation, taking into account the provisions of Section 3.1(f) hereof.

“Construction Loan Percentage” shall mean, as of any date and prior to the application of the principal amount with respect to which the Component Percentages are then being calculated, the ratio, expressed as a percentage, the numerator of which is an amount equal to the Construction Loan Outstanding Principal Balance on such date and the denominator of which is an amount equal to the Outstanding Principal Balance on such date.

“Construction Loan Reserve Account” shall have the meaning set forth in Section 7.7.1 hereof.

“Construction Loan Spread” shall mean, subject to application of the Default Rate, 4.25%; provided, however, that (a) subject to the following clause (b), if Substantial Completion has not occurred on or before the date which is twenty-four (24) months from the date of the Initial Construction Loan Advance, the Construction Loan Spread shall increase to 4.75% from and including such date which is twenty-four (24) months from the date of the Initial Construction Loan Advance through but excluding the first Payment Date following Substantial Completion, following which the Construction Loan Spread shall again be 4.25%, and (b) if the Second Non-Qualified Extension Term is exercised in accordance with the terms of Section 2.7.1 hereof, the Construction Loan Spread in effect from time to time pursuant to the foregoing clause (a) shall increase by 0.25% throughout the Second Non-Qualified Extension Term and thereafter until the Obligations are paid in full.

“Construction Management Agreement” shall mean an agreement to be entered into by and between Borrowers and Construction Manager providing for the construction of the Project in accordance with the Plans and Specifications prepared in accordance with the requirements of this Agreement and approved by Lender in its reasonable discretion.

“Construction Manager” shall mean a construction manager to be engaged by one or more Borrowers or any Affiliate thereof in connection with the Project and approved by Lender in its reasonable discretion; provided, that in no event shall the Construction Manager (a) be an Affiliate of any Restricted Party or (b) have any equity interest or any equivalent thereof in any of the Properties or in any Restricted Party.

“Construction Manager’s Certificate” shall have the meaning set forth in Section 3.2(f)(xi).

“Construction Manager’s Consent” shall mean a Construction Manager Certification and Consent Agreement executed and delivered by the Construction Manager in favor of Lender and substantially in the form attached as Exhibit E.

“Construction Qualification Date” shall mean May 1, 2008, subject to Excusable Delay not to exceed fifteen (15) days.

“Construction Schedule” shall mean a schedule for the construction and completion of the Project, in form and substance acceptable to Lender in its reasonable discretion, and including, without limitation, (i) a construction progress schedule reflecting the anticipated dates of completion of specified subcategories of the Loan Budget, (ii) a trade-by-trade breakdown of the estimated periods of commencement and completion of the work to be completed in connection with the Project, and (iii) such other information as the Construction Consultant shall reasonably require.

“Contingency (Hard Costs)” shall mean the amount allocated as a contingency reserve in the Loan Budget for Hard Costs, which shall in no event start out being less than ten percent (10%) of the total amount of the Hard Costs included in the Loan Budget.

“Contingency Line Item” shall have the meaning set forth in Section 3.10(a).

“Contingency (Soft Costs)” shall mean the amount allocated as a contingency reserve in the Loan Budget for Soft Costs, which shall in no event start out being less than five percent (5%) of the total amount of the Soft Costs included in the Loan Budget, excluding, however, the interest Line Item.

“Contingency” shall mean, collectively, the Contingency (Hard Costs) and the Contingency (Soft Costs).

“Contractor’s Certificate” shall have the meaning set forth in Section 3.2(f)(xi).

“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.

“Cost Savings” shall have the meaning set forth in Section 3.9(b) hereof.

“Counterparty” shall mean, with respect to the Interest Rate Cap Agreement, Natixis Financial Products Inc., 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 Notes (which is comprised of both Components) together with all interest accrued and unpaid thereon and all other sums (including, if applicable, any Spread Maintenance Premium, any Prepayment Fee, the Unused Advance Fee, the Administrative Agent Fee and the Exit Fee) due to Lender in respect of the Loan under the Notes, 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 each of the Notes.

“Debt Service Coverage Ratio” shall mean, as of any date of determination, a ratio in which:

(a) the numerator is the Pro-Forma Net Cash Flow as of such date of determination; and

(b) the denominator is the aggregate amount of interest that is reasonably estimated by Lender to be due and payable on the Reduced Acquisition Loan Outstanding Principal Balance, the Construction Loan Outstanding Principal Balance, the First Mezzanine Loan Outstanding Principal Balance, the Second Mezzanine Loan Outstanding Principal Balance and the Third Mezzanine Loan Outstanding Principal Balance as of such date of determination for the following full twelve (12) calendar month period.

“Debt Yield” shall mean:

(a) for all calculations of Debt Yield except in connection with the Second Qualified Extension Option, a ratio (expressed as a percentage) in which: (i) the numerator is the Net Cash Flow for the trailing twelve (12) calendar month period ending with the last calendar month prior to the date of determination for which financial reports have been delivered under Section 5.1.11 hereof, as reasonably determined by Lender based on the financial statements delivered to Lender pursuant to Section 5.1.11 hereof, and (ii) the denominator is the Aggregate Outstanding Principal Balance as of such date of determination, subject, however, to the provisions of Section 2.7.3 hereof; and

(b) for the calculation of Debt Yield in connection with the Second Qualified Extension Option, a ratio (expressed as a percentage) in which: (i) the numerator is the Net Cash Flow for a period equal to the lesser of (A) the trailing twelve (12) calendar month period ending with the last calendar month prior to the date of determination for which financial reports have been delivered under Section 5.1.11 hereof, or (B) the period commencing on the first (1st) day of the First Full Operating Month through and including the last day of the last calendar month prior to the date of determination for which financial reports have been delivered under Section 5.1.11 hereof, with such Net Cash Flow, in the case of the foregoing clause (B), then being reasonably annualized by Lender, and in each of the foregoing cases under clause (A) or (B) above, as reasonably determined by Lender based on the financial statements delivered to Lender pursuant to Section 5.1.11 hereof, and (ii) the denominator is the Aggregate Outstanding Principal Balance as of such date of determination, subject, however, to the provisions of Section 2.7.3 hereof.

“Debt Yield Letter of Credit” shall have the meaning set forth in Section 2.7.3(b) hereof.

“Deeded Adjacent Property” shall have the meaning set forth in Section 3.2(u) hereof.

“Deemed Relinquishment” shall have the meaning set forth in Section 3.1(c) hereof.

“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.

“Disbursement Schedule” shall mean the schedule of the amounts of Construction Loan Advances anticipated to be requisitioned by Borrowers each month during the term of the Loan, as certified by Borrower and reasonably approved by Lender and the Construction Consultant.

“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.

“Draw Request” shall mean, with respect to each Construction Loan Advance, an Advance Request together with all other documents required by this Agreement to be furnished to Lender as a condition to such Construction Loan Advance.

“Eighteen Month Anniversary” shall mean the date that is eighteen calendar months from the Closing Date.

“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 Xxxxx’x 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 Xxxxx’x).

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

“Environmental Indemnity” shall mean that certain Borrowers Environmental Indemnity Agreement, dated as of February 2, 2007, executed by Borrowers in connection with the Loan for the benefit of Lender, as modified by the Loan Document Modification Agreement and as the same hereafter may be amended, restated, replaced, supplemented or otherwise modified from time to time.

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

“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.

“Excess Cash Termination Conditions” shall mean that (i) as of any Financial Determination Date, the Properties have achieved and maintained a Debt Service Coverage Ratio of not less than 1.10 to 1.00 for the immediately preceding two (2) consecutive calendar quarters, and (ii) no Event of Default, First Mezzanine Event of Default, Second Mezzanine Event of Default or Third Mezzanine Event of Default shall have occurred and be continuing.

“Excess Cash Release Date” shall mean the date upon which the Excess Cash Termination Conditions have been satisfied.

“Excess Fully Funded IP Release Proceeds” shall have the meaning set forth in Section 2.4.3(g) hereof.

“Excess IP Release Price Proceeds” shall have the meaning set forth in Section 2.4.3(g) hereof.

“Excess Non-Fully Funded IP Release Proceeds” shall have the meaning set forth in Section 2.4.3(g) 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 the Administrative Agent, any Lender or any other recipient of any payment to be made by or on account of any obligation of Borrowers

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 the Administrative Agent, 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 Borrowers, 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 Borrowers 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 any Borrower and not arising out of (a) the negligence, willful misconduct or illegal act of any Borrower or any Affiliate of any Borrower, or (b) any cause or circumstance resulting from the insolvency, bankruptcy or lack of funds of any Borrower, any Guarantor or any Affiliate of any Borrower or any Guarantor.

“Existing FF&E Leases” shall have the meaning set forth in the definition of “Special Purpose Entity” set forth below.

“Exit Fee” shall have the meaning set forth in Section 2.8 hereof.

“Extended Maturity Date” shall mean, as applicable, either (a) the Qualified Extended Maturity Date as set forth in Section 2.7.2 hereof, or (b) the Non-Qualified Extended Maturity Date as set forth in Section 2.7.1 hereof.

“Extension Debt Service Coverage Ratio” shall mean, with respect to any Extension Term, a ratio for the applicable twelve (12) month period in which:

(a) the numerator is the Projected Underwritten Net Cash Flow for such Extension Term; and

(b) the denominator is the sum of:

(i) the aggregate amount of interest that would be payable on the Reduced Acquisition Loan Outstanding Principal Balance as of the first day of such Extension Term for the following full twelve (12) calendar month period at an interest rate equal to the Strike Price applicable to such Extension Term plus the Reduced Acquisition Loan Spread; plus

(ii) the aggregate amount of interest that would be payable on the sum of the Construction Loan Outstanding Principal Balance as of the first day of such Extension Term plus the amount of any anticipated Construction Loan Advances in accordance with the Construction Schedule (excluding any Construction Loan Advances anticipated to be made out of the Construction Loan Reserve Account), if any, for the following full twelve (12) calendar month period at an interest rate equal to the Strike Price applicable to such Extension Term plus the Construction Loan Spread; plus

(iii) the aggregate amount of interest that would be payable on the First Mezzanine Loan Outstanding Principal Balance as of the first day of such Extension Term for the following full twelve (12) calendar month period at an interest rate equal to the Strike Price applicable to such Extension Term plus the First Mezzanine Spread; plus

(iv) the aggregate amount of interest that would be payable on the Second Mezzanine Loan Outstanding Principal Balance as of the first day of such Extension Term for the following full twelve (12) calendar month period at an interest rate equal to the Strike Price applicable to such Extension Term plus the Second Mezzanine Spread; plus

(v) the aggregate amount of interest that would be payable on the Third Mezzanine Loan Outstanding Principal Balance as of the first day of such Extension Term for the following full twelve (12) calendar month period at an interest rate equal to the Strike Price applicable to such Extension Term plus the Third Mezzanine Spread.

“Extension Interest Shortfall” shall mean, with respect to each Extension Term, the difference between: (a) the Required Net Cash Flow with respect to such Extension Term, less (b) the amount on deposit in the Interest Reserve Fund as of the day immediately preceding the first (1^st) day of such Extension Term.

“Extension Option” shall mean any Qualified Extension Option or Non-Qualified Extension Option, as applicable.

“Extension Term” shall mean any Qualified Extension Term or Non-Qualified Extension Term, as applicable.

“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 and equipment required for the operation of any of the Properties, including, without limitation, (i) lobby furniture, carpeting, draperies, paintings, bedspreads, television sets, office furniture and equipment such as safes, cash registers, and accounting, duplicating and communication equipment, telephone systems, back and front of the house computerized systems, guest room furniture, specialized hotel equipment such as equipment required for the operation of kitchens, laundries, the front desk,

dry cleaning facilities, bar and cocktail lounges, restaurants, recreational facilities as they may exist from time to time, and decorative lighting, material handling equipment and cleaning and engineering equipment and all other fixtures, equipment, apparatus and personal property needed for such purposes, (ii) Gaming Equipment which any Borrower is lawfully permitted to own or lease, and (iii) rock and roll memorabilia unique to the Hotel/Casino Property and similar in character to the other rock and roll memorabilia displayed at the Hotel/Casino Property.

“FF&E Expenditures” shall mean amounts expended for the purchase, replacement and/or installation of FF&E at the Properties.

“FF&E Expenditures Work” shall mean any labor performed or materials installed in connection with any FF&E Expenditures.

“Final Completion” shall mean that, in addition to Substantial Completion, (i) all Punch List Items shall have been completed Lien free and substantially in accordance with the Plans and Specifications, all Legal Requirements and this Agreement, (ii) one or more Certificates of Occupancy shall have been issued (if subject to any conditions, such conditions being acceptable to Lender in its sole and absolute discretion) for the entire Project, and (iii) reasonably satisfactory evidence shall have been delivered to Lender confirming that all other Governmental Approvals have been issued and all other Legal Requirements have been satisfied in all material respects so as to allow the Project to be used and operated in accordance with the Loan Documents.

“Financial Determination Date” shall have the meaning set forth in Section 2.6.4 hereof.

“Financing Percentages” shall mean the Loan Percentage, the First Mezzanine Loan Percentage, the Second Mezzanine Loan Percentage and the Third Mezzanine Loan Percentage.

“First Anniversary” shall mean the first anniversary of the Closing Date.

“First Full Operating Month” shall mean the calendar month following the month in which Substantial Completion occurs.

“First Mezzanine Applicable Interest Rate” shall mean the “Applicable Interest Rate” as defined in the First Mezzanine Loan Agreement.

“First Mezzanine Borrower” and “First Mezzanine Borrowers” shall mean, individually or collectively, as applicable, HRHH Gaming Senior Mezz, LLC, a Delaware limited liability company, and HRHH JV Senior Mezz, LLC, a Delaware limited liability company, each in its capacity as a borrower under the First Mezzanine Loan, together with its or their successors or permitted assigns.

“First Mezzanine Cash Management Account” shall mean the “First Mezzanine Cash Management Account” established under the First Mezzanine Loan Documents.

“First Mezzanine Closing Completion Guaranty” shall mean that certain First Mezzanine Closing Guaranty of Completion, dated as of the date hereof, from Guarantors to First Mezzanine Lender, as the same hereafter may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“First Mezzanine Construction Completion Guaranty” shall mean a First Mezzanine Construction Guaranty of Completion from Guarantors in favor of First Mezzanine Lender in the form attached to the First Mezzanine Loan Agreement as Exhibit A thereto, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“First Mezzanine Debt” shall mean the “Debt” as defined in the First Mezzanine Loan Agreement.

“First Mezzanine Default” shall mean a “Default” as defined in the First Mezzanine Loan Agreement.

“First Mezzanine Event of Default” shall mean an “Event of Default” as defined in the First Mezzanine Loan Agreement.

“First Mezzanine Interest Reserve Fund” shall mean the “Interest Reserve Fund” as defined in the First Mezzanine Loan Agreement.

“First Mezzanine Lender” shall mean Column Financial, Inc., in its capacity as holder of the First Mezzanine Loan, its successors or assigns.

“First Mezzanine Loan” shall mean a loan in the original principal amount of Two Hundred Million and No/100 Dollars ($200,000,000.00) made by First Mezzanine Lender to First Mezzanine Borrowers.

“First Mezzanine Loan Agreement” shall mean that certain First Mezzanine Loan Agreement date as of the date hereof between First Mezzanine Lender and First Mezzanine Borrowers, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time subject to the terms of the Intercreditor Agreement.

“First Mezzanine Loan Documents” shall mean the First Mezzanine Loan Agreement and all other documents evidencing and/or securing the First Mezzanine Loan, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time subject to the terms of the Intercreditor Agreement.

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

“First Mezzanine Loan Percentage” shall mean, as of any date of determination and prior to the application of the principal amount with respect to which the Financing Percentages or the Alternate Financing Percentages are then being calculated, the ratio, expressed as a percentage, the numerator of which is an amount equal to the First Mezzanine Loan Outstanding Principal Balance on such date of determination and the denominator of which is an amount equal to the Aggregate Outstanding Principal Balance on such date of determination.

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

“First Mezzanine Obligations” shall mean the “Obligations” as defined in the First Mezzanine Loan Agreement.

“First Mezzanine Monthly Interest Payment” shall mean the “Monthly Interest Payment” as defined in the First Mezzanine Loan Agreement.

“First Mezzanine Spread” shall mean the “Spread” as defined in the First Mezzanine Loan Agreement.

“First Non-Qualified Extended Maturity Date” shall mean February 9, 2010.

“First Non-Qualified Extension Option” shall have the meaning set forth in Section 2.7.1(a) hereof.

“First Non-Qualified Extension Term” shall have the meaning set forth in Section 2.7.1(a) hereof.

“First Qualified Extended Maturity Date” shall mean February 9, 2011.

“First Qualified Extension Option” shall have the meaning set forth in Section 2.7.2(a) hereof.

“First Qualified Extension Term” shall have the meaning set forth in Section 2.7.2(a) 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.

“Fully Prepaid IP Sale” shall have the meaning set forth in Section 2.4.3(g) hereof.

“Future Funding Obligations” shall have the meaning set forth in Section 10.25(a) hereof.

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

“Gaming Assets” shall have the meaning set forth in the Gaming Sublease.

“Gaming Assets Note” shall mean that certain Gaming Asset Note dated as February 2, 2007 made by the Gaming Operator to HRHI, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Gaming Authority” shall mean any of the Nevada Gaming Commission, the Nevada State Gaming Control Board, the Xxxxx County Liquor and Gaming Licensing Board and any other Governmental Authority and/or regulatory authority or body or any agency which has, or may at any time after the Closing Date have, jurisdiction over the gaming activities or the sale or distribution of liquor at any of the Properties, or any successor to any such authority.

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

“Gaming Employees” shall have the meaning set forth in the Gaming Sublease.

“Gaming Equipment” shall mean any and all gaming devices (as defined in NRS 463.0155), gaming device parts, inventory and other related gaming equipment and supplies used in connection with the operation of a casino, including, without limitation, slot machines, gaming tables, cards, dice, chips, tokens (including slot machine tokens not currently in circulation, and “reserve” chips, if any, not currently in circulation), player tracking systems, cashless wagering systems (as defined in NRS 463.014) and associated equipment (as defined in NRS 463.0136), which are located at any Property, are owned or leased by any Borrower and are used or useable exclusively in the present or future operation of slot machines and live games at any Property, together with all improvements and/or additions thereto, mobile gaming systems (as defined in Regulation 14.010(11) under NRS Chapter 463), all contracts necessary to own or operate any of the Gaming Equipment and/or to conduct gaming operations for the Casino Component, all assignable manufacturers and other warranties applicable to the Gaming Equipment, all computer hardware and software used to operate the Gaming Equipment and/or to conduct gaming operations for the Casino Component.

“Gaming Laws” shall mean the provisions of the Nevada Gaming Control Act, codified as NRS Chapter 463, as amended from time to time, all regulations of the Gaming Authorities promulgated thereunder, as amended from time to time, the provisions of the Xxxxx County Code, as amended from time to time, and all other laws, statutes, rules, rulings, orders, ordinances, regulations and other Legal Requirements of any Gaming Authority.

“Gaming Letter of Credit” shall have the meaning set forth in Section 12.3.

“Gaming License” shall mean any license, qualification, franchise, accreditation, approval, registration, permit, finding of suitability or other authorization relating to gaming, the gaming business or the operation of a casino under the Gaming Laws or required by any Gaming Authority or otherwise necessary under any Gaming Laws for the operation of gaming, the gaming business or a resort casino at the Hotel/Casino Property.

“Gaming Liquidity Requirement” shall mean, if and when Gaming Borrower becomes the Gaming Operator in accordance with the terms of this Agreement, the minimum bankroll requirements for cash and cash equivalents required to be maintained by Gaming Borrower pursuant to the Gaming Laws in an amount no greater than is mandated by Nevada Gaming Commission Regulation 6.150.

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

“Gaming Operating Condition” shall mean that the gaming operations at the Hotel/Casino Property are being operated by a Qualified Gaming Operator pursuant to either (i) the Gaming Sublease and Gaming Recognition Agreement or (ii) one or more other written agreements previously approved by Lender.

“Gaming Operating Reserve” shall mean, if and when Gaming Borrower becomes the Gaming Operator in accordance with the terms of this Agreement, such cash funds and reserves that are held and maintained by Gaming Borrower, in its capacity as the duly licensed operator of the Casino Component under applicable Gaming Laws, either on-site at the Hotel/Casino Property or in the Casino Account, including, without limitation, casino chips, tokens, checks and markers; provided that all such Gaming Operating Reserves (i) are established and maintained solely for use in the day-to-day operation and management of the Casino Component in the ordinary course of business, and (ii) are funded and maintained in accordance with the requirements of all applicable Gaming Laws and are in the amounts that are reasonable and customary for casino operations at Comparable Hotel/Casinos (it being agreed that 110% of statutory or regulatory minimums shall be deemed a reasonable and customary minimum amount for these purposes).

“Gaming Operator” shall mean (i) subject to clause (ii) below, for so long as the Gaming Sublease is in effect and all required Gaming Licenses are maintained in accordance with applicable Gaming Laws, Golden HRC, LLC, a Nevada limited liability company, the subtenant under the Gaming Sublease, (ii) if Navegante HR, LLC, a Nevada limited liability company, replaces Golden HRC, LLC as the subtenant under the Gaming Sublease pursuant to the Navegante Agreement, for so long as the Gaming Sublease is in effect and all required Gaming Licenses are maintained in accordance with applicable Gaming Laws, Navegante HR, LLC, as replacement subtenant under the Gaming Sublease, and (iii) during any time when the Gaming Sublease is not in effect, a Qualified Gaming Operator who is supervising, managing and operating all gaming activities at the Hotel/Casino Property.

“Gaming Recognition Agreement” shall mean that certain Recognition Agreement, dated as of February 2, 2007, executed by Lender, Hotel/Casino Borrower, HRHI and Golden HRC LLC in connection with the Gaming Sublease, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Gaming Shortfall Notes” shall mean the “Shortfall Notes” as defined in the Gaming Sublease.

“Gaming Sublease” shall mean that certain Casino Sublease, dated as of November 6, 2006, by and among MHG HR Acquisition Corp., as sublandlord, Morgans Hotel Group Co., and Golden HRC, LLC, as subtenant (it being acknowledged and agreed that, upon consummation of the transactions under the Merger Agreement, HRHI succeeded to the interests of MHG HR Acquisition Corp. thereunder), covering the Casino Component of the Hotel/Casino Property as more particularly described therein, as such Casino Sublease was modified by that certain First Amendment to Casino Sublease, dated as of January 9, 2007 and by the Gaming Recognition Agreement, and as the same may hereafter be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Gaming Surplus Fund Reserve” shall mean the “Surplus Fund Reserve” as defined in the Gaming Sublease.

“Gaming Working Capital Note” shall mean the “Working Capital Note” as defined in the Gaming Sublease.

“General Contractor” shall mean each of (i) the general contractor engaged by (or on behalf of) one or more Borrowers or any Affiliate thereof with respect to the Project from time to time after the date hereof and approved by Lender in its reasonable discretion (which approval may take into account, without limitation, the financial condition and stability of any proposed general contractor), and (ii) any successor of the foregoing approved by Lender in its reasonable discretion (which approval may also take into account, without limitation, the financial condition and stability of any such successor); provided, that in no event shall the General Contractor (a) be an Affiliate of any Restricted Party or (b) have any equity interest or any equivalent thereof in any of the Properties or in any Restricted Party.

“General Contract” shall mean a guaranteed maximum price contract with the General Contractor entered into by one or more Borrowers or any Affiliate thereof in connection with the Project and approved by Lender in its reasonable discretion; provided, that (i) it shall be based on Plans and Specifications that are at least eighty percent (80%) complete in the Construction Consultant’s reasonable opinion and have been approved up to such point of completion by Lender and Construction Consultant in their reasonable discretion, and (ii) in no event shall allowances within such contract exceed fifteen percent (15%) of the guaranteed maximum price.

“General Contractor’s Consent” shall mean a General Contractor’s Performance Letter executed and delivered by the General Contractor in favor of Lender and substantially in the form attached as Exhibit F.

“General Reserve Account” shall have the meaning set forth in Section 7.6.1 hereof.

“General Reserve Excess Cash Conditions” shall mean, as of any Financial Determination Date, that (i) for the prior calendar month, the Net Operating Income from the Properties exceeded the projected Net Operating Income from the Properties as set forth on Schedule XIV attached hereto by at least fifteen percent (15%), and (ii) no Event of Default, First Mezzanine Event of Default, Second Mezzanine Event of Default or Third Mezzanine Event of Default shall have occurred and be continuing.

“General Reserve Fund” shall have the meaning set forth in Section 7.6.1 hereof.

“Governmental Approvals” shall mean all approvals, consents, waivers, orders, acknowledgments, authorizations, permits and licenses required under applicable Legal Requirements to be obtained from any Governmental Authority for the construction of any and all of the Project and/or the use, occupancy and operation following completion of construction, as the context requires.

“Governmental Authority” shall mean any court, board, agency, commission, office or other authority of any nature whatsoever for any governmental xxxx (xxxxxxx, xxxxx, xxxxxx, xxxxxxxx, xxxxxxxxx, xxxx or otherwise) whether now or hereafter in existence, including, without limitation, any Gaming Authority.

“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 and, to the extent applicable with respect to the Hotel/Casino Property, the Uniform System of Accounts), received by any Borrower or by any Manager (on behalf of any Borrower) or by Sub-Manager (on behalf of any Borrower or any Manager) for the use, occupancy or enjoyment of any of the Properties, or any part thereof, or received by any Borrower or any Manager or Sub-Manager for the sale of any goods, services or other items sold on or provided from any of the Properties in the ordinary course of such Property’s operation, including, without limitation: (a) all income and proceeds received under Leases, including, without limitation, the HRHI Lease; (b) all income and proceeds received from rental of rooms and commercial, meeting, conference and/or banquet space within any of the Properties including net parking revenue; (c) all income and proceeds received from food and beverage operations and from catering services conducted from any of the Properties even though rendered outside of any of the Properties; (d) without duplication of the foregoing clause (a) or the following clause (e), all income, proceeds and other amounts received by any Borrower under the Gaming Sublease; (e) without duplication of the foregoing clauses (a) or (d), all income, proceeds and revenue generated from gaming activities at any Property; (f) any payments received by or on behalf of any Borrower under the Gaming Assets Note, the Gaming Shortfall Notes or the Working Capital Note or from the Surplus Fund Reserve; (g) all income and proceeds from business interruption, rental interruption and use and occupancy insurance with respect to the operation of any of the Properties (after deducting therefrom all necessary costs and expenses incurred in the adjustment or collection thereof); (h) all Awards for temporary use (after deducting therefrom all costs incurred in the adjustment or collection thereof and in Restoration of any of the Properties); (i) 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 any of the Properties’ operation (after deducting therefrom all necessary costs and expenses incurred in the adjustment or collection thereof); (j) interest on credit accounts, rent concessions or credits, and other required pass-throughs and interest on Reserve Funds; and (k) deposits received for rental of rooms; and “Gross Income from Operations” shall also include all licensing fees and other income and receipts generated by the IP; but “Gross Income from Operations” shall exclude (1) gross receipts received by lessees, licensees or concessionaires of any of the Properties (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 applicable Property; (3) federal, state and municipal excise, sales and use taxes collected directly from customers, patrons or guests of any of the Properties as a part of or based on the sales price of any goods, services or other items, such as gross receipts, room, admission, cabaret or equivalent taxes; (4) Awards (except to the extent provided in clause (h) above); (5) refunds, rebates, discounts and other similar credits of amounts not included in Operating Expenses at any time and uncollectible accounts; (6) gratuities collected by the employees at any of the Properties; (7) the proceeds of any financing, refinancing or sale of any of the Properties (or all of the membership interests in any Borrower) or the FF&E; (8) other non-recurring income or proceeds resulting other than from the use or occupancy of any of the Properties, or any part thereof, or other than from the sale of goods, services or other items sold on or provided from any of the Properties in the ordinary course of

business; (9) any credits or refunds made to customers, guests or patrons in the form of allowances or adjustments to previously recorded revenues; (10) deposits received for rental of banquet space or business or conference meeting rooms; (11) security deposits received under any Leases, unless and until the same shall be applied in accordance with the terms of the applicable Lease(s); (12) all proceeds from insurance to the extent not included in income pursuant to clause (g) above; and (13) any disbursements to any 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.

“Guaranty Modification Agreement” shall have the meaning set forth in the recitals to this Agreement.

“Hard Costs” shall mean, collectively, the costs set forth in the Loan Budget which are for labor, materials, equipment, furniture and fixtures and fees and expenses of any construction manager and/or general contractor engaged in connection with the Project.

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

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

“HRHI” shall mean Hard Rock Hotel, Inc., a Nevada corporation, together with its successors and permitted assigns.

“HRHI Gaming Agreement” shall mean that certain HRHI Gaming Agreement, dated as of February 2, 2007, executed by Lender, Hotel/Casino Borrower and HRHI in connection with the Gaming Sublease and the gaming operations at the Hotel/Casino Property, as modified by the Loan Document Modification Agreement and the HRHI Modification Agreement and as the same hereafter may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“HRHI Guaranty” shall mean that certain HRHI Guaranty Agreement, dated as of February 2, 2007, from HRHI to Lender, as modified by the HRHI Modification Agreement and as the same hereafter may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“HRHI Lease” shall mean that certain Lease, dated February 2, 2007, between Hotel/Casino Borrower, as landlord, and HRHI, as tenant, covering the Casino Component of the Hotel/Casino Property as more particularly described therein, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“HRHI Modification Agreement” shall have the meaning set forth in the recitals to this Agreement.

“HRHI Security Agreement” shall mean that certain HRHI Security Agreement, dated as of February 2, 2007, from HRHI to Lender, securing the HRHI Guaranty and covering certain assets of HRHI described therein, including, without limitation, all of HRHI’s right, title and interest in and to the Gaming Assets Note, the Gaming Shortfall Notes, the Gaming Surplus Fund Reserve and the Gaming Working Capital Note, as such HRHI Security Agreement is being modified by the Loan Document Modification Agreement and the HRHI Modification Agreement and as the same hereafter may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“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 with respect to each Property.

“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 Person” 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 a Borrower or Gaming Member), officer, employee, partner, member (other than a “special member” or “springing member”), manager, attorney or counsel of any Borrower, Gaming Member, HRHI or any Affiliate of any of them; (b) a customer, supplier or other person who derives any of its purchases or revenues from its activities with any Borrower, Gaming Member, HRHI or any Affiliate of any of them; (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 a Borrower or Gaming Member 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 any Borrower or Gaming Member that does not own a direct or indirect equity interest in any Borrower or Gaming Member shall not be disqualified from serving as an Independent Director or Independent Manager of a Borrower or Gaming Member if such individual is at the time of initial appointment, or at any time while serving as a Independent Director of a Borrower or Gaming Member, an Independent Director or Independent Manager of a “special purpose entity” affiliated with a Borrower or Gaming Member (other than any Person that owns a direct or indirect equity interest in any Borrower or Gaming Member) 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 Construction Loan Advance” shall mean Lender’s first Construction Loan Advance, excluding, however, any Pre-Construction Advance, the Second Anniversary Unfunded Construction Loan Advance and any Quarterly Deficiency Advance.

“Initial Maturity Date” shall mean, as applicable, either (a) the Qualified Initial Maturity Date, in the event the Qualification Conditions have been satisfied on or prior to the Construction Qualification Date, or (b) the Non-Qualified Initial Maturity Date, in the event the Qualification Conditions have not been satisfied on or prior to the Construction Qualification Date.

“Initial Maturity Extension Interest Shortfall” shall mean, for purposes of determining the amount of the interest Line Item in the Loan Budget as set forth in Section 3.2(l)(ii) hereof, the difference between: (a) the difference between (i) the projected underwritten Net Cash Flow to be earned from and after the date of the Initial Construction Loan Advance through the last day of the Initial Maturity Extension Period, as reasonably estimated and underwritten by Lender based on the Approved Annual Budget then in effect and underwriting criteria consistent with that used by Lender to determine the amount of the deposit to the Interest Reserve Fund on the Closing Date, less (ii) the amount of interest which is anticipated to be due and payable on the Reduced Acquisition Loan, the Construction Loan, the First Mezzanine Loan, the Second Mezzanine Loan and the Third Mezzanine Loan from and after the date of the Initial Construction Loan Advance through the last day of the Initial Maturity Extension Period, taking into account the anticipated Construction Loan Advances from and after the date of the Initial Construction Loan Advance through the last day of the Initial Maturity Extension Period, all as reasonably estimated by Lender based on the then applicable Reduced Acquisition Loan Spread, Construction Loan Spread, First Mezzanine Spread, Second Mezzanine Spread and Third Mezzanine Spread; less (b) the amount on deposit in the Interest Reserve Fund in excess of the Minimum Balance as of the date of the Initial Construction Loan Advance.

“Initial Maturity Extension Period” shall mean a one (1) year extension of the Loan which shall automatically occur, without the payment of any fee or other sums and without Lender, any Borrower or any other Person taking any action, upon the satisfaction of the Qualification Conditions on or prior to the Construction Qualification Date.

“Initial Renovation Costs” shall mean the costs and expenses of performing the Initial Renovations as set forth on the budget for the Initial Renovations included in Schedule XIII attached hereto and made a part hereof.

“Initial Renovation Letter of Credit” shall have the meaning set forth in Section 7.5.3 hereof.

“Initial Renovation Reserve Account” shall have the meaning set forth in Section 7.5.1 hereof.

“Initial Renovation Reserve Fund” shall have the meaning set forth in Section 7.5.1 hereof.

“Initial Renovations” shall have the meaning set forth in Section 7.5.1 hereof.

“Initial Renovations Budget” shall mean a budget, prepared by Borrowers and approved by Lender in its reasonable discretion, which shall identify the costs and expenses, on a project-by-project and line item basis, for which the Initial Renovation Reserve Funds may be used, and all amendments and modifications thereto reasonably approved by Lender.

“Initial Renovations Shortfall” shall have the meaning set forth in Section 7.5.2 hereof.

“Insolvency Opinion” shall mean that certain non-consolidation opinion letter dated February 2, 2007 delivered by Xxxxxx & Xxxxxxx LLP in connection with the Loan.

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

“Insurance Proceeds” shall have the meaning set forth in Section 6.4(c) hereof.

“Intellectual Property Security Agreement” shall mean that certain Intellectual Property Security Agreement, dated as of February 2, 2007, among IP Borrower and HRHI, as debtors, and Lender, as secured party, as modified by the Loan Document Modification Agreement and the HRHI Modification Agreement and as the same hereafter may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Intercreditor Agreement” shall mean that certain Intercreditor Agreement, dated as of the date hereof, by and among Lender, First Mezzanine Lender, Second Mezzanine Lender and Third Mezzanine Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time in accordance with the terms thereof.

“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 ended on and included February 8, 2007.

“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 among Borrowers and an Acceptable Counterparty or a Replacement Interest Rate Cap Agreement.

“Interest Reserve Account” shall have the meaning set forth in Section 7.4.1 hereof.

“Interest Reserve Fund” shall have the meaning set forth in Section 7.4.1 hereof.

“Interest Shortfall” shall mean, as of any applicable Payment Date, the amount by which the aggregate amount of the Monthly Interest Payments due on such Payment Date exceeds the sum of (a) the amount on deposit in the Interest Reserve Fund on such Payment Date in excess of the Minimum Balance, and (b) the funds available in the Cash Management Account on such Payment Date after satisfying the items in clauses (i), (ii), (iii), (iv), (v) and (vi) of Section 2.6.2(b) hereof.

“Internal Approvals” shall have the meaning set forth in Section 13.2(b) hereof.

“IP” shall have the meaning ascribed to such term in Section 4.1.37(a) hereof.

“IP Agreements” shall have the meaning ascribed to such term in Section 4.1.37(a) hereof.

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

“IP License” shall have the meaning set forth in Section 5.1.26(a) hereof.

“IP Material Adverse Effect” shall have the meaning ascribed to such term in Section 4.1.37(d) hereof.

“IP Release Price” shall have the meaning set forth in Section 2.5.3(a)(vi) hereof.

“IP Sale” shall have the meaning set forth in Section 2.5.3(a) hereof.

“Joint Venture” shall mean any Person in which an Affiliate Joint Venture Counterparty owns a direct and/or indirect ownership interest, whether in the form of one or more membership interests, one or more partnership interests or capital stock.

“Junior Holder” shall have the meaning set forth in Section 10.25(a) hereof.

“Junior Participation” shall have the meaning set forth in Section 10.25(a) hereof.

“Lease” shall mean any lease, sublease or subsublease, 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 any Property, including, without limitation, the HRHI Lease, and (a) every modification, amendment or other agreement relating to such lease, sublease, subsublease, or other agreement entered into in connection with such lease, sublease, subsublease, 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. The foregoing definition expressly excludes ordinary course hotel room rentals.

“Legal Requirements” shall mean, with respect to each Property, all federal, state, county, municipal and other governmental statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and injunctions of Governmental Authorities affecting such 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 Gaming Laws and the Americans with Disabilities Act of 1990, as amended, and all permits, licenses and authorizations and regulations relating thereto, including, without limitation, all Governmental Approvals, and all covenants, agreements, restrictions and encumbrances contained in any instruments, either of record or known to any Borrower, at any time in force affecting such Property or any part thereof, including, without limitation, any which may (a) require repairs, modifications or alterations in or to such 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 Monthly Interest Advance” shall have the meaning set forth in Section 3.20.1 hereof.

“Lender’s Rejection Notice” shall have the meaning set forth in Section 13.2(c) hereof.

“Lender Successor Owner” shall have the meaning set forth in Section 5.1.23 hereof.

“Letter of Credit” shall mean an irrevocable, unconditional (other than ministerial conditions), transferable, clean sight draft letter of credit, as the same may be replaced, split, substituted, modified, amended, supplemented, assigned or otherwise restated from time to time, (either an evergreen letter of credit or a letter of credit which does not expire until at least two (2) Business Days after the Maturity Date or such earlier date as such Letter of Credit is no longer required pursuant to the terms of this Agreement) in favor of Lender and entitling Lender to draw thereon based solely on a statement purportedly executed by an officer of Lender stating that it has the right to draw thereon, and issued by a (i) domestic Approved Bank or the U.S. agency or branch of a foreign Approved Bank, or if there are no domestic Approved Banks or U.S. agencies or branches of a foreign Approved Bank then issuing letters of credit, then such letter of credit may be issued by a domestic bank, the long term unsecured debt rating of which is the highest such rating then given by the Rating Agency or Rating Agencies, as applicable, to a domestic commercial bank, or (ii) Credit Suisse, Cayman Islands Branch so long as it has and maintains a minimum long term unsecured debt rating of at least “A+” by S&P and Fitch and “A1” by Moody’s.

“Letter of Credit Reduction Notice” shall mean a notice, in the form attached hereto as Exhibit P or in such other form as Lender shall reasonably approve, requesting that the issuer of any Required Equity Letter of Credit amend such Required Equity Letter of Credit to evidence a reduction in the amount thereof.

“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.

“Licensed IP” shall have the meaning set forth in Section 4.1.37(b) hereof.

“Lien” shall mean, with respect to each Property, any mortgage, deed of trust, lien, pledge, hypothecation, assignment, security interest, or any other encumbrance, charge or transfer of, on or affecting any Borrower, the related 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. For the avoidance of doubt, “Lien” shall not be deemed to include any Permitted IP Encumbrances.

“Line Item” shall mean a line item of cost or expense set forth in the Loan Budget, as the same may be adjusted in compliance with the terms hereof.

“Line Item Component” shall have the meaning set forth in Section 3.9(b) hereof.

“Liquor Management Agreement” shall mean, with respect to the Hotel/Casino Property and, if applicable, the Adjacent Property, that certain Liquor Management and Employee Services Agreement, dated as of February 2, 2007, between Hotel/Casino Borrower and HRHI, in its capacity as the Liquor Manager, as the same may be amended, modified or supplemented from time to time, pursuant to which the Liquor Manager shall manage all alcoholic beverage services at the Hotel/Casino Property and, if applicable, the Adjacent Property, or, if the context requires, a Replacement Liquor Management Agreement.

“Liquor Manager” shall mean, with respect to the Hotel/Casino Property, HRHI, or, if the context requires, another Qualified Liquor Manager.

“Loan” shall mean the loan made by Lender to Borrowers pursuant to the Original Loan Agreement in a maximum principal amount of up to ONE BILLION THREE HUNDRED SIXTY MILLION and No/100 Dollars ($1,360,000,000.00), which was comprised of the Original Acquisition Loan and the Construction Loan, and which was evidenced by the Original Note, which is being prepaid with the Mezzanine Prepayments on the date hereof, and the maximum amount of which that may be funded in the future under the Construction Loan (as defined in the Original Loan Agreement) is being increased by $20,000,000.00 on the date hereof, both of the foregoing resulting in a maximum principal amount of the Loan from and after the date hereof of up to ONE BILLION THIRTY MILLION and 00/100 Dollars ($1,030,000,000.00), comprised of (i) the Reduced Acquisition Loan, which is evidenced by the Reduced Acquisition Loan Note, and (ii) the Construction Loan, which is evidenced by the Construction Loan Note, and which Loan is otherwise on the terms and conditions set forth in this Agreement and the other Loan Documents.

“Loan Amount” shall mean a maximum principal amount of up to ONE BILLION THIRTY MILLION and 00/100 Dollars ($1,030,000,000.00).

“Loan Budget” shall mean the budget for total estimated Project Costs prepared by Borrowers and approved by Lender in its reasonable discretion, which shall detail all items of direct and indirect costs estimated to be incurred in connection with the construction of the Project, and all amendments and modifications thereto approved by Lender in accordance with this Agreement.

“Loan Document Modification Agreement” shall have the meaning set forth in the recitals to this Agreement.

“Loan Documents” shall mean, collectively, this Agreement, the Notes, the Mortgage, the Assignment of Leases, the Environmental Indemnity, each O&M Agreement, each Assignment of Management Agreement, the Assignment of Restaurant Management Agreement, the Assignment of Liquor Management Agreement, the Intellectual Property Security Agreement, the Gaming Recognition Agreement, the HRHI Gaming Agreement, the Agreement Regarding Xxxxxx Indemnification and Escrow, the Assignment of Contracts, the Non-Recourse Guaranty, the Non-Qualified Prepayment Guaranty, the Closing Completion Guaranty, the Construction Completion Guaranty (if and when executed and delivered in accordance with the

terms of this Agreement), the HRHI Guaranty, the HRHI Security Agreement, the Cash Management Agreement, the Collateral Assignments of Interest Rate Caps, the Navegante Agreement and all other documents executed and/or delivered in connection with the Loan, as any of the foregoing are modified by any of the Modification Agreements and as any of the foregoing hereafter may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Loan Percentage” shall mean, as of any date and prior to the application of the principal amount with respect to which the Financing Percentages are then being calculated, the ratio, expressed as a percentage, the numerator of which is an amount equal to the Outstanding Principal Balance on such date and the denominator of which is an amount equal to the Aggregate Outstanding Principal Balance on such date.

“Loan-to-Value Ratio” shall mean the ratio, as of a particular date, in which the numerator is equal to the Aggregate Outstanding Principal Balance and the denominator is equal to the appraised value of the applicable Properties based on one or more appraisals reasonably acceptable to Lender conducted by one or more licensed appraisers.

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

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

“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.

“Major Contractor” shall mean the Construction Manager, the General Contractor and any other contractor hired by one or more Borrowers or an Affiliate thereof or any subcontractor, in any of the foregoing instances, approved by Lender in its reasonable discretion, and either (i) supplying design services, labor and/or materials in connection with the Project for an aggregate contract price, initially or thereafter by virtue of Change Orders, equal to or greater than (a) for purposes of the definition of “Payment and Performance Bonds” set forth below and all provisions of this Agreement related thereto, and for purposes of all requirements herein for obtaining Lien waivers (except if a lower amount is otherwise expressly provided), $2,000,000.00, and (b) for all other provisions of this Agreement, $5,000,000.00, in each of the foregoing instances, whether pursuant to one contract or agreement or multiple contracts or agreements, or (ii) which relates to major design elements such as engineering, traffic flow and landscape architecture, or (iii) which relates to major project elements such as steel, concrete, HVAC systems, windows, doors and other similar items; provided, that in no event shall any Major Contractor (a) be an Affiliate of any Restricted Party or (b) have any equity interest or any equivalent thereof in any of the Properties or in any Restricted Party.

“Major Contractor’s Consent” shall mean a Major Contractor Certification and Consent Agreement executed and delivered by the applicable Major Contractor in favor of Lender and substantially in the form attached as Exhibit G.

“Major Contracts” shall mean any contract with a Major Contractor.

“Major Lease” shall mean any of the following: (i) any Lease of space at any of the Properties for retail, restaurant or any other use in excess of 20,000 square feet to a single tenant or by the aggregate of one or more affiliated tenants, (ii) any Lease of space at any of the Properties for retail, restaurant or any other use providing for net rental payments (including, without limitation, percentage rent) in excess of $7,500,000 per annum to a single tenant or by the aggregate of one or more affiliated tenants, it being acknowledged and agreed that for purposes of determining whether a new Lease is a Major Lease, percentage rent shall be estimated based on Lender’s reasonable underwriting at the time of Lease execution, (iii) any Lease of space at any of the Properties with an Affiliate of Borrower, or (iv) any Lease that is not the result of arm’s length negotiations.

“Management Agreement” shall mean, with respect to each Property, the property management agreement entered into by and between the applicable Borrower or Borrowers and the applicable Manager, as the same has been and may be amended, modified or supplemented from time to time, pursuant to which such Manager is to provide property management and other services with respect to the Property owned by such Borrower, or, if the context requires, a Replacement Management Agreement; provided, however, that the foregoing definition shall expressly exclude the Sub-Management Agreement.

“Manager” shall mean Morgans Hotel Group Management LLC or, if the context requires, a Qualified Manager who is managing any of the Properties, it being understood that the foregoing definition shall expressly exclude the Sub-Manager.

“Material Change Order” shall mean any Change Order with respect to the Project, other than with respect to any guaranteed maximum price Major Contract, that, together with all other Change Orders theretofore entered into with respect to the Project, (i) increases any Line Item in the Loan Budget in excess of the greater of (a) ten percent (10%) over the original amount of such Line Item stated in the Loan Budget, but in no event in excess of $1,000,000.00, or (b) $500,000.00 over the original amount of such Line Item stated in the Loan Budget, and/or (ii) increases the aggregate amount of the Loan Budget in excess of ten percent (10%) over the original amount thereof.

“Material Construction Documents” shall have the meaning set forth in Section 3.2(f)(vi).

“Material Economic Terms” shall have the meaning set forth in Section 13.1 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 Notes 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 either 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.

“Merger Agreement” shall mean that certain Agreement and Plan of Merger, dated as of May 11, 2006, by and among Morgans Hotel Group Co., MHG HR Acquisition Corp., Hard Rock Hotel, Inc. and Xxxxx X. Xxxxxx, as amended by that certain First Amendment to Agreement and Plan of Merger, dated as of January 30, 2007.

“Mezzanine Closing Completion Guaranties” shall mean, collectively, the First Mezzanine Closing Completion Guaranty, the Second Mezzanine Closing Completion Guaranty and the Third Mezzanine Closing Completion Guaranty.

“Mezzanine Construction Completion Guaranties” shall mean, collectively, the First Mezzanine Construction Completion Guaranty, the Second Mezzanine Construction Completion Guaranty and the Third Mezzanine Construction Completion Guaranty.

“Mezzanine Non-Qualified Prepayment Guaranties” shall mean, collectively, the First Mezzanine Non-Qualified Prepayment Guaranty, the Second Mezzanine Non-Qualified Prepayment Guaranty and the Third Mezzanine Non-Qualified Prepayment Guaranty.

“Mezzanine Prepayment” shall have the meaning set forth in the recitals to this Agreement.

“Minimum Advance Schedule” shall have the meaning set forth in Section 3.1(e) hereof.

“Minimum Balance” shall mean, as of any Payment Date, an amount equal to the product resulting after multiplying (i) the sum of (a) the amount of the Reduced Acquisition Loan Monthly Interest Payment due on such Payment Date calculated at the Applicable Interest Rate in effect on such Payment Date, plus (b) the amount of the Construction Loan Monthly Interest Payment due on such Payment Date calculated at the Applicable Interest Rate in effect on such Payment Date, plus (c) the amount of the First Mezzanine Monthly Interest Payment due on such Payment Date calculated at the First Mezzanine Applicable Interest Rate in effect on such Payment Date, plus (d) the amount of the Second Mezzanine Monthly Interest Payment due on such Payment Date calculated at the Second Mezzanine Applicable Interest Rate in effect on such Payment Date, plus (e) the amount of the Third Mezzanine Monthly Interest Payment due on such Payment Date calculated at the Third Mezzanine Applicable Interest Rate in effect on such Payment Date, by (ii) two (2).

“Minimum Mandatory Amount” shall mean, as of any date of determination, (a) if one or more Release Parcel Sales have not resulted in Release Parcel Release Prices paid to Lender in an aggregate amount of at least $40,000,000.00 prior to such date of determination, then the Minimum Mandatory Amount shall mean $110,000,000.00, or (b) if one or more Release Parcel Sales have resulted in Release Parcel Release Prices paid to Lender in an aggregate amount in excess of $40,000,000.00 prior to such date of determination, then the Minimum Mandatory Amount shall mean an amount equal to the difference between (i) $110,000,000.00 and (ii) the aggregate amount of Release Parcel Release Prices paid to Lender prior to such date of determination, but in no event shall such calculation result in a negative number.

“Minimum Mandatory Prepayment” shall have the meaning set forth in Section 2.4.2(b)(i) hereof.

“Minor Casualty” shall mean any injury or damage to the Improvements on the Hotel/Casino Property and/or the Adjacent Property, including any partially constructed portion of the Project, (i) the cost of which to Restore, together with any prior such damages which (A) have not yet been Restored or (B) with respect to which Net Proceeds in an amount sufficient for Restoration have not yet been received by Borrowers or Lender as required pursuant to this Agreement, is less than $5,000,000.00, and (ii) is not materially interfering with, and is not, in Lender’s reasonable judgment, reasonably likely to materially interfere with, the progress of construction of the Project.

“Modification Agreements” shall mean, collectively, the Loan Document Modification Agreement, the HRHI Modification Agreement and the Guaranty Modification Agreement.

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

“Monthly Interest Advance” shall have the meaning set forth in Section 3.20.1 hereof.

“Monthly Interest Payments” shall mean, collectively, the Reduced Acquisition Loan Monthly Interest Payment and the Construction Loan Monthly Interest Payment.

“Monthly Gaming Requirement Certificate” shall have the meaning set forth in Section 12.2 hereof.

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

“Morgans Parent” shall mean Morgans Hotel Group Co., a Delaware corporation, together with its successors and permitted assigns.

“Mortgage” shall mean that certain first priority Construction Deed of Trust, Assignment of Leases and Rents, Security Agreement and Financing Statement (Fixture Filing), dated February 2, 2007, executed and delivered by Borrowers as security for the Loan and encumbering the Properties, as modified by the Loan Document Modification Agreement and as the same hereafter may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Xxxxxx” shall mean Xxxxx X. Xxxxxx.

“Xxxxxx Assigned IP” shall have the meaning set forth in Section 4.1.37(b) hereof.

“Xxxxxx Indemnification” shall mean that certain Indemnification Agreement dated as of May 11, 2006 between Morgans Hotel Group Co., the indirect parent of each of the Borrowers, and Xxxxxx, as the same has been and may be amended, modified or supplemented from time to time.

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

“Navegante Agreement” shall mean that certain Agreement, dated as of October 31, 2007, by and among Navegante HR, LLC, Morgans Parent, HRHI, Lender and Navegante Gaming, LLC, as the same hereafter may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Net Cash Flow” shall mean, for any period, the amount obtained by subtracting (a) (i) Operating Expenses for the Properties, and (ii) monthly contributions to the Replacement Reserve Fund, in each of the foregoing instances, for such period, from (b) Gross Income from Operations for such period.

“Net Cash Flow Schedule” shall have the meaning set forth in Section 5.1.11(b) hereof.

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

“Net Proceeds” shall have the meaning set forth in Section 6.4(c) hereof.

“Net Proceeds Deficiency” shall have the meaning set forth in Section 6.4(c)(vi) hereof.

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

“New Mezzanine Loan” shall have the meaning set forth in Section 9.8 hereof.

“Non-Fully Prepaid IP Sale” shall have the meaning set forth in Section 2.4.3(g) hereof.

“Non-Qualified Extended Maturity Date” shall have the meaning set forth in Section 2.7.1 hereof.

“Non-Qualified Extension Option” shall have the meaning set forth in Section 2.7.1 hereof.

“Non-Qualified Extension Term” shall have the meaning set forth in Section 2.7.1 hereof.

“Non-Qualified Initial Maturity Date” shall mean February 9, 2009.

“Non-Qualified Mandatory Prepayment” shall have the meaning set forth in Section 2.4.2(c) hereof.

“Non-Qualified Prepayment Guaranty” shall mean that certain Guaranty Agreement (Non-Qualified Mandatory Prepayment), dated as of February 2, 2007, from Guarantors to Lender, as modified by the Guaranty Modification Agreement and as the same hereafter may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Non-Qualified Prepayment Letter of Credit” shall have the meaning set forth in Section 2.4.2(c) hereof.

“Non-Recourse Guaranty” shall mean that certain Guaranty Agreement, dated as of February 2, 2007, from Guarantors to Lender, as modified by the Guaranty Modification Agreement and 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” and “Notes” shall mean, individually or collectively, as applicable, the Reduced Acquisition Loan Note and/or the Construction Loan Note.

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

“NRS” shall mean the Nevada Revised Statutes, as amended from time to time.

“O&M Agreement” shall mean an Operations and Maintenance Agreement, dated as of February 2, 2007, by and among a Borrower and Lender given in connection with the Loan, as modified by the Loan Document Modification Agreement and as the same hereafter may be amended, restated, replaced, supplemented or otherwise modified from time to time. On the Closing Date, O&M Agreements were entered into by each of Hotel/Casino Borrower and Lender and Adjacent Borrower and Lender.

“Obligations” shall mean, collectively, Borrowers’ 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 a Borrower or a Guarantor, as applicable, which is signed by an authorized officer or manager of such Borrower or Guarantor or a Constituent Member thereof, as applicable, which shall in all events be subject to Section 9.4 hereof.

“Operating Expense Request” shall have the meaning set forth in Section 2.6.2(b) hereof.

“Operating Expense Surplus” shall mean, with respect to any Payment Date, the positive difference between (i) the aggregate amount of the monthly Operating Expenses and Capital Expenditures for the applicable month set forth in the Approved Annual Budget then in effect less (ii) the amount requested in the Operating Expense Request delivered to Lender with respect to such Payment Date.

“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 any of the Properties that are incurred on a regular monthly or other periodic basis, including without limitation, utilities, ordinary repairs, maintenance, environmental and engineering (but excluding utilities) (which ordinary repairs, maintenance, environmental and engineering (but excluding utilities) for the purposes of this definition shall be no less than an assumed expense of $400,000.00 per month, and following the First Full Operating Month, such assumed expense shall increase to $600,000.00 per month, insurance, license fees, property taxes and assessments, advertising expenses, base and incentive management fees, 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 Properties, Debt Service, debt service under the First Mezzanine Loan, debt service under the Second Mezzanine Loan, debt service under the Third Mezzanine Loan, Capital Expenditures, items that would otherwise constitute Project Costs, Extraordinary Expenses, the cost of any items incurred at any Manager’s expense pursuant to any Management Agreement or at the Sub-Manager’s expense pursuant to the Sub-Management Agreement, non-recurring expenses and contributions to the Replacement Reserve Fund, the Tax and Insurance Escrow Fund and any other reserves required under the Loan Documents. Operating Expenses shall also include the cost (computed in accordance with GAAP) of any complimentary food, beverages, hotel room and/or other amenities provided to any customers or guests of the Hotel/Casino Property, including, without limitation, under the Gaming Sublease, under the Liquor Management Agreement and/or under any Management Agreement.

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

“Optional IP Release Payment” shall have the meaning set forth in Section 2.4.3(g) hereof.

“Original Acquisition Loan” shall mean that portion of the Loan made by Lender to Borrowers on the Closing Date pursuant to the Original Loan Agreement in the principal amount of $760,000,000.00.

“Original Acquisition Loan Advance” shall mean the advance of the Original Acquisition Loan made on the Closing Date pursuant to the provisions of the Original Loan Agreement.

“Original Loan Agreement” shall have the meaning set forth in the recitals to this Agreement.

“Original Note” shall have the meaning set forth in the recitals to this Agreement.

“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 any Property, now or hereafter levied or assessed or imposed against such Property or any part thereof.

“Other Obligations” shall mean (a) the performance of all obligations of each Borrower contained herein; (b) the performance of each obligation of each Borrower contained in any other Loan Document; and (c) the performance of each obligation of each Borrower contained in any renewal, extension, amendment, modification, consolidation, change of, or substitution or replacement for, all or any part of this Agreement, either of the Notes 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 (which shall be comprised of the Reduced Acquisition Loan Outstanding Principal Balance and the Construction Loan Outstanding Principal Balance).

“Owned IP” shall have the meaning set forth in Section 4.1.37(b) hereof.

“Partial Adjacent Parcel” shall have the meaning set forth in Section 2.5.2(a) hereof.

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

“Payment and Performance Bonds” shall mean dual-obligee payment and performance bonds relating to each Major Contractor other than the General Contractor, issued by a surety company or companies and in form and content reasonably acceptable to Lender, in each case in an amount not less than the full contract price, together with a dual obligee and modification rider in form reasonably acceptable to Lender which shall be attached thereto.

“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 was February 9, 2007 for all purposes of this Agreement other than the payment of the Monthly Interest Payments (because Borrowers and Lender acknowledge that stub interest through February 9, 2007 was paid on the Closing Date) and the required deposits to the Tax and Insurance Escrow Fund (because Borrowers and Lender acknowledge that the required initial deposit to the Tax and Insurance Escrow Fund through February 9, 2007 was deposited on the Closing Date), and the first Payment Date for purposes of the Monthly Interest Payments and the required deposits to the Tax and Insurance Escrow Fund was March 9, 2007.

“Permitted Adjacent/Café Uses” shall have the meaning set forth in Section 4.1.11 hereof.

“Permitted Encumbrances” shall mean, with respect to a 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 such 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 such 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 any Borrower, any Guarantor or any Property or (ii) the value of, or cash flow from, any Property, (f) zoning restrictions and/or laws affecting such 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 any Borrower, any Guarantor or any Property or (ii) the value of, or cash flow from, any Property, (g) the Liens securing any Existing FF&E Leases and/or any Permitted Future FF&E Leases, and (h) 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 Future FF&E Leases” shall have the meaning set forth in the definition of “Special Purpose Entity” set forth below.

“Permitted Investment Fund” shall have the meaning set forth in the definition of “Qualified Guarantor Transferee” set forth below.

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

“Permitted IP Encumbrances” shall mean, with respect to the IP, collectively (a) the Liens and security interests created by the Loan Documents, the First Mezzanine Loan Documents (only as to the IP owned by HRHI), the Second Mezzanine Loan Documents (only as to the IP owned by HRHI) and the Third Mezzanine Loan Documents (only as to the IP owned by HRHI), (b) such other Liens or security interests as Lender may approve in writing in Lender’s sole discretion, (c) the Liens on the IP set forth on Schedule XI hereto, which were extinguished on or prior to the Closing Date, and (d) any other IP Agreements permitted under this Agreement.

“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.

“Personal Property” shall have the meaning set forth in the granting clause of the Mortgage with respect to each Property.

“Physical Conditions Report” shall mean, with respect to each Property, a report prepared by a company reasonably satisfactory to Lender regarding the physical condition of such Property, reasonably satisfactory in form and substance to Lender.

“Pink Taco IP” shall have the meaning set forth in Section 4.1.37(b) hereof.

“Pink Taco License” shall have the meaning set forth in Section 4.1.37(b) hereof.

“Plans and Specifications” shall mean the plans and specifications for the Project prepared by the Architect and reasonably approved by Lender in accordance with the terms hereof, as the same may be amended and supplemented from time to time in accordance with the terms of this Agreement.

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

“Pre-Construction Advance” shall have the meaning set forth in Section 3.17.1 hereof.

“Pre-Construction Budget” shall mean a budget, prepared by Borrowers and approved by Lender in its reasonable discretion, which shall identify the costs and expenses for which the proceeds of any Pre-Construction Advance may be used, and all amendments and modifications thereto reasonably approved by Lender. The Pre-Construction Budget as of the date hereof is attached hereto and made a part hereof as Schedule XX.

“Pre-Construction Letter of Credit” shall have the meaning set forth in Section 3.17.1(g) hereof.

“Pre-Construction Relinquishment Amounts” shall have the meaning set forth in Section 3.17.5(b) hereof.

“Pre-Construction Work” shall have the meaning set forth in Section 3.17.1(b) hereof.

“Prepayment Fee” shall mean an amount equal to the following:

(i) two percent (2.0%) of each of the Minimum Mandatory Prepayment (or any partial payment on account thereof), each Release Parcel Release Price, each Adjacent Parcel Release Price and the IP Release Price, if any of the foregoing are due and payable in accordance with the terms of this Agreement after the Closing Date through, but excluding, May 9, 2007;

(ii) one and one-half percent (1.5%) of each of the Minimum Mandatory Prepayment (or any partial payment on account thereof), each Release Parcel Release Price, each Adjacent Parcel Release Price and the IP Release Price, if any of the foregoing are due and payable in accordance with the terms of this Agreement on or after May 9, 2007 through, but excluding, December 9, 2007; and

(iii) one percent (1.0%) of each of the Minimum Mandatory Prepayment (or any partial payment on account thereof), each Release Parcel Release Price, each Adjacent Parcel Release Price and the IP Release Price, if any of the foregoing are due and payable in accordance with the terms of this Agreement on or after December 9, 2007 through, but excluding, the Prepayment Fee Release Date.

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

“Prepayment Fee Release Date” shall mean May 9, 2008.

“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 Reduced Acquisition Loan Spread or the Construction Loan Spread, as applicable, 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.

“Pro-Forma Net Cash Flow” shall mean, as of any date of determination, (i) Gross Income from Operations collected for the trailing three (3) month period ending with the last calendar month for which financial reports are then required to have been delivered under Section 5.1.11 hereof, multiplied by four (4), less (ii) actual Operating Expenses for the trailing twelve (12) month period ending with such last calendar month for which financial reports are then required to have been delivered under Section 5.1.11 hereof, as adjusted by Lender to reflect any actual increases to Operating Expenses then known to Lender (i.e., real estate taxes and insurance premiums) as reflected in the Approved Annual Budget in effect.

“Project” shall mean those renovations and improvements (exclusive of the Initial Renovations) expected to be constructed and performed on the Hotel/Casino Property and the Adjacent Property in accordance with the terms of this Agreement and the other Loan Documents, including, without limitation, a parking facility, an expansion of the hotel and casino on the Hotel/Casino Property and the construction of an approximately 440 room hotel facility, as generally described on Schedule II attached hereto and as more particularly described in the Plans and Specifications.

“Project Cost Ceiling” shall mean $75,000,000.00.

“Project Cost Ceiling Date” shall mean the date upon which the Project Costs incurred or expended by Borrowers in connection with the Project reach the Project Cost Ceiling.

“Project Costs” shall mean, collectively, all Hard Costs and Soft Costs incurred or to be incurred in connection with the financing, development, design, engineering, procurement, installation and construction of the Project until Final Completion thereof, in each case as set forth in the Loan Budget.

“Projected Underwritten Net Cash Flow” shall mean, with respect to each Extension Option, the projected underwritten Net Cash Flow to be earned during the applicable Extension Term, as reasonably estimated and underwritten by Lender based on (i) the Approved Annual

Budget then in effect and (ii) underwriting criteria consistent with that used by Lender to determine the amount of the deposit to the Interest Reserve Fund on the Closing Date.

“Property” and “Properties” shall mean, individually and collectively, each and every one of the Hotel/Casino Property, the Café Property and the Adjacent Property that, as of any particular date, is subject to the terms of this Agreement, the Mortgage and the other Loan Documents.

“Provided Information” shall mean any and all financial and other information prepared and provided by any Borrower, any Manager, Sub-Manager, HRHI or any Guarantor or under the supervision or control of any Borrower, any Manager, Sub-Manager, HRHI or any Guarantor (but excluding third party independent reports) with respect to one or more of the Properties, the IP, any Borrower, any First Mezzanine Borrower, any Second Mezzanine Borrower, any Third Mezzanine Borrower, any Manager, Sub-Manager, HRHI 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.

“Punch List Items” shall mean, collectively, minor or insubstantial details of construction, decoration, mechanical adjustment or installation, which do not materially hinder or impede the use, operation, or maintenance of the Project.

“Purchaser Licensed IP” shall have the meaning set forth in Section 2.5.3(a)(xi) hereof.

“PWR/RWB Escrow Agreement” shall mean that certain Escrow Agreement dated as of May 11, 2006 between PM Realty, LLC, Red, White and Blue Pictures, Inc., Xxxxxx, 510 Development Corporation, Morgans Hotel Group Co., the indirect parent of each of the Borrowers, Morgans Group LLC and Chicago Title Agency of Nevada, Inc., as the same has been and may be amended, modified or supplemented from time to time.

“Qualification Conditions” shall mean, collectively, that (i) the satisfaction of the conditions for the Initial Construction Loan Advance set forth in Section 3.2 hereof shall have occurred, (ii) no Event of Default shall have occurred and be continuing, and (iii) Lender shall have advanced the Initial Construction Loan Advance; provided, however, that if the conditions set forth in the foregoing clauses (i) and (ii) have been satisfied and the failure of Lender to have advanced the Initial Construction Loan Advance is due to no fault of Borrowers or any Affiliate thereof, then the Qualification Conditions shall be deemed satisfied notwithstanding that the Initial Construction Loan Advance has not actually been advanced.

“Qualified Extended Maturity Date” shall have the meaning set forth in Section 2.7.2 hereof.

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

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

“Qualified Gaming Operator” shall mean (a) Golden HRC, LLC, (b) Gaming Borrower, if and when Gaming Borrower shall become the Gaming Operator for the Hotel/Casino Property in accordance with the provisions of Article XII hereof, (c) Navegante HR, LLC, if and when Navegante HR, LLC shall become the Gaming Operator for the Hotel/Casino Property in accordance with the provisions of the Navegante Agreement, or (d) a reputable and experienced gaming operator (which may be an Affiliate of any Borrower) possessing experience in supervising, operating and managing gaming activities at properties similar in size, scope, use and value as the Hotel/Casino Property, provided, that with respect to any Person under any of the foregoing clauses (a), (b), (c) or (d), such Person shall have, at all times during its engagement as Gaming Operator, all required approvals and licenses from all applicable Governmental Authorities, including, without limitation, all Gaming Authorities, and provided, further, that with respect to the foregoing clause (d): (i) such Person shall be reasonably acceptable to Lender and such Person shall agree to operate the gaming operations at the Hotel/Casino Property pursuant to one or more written agreements previously approved by Lender in its reasonable discretion (including, by way of example but without limitation, a new lease and/or sublease and related recognition agreement), (ii) after a Securitization has occurred, Borrowers shall have obtained prior written confirmation from the applicable Rating Agencies that the supervision, operation and management of the gaming activities at the Hotel/Casino 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 (iii) if such Person is an Affiliate of any Borrower, (A) if such Affiliate was covered in the Insolvency Opinion or in any subsequent Additional Insolvency Opinion, Borrowers 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 Borrowers, or (B) if such Affiliate was not covered in the Insolvency Opinion or in any subsequent Additional Insolvency Opinion, Borrowers shall have obtained and delivered to Lender an Additional Insolvency Opinion with respect to such Affiliate and Borrowers.

“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 Investment Grade or (b) who, together with its Affiliates, (A) (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) full service hotels exclusive of the Properties totaling in the aggregate no less than 3,500 rooms; or

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

“Qualified Initial Maturity Date” shall mean February 9, 2010.

“Qualified Liquor Manager” shall mean either (a) HRHI, (b) Gaming Borrower, (c) Hotel Casino Borrower, (d) Golden HRC, LLC, or (e) a reputable and experienced liquor management organization (which may be an Affiliate of any Borrower) possessing experience in managing all or substantially all alcoholic beverage services at properties similar in size, scope, use and value as the Hotel/Casino Property, provided, that (i) any Person referred to in the foregoing clause (a) through (e) shall have, at all times during its engagement as the Liquor Manager, all Governmental Approvals necessary to provide all alcoholic beverage services at the Hotel/Casino Property, and (ii) with respect to clause (e) above, (A) after a Securitization has occurred, Borrowers shall have obtained prior written confirmation from the applicable Rating Agencies that management of all alcoholic beverage services at the Hotel/Casino 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 (B) if such Person is an Affiliate of any Borrower, (1) if such Affiliate was covered in the Insolvency Opinion or in any subsequent Additional Insolvency Opinion, Borrowers 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 Borrowers, or (2) if such Affiliate was not covered in the Insolvency Opinion or in any subsequent Additional Insolvency Opinion, Borrowers shall have obtained and delivered to Lender an Additional Insolvency Opinion with respect to such Affiliate and Borrowers.

“Qualified Manager” shall mean either (a) any Manager with respect to the Property it is managing on the date hereof, or (b) in the reasonable judgment of Lender, a reputable and experienced property management organization (which may be an Affiliate of any Borrower or Guarantor) possessing experience in managing properties similar in size, scope, use and value as the applicable Property, provided, that with respect to clause (b) above, (i) after a Securitization has occurred, Borrowers shall have obtained prior written confirmation from the applicable Rating Agencies that management of the applicable 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 any Borrower, (A) if such Affiliate was covered in the Insolvency Opinion or in any subsequent Additional Insolvency Opinion, Borrowers 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 Borrowers, or (B) if such Affiliate was not covered in the Insolvency Opinion or in any subsequent Additional Insolvency Opinion, Borrowers shall have obtained and delivered to Lender an Additional Insolvency Opinion with respect to such Affiliate and Borrowers.

“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 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.

“Quarter-End Payment Date” shall have the meaning set forth in Section 3.1(e) hereof.

“Quarterly Deficiency” shall have the meaning set forth in Section 3.1(e) hereof.

“Quarterly Deficiency Advance” shall have the meaning set forth in Section 3.1(e) hereof.

“Quarterly Deficiency Relinquishment Prepayment” shall have the meaning set forth in Section 3.1(e) hereof.

“Rank” shall have the meaning set forth in Section 4.1.37(b) hereof.

“Rank IP” shall have the meaning set forth in Section 4.1.37(b) hereof.

“Rank License” shall have the meaning set forth in Section 4.1.37(b) hereof.

“Rating Agencies” shall mean, prior to the final Securitization of the Loan, each of S&P, Xxxxx’x 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.

“Reduced Acquisition Loan” shall have the meaning set forth in Section 2.1.2 hereof.

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

“Reduced Acquisition Loan Note” shall mean that certain Replacement Reduced Acquisition Loan Promissory Note of even date herewith in the principal amount of FOUR HUNDRED TEN MILLION AND NO/100 DOLLARS ($410,000,000.00), made by Borrowers in favor of Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, which partially replaces, amends and restates the Original Note.

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

“Reduced Acquisition Loan Percentage” shall mean, as of any date and prior to the application of the principal amount with respect to which the Component Percentages or the Alternate Financing Percentages are then being calculated, the ratio, expressed as a percentage, the numerator of which is an amount equal to the Reduced Acquisition Loan Outstanding Principal Balance on such date and the denominator of which is an amount equal to the Outstanding Principal Balance on such date.

“Reduced Acquisition Loan Spread” shall mean, subject to application of the Default Rate, 2.3536585366%; provided, however, that (a) subject to the following clause (b), if Substantial Completion has not occurred on or before the date which is twenty-four (24) months from the date of the Initial Construction Loan Advance, the Reduced Acquisition Loan Spread shall increase to 2.6305595409% from and including such date which is twenty-four (24) months from the date of the Initial Construction Loan Advance through but excluding the first Payment Date following Substantial Completion, following which the Reduced Acquisition Loan Spread shall again be 2.3536585366%, and (b) if the Second Non-Qualified Extension Term is exercised in accordance with the terms of Section 2.7.1 hereof, the Reduced Acquisition Loan Spread in effect from time to time pursuant to the foregoing clause (a) shall increase by 0.1384505022% throughout the Second Non-Qualified Extension Term and thereafter until the Obligations are paid in full.

“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 any of the Properties and/or the IP and/or the direct or indirect ownership interests in one or more Borrowers.

“Register” shall have the meaning set forth in Section 10.26.

“Registered,” with respect to any IP, means any IP issued by, registered with, renewed by or the subject of a pending application before, any Governmental Authority or Internet domain name registrar.

“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 any Borrower or secured by a Related Property, that is included in a Securitization with the Loan or any Component.

“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 any Property.

“Release Parcel” shall mean a portion of the Adjacent Property consisting of approximately, but in no event less than, fifteen (15) acres and substantially identified on Schedule VII attached hereto and made a part hereof, on which no portion of the Project is contemplated to be constructed, as such portion is reasonably approved by Lender prior to the date of the first Release Parcel Sale.

“Release Parcel Binding Contract” shall have the meaning set forth in Section 2.4.2(b)(i) hereof.

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

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

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

“Relinquishment Deadline” shall have the meaning set forth in Section 3.1(c) hereof.

“Relinquishment Effective Date” shall have the meaning set forth in Section 3.1(c) hereof.

“Relinquishment Interest Reserve Deposit” shall have the meaning set forth in Section 3.1(c) hereof.

“Relinquishment Notice” shall have the meaning set forth in Section 3.1(c) hereof.

“Relinquishment Restoration Completion Notice” shall have the meaning set forth in Section 3.17.6(b) hereof.

“Relinquishment Restoration Payment Statement” shall have the meaning set forth in Section 3.17.6(c) hereof.

“Remaining Adjacent Property” shall mean that portion of the Adjacent Property that does not constitute the Release Parcel.

“REMIC Requirements” shall have the meaning set forth in Section 2.5.1(a)(xvi) hereof.

“Rents” shall mean, with respect to each Property, 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 (including liquor revenues), deposits (including, without limitation, security deposits, utility deposits and deposits for rental of rooms, but excluding deposits for rental of banquet space or business or conference meeting rooms), accounts, cash, issues, profits, charges for services rendered, all other amounts payable as rent under any Lease or other agreement relating to any Property (including without limitation the Liquor Management Agreement or Replacement Liquor Management Agreement), and other payments and consideration of whatever form or nature received by or paid to or for the account of or benefit of any Borrower, any Manager, Sub-Manager or any of their respective agents or employees from any and all sources arising from or attributable to any Property and/or the Improvements thereon, and proceeds, if any, from business interruption or other loss of income insurance, including, without limitation, all hotel receipts, revenues and net credit card receipts collected from guest rooms, restaurants, bars, meeting rooms, banquet rooms and recreational facilities, revenues from telephone services, internet services, laundry services and television, all receivables, customer obligations, installment payment obligations and other obligations now existing or hereafter arising or created out of the sale, lease, sublease, license, concession or other grant of the right of the use and occupancy of any Property or rendering of services by any Borrower or any operator or manager of the hotel or the commercial space located in any of the Improvements or acquired from others (including, without limitation, from the rental of any office space, retail space, guest rooms or other space, halls, stores, and offices, and deposits securing reservations of such space), net license, lease, sublease and net concession fees and rentals, health club membership fees, food and beverage wholesale and retail sales, service charges and vending machine sales.

“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 Borrowers 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.

“Replacement Liquor Management Agreement” shall mean, collectively, (a) either (i) a management agreement with a Qualified Liquor Manager substantially in the same form and substance as the Liquor Management Agreement being replaced, or (ii) a liquor management agreement with a Qualified Liquor Manager, which liquor management agreement shall be reasonably acceptable to Lender in form and substance, provided, with respect to this subclause (ii), after the occurrence of a Securitization, Lender, at its option, may require that Borrowers obtain confirmation from the applicable Rating Agencies that such liquor management agreement will not cause a downgrade, withdrawal or qualification of the then current rating of the Securities or any class thereof; and (b) an assignment of liquor management agreement and subordination of liquor management fees in a form reasonably acceptable to Lender, executed and delivered to Lender by Borrowers and such Qualified Liquor Manager at Borrowers’ expense.

“Replacement Management Agreement” shall mean, collectively, (a) either (i) a management agreement with a Qualified Manager substantially in the same form and substance as the Management Agreement being replaced, or (ii) a management agreement with a Qualified Manager, which management agreement shall be reasonably acceptable to Lender in form and substance, provided, with respect to this subclause (ii), after the occurrence of a Securitization, Lender, at its option, may require that Borrowers 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; and (b) an assignment of management agreement and subordination of management fees substantially in the form then used by Lender (or such other form and substance reasonably acceptable to Lender), executed and delivered to Lender by Borrowers and such Qualified Manager at Borrowers’ expense.

“Replacement Reserve Account” shall have the meaning set forth in Section 7.3.1 hereof.

“Replacement Reserve Fund” shall have the meaning set forth in Section 7.3.1 hereof.

“Replacements” shall have the meaning set forth in Section 7.3.1 hereof.

“Requested Disbursement Date” shall have the meaning set forth in Section 3.6 hereof.

“Required Equity Amount” shall have the meaning set forth in Section 3.2(h) hereof.

“Required Equity Letter of Credit” shall have the meaning set forth in Section 3.2(h) hereof.

“Required Net Cash Flow” shall mean, with respect to each Extension Term, the amount of Net Cash Flow that will need to be generated during such Extension Term in order to achieve an Extension Debt Service Coverage Ratio of 1.05 to 1.00.

“Required Prepayment” shall have the meaning set forth in Section 2.4.2(b) hereof.

“Required Repair Account” shall have the meaning set forth in Section 7.1.1 hereof.

“Required Repair Fund” shall have the meaning set forth in Section 7.1.1 hereof.

“Required Repairs” shall have the meaning set forth in Section 7.1.1 hereof.

“Reserve Funds” shall mean, collectively, the Tax and Insurance Escrow Fund, the Replacement Reserve Fund, the Required Repair Fund, the Initial Renovation Reserve Fund, the Interest Reserve Fund, the General Reserve Fund, any funds on deposit in the Construction Loan Reserve Account, any Shortfall Funds and any other escrow fund established pursuant to the Loan Documents.

“Restoration” shall mean the repair and restoration of a Property after a Casualty or Condemnation as nearly as possible to the condition such Property was in immediately prior to such Casualty or Condemnation, with such alterations as may be reasonably approved by Lender to the extent required hereunder.

“Restoration Completion Notice” shall have the meaning set forth in Section 3.22(c) hereof.

“Restoration Payment Statement” shall have the meaning set forth in Section 3.22(d) hereof.

“Restoration Threshold” shall mean Ten Million Dollars ($10,000,000.00).

“Restoration Value Threshold” shall mean that (i) in the case of a Condemnation, the Net Proceeds are less than 15% of the then current fair market value of the applicable Property, and (ii) in the case of a Casualty, the Net Proceeds are less than 30% of the then current fair market value of the applicable Property.

“Restricted Party” shall mean, collectively, each Borrower, each First Mezzanine Borrower, each Second Mezzanine Borrower, each Third Mezzanine Borrower, HRHI, HR Holdings and each Guarantor.

“Retainage” shall mean, for each construction contract and subcontract, the greater of (i) ten percent (10%) of all Hard Costs funded to the Trade Contractor (or any General Contractor to the extent any General Contractor is performing the work) under such contract or subcontract until such time as the work to be provided thereunder is fifty percent (50%) complete as reasonably determined and certified by the Construction Consultant, at which time the retainage

holdback upon each subsequent payment under such contract or subcontract shall be reduced to such amount as is necessary to maintain a retainage holdback, taking into account the amount already being held back, equal to at least five percent (5%) of the total amount of the applicable contract or subcontract, including any increases thereto, and (ii) the actual retainage under such contract or subcontract.

“Revised Maturity Date” shall have the meaning set forth in Section 3.22(b) hereof.

“Right of First Offer” shall have the meaning set forth in Section 13.1 hereof.

“Right of First Offer Notice” shall have the meaning set forth in Section 13.1 hereof.

“Right of First Offer Information and Materials” shall have the meaning set forth in Section 13.2(b) hereof.

“ROFO Term Sheet” shall have the meaning set forth in Section 13.2(d) hereof.

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

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

“Second Anniversary” shall mean February 2, 2009.

“Second Anniversary Unfunded Construction Loan Advance” shall have the meaning set forth in Section 3.1 hereof.

“Second Mezzanine Applicable Interest Rate” shall mean the “Applicable Interest Rate” as defined in the Second Mezzanine Loan Agreement.

“Second Mezzanine Borrower” and “Second Mezzanine Borrowers” shall mean, individually or collectively, as applicable, HRHH Gaming Junior Mezz, LLC, a Delaware limited liability company, and HRHH JV Junior Mezz, LLC, a Delaware limited liability company, each in its capacity as a borrower under the Second Mezzanine Loan, together with its or their successors or permitted assigns.

“Second Mezzanine Cash Management Account” shall mean the “Second Mezzanine Cash Management Account” established under the Second Mezzanine Loan Documents.

“Second Mezzanine Closing Completion Guaranty” shall mean that certain Second Mezzanine Closing Guaranty of Completion, dated as of the date hereof, from Guarantors to Second Mezzanine Lender, as the same hereafter may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Second Mezzanine Construction Completion Guaranty” shall mean a Second Mezzanine Construction Guaranty of Completion from Guarantors in favor of Second Mezzanine Lender in the form attached to the Second Mezzanine Loan Agreement as Exhibit A thereto, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Second Mezzanine Debt” shall mean the “Debt” as defined in the Second Mezzanine Loan Agreement.

“Second Mezzanine Default” shall mean a “Default” as defined in the Second Mezzanine Loan Agreement.

“Second Mezzanine Event of Default” shall mean an “Event of Default” as defined in the Second Mezzanine Loan Agreement.

“Second Mezzanine Interest Reserve Fund” shall mean the “Interest Reserve Fund” as defined in the Second Mezzanine Loan Agreement.

“Second Mezzanine Lender” shall mean Column Financial, Inc., in its capacity as holder of the Second Mezzanine Loan, its successors or assigns.

“Second Mezzanine Loan” shall mean a loan in the original principal amount of One Hundred Million and No/100 Dollars ($100,000,000.00) made by Second Mezzanine Lender to Second Mezzanine Borrowers.

“Second Mezzanine Loan Agreement” shall mean that certain Second Mezzanine Loan Agreement dated as of the date hereof between Second Mezzanine Lender and Second Mezzanine Borrowers, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time subject to the terms of the Intercreditor Agreement.

“Second Mezzanine Loan Documents” shall mean the Second Mezzanine Loan Agreement and all other documents evidencing and/or securing the Second Mezzanine Loan, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time subject to the terms of the Intercreditor Agreement.

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

“Second Mezzanine Loan Percentage” shall mean, as of any date of determination and prior to the application of the principal amount with respect to which the Financing Percentages or the Alternate Financing Percentages are then being calculated, the ratio, expressed as a percentage, the numerator of which is an amount equal to the Second Mezzanine Loan Outstanding Principal Balance on such date of determination and the denominator of which is an amount equal to the Aggregate Outstanding Principal Balance on such date of determination.

“Second Mezzanine Non-Qualified Prepayment Guaranty” shall mean that certain Second Mezzanine Guaranty Agreement (Non-Qualified Mandatory Prepayment), dated as of the

date hereof, from Guarantors to Second Mezzanine Lender, as the same hereafter may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Second Mezzanine Obligations” shall mean the “Obligations” as defined in the Second Mezzanine Loan Agreement.

“Second Mezzanine Monthly Interest Payment” shall mean the “Monthly Interest Payment” as defined in the Second Mezzanine Loan Agreement.

“Second Mezzanine Spread” shall mean the “Spread” as defined in the Second Mezzanine Loan Agreement.

“Second Non-Qualified Extended Maturity Date” shall mean February 9, 2011.

“Second Non-Qualified Extension Option” shall have the meaning set forth in Section 2.7.1(b) hereof.

“Second Non-Qualified Extension Term” shall have the meaning set forth in Section 2.7.1(b) hereof.

“Second Qualified Extended Maturity Date” shall mean February 9, 2012.

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

“Second Qualified Extension Term” shall have the meaning set forth in Section 2.7.2(b) 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 9.7 hereof.

“Servicing Agreement” shall have the meaning set forth in Section 9.7 hereof.

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

“Shortfall” shall mean, at any given time, the amount by which the sum of (i) the unfunded portion of the then applicable Construction Loan Amount, taking into account the existing unapplied Contingency Line Items and applying a percentage of completion analysis with respect thereto, (ii) any General Reserve Funds then on deposit in the General Reserve Account, if any, (iii) any Interest Reserve Funds then on deposit in the Interest Reserve Account in excess of the Minimum Balance, and (iv) any funds then on deposit in the Construction Loan Reserve Account, if any, is less than the actual sum, as reasonably estimated by Lender (based on advice of Construction Consultant), which will be required to complete the Project in accordance with the Plans and Specifications, the Loan Budget and all Legal Requirements, and

to pay all unpaid Project Costs in connection therewith, including, without limitation, the payment of Debt Service on the Loan, debt service on the First Mezzanine Loan, debt service on the Second Mezzanine Loan and debt service on the Third Mezzanine Loan, in each instance, through and including the Qualified Initial Maturity Date (i.e., including the Initial Maturity Extension Period).

“Shortfall Account” shall have the meaning set forth in Section 3.12(b) hereof.

“Shortfall Funds” shall have the meaning set forth in Section 3.12(a) hereof.

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

“Soft Costs” shall mean, collectively, the costs set forth in the Loan Budget which are not Hard Costs, including, without limitation, fees and expenses of any architect or engineer engaged in connection with the Project, fees and expenses of Borrowers’ counsel and Lender’s counsel, fees and expenses of the Construction Consultant and the Administrative Agent, Debt Service, pre-opening costs and expenses, operating supplies and equipment and such other costs as are set forth in the Loan Budget.

“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 one of the Properties or the IP and incidental personal and intangible property related thereto, (B) with respect to Adjacent Borrower, owning all of the membership interests in one or more Subsidiary Transferees, (C) operating the gaming and/or liquor operations at the Hotel/Casino Property and owning incidental personal and intangible property related thereto, (D) entering into the Original Loan Agreement with Lender, (E) refinancing its Property or the IP in connection with repayment of the Loan, and/or (F) 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 one of the Properties or the IP or that acts as the gaming operator and/or liquor manager at the Hotel/Casino Property or managing member of the limited liability company that owns one of the Properties or the IP or that acts as the gaming operator and/or liquor manager at the Hotel/Casino 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 one of the Properties or the IP and incidental personal and intangible property related thereto, (B) with respect to Adjacent Borrower, owning all of the membership interests in one or more Subsidiary Transferees, or (C) operating the gaming operations and/or liquor operations at the Hotel/Casino Property and owning incidental personal and intangible property related thereto, (ii) acting as general partner of the limited partnership that owns one of the Properties or the IP or that acts as the gaming operator and/or liquor manager at the Hotel/Casino Property, or (ii) acting as managing member of the limited liability company that owns one of the Properties or the IP or that acts as the gaming operator and/or liquor manager at the Hotel/Casino Property;

(c) has not had, does not have and will not have any assets other than those related to one of the Properties or the IP or the gaming and/or liquor operations at the Hotel/Casino Property or, with respect to Adjacent Borrower, 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 one of the Properties or the IP or that acts as the gaming operator and/or liquor manager at the Hotel/Casino Property, or, if such entity is a managing member of a limited liability company, its membership interest in the limited liability company that owns one of the Properties or the IP or that acts as the gaming operator and/or liquor manager at the Hotel/Casino 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 will 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 will 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 with respect to one or more other Borrowers, has maintained and will maintain its accounts, books and records separate from any other Person (except other Borrowers) 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 (except with other Borrowers) records, books, resolutions (if any) and agreements;

(m) other than as provided in the Cash Management Agreement or in any Management Agreement with respect to one or more other Borrowers, (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 of any Borrower, except for services rendered under a business management services agreement with an Affiliate that complies with the terms contained in Subsection (dd) below, so long as the manager, or equivalent thereof, under such business management services agreement holds itself out as an agent of such Borrower;

(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 a 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 (dd) 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 or Nevada, as applicable, 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, (ii) unsecured trade payables and operational debt not evidenced by a note and in an aggregate amount not exceeding two percent (2%) of the then Outstanding Principal Balance (not including any trade payables in an amount not to exceed $200,000 that are the subject of a good faith dispute by a Borrower, in appropriate proceedings therefor, and for which adequate reserves have been established by such Borrower); 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, (iii) the FF&E, capital and equipment leases shown on Schedule V attached hereto and made a part hereof, provided that the aggregate principal amount payable thereunder does not exceed $5,000,000 and shall be paid within sixty (60) days of the date when due (collectively, the “Existing FF&E Leases”), (iv) any FF&E, capital and equipment leases hereinafter entered into in connection with any of the Properties in the ordinary course of business, provided that the aggregate principal amount payable thereunder does not exceed $15,000,000 and shall be paid within sixty (60) days of the date when due (collectively, “Permitted Future FF&E Leases”), and (v) any Letters of Credit required or permitted to be furnished hereunder or any reimbursement obligation with respect thereto;

(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 except with respect to the ownership of the limited liability company interests or partnership interests (as applicable) of the Single Purpose Entities as shown on the organizational chart attached to this Agreement as Schedule VI;

(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 of any Borrower 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 (dd) below, so long as the manager, or equivalent thereof, under such business management services agreement holds itself out as an agent of such Borrower;

(z) except as provided in the Cash Management Agreement or in any Management Agreement, 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 (i) Guarantors pursuant to the Non-Recourse Guaranty, the Non-Qualified Prepayment Guaranty, the Closing Completion Guaranty and the Construction Completion Guaranty, and (ii) HRHI pursuant to the HRHI 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 Maintenance Premium” shall mean, with respect to any prepayment of the Outstanding Principal Balance prior to the Spread Maintenance Release Date, other than (a) the Mezzanine Prepayments, (b) if applicable, the Quarterly Deficiency Relinquishment Prepayment, and (c) any prepayment from the proceeds of any Minimum Mandatory Prepayment (or any partial payment on account thereof), Non-Qualified Mandatory Prepayment, Additional Non-Qualified Mandatory Prepayment, Release Parcel Release Price, Adjacent Parcel Release Price and/or IP Release Price, an amount equal to the product of (i) the sum of (A) the product of (1) the principal amount of such prepayment applied to the Reduced Acquisition Loan in accordance with the provisions of Section 2.4.3 hereof, multiplied by (2) the Reduced Acquisition Loan Spread, plus (B) the product of (1) the principal amount of such prepayment applied to the Construction Loan in accordance with the provisions of Section 2.4.3 hereof, multiplied by (2) the Construction Loan Spread, multiplied by (ii) a fraction, the numerator of which shall equal the actual number of days from the date of such payment through the Spread Maintenance Release Date and the denominator of which is 360; provided, however, if any such prepayment shall occur on a day other than a Payment Date, the numerator of such fraction shall equal the actual number of days from the next succeeding ninth (9th) day of a calendar month through the Spread Maintenance Release Date.

“Spread Maintenance Release Date” shall mean, as applicable, either (i) May 9, 2008, in the event the Qualification Conditions have not been satisfied on or prior to the Construction Qualification Date, or (ii) August 9, 2008, in the event the Qualification Conditions have been satisfied on or prior to the Construction Qualification Date.

“State” shall mean the State of Nevada.

“Stop Notice” shall have the meaning set forth in Section 3.22(a) hereof.

“Stored Materials” shall have the meaning set forth in Section 3.11 hereof.

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

(i) the period commencing on the Closing Date through and including the Initial Maturity Date, five and one-half percent (5.5%) per annum; and

(ii) for each Extension Term, a rate to be selected by Borrowers no later than ten (10) days prior to the first day of such Extension Term, which shall in no event exceed one percent (1%) in excess of LIBOR as of the most recent Determination Date.

“Sub-Management Agreement” shall mean that certain Paradise Bay Club Apartments Management Agreement, dated as of September 17, 2004, between PM Realty LLC (predecessor-in-interest to Adjacent Borrower) and Sub-Manger, with respect to the Adjacent Property, as the same has been and may be amended, modified or supplemented from time to time.

“Sub-Manager” shall mean, with respect to the Adjacent Property, ConAm Management Corporation.

“Subsequent Construction Loan Reserve Disbursements” shall have the meaning set forth in Section 3.1(f) hereof.

“Subsequent Required Equity Amount” shall have the meaning set forth in Section 3.3(d) hereof.

“Subsidiary Transferee” shall have the meaning set forth in Section 2.5.1(f) hereof.

“Substantial Completion” shall mean the Lien free (subject to Borrowers’ rights to contest certain Liens as provided in Sections 5.1.1 and 5.1.2 hereof and Section 3.6(b) of the Mortgage) substantial completion of the Project substantially in accordance with the Plans and Specifications, all Legal Requirements and this Agreement, such compliance to be evidenced to the reasonable satisfaction of Lender and the Construction Consultant, together with the delivery to Lender of one or more Certificates of Occupancy (if subject to any conditions, such conditions being reasonably acceptable to Lender) for the Project (except to the extent third parties under Leases who are not Affiliates of any Restricted Party have not obtained their Certificate(s) of Occupancy) and evidence that all other Governmental Approvals have been issued and all other Legal Requirements have been satisfied as necessary to permit the commencement at the Project of substantially all gaming, hotel, food and beverage operations contemplated in the space constituting the Project in accordance with the Plans and Specifications other than immaterial portions thereof.

“Survey” shall mean a current survey of each of the Properties, certified to the title company and Lender and their successors and assigns, in form and content reasonably satisfactory to Lender.

“Targeted Minimum Balance” shall mean, as of any Payment Date, the targeted minimum balance in the Interest Reserve Account as set forth on Schedule XXI attached hereto and made a part hereof.

“Tax and Insurance Escrow Fund” shall have the meaning set forth in Section 7.2 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 any Property or part thereof, together with all interest and penalties thereon.

“Terrorism Cap” shall have the meaning set forth in Section 6.1(a)(x) hereof.

“Terrorism Insurance” shall have the meaning set forth in Section 6.1(a)(x) hereof.

“Third Mezzanine Applicable Interest Rate” shall mean the “Applicable Interest Rate” as defined in the Third Mezzanine Loan Agreement.

“Third Mezzanine Borrower” and “Third Mezzanine Borrowers” shall mean, individually or collectively, as applicable, HRHH Gaming Junior Mezz Two, LLC, a Delaware limited liability company, and HRHH JV Junior Mezz Two, LLC, a Delaware limited liability company, each in its capacity as a borrower under the Third Mezzanine Loan, together with its or their successors or permitted assigns.

“Third Mezzanine Cash Management Account” shall mean the “Third Mezzanine Cash Management Account” established under the Third Mezzanine Loan Documents.

“Third Mezzanine Closing Completion Guaranty” shall mean that certain Third Mezzanine Closing Guaranty of Completion, dated as of the date hereof, from Guarantors to Third Mezzanine Lender, as the same hereafter may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Third Mezzanine Construction Completion Guaranty” shall mean a Third Mezzanine Construction Guaranty of Completion from Guarantors in favor of Third Mezzanine Lender in the form attached to the Third Mezzanine Loan Agreement as Exhibit A thereto, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Third Mezzanine Construction Funds” shall mean the $10,000,000.00 in proceeds of the Third Mezzanine Loan funded into the Construction Loan Reserve Account pursuant to Section 3.4.2 of the Third Mezzanine Loan Agreement on or about November 30, 2007.

“Third Mezzanine Debt” shall mean the “Debt” as defined in the Third Mezzanine Loan Agreement.

“Third Mezzanine Default” shall mean a “Default” as defined in the Third Mezzanine Loan Agreement.

“Third Mezzanine Event of Default” shall mean an “Event of Default” as defined in the Third Mezzanine Loan Agreement.

“Third Mezzanine Initial Renovation Funds” shall mean the $2,894,363.08 in proceeds of the Third Mezzanine Loan funded into the Initial Renovation Reserve Account on the date hereof pursuant to Section 2.1.3.(a) of the Third Mezzanine Loan Agreement.

“Third Mezzanine Interest Reserve Fund” shall mean the “Interest Reserve Fund” as defined in the Third Mezzanine Loan Agreement.

“Third Mezzanine Lender” shall mean Column Financial, Inc., in its capacity as holder of the Third Mezzanine Loan, its successors or assigns.

“Third Mezzanine Loan” shall mean a loan in the original principal amount of up to Sixty-Five Million and No/100 Dollars ($65,000,000.00) made by Third Mezzanine Lender to Third Mezzanine Borrowers.

“Third Mezzanine Loan Agreement” shall mean that certain Third Mezzanine Loan Agreement dated as of the date hereof between Third Mezzanine Lender and Third Mezzanine Borrowers, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time subject to the terms of the Intercreditor Agreement.

“Third Mezzanine Loan Documents” shall mean the Third Mezzanine Loan Agreement and all other documents evidencing and/or securing the Third Mezzanine Loan, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time subject to the terms of the Intercreditor Agreement.

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

“Third Mezzanine Loan Percentage” shall mean, as of any date of determination and prior to the application of the principal amount with respect to which the Financing Percentages or the Alternate Financing Percentages are then being calculated, the ratio, expressed as a percentage, the numerator of which is an amount equal to the Third Mezzanine Loan Outstanding Principal Balance on such date of determination and the denominator of which is an amount equal to the Aggregate Outstanding Principal Balance on such date of determination.

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

“Third Mezzanine Obligations” shall mean the “Obligations” as defined in the Third Mezzanine Loan Agreement.

“Third Mezzanine Monthly Interest Payment” shall mean the “Monthly Interest Payment” as defined in the Third Mezzanine Loan Agreement.

“Third Mezzanine Spread” shall mean the “Spread” as defined in the Third Mezzanine Loan Agreement.

“Third Party IP License” shall have the meaning set forth in Section 5.1.26(c) hereof.

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

“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 one or more ALTA mortgagee title insurance policies in a form reasonably acceptable to Lender (or, if the Properties are 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 Properties and insuring the lien of the Mortgage as against such Properties.

“Total Costs” shall mean, as of any date of determination, (i) the sum of all Acquisition Costs and all Project Costs, less (ii) any Release Parcel Release Price, Adjacent Parcel Release Price and/or IP Release Price paid to Lender prior to such date of determination.

“Total Cost Ratio” shall mean, as of any date of determination, a ratio, expressed as a percentage, in which (i) the numerator is the Aggregate Outstanding Principal Balance as of such date of determination, and (ii) the denominator is the Total Costs as of such date of determination.

“Trade Contractor” shall mean any contractor, subcontractor or supplier that provides labor, materials, equipment or services in connection with the construction of the Project, including specifically any Major Contractor, but excluding specifically the Architect.

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

“Transfer Restricted Party” shall mean, collectively, each Borrower, each First Mezzanine Borrower, each Second Mezzanine Borrower, each Third Mezzanine Borrower, each Constituent Member of each Borrower, HRHI, HR Holdings and each Guarantor.

“Trust” shall have the meaning set forth in Section 10.25(a) hereof.

“Unaffiliated Joint Venture Counterparty” shall mean any party to any Affiliate Joint Venture other than any Affiliate Joint Venture Counterparty.

“Uniform System of Accounts” shall mean the most recent edition of the Uniform System of Accounts for Hotels, as adopted by the American Hotel and Motel Association.

“Unused Advance Fee” shall have the meaning set forth in Section 2.9 hereof.

“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 Reports” shall mean the zoning reports regarding each of the Properties 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. All uses in this Agreement of the phrase “any Borrower” shall be deemed to mean “any one or more of the Borrowers including all of the Borrowers”. All uses in this Agreement of the phrase “any Property” or “any of the Properties” shall be deemed to mean “any one or more of the Properties including all of the Properties”. All uses in this Agreement of the phrase “the IP” shall be deemed to mean “all or any part of the IP”. 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 Borrowers.

2.1.1 Agreement to Lend and Borrow. Subject to and upon the terms and conditions set forth in the Original Loan Agreement, Lender agreed to make and Borrowers jointly and severally agreed to accept the Loan.

2.1.2 Acquisition Loan. Borrowers hereby acknowledge and agree that, on the Closing Date, Lender made the Original Acquisition Loan Advance to Borrowers in the principal amount of $760,000,000.00, which Original Acquisition Loan Advance represented a full disbursement of all proceeds of the Original Acquisition Loan. As a result of the application of the Mezzanine Prepayments to the partial prepayment of the Original Acquisition Loan on the date hereof, the Original Acquisition Loan is now in the reduced amount of $410,000,000.00 (the “Reduced Acquisition Loan”). The Reduced Acquisition Loan is evidenced by the Reduced Acquisition Loan Note and this Agreement, is secured by the Mortgage and the other Loan Documents and shall be repaid with interest, costs and charges as more particularly set forth in the Reduced Acquisition Loan Note, this Agreement, the Mortgage and the other Loan Documents. Principal amounts of the Original Acquisition Loan or the Reduced Acquisition Loan which are repaid for any reason may not be reborrowed. Lender did not fund any portion of the Original Acquisition Loan from any account holding “plan assets” of one or more plans within the meaning of 29 C.F.R. 2510.3-101 unless such Original Acquisition Loan did not constitute a non-exempt prohibited transaction under ERISA. Borrowers used the proceeds of the Original Acquisition Loan to (a) directly or indirectly acquire the Properties and the IP, (b) repay and discharge existing loans relating, directly or indirectly, to the Properties and/or the IP, (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 Borrowers

and Lender on the Closing Date, and (e) for such other purposes as were reasonably approved by Lender, as set forth on a sources and uses of funds schedule executed by Borrowers and Lender on the Closing Date.

2.1.3 Construction Loan. Subject to the conditions and upon the terms provided in the Original Loan Agreement and herein, Lender agreed and hereby agrees to lend to Borrowers, and Borrowers agreed and hereby agree to borrow from Lender, the Construction Loan in a maximum principal amount not to exceed the Construction Loan Amount. The Construction Loan is evidenced by the Construction Loan Note and this Agreement, is secured by the Mortgage and the other Loan Documents and shall be repaid with interest, costs and charges as more particularly set forth in the Construction Loan Note, this Agreement, the Mortgage and the other Loan Documents. Principal amounts of the Construction Loan which are repaid for any reason may not be reborrowed. Lender shall not fund any portion of the Construction Loan from any account holding “plan assets” of one or more plans within the meaning of 29 C.F.R. 2510.3-101 unless such Construction Loan will not constitute a non-exempt prohibited transaction under ERISA. Borrowers shall use the proceeds of the Construction Loan to pay Project Costs as contemplated hereunder. The Construction Loan shall be advanced in accordance with the provisions of Article III hereof.

2.1.4 Maximum Aggregate Loan Amount. Notwithstanding anything contained herein or in any other Loan Document to the contrary, the aggregate amount advanced under the Reduced Acquisition Loan and the Construction Loan shall not under any circumstances exceed the Loan Amount. Other than the disbursement of the Original Acquisition Loan Advance made on the Closing Date and any Construction Loan Advances made pursuant to the Original Loan Agreement or this Agreement, Lender shall have no obligation to loan any additional funds in respect of the Loan.

Section 2.2 Interest Rate.

2.2.1 Interest Generally. Interest on each of the Reduced Acquisition Loan Outstanding Principal Balance and the Construction Loan Outstanding Principal Balance shall accrue from the Closing Date to but excluding the Maturity Date at the Applicable Interest Rate. Borrowers 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 each of the Reduced Acquisition Loan Outstanding Principal Balance and the Construction Loan 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 Reduced Acquisition Loan Outstanding Principal Balance or the Construction Loan Outstanding Principal Balance, as applicable. If, at any time, Lender or Borrowers determine 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, Borrowers 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 Borrowers to Lender and no Event of Default then exists, Lender shall promptly refund the overpayment to Borrowers or, at Borrowers’ option, credit such amounts against Borrowers’ payment next due hereunder.

2.2.3 Determination of Interest Rate. (a) The Applicable Interest Rate with respect to each Component shall be: (i) LIBOR plus the Reduced Acquisition Loan Spread or the Construction Loan Spread, as applicable, with respect to the applicable Interest Period for a LIBOR Loan or (ii) the Prime Rate plus the applicable Prime Rate Spread for a Prime Rate Loan if the applicable Component(s) is/are converted to a Prime Rate Loan pursuant to the provisions of Section 2.2.3(c) or (f) hereof.

(b) Subject to the terms and conditions of this Section 2.2.3, each Component shall be a LIBOR Loan and Borrowers shall pay interest on each of the Reduced Acquisition Loan Outstanding Principal Balance and the Construction Loan Outstanding Principal Balance at LIBOR plus the Reduced Acquisition Loan Spread or the Construction Loan Spread, as applicable, for the applicable Interest Period. Any change in any 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 Borrowers 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 Borrowers 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 Borrowers 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 Borrowers 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 Borrowers 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 Borrowers 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) the Administrative Agent or Lender (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (B) Borrowers shall make such deductions, and (C) Borrowers shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law. If Lender gives

Borrowers written notice that any such amounts are payable by Borrowers, Borrowers 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, such 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), each Borrower shall indemnify the Administrative Agent and 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 the Administrative Agent or Lender, as the case may be, 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 Borrowers determine that any such Indemnified Taxes or Other Taxes were not correctly or legally imposed or asserted, the Administrative Agent or the Lender, as applicable, shall, upon payment by Borrowers of the full amount of any Indemnified Taxes or Other Taxes, allow Borrowers to contest (and shall cooperate in such contest), the imposition of such tax upon the reasonable request of Borrowers and at Borrowers’ expense; provided, however, that the Administrative Agent or 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 Borrowers by a Lender, or by the Administrative Agent on its own behalf or on behalf of a Lender (together with any supporting detail reasonably requested by Borrowers), 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 Borrowers are 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 Borrowers (with a copy to the Administrative Agent), at the time or times prescribed by applicable law, or as reasonably requested by Borrowers, such properly completed and executed documentation prescribed by applicable law or reasonably requested by Borrowers 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 Borrowers and the Administrative Agent (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 Borrowers 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 Borrowers 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 Borrowers 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, Borrowers are 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 the Administrative Agent or 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 Borrowers have paid additional amounts pursuant to this Section 2.2.3(e), it shall pay over to Borrowers an amount equal to the additional amounts paid by Borrowers 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 the Administrative Agent or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided that Borrowers, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to Borrowers (plus any interest to the extent accrued from the date such refund is paid over to Borrowers) to the Administrative Agent or such Lender in the event the Administrative Agent or 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 the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes which it deems confidential) to Borrowers 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. Borrowers hereby agree 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, Borrowers 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 Borrowers 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) Each 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 Borrowers 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 Borrowers 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 any Applicable Interest Rate from LIBOR plus the Reduced Acquisition Loan Spread or the Construction Loan Spread, as applicable, to the Prime Rate plus the applicable Prime Rate Spread with respect to any portion of the Reduced Acquisition Loan Outstanding Principal Balance or the Construction Loan Outstanding Principal Balance, as applicable, then bearing interest at LIBOR plus the Reduced Acquisition Loan Spread or the Construction Loan Spread, as applicable, 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 Borrowers 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 Borrowers, Borrowers pay 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 Borrowers in writing of the change in law or other circumstance on which such claim of compensation is based and delivered to Borrowers 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 Borrowers under Section 2.2.3 hereof, including, if requested by Borrowers, 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 Borrowers to be reimbursed by Borrowers 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, each of the Reduced Acquisition Loan Outstanding Principal Balance and the Construction Loan 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 Notes and the other Loan Documents are subject to the express condition that at no time shall any 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, any 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, Borrowers shall have entered into one or more Interest Rate Cap Agreements for each of the Components with a blended LIBOR strike price equal to the Strike Price. Each 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 any amounts due Borrowers 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 one or more of the Properties or the IP 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) when aggregated with all other Interest Rate Cap Agreements, shall have an initial notional amount equal to the Reduced Acquisition Loan Outstanding Principal Balance or the Construction Loan Outstanding Principal Balance, as applicable, as of the date hereof. Borrowers shall collaterally assign to Lender, pursuant to the Collateral Assignments of Interest Rate Caps, all of its right, title and interest to receive any and all payments under all Interest Rate Cap Agreements, and shall deliver to Lender an executed counterpart of such Interest Rate Cap Agreements (which shall, by their respective terms, authorize the assignment to Lender and require that payments be deposited directly into the Lockbox Account).

(b) Borrowers shall comply with all of their obligations under the terms and provisions of each Interest Rate Cap Agreement. All amounts paid by the Counterparty under each Interest Rate Cap Agreement to Borrowers or Lender shall be deposited immediately into the Lockbox Account. Borrowers shall take all actions reasonably requested by Lender to enforce Lender’s rights under each 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 “AA-” by S&P or “Aa3” by Xxxxx’x, Borrowers shall replace the applicable Interest Rate Cap Agreement(s) with one or more Replacement Interest Rate Cap Agreements not later than ten (10) Business Days following receipt of notice from Lender of such downgrade.

(d) In the event that Borrowers fail to purchase and deliver to Lender any Interest Rate Cap Agreement or fail to maintain each Interest Rate Cap Agreement in accordance with the terms and provisions of this Agreement, after ten (10) Business Days notice to Borrowers and Borrowers’ failure to cure, Lender may purchase the required Interest Rate Cap Agreement(s) and the actual out-of-pocket cost incurred by Lender in purchasing such Interest Rate Cap Agreement(s) shall be paid by Borrowers 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 Borrowers to Lender.

(e) In connection with each Interest Rate Cap Agreement, Borrowers 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 all Interest Rate Cap Agreements shall terminate and Lender shall, at Borrowers’ reasonable expense, promptly execute and deliver such documents as may be reasonably required and prepared by the Counterparty and/or Borrowers to evidence release of each Interest Rate Cap Agreement.

Section 2.3 Loan Payment.

2.3.1 Payments Generally. Borrowers shall pay to Lender on each Payment Date (a) the interest accrued on the Reduced Acquisition Loan for the preceding Interest Period (the “Reduced Acquisition Loan Monthly Interest Payment”), and (b) the interest accrued on the Construction Loan for the preceding Interest Period (the “Construction Loan Monthly Interest Payment”), except that Borrowers 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.

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

2.3.2 Payment on Maturity Date. Borrowers shall pay to Lender on the Maturity Date the Outstanding Principal Balance, all accrued and unpaid interest, the Exit Fee (if applicable) and all other amounts due hereunder and under the Notes, 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 Borrowers by the date on which it is due, Borrowers 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 Notes 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 00 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx Xxxxxx, 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.

(a) From and after the date hereof, so long as no Event of Default has occurred and is continuing, Borrowers may, at their 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 any prepayment is accompanied by (i) if such prepayment occurs on a date other than a Payment Date, all interest which would have accrued on the amount of each Component paid (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 Spread Maintenance Release Date, the Spread Maintenance Premium due with respect to the amount prepaid, if any; and (iii) all other sums due and payable under this Agreement, the Notes, and the other Loan Documents, including, but not limited to, the Breakage Costs, if any, the applicable Prepayment Fee, if any, the Exit Fee (or the applicable portion thereof), if applicable, and all of Lender’s costs and expenses (including reasonable attorney’s fees and disbursements) incurred by Lender in connection with such prepayment. No Spread Maintenance Premium or, subject to the proviso at the end of this sentence, any other prepayment premium or fee (except as and to the extent provided in Section 2.8 hereof) shall be due in connection with any prepayment of the Loan (A) made from the proceeds of any Mezzanine Prepayment, (B) made from the proceeds of the Quarterly Deficiency Relinquishment Prepayment, if applicable, (C) made after the Spread Maintenance Release Date, or (D) made from the proceeds of any Minimum Mandatory Prepayment (or any partial payment on account thereof), Non-Qualified Mandatory Prepayment, Additional Non-Qualified Mandatory Prepayment, Release Parcel Release Price, Adjacent Parcel Release Price and/or IP Release Price; provided, however, that the applicable Prepayment Fee shall be due in connection with any prepayment of the Loan made from the proceeds of any Minimum Mandatory Prepayment (or any partial payment on account thereof), Release Parcel Release Price, Adjacent Parcel Release Price and/or IP Release Price if any such prepayment shall occur prior to the Prepayment Fee Release Date. If a notice of prepayment is given by Borrowers 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, Borrowers 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 Borrowers pay 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.

(b) Notwithstanding anything to the contrary contained herein, Borrowers and Lender expressly acknowledge and agree that (i) on the date hereof, Borrowers, with the permission of Lender, have made Mezzanine Prepayments of the Loan in the aggregate amount of $350,000,000.00, (ii) there is no Spread Maintenance Premium, Prepayment Fee or other premium, charge or fee due in connection with such Mezzanine Prepayments, and (iii) no portion of such prepaid amount of the Loan shall be readvanced to Borrowers or any other Person.

2.4.2 Mandatory Prepayments.

(a) Net Proceeds. On the next occurring Payment Date following the date on which Lender actually receives any Net Proceeds, if Lender is not obligated to, and does not otherwise elect in its sole discretion to, make such Net Proceeds available to Borrowers for Restoration in accordance with Section 6.4 hereof, Borrowers 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 Spread Maintenance Premium or any other penalty or premium shall be due in connection with any prepayment made pursuant to this Section 2.4.2(a), whether occurring prior to or after the Spread Maintenance Release Date. Any prepayment under this Section 2.4.2(a) shall be applied in accordance with Section 2.4.3(c) hereof. Any Net Proceeds in excess of the amount required to pay the Debt in full shall be (a)

disbursed to First Mezzanine Lender for application in accordance with the terms of the First Mezzanine Loan Documents if the First Mezzanine Debt (or any portion thereof) is then outstanding, until the First Mezzanine Debt is paid in full, and then (b) disbursed to Second Mezzanine Lender for application in accordance with the terms of the Second Mezzanine Loan Documents if the Second Mezzanine Debt (or any portion thereof) is then outstanding, until the Second Mezzanine Debt is paid in full, and then (c) disbursed to Third Mezzanine Lender for application in accordance with the terms of the Third Mezzanine Loan Documents if the Third Mezzanine Debt (or any portion thereof) is then outstanding, until the Third Mezzanine Debt is paid in full, and then (d) the balance disbursed to Borrowers.

(b) Minimum Mandatory Prepayment and Alternative Minimum Mandatory Letter of Credit.

(i) In the event that the entire Release Parcel has not been sold pursuant to one or more Release Parcel Sales consummated in accordance with the provisions of Section 2.5.1 hereof, including, without limitation, the payment of the Release Parcel Release Price(s) resulting from any such Release Parcel Sale(s), on or prior to the First Anniversary, subject to extension as set forth in the immediately following sentence, Borrowers shall pay to Lender on the First Anniversary, subject to extension as set forth in the immediately following sentence, a mandatory prepayment of the Aggregate Outstanding Principal Balance in the Minimum Mandatory Amount (the “Minimum Mandatory Prepayment”). Notwithstanding the foregoing, in the event that, on the First Anniversary, the then unsold portion of the Release Parcel is subject to one or more binding commitments to sell and/or binding contracts of sale which, in each case, are not subject to any contingencies other than standard title and similar conditions and under which any Borrower has received a non-refundable deposit, the amount of which is consistent with then market standards (subject only to such standard title and similar conditions and the selling Borrower’s performance) (each a “Release Parcel Binding Contract”), then (i) if the closing of the Release Parcel Sale(s) pursuant to such Release Parcel Binding Contract(s) shall occur in accordance with the provisions of Section 2.5.1 hereof, resulting in the entire Release Parcel having been sold in one or more Release Parcel Sales, including, without limitation, the payment of each applicable Release Parcel Release Price, within sixty (60) days following the First Anniversary, then the Minimum Mandatory Prepayment shall not be required to be made by Borrowers at any time, or (ii) if any Release Parcel Binding Contracts shall be terminated, or the purchaser thereunder shall notify any Borrower in writing that it shall not close thereunder, during the sixty (60) days following the First Anniversary, then Borrowers shall make the Minimum Mandatory Prepayment within fifteen (15) days following such termination or receipt of such written notice from the purchaser, or (iii) if the closing of any Release Parcel Sale pursuant to any such Release Parcel Binding Contract shall not occur for any other reason within sixty (60) days following the First Anniversary, then Borrowers shall make the Minimum Mandatory Prepayment within fifteen (15) days following such sixtieth (60th) day, irrespective of whether the closing of such Release Parcel Sale pursuant to the Release Parcel Binding Contract shall close during such fifteen (15) day period.

(ii) Notwithstanding the foregoing, in lieu of clause (i) above, in the event that the entire Release Parcel has not been sold pursuant to one or more Release Parcel Sales consummated in accordance with the provisions of Section 2.5.1 hereof,

including, without limitation, the payment of the Release Parcel Release Price(s) resulting from any such Release Parcel Sale(s), on or prior to the First Anniversary, subject to extension as set forth in the foregoing clause (i), in lieu of making the Minimum Mandatory Prepayment on the First Anniversary, Borrowers shall have the right, on before the First Anniversary, to (A) deliver to Lender a Letter of Credit in the Minimum Mandatory Amount (an “Alternative Minimum Mandatory Letter of Credit”), and (B) deliver to Lender, for deposit into the Interest Reserve Account and thereafter to constitute a portion of the Interest Reserve Fund for all purposes under this Agreement and the other Loan Documents (the “Alternative Minimum Interest Reserve Amount”), an amount equal to (x) the Minimum Mandatory Amount multiplied by (y) the Strike Price plus the Blended Spread and then (z) such amount divided by two (2). In the event that, on or prior to the First Anniversary, Borrowers shall deliver the Alternative Minimum Mandatory Letter of Credit and the Alternative Minimum Interest Reserve Amount, Borrowers’ obligation to make the Minimum Mandatory Prepayment shall be extended until the Eighteen Month Anniversary and the following shall apply:

(1) in the event that between the First Anniversary and the Eighteen Month Anniversary Borrowers shall consummate any Release Parcel Sales in accordance with the provisions of Section 2.5.1 hereof, including, without limitation, the payment of the Release Parcel Release Price(s) resulting from any such Release Parcel Sale(s), upon the payment of any such Release Parcel Release Price to Lender, Lender shall, at Borrowers’ option and at Borrowers’ sole cost and expense, (aa) accept an amendment to, exchange of or replacement for the Alternative Minimum Mandatory Letter of Credit in an amount equal to such Release Parcel Release Price, so long as Lender is not required to relinquish physical possession of the Alternative Minimum Mandatory Letter of Credit until such amendment, exchanged item or replacement has been delivered to Lender, and (bb) return to Borrower a ratable portion of the Alternative Minimum Interest Reserve Amount, as reasonably determined by Lender;

(2) in the event that between the First Anniversary and the Eighteen Month Anniversary Borrowers shall, at their sole election, fully or partially pay the Minimum Mandatory Prepayment, Lender shall, at Borrowers’ option and at Borrowers’ sole cost and expense, (aa) accept an amendment to the Alternative Minimum Mandatory Letter of Credit in an amount equal to the amount of such payment or return such Alternative Minimum Mandatory Letter of Credit if such payment fully pays the Minimum Mandatory Prepayment, and (bb) return to Borrowers a ratable portion of the Alternative Minimum Interest Reserve Amount, as reasonably determined by Lender, or return the balance of the Alternative Minimum Interest Reserve Amount to Borrowers if such payment fully pays the Minimum Mandatory Prepayment; and/or

(3) in the event that on or before the Eighteen Month Anniversary the entire Release Parcel has not been sold pursuant to one or more Release Parcel Sales consummated in accordance with the provisions of Section 2.5.1 hereof, including, without limitation, the

payment of the Release Parcel Release Price(s) resulting from any such Release Parcel Sale(s), on or after the Eighteen Month Anniversary, Lender may draw down on the Alternative Minimum Mandatory Letter of Credit and shall apply the proceeds to prepayment of the Loan in accordance with Section 2.4.3(b) hereof in satisfaction of the Minimum Mandatory Prepayment, it being acknowledged and agreed by Borrowers that, in such instance, Borrowers shall not receive a return of any portion of the Alternative Minimum Interest Reserve Amount, which shall be and remain a portion of the Interest Reserve Fund.

(iii) Each payment of or on account of the Minimum Mandatory Prepayment, whether made pursuant to one or a combination of the forgoing clauses (a), (b)(I), (b)(II) and/or (b)(III), shall be accompanied by (1) if such Minimum Mandatory Prepayment (or a partial payment on account thereof) occurs on a date other than a Payment Date, all interest which would have accrued on the amount of the Reduced Acquisition Loan, the Construction Loan, the First Mezzanine Loan, the Second Mezzanine Loan and the Third Mezzanine Loan to be prepaid through, but not including, the next succeeding ninth (9th) day of a calendar month (subject to Section 2.4.5 hereof), or, if such Minimum Mandatory Prepayment (or a partial payment on account thereof) occurs on a Payment Date, through and including the last day of the Interest Period immediately prior to the applicable Payment Date, (2) the applicable Prepayment Fee, and (3) all other sums due and payable under this Agreement, the Notes, 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 Minimum Mandatory Prepayment (or such partial payment on account thereof), but Lender acknowledges and agrees that (1) no Spread Maintenance Premium shall be due at any time in connection with the Minimum Mandatory Prepayment (or any partial payment on account thereof), and (2) no Exit Fee shall be due at any time in connection with the Minimum Mandatory Prepayment (or any partial payment on account thereof). Each payment of or on account of the Minimum Mandatory Prepayment shall be applied as contemplated by Section 2.4.3 hereof.

(c) Non-Qualified Mandatory Prepayment. Without limiting the foregoing Section 2.4.2(b), in the event that Borrowers shall deliver a Relinquishment Notice or in the event that a Deemed Relinquishment shall occur, and whether or not the entire Release Parcel shall have been sold pursuant to one or more Release Parcel Sales in accordance with the provisions of Section 2.5.1 hereof, Borrowers shall pay to Lender on or prior to the Construction Qualification Date a mandatory prepayment of the Aggregate Outstanding Principal Balance in the amount of $50,000,000.00 (the “Non-Qualified Mandatory Prepayment”). The payment of the Non-Qualified Mandatory Prepayment shall be accompanied by (A) if such Non-Qualified Mandatory Prepayment occurs on a date other than a Payment Date, all interest which would have accrued on the amount of the Reduced Acquisition Loan, the Construction Loan, the First Mezzanine Loan, the Second Mezzanine Loan and the Third Mezzanine Loan to be prepaid through, but not including, the next succeeding ninth (9th) day of a calendar month (subject to Section 2.4.5 hereof), or, if such Non-Qualified Mandatory Prepayment occurs on a Payment Date, through and including the last day of the Interest Period immediately prior to the applicable Payment Date, and (B) all other sums due and payable under this Agreement, the Notes, 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 Non-Qualified Mandatory Prepayment, but Lender acknowledges and agrees that (1) no Spread Maintenance Premium shall be due at any time in connection with the Non-Qualified Mandatory Prepayment, (2) no Prepayment Fee shall be due at any time in connection with the Non-Qualified Mandatory Prepayment, and (3) no Exit Fee shall be due at any time in connection with the Non-Qualified Mandatory Prepayment. The Non-Qualified Mandatory Prepayment shall be applied as contemplated by Section 2.4.3 hereof.

Borrowers and Lender further agree with respect to the Non-Qualified Mandatory Prepayment that (y) in lieu of making the Non-Qualified Mandatory Prepayment if the same shall be due in accordance with the foregoing paragraph of this Section 2.4.2(c), Borrowers shall have the right to deliver to Lender, no later than the Construction Qualification Date, a Letter of Credit in the amount of $50,000,000.00 (a “Non-Qualified Prepayment Letter of Credit”); and (z) on the Closing Date, Guarantors are guaranteeing the payment of the Non-Qualified Mandatory Prepayment pursuant to the Non-Qualified Prepayment Guaranty, which shall be returned to Guarantors (I) promptly following (aa) Borrowers’ payment of the Non-Qualified Mandatory Prepayment or (bb) Borrowers’ delivery of a Non-Qualified Prepayment Letter of Credit (or a combination of the foregoing clauses (aa) and (bb)), or (II) pursuant to Section 3.22(f) hereof, whichever shall be applicable and shall first occur. Upon the satisfaction of clause (I) or (II) above, Lender shall, at Borrowers’ reasonable expense (including Lender’s reasonable attorneys’ fees), promptly execute and deliver such documents as may be reasonably requested by Borrowers or Guarantors to evidence release of the Non-Qualified Prepayment Guaranty.

(d) Additional Non-Qualified Mandatory Prepayment. Without limiting the foregoing Sections 2.4.2(b) and (c), in the event that Borrowers were obligated to make the Non-Qualified Mandatory Prepayment (or deliver a Non-Qualified Prepayment Letter of Credit in lieu thereof) as provided in the foregoing Section 2.4.2(c), Borrowers shall pay to Lender on the Additional Non-Qualified Prepayment Date an additional mandatory prepayment of the Aggregate Outstanding Principal Balance in the amount of $75,000,000.00 (the “Additional Non-Qualified Mandatory Prepayment”). The payment of the Additional Non-Qualified Mandatory Prepayment shall be accompanied by (A) if such Additional Non-Qualified Mandatory Prepayment occurs on a date other than a Payment Date, all interest which would have accrued on the amount of the Reduced Acquisition Loan, the Construction Loan, the First Mezzanine Loan, the Second Mezzanine Loan and the Third Mezzanine Loan to be prepaid through, but not including, the next succeeding ninth (9th) day of a calendar month (subject to Section 2.4.5 hereof), or, if such Additional Non-Qualified Mandatory Prepayment occurs on a Payment Date, through and including the last day of the Interest Period immediately prior to the applicable Payment Date, and (B) all other sums due and payable under this Agreement, the Notes, 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 Additional Non-Qualified Mandatory Prepayment, but Lender acknowledges and agrees that (1) no Spread Maintenance Premium shall be due at any time in connection with the Additional Non-Qualified Mandatory Prepayment, (2) no Prepayment Fee shall be due at any time in connection with the Additional Non-Qualified Mandatory Prepayment, and (3) no Exit Fee shall be due at any time in connection with the Additional Non-Qualified Mandatory Prepayment. The Additional Non-Qualified Mandatory Prepayment shall be applied as contemplated by Section 2.4.3 hereof.

(e) If Borrowers elect to deliver an Alternative Minimum Mandatory Letter of Credit pursuant to Section 2.4.2(b) hereof and/or a Non-Qualified Prepayment Letter of Credit pursuant to Section 2.4.2(b) hereof, the following shall apply thereto:

(i) Borrowers shall pay to Lender all of Lender’s reasonable out-of-pocket costs and expenses in connection with such Alternative Minimum Mandatory Letter of Credit and/or Non-Qualified Prepayment Letter of Credit, as applicable, including, without limitation, any costs or expenses incurred in drawing down on the same. Borrowers shall not be entitled to draw from such Alternative Minimum Mandatory Letter of Credit and/or Non-Qualified Prepayment Letter of Credit, as applicable. Upon five (5) days notice to Lender and provided that no Event of Default, First Mezzanine Event of Default, Second Mezzanine Event of Default or Third Mezzanine Event of Default shall have occurred and be continuing, Borrowers may replace such Alternative Minimum Mandatory Letter of Credit and/or Non-Qualified Prepayment Letter of Credit, as applicable, with a partial prepayment of the Loan, the First Mezzanine Loan, the Second Mezzanine Loan and the Third Mezzanine Loan in an aggregate amount equal to such Alternative Minimum Mandatory Letter of Credit and/or Non-Qualified Prepayment Letter of Credit, as applicable, which prepayment shall be applied in accordance with Section 2.4.3 hereof as though it were the Minimum Mandatory Prepayment (or a portion thereof) or the Non-Qualified Mandatory Prepayment, as applicable, following which prepayment, Lender shall promptly return such Alternative Minimum Mandatory Letter of Credit and/or Non-Qualified Prepayment Letter of Credit, as applicable, to Borrowers.

(ii) Such Alternative Minimum Mandatory Letter of Credit and/or Non-Qualified Prepayment Letter of Credit, as applicable, delivered under this Agreement shall be additional security for the payment of the Debt. Upon the occurrence and during the continuance of an Event of Default, Lender shall have the right, at its option, to draw on such Alternative Minimum Mandatory Letter of Credit and/or Non-Qualified Prepayment Letter of Credit, as applicable, and to apply all or any part thereof in accordance with the provisions of Section 2.4.3(b) hereof applicable to a prepayment following the occurrence and during the continuance of an Event of Default.

(iii) In addition to any other right Lender may have to draw upon such Alternative Minimum Mandatory Letter of Credit and/or Non-Qualified Prepayment Letter of Credit, as applicable, pursuant to the terms and conditions of this Agreement, Lender shall have the additional rights to draw in full on any Alternative Minimum Mandatory Letter of Credit and/or Non-Qualified Prepayment Letter of Credit, as applicable: (i) with respect to any evergreen Alternative Minimum Mandatory Letter of Credit and/or Non-Qualified Prepayment Letter of Credit, as applicable, if Lender has received a notice from the issuing bank that such Alternative Minimum Mandatory Letter of Credit

and/or Non-Qualified Prepayment Letter of Credit, as applicable, will not be renewed and a substitute Alternative Minimum Mandatory Letter of Credit and/or Non-Qualified Prepayment Letter of Credit, as applicable, is not provided at least ten (10) Business Days prior to the date on which the outstanding Alternative Minimum Mandatory Letter of Credit and/or Non-Qualified Prepayment Letter of Credit, as applicable, is scheduled to expire; (ii) with respect to any Alternative Minimum Mandatory Letter of Credit and/or Non-Qualified Prepayment Letter of Credit, as applicable, with a stated expiration date, if Lender has not received a notice from the issuing bank that it has renewed such Alternative Minimum Mandatory Letter of Credit and/or Non-Qualified Prepayment Letter of Credit, as applicable, at least ten (10) Business Days prior to the date on which such Alternative Minimum Mandatory Letter of Credit and/or Non-Qualified Prepayment Letter of Credit, as applicable, is scheduled to expire and a substitute Alternative Minimum Mandatory Letter of Credit and/or Non-Qualified Prepayment Letter of Credit, as applicable, is not provided at least ten (10) Business Days prior to the date on which the outstanding Alternative Minimum Mandatory Letter of Credit and/or Non-Qualified Prepayment Letter of Credit, as applicable, is scheduled to expire; (iii) upon receipt of notice from the issuing bank that such Alternative Minimum Mandatory Letter of Credit and/or Non-Qualified Prepayment Letter of Credit, as applicable, will be terminated and a substitute Alternative Minimum Mandatory Letter of Credit and/or Non-Qualified Prepayment Letter of Credit, as applicable, is not provided at least ten (10) Business Days prior to the date on which the outstanding Alternative Minimum Mandatory Letter of Credit and/or Non-Qualified Prepayment Letter of Credit, as applicable, is scheduled to be terminated; or (iv) if Lender has received notice that the bank issuing any Alternative Minimum Mandatory Letter of Credit and/or Non-Qualified Prepayment Letter of Credit, as applicable, shall cease to be an Eligible Institution and within ten (10) Business Days after Lender notifies Borrowers in writing of such circumstance, Borrowers shall fail to deliver to Lender a substitute Alternative Minimum Mandatory Letter of Credit and/or Non-Qualified Prepayment Letter of Credit, as applicable, issued by an Eligible Institution. Notwithstanding anything to the contrary contained in the above, Lender is not obligated to draw upon any Alternative Minimum Mandatory Letter of Credit and/or Non-Qualified Prepayment Letter of Credit, as applicable, upon the happening of an event specified in clause (i), (ii), (iii) or (iv) above and shall not be liable for any losses sustained by Borrowers due to the insolvency of the bank issuing any such Alternative Minimum Mandatory Letter of Credit and/or Non-Qualified Prepayment Letter of Credit, as applicable, if Lender has not drawn upon such Alternative Minimum Mandatory Letter of Credit and/or Non-Qualified Prepayment Letter of Credit, as applicable.

(f) Credits Against Mandatory Prepayments. Notwithstanding the foregoing provisions of this Section 2.4.2, Borrowers shall be given a credit against the Minimum Mandatory Prepayment, the Non-Qualified Mandatory Prepayment and/or the Additional Non-Qualified Mandatory Prepayment, and the required amounts thereof shall thereafter be reduced, as follows and as applicable (but in no event shall any such credit reduce any such payment below zero dollars): (i) the amount of any Optional IP Release Payment shall

be credited against, at Borrowers’ option, any of the Minimum Mandatory Prepayment, the Non-Qualified Mandatory Prepayment and/or the Additional Non-Qualified Mandatory Prepayment, thus reducing the amount required to be paid on account of such Minimum Mandatory Prepayment, Non-Qualified Mandatory Prepayment and/or Additional Non-Qualified Mandatory Prepayment, as applicable, by an equal amount; (ii) the amount of any Adjacent Parcel Release Price shall be credited against the Additional Non-Qualified Mandatory Prepayment thus reducing the amount required to be paid on account of such Additional Non-Qualified Mandatory Prepayment by an equal amount; and (iii) $40,000,000 of any IP Release Price that arises from an IP Sale occurring prior to the First Anniversary shall be credited against the Minimum Mandatory Prepayment thus reducing the Minimum Mandatory Prepayment by an equal amount.

2.4.3 Application of Payments of Principal. Notwithstanding anything to the contrary contained in this Agreement, the following principal payments shall be allocated among the Loan (and the Components thereof), the First Mezzanine Loan, the Second Mezzanine Loan and the Third Mezzanine Loan as follows:

(a) so long as no Event of Default shall have occurred and be continuing, any voluntary prepayment, including, without limitation, any prepayment pursuant to Section 2.7.3(a), 2.7.3(b)(i), 3.2(h), 3.2(h)(A) or 3.3(d) hereof, but expressly excluding (1) the Mezzanine Prepayments, (2) any prepayment pursuant to Section 3.17.2 hereof, which shall be governed by the provisions of Section 2.4.3(j) hereof, (3) any prepayment pursuant to Section 3.1(e) hereof, which shall be governed by the provisions of Section 2.4.3(i) hereof, (4) any prepayment pursuant to Section 3.17.5(a) hereof, which shall be governed by the provisions of Section 2.4.3(i) hereof, and (5) any prepayment pursuant to Section 3.22(a)(iii)(A) hereof, which shall be governed by the provisions of Section 2.4.3(i) hereof, shall be applied, pro rata in accordance with the Financing Percentages, to (i) the Debt, pro rata between the Components in accordance with the Component Percentages, (ii) the First Mezzanine Debt, (iii) the Second Mezzanine Debt and (iv) the Third Mezzanine Debt, until the Debt, the First Mezzanine Debt, the Second Mezzanine Debt and the Third Mezzanine Debt are paid in full, which Financing Percentages and Component Percentages shall be calculated as of the date of such prepayment; provided, however, that upon the occurrence and during the continuance of an Event of Default, Lender shall apply any voluntary prepayment first, to payment of the Debt, pro rata between the Components in accordance with the Component Percentages (as calculated as of the date of such prepayment), and applied to each Component 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 shall then disburse any remainder, as a distribution permitted under applicable law, to (A) First Mezzanine Lender for application in accordance with the terms of the First Mezzanine Loan Documents if the First Mezzanine Debt (or any portion thereof) is then outstanding, until the First Mezzanine Debt is paid in full, and then (B) Second Mezzanine Lender for application in accordance with the terms of the Second Mezzanine Loan Documents if the Second Mezzanine Debt (or any portion thereof) is then outstanding, until the Second Mezzanine Debt is paid in full, and then (C) Third Mezzanine Lender for application in accordance with the terms of the Third Mezzanine Loan Documents if the Third Mezzanine Debt (or any portion thereof) is then outstanding, until the Third Mezzanine Debt is paid in full, and then (D) any balance to Borrowers;

(b) so long as no Event of Default shall have occurred and be continuing, any Minimum Mandatory Prepayment (or any partial payment on account thereof), Non-Qualified Mandatory Prepayment and/or Additional Non-Qualified Mandatory Prepayment shall be applied, pro rata in accordance with the Financing Percentages, to (i) the Debt, pro rata between the Components in accordance with the Component Percentages, (ii) the First Mezzanine Debt, (iii) the Second Mezzanine Debt and (iv) the Third Mezzanine Debt, until the Debt, the First Mezzanine Debt, the Second Mezzanine Debt and the Third Mezzanine Debt are paid in full, which Financing Percentages and Component Percentages shall be calculated as of the date of such prepayment; provided, however, that upon the occurrence and during the continuance of an Event of Default, Lender shall apply any Minimum Mandatory Prepayment (or any partial payment on account thereof), Non-Qualified Mandatory Prepayment and/or Additional Non-Qualified Mandatory Prepayment first, to payment of the Debt, pro rata between the Components in accordance with the Component Percentages (as calculated as of the date of such prepayment), and applied to each Component 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 shall then disburse any remainder, as a distribution permitted under applicable law, to (A) First Mezzanine Lender for application in accordance with the terms of the First Mezzanine Loan Documents if the First Mezzanine Debt (or any portion thereof) is then outstanding, until the First Mezzanine Debt is paid in full, and then (B) Second Mezzanine Lender for application in accordance with the terms of the Second Mezzanine Loan Documents if the Second Mezzanine Debt (or any portion thereof) is then outstanding, until the Second Mezzanine Debt is paid in full, and then (C) Third Mezzanine Lender for application in accordance with the terms of the Third Mezzanine Loan Documents if the Third Mezzanine Debt (or any portion thereof) is then outstanding, until the Third Mezzanine Debt is paid in full, and then (D) any balance to Borrowers;

(c) all Net Proceeds not required to be made available for Restoration, and as to which Lender has not otherwise elected in its sole discretion to make available for Restoration, shall be applied first, to the Debt, pro rata between the Components in accordance with the Component Percentages (as calculated as of the date of such prepayment), and applied to each Component 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 then, as a distribution permitted under applicable law, (i) disbursed to First Mezzanine Lender for application in accordance with the terms of the First Mezzanine Loan Documents if the First Mezzanine Debt (or any portion thereof) is then outstanding, until the First Mezzanine Debt is paid in full, and then (ii) disbursed to Second Mezzanine Lender for application in accordance with the terms of the Second Mezzanine Loan Documents if the Second Mezzanine Debt (or any portion thereof) is then outstanding, until the Second Mezzanine Debt is paid in full, and then (iii) disbursed to Third Mezzanine Lender for application in accordance with the terms of the Third Mezzanine Loan Documents if the Third Mezzanine Debt (or any portion thereof) is then outstanding, until the Third Mezzanine Debt is paid in full, and then (iv) the balance disbursed to Borrowers;

(d) 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 Replacement Reserve Account, the Required Repair Account, the Initial Renovation Reserve Account, the Interest Reserve Account, the General Reserve Account, the Construction Loan Reserve Account, the Shortfall 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 as follows or may continue to be held by Lender as additional collateral for the Loan, all in Lender’s sole discretion: first, to the Debt, pro rata between the Components in accordance with the Component Percentages (as calculated as of the date of such prepayment), and applied to each Component 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 then, as a distribution permitted under applicable law, (i) disbursed to First Mezzanine Lender for application in accordance with the terms of the First Mezzanine Loan Documents if the First Mezzanine Debt (or any portion thereof) is then outstanding, until the First Mezzanine Debt is paid in full, and then (ii) disbursed to Second Mezzanine Lender for application in accordance with the terms of the Second Mezzanine Loan Documents if the Second Mezzanine Debt (or any portion thereof) is then outstanding, until the Second Mezzanine Debt is paid in full, and then (iii) disbursed to Third Mezzanine Lender for application in accordance with the terms of the Third Mezzanine Loan Documents if the Third Mezzanine Debt (or any portion thereof) is then outstanding, until the Third Mezzanine Debt is paid in full, and then (iv) the balance disbursed to Borrowers;

(e) subject to Section 2.5.4 hereof, the proceeds of any Release Parcel Release Price shall be allocated, pro rata in accordance with the Financing Percentages, among (i) the Loan, pro rata between the Components in accordance with the Component Percentages, (ii) the First Mezzanine Loan, (iii) the Second Mezzanine Loan and (iv) the Third Mezzanine Loan, which Financing Percentages and Component Percentages shall be calculated as of the date of payment of such Release Parcel Release Price;

(f) subject to Section 2.5.4 hereof, the proceeds of any Adjacent Parcel Release Price shall be allocated, pro rata in accordance with the Financing Percentages, among (i) the Loan, pro rata between the Components in accordance with the Component Percentages, (ii) the First Mezzanine Loan, (iii) the Second Mezzanine Loan and (iv) the Third Mezzanine Loan, which Financing Percentages and Component Percentages shall be calculated as of the date of payment of such Adjacent Parcel Release Price;

(g) subject to Section 2.5.4 hereof, (i) the proceeds of any IP Release Price which is less than or equal to $80,000,000 and arises from an IP Sale (a “Non-Fully Prepaid IP Sale”) occurring at any time when Borrowers have not paid in full the Minimum Mandatory Prepayment, the Non-Qualified Mandatory Prepayment and the Additional Non-Qualified Mandatory Prepayment, shall be allocated, pro rata in accordance with the Financing Percentages, among (I) the Loan, pro rata between the Components in accordance with the Component Percentages, (II) the First Mezzanine Loan, (III) the Second Mezzanine Loan and (IV) the Third Mezzanine Loan, which Financing Percentages and Component Percentages shall be calculated as of the date of payment of such IP Release Price; (ii) the proceeds of any IP Release Price which is less than or equal to $60,000,000 and arises from an IP Sale (a “Fully Prepaid IP Sale”) occurring at any time after Borrowers have paid in full the Minimum Mandatory Prepayment, the Non-Qualified Mandatory Prepayment and the Additional Non-Qualified Mandatory Prepayment, shall be allocated, pro rata in accordance with the Financing Percentages, among (I) the Loan, pro rata between the Components in accordance with the Component Percentages, (II) the First Mezzanine Loan, (III) the Second Mezzanine Loan and (IV) the Third Mezzanine Loan, which Financing Percentages and Component Percentages shall

be calculated as of the date of payment of such IP Release Price; and (iii) the proceeds of any IP Release Price in excess of $80,000,000 which arise from a Non-Fully Prepaid IP Sale (the “Excess Non-Fully Funded IP Release Proceeds”) or the proceeds of any IP Release Price in excess of $60,000,000 which arise from a Fully Prepaid IP Sale (“Excess Fully Funded IP Release Proceeds”; and whichever of the Excess Fully Funded IP Release Proceeds or the Excess Non-Fully Funded IP Release Proceeds is applicable, the “Excess IP Release Price Proceeds”), shall, at Borrowers’ option, either (A) be deposited in the General Reserve Account and thereafter constitute a part of the General Reserve Fund for all purposes under this Agreement, to be held and disbursed by Lender as set forth in Section 7.6 hereof, or (B) applied as follows, in such amounts as Borrowers shall elect: (1) up to fifty percent (50%) of such Excess IP Release Price Proceeds shall be applied to satisfy any Required Equity Amount or Subsequent Required Equity Amount then due and payable and/or to pay any Unused Advance Fee, Exit Fee and/or Administrative Agent Fee then due and payable, and/or (2) the balance of such Excess IP Release Price Proceeds after application in accordance with the foregoing clause (1), but in no event less than fifty percent (50%) thereof, to repayment, pro rata in accordance with the Financing Percentages, of (w) the Loan, pro rata between the Components in accordance with the Component Percentages, (x) the First Mezzanine Loan, (y) the Second Mezzanine Loan and (z) the Third Mezzanine Loan, which Financing Percentages and Component Percentages shall be calculated as of the date of payment of such IP Release Price (any repayment of the Loan, the First Mezzanine Loan, the Second Mezzanine Loan and the Third Mezzanine Loan pursuant to this Section 2.4.3(g)(iii)(B)(2) paid out of Excess Non-Fully Funded IP Release Proceeds being referred to as the “Optional IP Release Payment”);

(h) all 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 shall be applied by Lender as follows or may continue to be held by Lender as additional collateral for the Loan, all in Lender’s sole discretion: first, (i) to the expenses of managing and securing any of the Properties, as contemplated by clause (a) of said Section 3.1 of the Assignment of Leases, and/or (ii) to the Debt, pro rata between the Components in accordance with the Component Percentages (as calculated as of the date of such prepayment), and applied to each Component 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 then (A) disbursed to First Mezzanine Lender for application in accordance with the terms of the First Mezzanine Loan Documents if the First Mezzanine Debt (or any portion thereof) is then outstanding, until the First Mezzanine Debt is paid in full, and then (B) disbursed to Second Mezzanine Lender for application in accordance with the terms of the Second Mezzanine Loan Documents if the Second Mezzanine Debt (or any portion thereof) is then outstanding, until the Second Mezzanine Debt is paid in full, and then (C) disbursed to Third Mezzanine Lender for application in accordance with the terms of the Third Mezzanine Loan Documents if the Third Mezzanine Debt (or any portion thereof) is then outstanding, until the Third Mezzanine Debt is paid in full, and then (D) the balance disbursed to Borrowers;

(i) so long as no Event of Default shall have occurred and be continuing, any voluntary prepayment pursuant to Section 3.1(e), 3.17.5(a) or 3.22(a)(iii)(A) hereof shall be applied as follows: (A) first, to the Construction Loan until the Construction Loan is repaid in full, and then (B) second, out of any remaining balance of such voluntary prepayment, $10,000,000.00 thereof shall be applied to the Third Mezzanine Debt provided that the Third Mezzanine Construction Funds were previously delivered to Lender for deposit into

the Construction Loan Reserve Account pursuant to Section 3.4.2 of the Third Mezzanine Loan Agreement, and then (C) third, any remaining balance of such voluntary prepayment shall be applied, pro rata in accordance with the Alternate Financing Percentages, to (i) the Reduced Acquisition Loan, (ii) the First Mezzanine Debt, (iii) the Second Mezzanine Debt and (iv) the Third Mezzanine Debt, until the Reduced Acquisition Loan, the First Mezzanine Debt, the Second Mezzanine Debt and the Third Mezzanine Debt are paid in full, which Alternate Financing Percentages shall be calculated as of the date of such prepayment and taking into account the prepayments made pursuant to the foregoing clauses (A) and (B); provided, however, that upon the occurrence and during the continuance of an Event of Default, Lender shall apply any voluntary prepayment pursuant to Section 3.1(e), 3.17.5(a) or 3.22(a)(iii)(A) hereof first, to payment of the Construction Loan, to be applied in any order, priority and proportions as Lender shall elect in its sole discretion from time to time, until the Construction Loan is paid in full, and then second, to payment of the Reduced Acquisition Loan, to be applied in any order, priority and proportions as Lender shall elect in its sole discretion from time to time, until the Reduced Acquisition Loan is paid in full, and shall then disburse any remainder, as a distribution permitted under applicable law, to (1) First Mezzanine Lender for application in accordance with the terms of the First Mezzanine Loan Documents if the First Mezzanine Debt (or any portion thereof) is then outstanding, until the First Mezzanine Debt is paid in full, and then (2) Second Mezzanine Lender for application in accordance with the terms of the Second Mezzanine Loan Documents if the Second Mezzanine Debt (or any portion thereof) is then outstanding, until the Second Mezzanine Debt is paid in full, and then (3) Third Mezzanine Lender for application in accordance with the terms of the Third Mezzanine Loan Documents if the Third Mezzanine Debt (or any portion thereof) is then outstanding, until the Third Mezzanine Debt is paid in full, and then (4) any balance to Borrowers; and

(j) so long as no Event of Default shall have occurred and be continuing, any voluntary prepayment pursuant to Section 3.17.2 hereof shall be applied as follows: (A) first, to the Construction Loan until the Construction Loan is repaid in full, and then (B) second, any remaining balance of such voluntary prepayment shall be applied, pro rata in accordance with the Alternate Financing Percentages, to (i) the Reduced Acquisition Loan, (ii) the First Mezzanine Debt, (iii) the Second Mezzanine Debt and (iv) the Third Mezzanine Debt, until the Reduced Acquisition Loan, the First Mezzanine Debt, the Second Mezzanine Debt and the Third Mezzanine Debt are paid in full, which Alternate Financing Percentages shall be calculated as of the date of such prepayment and taking into account the prepayment made pursuant to the foregoing clause (A); provided, however, that upon the occurrence and during the continuance of an Event of Default, Lender shall apply any voluntary prepayment pursuant to Section 3.17.2 hereof first, to payment of the Construction Loan, to be applied in any order, priority and proportions as Lender shall elect in its sole discretion from time to time, until the Construction Loan is paid in full, and then second, to payment of the Reduced Acquisition Loan, to be applied in any order, priority and proportions as Lender shall elect in its sole discretion from time to time, until the Reduced Acquisition Loan is paid in full, and shall then disburse any remainder, as a distribution permitted under applicable law, to (1) First Mezzanine Lender for application in accordance with the terms of the First Mezzanine Loan Documents if the First Mezzanine Debt (or any portion thereof) is then outstanding, until the First Mezzanine Debt is paid in full, and then (2) Second Mezzanine Lender for application in accordance with the terms of the Second Mezzanine Loan Documents if the Second Mezzanine Debt (or any portion thereof) is then outstanding, until the Second Mezzanine Debt is paid in full, and then (3) Third

Mezzanine Lender for application in accordance with the terms of the Third Mezzanine Loan Documents if the Third Mezzanine Debt (or any portion thereof) is then outstanding, until the Third Mezzanine Debt is paid in full, and then (4) any balance to Borrowers.

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 Borrowers 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 Spread Maintenance Release Date, Borrowers shall pay, in addition to the Debt, the Spread Maintenance Premium due on the amount of each Component 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 Exit Fee (or the applicable portion thereof).

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 each Component so paid or prepaid through, but not including, the next succeeding ninth (9th) day of a calendar month, Borrowers shall be entitled to a credit toward the following month’s Monthly Interest Payments 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 Payments due to Borrowers 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 Borrowers 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.

2.4.6 Application of Prepayment Fee. Any Prepayment Fee received by Lender in connection with the Minimum Mandatory Prepayment (or any partial payment on account thereof), any Release Parcel Release Price, any Adjacent Parcel Release Price or the IP Release Price (any of the foregoing, a “Prepayment Fee-Generating Prepayment”) shall be allocated among the Loan (and the Components thereof), the First Mezzanine Loan, the Second Mezzanine Loan and the Third Mezzanine Loan based on the following formula: Lender, First Mezzanine Lender, Second Mezzanine Lender and/or Third Mezzanine Lender, as applicable, shall be entitled to an amount equal to the product resulting from multiplying (a) the amount of the applicable Prepayment Fee, by (b) a fraction, the numerator of which is the amount of the applicable Prepayment Fee-Generating Prepayment allocated to the Loan (or the applicable

Component thereof), the First Mezzanine Loan, the Second Mezzanine Loan or the Third Mezzanine Loan, as applicable, pursuant to the applicable provision of Section 2.4.3 hereof, and the denominator of which is the total amount of the applicable Prepayment Fee-Generating Prepayment.

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 either of the Notes 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 any Property or the IP.

2.5.1 Releases of Release Parcel.

(a) Conditions for Release. Notwithstanding anything to the contrary set forth in this Agreement or the other Loan Documents, Adjacent Borrower shall have the right, without the prior consent of Lender and without violating the Loan Documents, to (1) sell one or more portions of the Release Parcel (each, including the entire Release Parcel, a “Partial Release Parcel”) either to a bonafide third party purchaser (a “Bonafide Release Parcel Purchaser”) or to an Affiliate of Borrower or any other Restricted Party (an “Affiliate Release Parcel Purchaser”; and together with a Bonafide Release Parcel Purchaser, individually, a “Release Parcel Purchaser”), or (2) refinance one or more Partial Release Parcels (each of the foregoing, including a sale or refinancing of the entire Release Parcel, a “Release Parcel Sale”, it being agreed that, for purposes of this Section 2.5.1, a refinancing of a Partial Release Parcel, including the entire Release Parcel, shall be treated as a Release Parcel Sale thereof to an Affiliate Release Parcel Purchaser), and obtain a release of such Partial Release Parcel from the Liens of the Mortgage and the other Loan Documents encumbering such Partial Release Parcel, provided that all of the following conditions shall be satisfied with respect to each such Release Parcel Sale:

(i) At least ten (10) Business Days prior to the anticipated date of such Release Parcel Sale, Adjacent Borrower shall have submitted to Lender a written request for release (a “Sale Request”), specifically identifying and legally describing the Partial Release Parcel that Adjacent Borrower intends to sell, which proposed Partial Release Parcel shall, unless it is the entire Release Parcel, be reasonably acceptable to Lender taking into account its potential impact on the value of the remaining portions of the Release Parcel and the Remaining Adjacent Parcel, which Sale Request shall include a copy of the contract of sale relating to such Release Parcel Sale and an Officer’s Certificate providing a certification that (A) as of the date of such Sale Request, no monetary Default, monetary First Mezzanine Default, monetary Second Mezzanine Default or monetary Third Mezzanine Default, and no Event of Default, First Mezzanine Event of Default, Second Mezzanine Event of Default or Third Mezzanine Event of Default, shall have occurred and be continuing, (B) the proposed purchaser is a Bonafide Release Parcel Purchaser or an Affiliate Release Parcel Purchaser, as applicable, and (C) the copy of the contract of sale relating to such Release Parcel Sale attached to such certification is true, correct and complete;

(ii) Adjacent Borrower shall have delivered to Lender reasonably detailed information regarding the terms of, and the actual and reasonably anticipated costs and expenses associated with, such Release Parcel Sale in order to enable Lender to reasonably determine the Release Parcel Release Price with respect thereto, all of which shall be certified by Adjacent Borrower to Lender as true, complete and correct;

(iii) All accrued and unpaid interest and any unpaid or unreimbursed amounts in respect of the Reduced Acquisition Loan and/or the Construction Loan and/or the First Mezzanine Loan and/or the Second Mezzanine Loan and/or the Third Mezzanine Loan and any other sum then due hereunder or under any of the other Loan Documents and/or under any of the First Mezzanine Loan Documents and/or under any of the Second Mezzanine Loan Documents and/or under any of the Third Mezzanine 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 Release Parcel Sale; provided, however, if such Release Parcel Sale closes on a date which is not a Payment Date, Borrowers shall also have paid or shall have arranged to be paid contemporaneously with the closing of such Release Parcel Sale interest on the Release Parcel Release Price to, but not including, the next succeeding ninth (9th) day of a calendar month;

(iv) If the closing of such Release Parcel Sale shall occur prior to the Prepayment Fee Release Date, Borrowers shall have paid or shall have arranged to be paid contemporaneously with the closing of such Release Parcel Sale the Prepayment Fee based on the amount of the applicable Release Parcel Release Price;

(v) If the Release Parcel Purchaser is a Bonafide Release Parcel Purchaser, in addition to the amounts set forth in the foregoing clauses (iii) and (iv), Borrowers shall have paid, or shall have arranged to be paid contemporaneously with the closing of such Release Parcel Sale, to Lender a release price with respect to the sale of such Partial Release Parcel equal to the greater of the following (whichever of the following subclause (A) or (B) is greater, such Partial Release Parcel’s “Bonafide Release Parcel Release Price”), which Bonafide Release Parcel Release Price shall be applied as contemplated by Section 2.4.3 hereof:

(A) (1) the gross sales price for such Partial Release Parcel, less (2) the amount of all reasonable and customary closing costs in connection with such Release Parcel Sale actually paid by any Borrower to any Person who is not a Restricted Party or any Affiliate thereof; provided, however, that in no event shall such closing costs exceed eight percent (8%) of such gross sales price; or

(B) one hundred twenty-five percent (125%) of the per acre Allocated Loan Amount for such portion of the Release Parcel;

(vi) If the Release Parcel Purchaser is an Affiliate Release Parcel Purchaser, in addition to the amounts set forth in the foregoing clauses (iii) and (iv), Borrowers shall have paid, or shall have arranged to be paid contemporaneously with the closing of such Release Parcel Sale, to Lender a release price with respect to the sale of such Partial Release Parcel equal to the greater of the following (whichever of the following subclause (A) or (B) is greater, the “Affiliate Release Parcel Release Price”; and whichever of the Bonafide Release Parcel Release Price or the Affiliate Release Parcel Release Price shall be applicable in any instance, the “ Release Parcel Release Price”), which Affiliate Release Parcel Release Price shall be applied as contemplated by Section 2.4.3 hereof:

(A) Eighty-five percent (85%) of the Appraised Value of such Partial Release Parcel; or

(B) one hundred twenty-five percent (125%) of the per acre Allocated Loan Amount for such portion of the Release Parcel;

(vii) If the Release Parcel Purchaser is an Affiliate Release Parcel Purchaser, simultaneously with the closing of such Release Parcel Sale, (A) if such Release Parcel Purchaser is a Joint Venture, at Lender’s election, the ownership interest(s) of any Affiliate Joint Venture Counterparty shall be pledged to Lender as additional collateral for the Obligations, which pledge shall constitute a first priority Lien thereon, and Borrowers shall have (1) obtained the consent of each Unaffiliated Joint Venture Counterparty to such pledge, and (2) executed and delivered, and caused any such Affiliate Joint Venture Counterparty and Unaffiliated Joint Venture Counterparty to execute and deliver, such documents and instruments, and taken such further actions, and caused any such Affiliate Joint Venture Counterparty and Unaffiliated Joint Venture Counterparty to take any such further actions, as reasonably requested by Lender to evidence, secure and perfect such pledge of the ownership interest(s) of any Affiliate Joint Venture Counterparty, or (B) if such Release Parcel Purchaser is an Affiliate Release Parcel Purchaser of any kind, whether or not a Joint Venture, at Lender’s election, which in the case of a Release Parcel Purchaser who is a Joint Venture, would be in lieu of the foregoing clause (A), a security interest in any future sales proceeds from the sale of such Partial Release Parcel shall be pledged to Lender as additional collateral for the Obligations, which pledge shall constitute a first priority Lien thereon, and Borrowers shall have executed such documents and instruments, and taken such further actions, as reasonably requested by Lender to evidence, secure and perfect such pledge; provided, however, that in the case of either clause (A) or clause (B) above, such pledge (y) shall not prohibit, or require Lender’s consent to, a subsequent sale by the Release Parcel Purchaser of such Partial Release Parcel, but shall only require that the net proceeds of any such subsequent sale which are payable to such Release Parcel Purchaser be delivered to Lender and be used as a prepayment of the Loan pursuant to the same terms and conditions as governed the payment of the Release Parcel Release Price that was paid in connection with such Partial Release Parcel (it being understood that

any such net proceeds of any such subsequent sale shall be deemed a part of the previously-paid Release Parcel Release Price for such Partial Release Parcel for all purposes under this Agreement), and (z) shall terminate upon the earlier of (I) one (1) year from the date of such Release Parcel Sale or (II) the repayment in full of the Debt;

(viii) If the Release Parcel Purchaser is a Bonafide Release Parcel Purchaser, if such Bonafide Release Parcel Purchaser finances such Release Parcel Sale, Borrowers shall have caused such Bonafide Release Parcel Purchaser to provide to Credit Suisse (whether or not Credit Suisse or any Affiliate thereof is then “Lender” under this Agreement and the other Loan Documents), and such Bonafide Release Parcel Purchaser shall have complied with the terms of, a right of first offer with respect to such financing, such right to be on the same terms and conditions as are set forth in Article XIII hereof (except only with respect to the particular Release Parcel Sale and not with respect to a total Refinancing Loan);

(ix) If the Release Parcel Purchaser is an Affiliate Release Parcel Purchaser, if such Affiliate Release Parcel Purchaser finances such Release Parcel Sale, Borrowers shall have caused such Affiliate Release Parcel Purchaser to provide to Credit Suisse (whether or not Credit Suisse or any Affiliate thereof is then “Lender” under this Agreement and the other Loan Documents), and such Affiliate Release Parcel Purchaser shall have complied with the terms of, (A) a right of first offer with respect to such financing, such right to be on the same terms and conditions as are set forth in Schedule XVII attached hereto and made a part hereof, and (B) a right of last look with respect to such financing, such right to be on the same terms and conditions as are set forth in Schedule XVIII attached hereto and made a part hereof;

(x) Borrowers 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 Sale Request with respect to a Release Parcel Sale, whether or not the Release Parcel Sale which is the subject of a Sale Request 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 any Release Parcel Sale as provided in Section 2.5.1(d) hereof;

(xi) No monetary Default, monetary First Mezzanine Default, monetary Second Mezzanine Default or monetary Third Mezzanine Default, and no Event of Default, First Mezzanine Event of Default, Second Mezzanine Event of Default or Third Mezzanine Event of Default, shall have occurred and be continuing at the time of the submission by Adjacent Borrower of a Sale Request or at the time of the closing of such Release Parcel Sale;

(xii) After giving effect to the sale and release of such Partial Release Parcel, the then remaining portions of the Release Parcel and the Remaining

Adjacent Parcel will each (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 such Partial Release Parcel, and (C) comply, in all material respects, with all applicable Legal Requirements, including, without limitation, those relating to land use and certificates of occupancy, except to the extent of any legal non-conforming use permitted as of the Closing Date;

(xiii) Adjacent Borrower shall have certified to Lender that, with respect to the then remaining portions of each of the Release Parcel and the Remaining Adjacent 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 on such remaining portions of each of the Release Parcel and the Remaining Adjacent Parcel to parking, vehicular and pedestrian ingress and egress from public roads and common areas, and (B) utility services in all of the Improvements on such remaining portions of each of the Release Parcel and the Remaining Adjacent Parcel, in each instance as exists as of the date immediately preceding such Release Parcel Sale, 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;

(xiv) Borrowers shall deliver to Lender, at Borrowers’ sole cost and expense, new or updated ALTA/ASCM surveys of the remaining portion of the Release Parcel and such Partial Release Parcel, which surveys shall substantially conform to Lender’s then-current requirements for surveys to be delivered in connection with its loans;

(xv) The Title Company shall issue an endorsement to the Title Insurance Policy regarding the validity of Lender’s lien on the remaining portion of the Release Parcel after such Release Parcel Sale and any other endorsements reasonably requested by Lender in connection with such Release Parcel Sale;

(xvi) If a Securitization has occurred and the Release Parcel Sale covers less than the entire Release Parcel, Borrowers shall have provided to Lender an opinion letter from counsel reasonably satisfactory to Lender confirming that such Release Parcel Sale shall not constitute a “significant modification” of the Loan within the meaning of Section 1.1001-3 of the regulations of the United States Department of the Treasury or would otherwise violate any of the provisions of the federal income tax law relating to real estate mortgage investment conduits, which appear at Section 860A through 860G of Subchapter M of Chapter 1 of the Code, as amended, and related provisions and regulations (including any applicable proposed regulations) and rulings promulgated thereunder, as the foregoing may be in effect from time to time (collectively, the “REMIC Requirements”), and Lender shall not otherwise have any reasonable belief (based on an opinion of counsel or a certified public accountant) that such Release

Parcel Sale will constitute such a “significant modification” or otherwise violate such REMIC Requirements; and

(xvii) Borrowers shall have delivered to Lender (A) any amendments to the Loan Documents deemed reasonably necessary by Lender in order to effectuate the release of such Partial Release Parcel and/or to continue to retain all of its rights in the remaining portion of the Release Parcel and/or the Remaining Adjacent 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 Release Parcel Sale 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 Release Parcel Sale will not close, or (ii) the one hundred thirty-fifth (135th) day following the delivery to Lender of the related Sale 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 Release Parcel Sale with respect to which a Sale Request was submitted to Lender does not close within one hundred thirty-five (135) days after the date of such Sale Request, if Adjacent Borrower wishes to proceed with such Release Parcel Sale, Adjacent Borrower shall be required to re-submit an updated Sale Request to Lender and satisfy the conditions set forth in Section 2.5.1(a) hereof with respect to the Release Parcel Sale which is the subject of such resubmitted Sale Request as of the date of such resubmission.

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

(e) With respect to a Release Parcel Sale, 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 terms “Release Parcel” and “Adjacent Property” shall be deemed to exclude the applicable Partial Release Parcel for all purposes hereunder.

(f) With respect to any Release Parcel Sale, Lender hereby acknowledges and agrees that Adjacent Borrower shall have the right to consummate such a Release Parcel Sale through the following process: (i) the formation of a Special Purpose Entity that is a wholly-owned, Delaware limited liability company subsidiary of Adjacent Borrower, the organizational documentation with respect to which shall be reasonably satisfactory to Lender (a “Subsidiary Transferee”); provided, however, that no Subsidiary Transferee shall be required to have any springing member or any Independent Director or Independent Manager; and, provided, further, that such Subsidiary Transferee shall only be required to satisfy all of the other requirements of a Special Purpose Entity when Adjacent Borrower owns all or any portion of the membership interests therein, and (ii) the occurrence of the following events, all of which shall occur substantially contemporaneously through an escrow established with an escrow agent

reasonably acceptable to Lender and pursuant to escrow instructions reasonably acceptable to Lender: (A) the transfer by deed of the applicable Partial Release Parcel from Adjacent Borrower to such Subsidiary Transferee subject to the Mortgage and the other Loan Documents, (B) the immediately subsequent purchase of all of the equity interests held by Adjacent Borrower in such Subsidiary Transferee by the applicable Bonafide Release Parcel Purchaser or Affiliate Release Parcel Purchaser, as the case may be, and (C) the payment of the applicable Release Parcel Release Price and all other amounts due under Section 2.5.1(a) hereof in connection with such Release Parcel Sale. In connection with the foregoing, Lender and Borrowers hereby agree that, with respect to any Release Parcel Sale consummated in accordance with this Section 2.5.1(f), (1) the applicable Bonafide Release Parcel Purchaser or Affiliate Release Parcel Purchaser, as the case may be, shall refer to the ultimate purchaser of the equity interests held by Adjacent Borrower in the Subsidiary Transferee, rather than to the Subsidiary Transferee, (2) the gross sales price used in the calculation of the applicable Release Parcel Release Price with respect to a Bonafide Release Parcel Purchaser shall refer to the gross sales price for the purchase of the equity interests held by Adjacent Borrower in the Subsidiary Transferee, rather than to any consideration paid by the Subsidiary Transferee to Adjacent Borrower, and (3) without limiting the generality of the foregoing, for purposes of the satisfaction of the conditions set forth in Section 2.5.1(a), all references to such Release Parcel Sale and/or to the related contract of sale, gross sales price, Release Parcel Purchaser, Release Parcel Release Price and all other related terms and items (including any such references in Schedule XVII and/or XVIII attached hereto) shall be deemed to be references to, and shall include, the sale of the equity interests held by Adjacent Borrower to the ultimate Bonafide Release Parcel Purchaser or Affiliate Release Parcel Purchaser, as the case may be, rather than to the transfer by deed of the applicable Partial Release Parcel from Adjacent Borrower to the Subsidiary Transferee.

2.5.2 Releases of Remaining Adjacent Parcel.

(a) Conditions for Release. Notwithstanding anything to the contrary set forth in this Agreement or the other Loan Documents, Adjacent Borrower shall have the right, without the prior consent of Lender and without violating the Loan Documents, to (1) sell one or more portions of the Remaining Adjacent Parcel (each, including the entire Remaining Adjacent Parcel, a “Partial Adjacent Parcel”) either to a bonafide third party purchaser (a “Bonafide Adjacent Parcel Purchaser”) or to an Affiliate of Borrower or any other Restricted Party (an “Affiliate Adjacent Parcel Purchaser”; and together with a Bonafide Adjacent Parcel Purchaser, individually, an “Adjacent Parcel Purchaser”), or (2) refinance one or more Partial Adjacent Parcels (each of the foregoing, including a sale or refinancing of the entire Remaining Adjacent Parcel, an “Adjacent Parcel Sale”, it being agreed that, for purposes of this Section 2.5.2, a refinancing of a Partial Adjacent Parcel, including the entire Remaining Adjacent Parcel, shall be treated as an Adjacent Parcel Sale thereof to an Affiliate Adjacent Parcel Purchaser), and obtain a release of such Partial Adjacent Parcel from the Liens of the Mortgage and the other Loan Documents encumbering such Partial Adjacent Parcel, provided that all of the following conditions shall be satisfied with respect to each such Adjacent Parcel Sale:

(i) At least ten (10) Business Days prior to the anticipated date of such Adjacent Parcel Sale, Adjacent Borrower shall have submitted a Sale Request to Lender, specifically identifying and legally describing the Partial Adjacent Parcel that Adjacent Borrower intends to sell, which proposed Partial Adjacent Parcel

shall, unless it is the entire Remaining Adjacent Parcel, be reasonably acceptable to Lender taking into account its potential impact on the value of the remaining portions of the Remaining Adjacent Parcel and the Release Parcel, which Sale Request shall include a copy of the contract of sale relating to such Adjacent Parcel Sale and an Officer’s Certificate providing a certification that (A) as of the date of such Sale Request, no monetary Default, monetary First Mezzanine Default, monetary Second Mezzanine Default or monetary Third Mezzanine Default, and no Event of Default, First Mezzanine Event of Default, Second Mezzanine Event of Default or Third Mezzanine Event of Default, shall have occurred and be continuing, (B) the proposed purchaser is a Bonafide Adjacent Parcel Purchaser or an Affiliate Adjacent Parcel Purchaser, as applicable, and (C) the copy of the contract of sale relating to such Adjacent Parcel Sale attached to such certification is true, correct and complete;

(ii) Adjacent Borrower shall have delivered to Lender reasonably detailed information regarding the terms of, and the actual and reasonably anticipated costs and expenses associated with, such Adjacent Parcel Sale in order to enable Lender to reasonably determine the Adjacent Parcel Release Price with respect thereto, all of which shall be certified by Adjacent Borrower to Lender as true, complete and correct;

(iii) All accrued and unpaid interest and any unpaid or unreimbursed amounts in respect of the Reduced Acquisition Loan and/or the Construction Loan and/or the First Mezzanine Loan and/or the Second Mezzanine Loan and/or the Third Mezzanine Loan and any other sum then due hereunder or under any of the other Loan Documents and/or under any of the First Mezzanine Loan Documents and/or under any of the Second Mezzanine Loan Documents and/or under any of the Third Mezzanine 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 Adjacent Parcel Sale; provided, however, if such Adjacent Parcel Sale closes on a date which is not a Payment Date, Borrowers shall also have paid or shall have arranged to be paid contemporaneously with the closing of such Adjacent Parcel Sale interest on the Adjacent Parcel Release Price to, but not including, the next succeeding ninth (9th) day of a calendar month;

(iv) If the closing of such Adjacent Parcel Sale shall occur prior to the Prepayment Fee Release Date, Borrowers shall have paid or shall have arranged to be paid contemporaneously with the closing of such Adjacent Parcel Sale the Prepayment Fee based on the amount of the applicable Adjacent Parcel Release Price;

(v) If the Adjacent Parcel Purchaser is a Bonafide Adjacent Parcel Purchaser, in addition to the amounts set forth in the foregoing clauses (iii) and (iv), Borrowers shall have paid, or shall have arranged to be paid contemporaneously with the closing of such Adjacent Parcel Sale, to Lender a release price with respect to the sale of such Partial Adjacent Parcel equal to the

greater of the following (whichever of the following subclause (A) or (B) is greater, such Partial Adjacent Parcel’s “Bonafide Adjacent Parcel Release Price”), which Bonafide Adjacent Parcel Release Price shall be applied as contemplated by Section 2.4.3 hereof:

(A) (1) the gross sales price for such Partial Adjacent Parcel, less (2) the amount of all reasonable and customary closing costs in connection with such Adjacent Parcel Sale actually paid by any Borrower to any Person who is not a Restricted Party or any Affiliate thereof; provided, however, that in no event shall such closing costs exceed eight percent (8%) of such gross sales price; or

(B) one hundred twenty-five percent (125%) of the per acre Allocated Loan Amount for such portion of the Remaining Adjacent Parcel;

(vi) If the Adjacent Parcel Purchaser is an Affiliate Adjacent Parcel Purchaser, in addition to the amounts set forth in the foregoing clauses (iii) and (iv), Borrowers shall have paid, or shall have arranged to be paid contemporaneously with the closing of such Adjacent Parcel Sale, to Lender a release price with respect to the sale of such Partial Adjacent Parcel equal to the greater of the following (whichever of the following subclause (A) or (B) is greater, the “Affiliate Adjacent Parcel Release Price”; and whichever of the Bonafide Adjacent Parcel Release Price or the Affiliate Adjacent Parcel Release Price shall be applicable in any instance, the “Adjacent Parcel Release Price”), which Affiliate Adjacent Parcel Release Price shall be applied as contemplated by Section 2.4.3 hereof:

(A) Eighty-five percent (85%) of the Appraised Value of such Partial Adjacent Parcel; or

(B) one hundred twenty-five percent (125%) of the per acre Allocated Loan Amount for such portion of the Remaining Adjacent Parcel;

(vii) If the Adjacent Parcel Purchaser is an Affiliate Adjacent Parcel Purchaser, simultaneously with the closing of such Adjacent Parcel Sale, (A) if such Adjacent Parcel Purchaser is a Joint Venture, at Lender’s election, the ownership interest(s) of any Affiliate Joint Venture Counterparty shall be pledged to Lender as additional collateral for the Obligations, which pledge shall constitute a first priority Lien thereon, and Borrowers shall have (1) obtained the consent of each Unaffiliated Joint Venture Counterparty to such pledge, and (2) executed and delivered, and caused any such Affiliate Joint Venture Counterparty and Unaffiliated Joint Venture Counterparty to execute and deliver, such documents and instruments, and taken such further actions, and caused any such Affiliate Joint Venture Counterparty and Unaffiliated Joint Venture Counterparty to take any such further actions, as reasonably requested by Lender to evidence,

secure and perfect such pledge of the ownership interest(s) of any Affiliate Joint Venture Counterparty, or (B) if such Adjacent Parcel Purchaser is an Affiliate Adjacent Parcel Purchaser of any kind, whether or not a Joint Venture, at Lender’s election, which in the case of an Adjacent Parcel Purchaser who is a Joint Venture, would be in lieu of the foregoing clause (A), a security interest in any future sales proceeds from the sale of such Partial Adjacent Parcel shall be pledged to Lender as additional collateral for the Obligations, which pledge shall constitute a first priority Lien thereon, and Borrowers shall have executed such documents and instruments, and taken such further actions, as reasonably requested by Lender to evidence, secure and perfect such pledge; provided, however, that in the case of either clause (A) or clause (B) above, such pledge (y) shall not prohibit, or require Lender’s consent to, a subsequent sale by the Adjacent Parcel Purchaser of such Partial Adjacent Parcel, but shall only require that the net proceeds of any such subsequent sale which are payable to such Adjacent Parcel Purchaser be delivered to Lender and be used as a prepayment of the Loan pursuant to the same terms and conditions as governed the payment of the Adjacent Parcel Release Price that was paid in connection with such Partial Adjacent Parcel (it being understood that any such net proceeds of any such subsequent sale shall be deemed a part of the previously-paid Adjacent Parcel Release Price for such Partial Adjacent Parcel for all purposes under this Agreement), and (z) shall terminate upon the earlier of (I) one (1) year from the date of such Partial Adjacent Sale or (II) the repayment in full of the Debt;

(viii) If the Adjacent Parcel Purchaser is a Bonafide Adjacent Parcel Purchaser, if such Bonafide Adjacent Parcel Purchaser finances such Adjacent Parcel Sale, Borrowers shall have caused such Bonafide Adjacent Parcel Purchaser to provide to Credit Suisse (whether or not Credit Suisse or any Affiliate thereof is then “Lender” under this Agreement and the other Loan Documents), and such Bonafide Adjacent Parcel Purchaser shall have complied with the terms of, a right of first offer with respect to such financing, such right to be on the same terms and conditions as are set forth in Article XIII hereof (except only with respect to the particular Adjacent Parcel Sale and not with respect to a total Refinancing Loan);

(ix) If the Adjacent Parcel Purchaser is an Affiliate Adjacent Parcel Purchaser, if such Affiliate Adjacent Parcel Purchaser finances such Adjacent Parcel Sale, Borrowers shall have caused such Affiliate Adjacent Parcel Purchaser to provide to Credit Suisse (whether or not Credit Suisse or any Affiliate thereof is then “Lender” under this Agreement and the other Loan Documents), and such Affiliate Adjacent Parcel Purchaser shall have complied with the terms of, (A) a right of first offer with respect to such financing, such right to be on the same terms and conditions as are set forth in Schedule XVII attached hereto and made a part hereof, and (B) a right of last look with respect to such financing, such right to be on the same terms and conditions as are set forth in Schedule XVIII attached hereto and made a part hereof;

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(x) Borrowers 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 Sale Request with respect to an Adjacent Parcel Sale, whether or not the Adjacent Parcel Sale which is the subject of a Sale Request actually closes, (B) the satisfaction of any of the conditions set forth in this Section 2.5.2(a), and (C) providing all release documents in connection with any Adjacent Parcel Sale as provided in Section 2.5.2(d) hereof;

(xii) After giving effect to the sale and release of such Partial Adjacent Parcel, the then remaining portions of the Release Parcel and the Remaining Adjacent Parcel will each (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 such Partial Adjacent Parcel, and (C) comply, in all material respects, with all applicable Legal Requirements, including, without limitation, those relating to land use and certificates of occupancy, except to the extent of any legal non-conforming use permitted as of the Closing Date;

(xiii) Adjacent Borrower shall have certified to Lender that, with respect to the then remaining portions of each of the Release Parcel and the Remaining Adjacent 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 on such remaining portions of each of the Release Parcel and the Remaining Adjacent Parcel to parking, vehicular and pedestrian ingress and egress from public roads and common areas, and (B) utility services in all of the Improvements on such remaining portions of each of the Release Parcel and the Remaining Adjacent Parcel, in each instance as exists as of the date immediately preceding such Adjacent Parcel Sale, 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;

(xiv) Borrowers shall deliver to Lender, at Borrowers’ sole cost and expense, new or updated ALTA/ASCM surveys of the remaining portion of the Remaining Adjacent Parcel and such Partial Adjacent Parcel, which surveys shall substantially conform to Lender’s then-current requirements for surveys to be delivered in connection with its loans;

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(xv) The Title Company shall issue an endorsement to the Title Insurance Policy regarding the validity of Lender’s lien on the remaining portion of the Remaining Adjacent Parcel after such Adjacent Parcel Sale and any other endorsements reasonably requested by Lender in connection with such Adjacent Parcel Sale;

(xvi) If a Securitization has occurred and the Adjacent Parcel Sale covers less than the entire Remaining Adjacent Parcel, Borrowers shall have provided to Lender an opinion letter from counsel reasonably satisfactory to Lender confirming that such Adjacent Parcel Sale shall not constitute a “significant modification” of the Loan within the meaning of Section 1.1001-3 of the regulations of the United States Department of the Treasury or would otherwise violate any of the REMIC Requirements, and Lender shall not otherwise have any reasonable belief (based on an opinion of counsel or a certified public accountant) that such Adjacent Parcel Sale will constitute such a “significant modification” or otherwise violate such REMIC Requirements;

(xvii) Such Adjacent Parcel Sale shall not occur until either (A) Borrowers shall have delivered the Relinquishment Notice, or (B) the Qualification Conditions have not been satisfied on or prior to the Construction Qualification Date;

(xviii) Borrowers shall have paid the Non-Qualified Mandatory Prepayment or shall have delivered a Non-Qualified Prepayment Letter of Credit in lieu thereof, in either instance, on or before the date required under, and otherwise in accordance with the terms of, Section 2.4.2(c) hereof; and

(xix) Borrowers shall have delivered to Lender (A) any amendments to the Loan Documents deemed reasonably necessary by Lender in order to effectuate the release of such Partial Adjacent Parcel and/or to continue to retain all of its rights in the remaining portion of Remaining Adjacent Parcel and/or the Release 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 Adjacent Parcel Sale 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 Adjacent Parcel Sale will not close, or (ii) the one hundred thirty-fifth (135th) day following the delivery to Lender of the related Sale 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 an Adjacent Parcel Sale with respect to which a Sale Request was submitted to Lender does not close within one hundred thirty-five (135) days after the date of such Sale Request, if Adjacent Borrower wishes to proceed with such Adjacent Parcel Sale, Adjacent Borrower shall be required to re-submit an updated Sale Request to Lender and satisfy the conditions set forth in Section 2.5.2(a) hereof with respect to the Adjacent Parcel Sale which is the subject of such resubmitted Sale Request as of the date of such resubmission.

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(d) With respect to any Adjacent Parcel Sale, upon satisfaction of the conditions set forth in Section 2.5.2(a) hereof, Lender, at the sole cost and expense of Borrowers, shall execute and deliver to Borrowers releases, satisfactions, reconveyances, discharges, terminations and/or assignments, as applicable and as reasonably requested by Borrowers, of the Mortgage and the other Loan Documents relating to the applicable Partial Adjacent Parcel.

(e) With respect to an Adjacent Parcel Sale, upon the full execution, delivery and, as appropriate, recordation or filing of the applicable documents contemplated under Section 2.5.2(d) hereof, all references in this Agreement to the terms “Remaining Adjacent Parcel” and “Adjacent Property” shall be deemed to exclude the applicable Partial Adjacent Parcel for all purposes hereunder.

(f) With respect to any Adjacent Parcel Sale, Lender hereby acknowledges and agrees that Adjacent Borrower shall have the right to consummate such an Adjacent Parcel Sale through the following process: (i) the formation of a Subsidiary Transferee; provided, however, that no Subsidiary Transferee shall be required to have any springing member or any Independent Director or Independent Manager; and, provided, further, that such Subsidiary Transferee shall only be required to satisfy all of the other requirements of a Special Purpose Entity when Adjacent Borrower owns all or any portion of the membership interests therein, and (ii) the occurrence of the following events, all of which shall occur substantially contemporaneously through an escrow established with an escrow agent reasonably acceptable to Lender and pursuant to escrow instructions reasonably acceptable to Lender: (A) the transfer by deed of the applicable Partial Adjacent Parcel from Adjacent Borrower to such Subsidiary Transferee subject to the Mortgage and the other Loan Documents, (B) the immediately subsequent purchase of all of the equity interests held by Adjacent Borrower in such Subsidiary Transferee by the applicable Bonafide Adjacent Parcel Purchaser or Affiliate Adjacent Parcel Purchaser, as the case may be, and (C) the payment of the applicable Adjacent Parcel Release Price and all other amounts due under Section 2.5.2(a) hereof in connection with such Adjacent Parcel Sale. In connection with the foregoing, Lender and Borrowers hereby agree that, with respect to any Adjacent Parcel Sale consummated in accordance with this Section 2.5.2(f), (1) the applicable Bonafide Adjacent Parcel Purchaser or Affiliate Adjacent Parcel Purchaser, as the case may be, shall refer to the ultimate purchaser of the equity interests held by Adjacent Borrower in the Subsidiary Transferee, rather than to the Subsidiary Transferee, (2) the gross sales price used in the calculation of the applicable Adjacent Parcel Release Price with respect to a Bonafide Adjacent Parcel Purchaser shall refer to the gross sales price for the purchase of the equity interests held by Adjacent Borrower in the Subsidiary Transferee, rather than to any consideration paid by the Subsidiary Transferee to Adjacent Borrower, and (3) without limiting the generality of the foregoing, for purposes of the satisfaction of the conditions set forth in Section 2.5.2(a) hereof, all references to such Adjacent Parcel Sale and/or to the related contract of sale, gross sales price, Adjacent Parcel Purchaser, Adjacent Parcel Release Price and all other related terms and items (including any such references in Schedule XVII and/or XVIII attached hereto) shall be deemed to be references to, and shall include, the sale of the equity interests held by Adjacent Borrower to the ultimate Bonafide Adjacent Parcel Purchaser or Affiliate Adjacent Parcel Purchaser, as the case may be, rather than to the transfer by deed of the applicable Partial Adjacent Parcel from Adjacent Borrower to the Subsidiary Transferee.

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2.5.3 Release of IP.

(a) Conditions for Release. Notwithstanding anything to the contrary set forth in this Agreement or the other Loan Documents, in the event that IP Borrower shall desire to sell the IP (in whole but not in part) (an “IP Sale”), to either a bonafide third party purchaser (a “Bonafide IP Purchaser”) or to an Affiliate of Borrower or any other Restricted Party (an “Affiliate IP Purchaser”; and together with a Bonafide IP Purchaser, individually, an “IP Purchaser”), IP Borrower shall have the right, without the prior consent of Lender and without violating the Loan Documents, to sell the entire IP and obtain a release of the IP from the Liens of the Mortgage and the other Loan Documents encumbering the IP, provided that all of the following conditions shall be satisfied with respect to such IP Sale:

(i) IP Borrower shall have submitted a Sale Request to Lender at least ten (10) Business Days prior to the anticipated date of such IP Sale, which shall include a copy of the contract of sale relating to such IP Sale and an Officer’s Certificate providing a certification that (A) as of the date of such Sale Request, no monetary Default, monetary First Mezzanine Default, monetary Second Mezzanine Default or monetary Third Mezzanine Default, and no Event of Default, First Mezzanine Event of Default, Second Mezzanine Event of Default or Third Mezzanine Event of Default, shall have occurred and be continuing, (B) the proposed purchaser is a Bonafide IP Purchaser or an Affiliate IP Purchaser, as applicable, and (C) the copy of the contract of sale relating to such IP Sale attached to such certification is true, correct and complete;

(ii) IP Borrower shall have delivered to Lender reasonably detailed information regarding the terms of, and the actual and reasonably anticipated costs and expenses associated with, such IP Sale in order to enable Lender to reasonably determine the IP Release Price with respect thereto, all of which shall be certified by IP Borrower to Lender as true, complete and correct;

(iii) All accrued and unpaid interest and any unpaid or unreimbursed amounts in respect of the Reduced Acquisition Loan and/or the Construction Loan and/or the First Mezzanine Loan and/or the Second Mezzanine Loan and/or the Third Mezzanine Loan and any other sum then due hereunder or under any of the other Loan Documents and/or under any of the First Mezzanine Loan Documents and/or under any of the Second Mezzanine Loan Documents and/or under any of the Third Mezzanine 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 IP Sale; provided, however, if such IP Sale closes on a date which is not a Payment Date, Borrowers shall also have paid or shall have arranged to be paid contemporaneously with the closing of such IP Sale, interest on the IP Release Price to, but not including, the next succeeding ninth (9th) day of a calendar month;

(iv) If the closing of such IP Sale shall occur prior to the Prepayment Fee Release Date, Borrowers shall have paid or shall have arranged to be paid contemporaneously with the closing of such IP Sale, the Prepayment Fee based on the IP Release Price;

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(v) If the IP Purchaser is a Bonafide IP Purchaser, in addition to the amounts set forth in the foregoing clauses (iii) and (iv), Borrowers shall have paid, or shall have arranged to be paid contemporaneously with the closing of the IP Sale, to Lender a release price with respect to the IP equal to the greater of the following (whichever of the following subclause (A) or (B) is greater, the “Bonafide IP Release Price”), which Bonafide IP Release Price shall be applied as contemplated by Section 2.4.3 hereof:

(A) (1) the gross sales price for the IP, less (2) the amount of all reasonable and customary closing costs in connection with such IP Sale actually paid by any Borrower to any Person who is not a Restricted Party or any Affiliate thereof; provided, however, that in no event shall such closing costs exceed three percent (3%) of such gross sales price; or

(B) one hundred twenty-five percent (125%) of the Allocated Loan Amount for the IP;

(vi) If the IP Purchaser is an Affiliate IP Purchaser, in addition to the amounts set forth in the foregoing clauses (iii) and (iv), Borrowers shall have paid, or shall have arranged to be paid contemporaneously with the closing of the IP Sale, to Lender a release price with respect to the IP equal to the greater of the following (whichever of the following subclause (A) or (B) is greater, the “Affiliate IP Release Price”; and whichever of the Bonafide IP Release Price or the Affiliate IP Release Price shall be applicable, the “IP Release Price”), which Affiliate IP Release Price shall be applied as contemplated by Section 2.4.3 hereof:

(B) Eighty Million Dollars ($80,000,000.00);

(vii) If the IP Purchaser is an Affiliate IP Purchaser, simultaneously with the closing of the IP Sale, (A) if such IP Purchaser is a Joint Venture, at Lender’s election, the ownership interest(s) of any Affiliate Joint Venture Counterparty shall be pledged to Lender as additional collateral for the Obligations, which pledge shall constitute a first priority Lien thereon, and Borrowers shall have (1) obtained the consent of each Unaffiliated Joint Venture Counterparty to such pledge, and (2) executed and delivered, and caused any such Affiliate Joint Venture Counterparty and Unaffiliated Joint Venture Counterparty to execute and deliver, such documents and instruments, and taken such further actions, and caused any such Affiliate Joint Venture Counterparty and Unaffiliated Joint Venture Counterparty to take any such further actions, as reasonably requested by Lender to evidence, secure and perfect such pledge of the

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ownership interest(s) of any Affiliate Joint Venture Counterparty, or (B) if such IP Purchaser is an Affiliate IP Purchaser of any kind, whether or not a Joint Venture, at Lender’s election, which in the case of an IP Purchaser who is a Joint Venture, would be in lieu of the foregoing clause (A), a security interest in any future sales proceeds from the sale of the IP shall be pledged to Lender as additional collateral for the Obligations, which pledge shall constitute a first priority Lien thereon, and Borrowers shall have executed such documents and instruments, and taken such further actions, as reasonably requested by Lender to evidence, secure and perfect such pledge; provided, however, that in the case of either clause (A) or clause (B) above, such pledge (y) shall not prohibit, or require Lender’s consent to, a subsequent sale by the IP Purchaser of the IP, but shall only require that the net proceeds of any such subsequent sale which are payable to the IP Purchaser be delivered to Lender and be used as a prepayment of the Loan pursuant to the same terms and conditions as governed the payment of the IP Release Price (it being understood that any such net proceeds of any such subsequent sale shall be deemed a part of the previously-paid IP Release Price for all purposes under this Agreement), and (z) shall terminate upon the earlier of (I) one (1) year from the date of the IP Sale or (II) the repayment in full of the Debt;

(viii) Borrowers 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 Sale Request with respect to an IP Sale, whether or not the IP Sale which is the subject of a Sale Request actually closes, (B) the satisfaction of any of the conditions set forth in this Section 2.5.3(a), and (C) providing all release documents in connection with any IP Sale as provided in Section 2.5.3(d) hereof;

(ix) No monetary Default, monetary First Mezzanine Default, monetary Second Mezzanine Default or monetary Third Mezzanine Default, and no Event of Default, First Mezzanine Event of Default, Second Mezzanine Event of Default or Third Mezzanine Event of Default, shall have occurred and be continuing at the time of the submission by IP Borrower of a Sale Request or at the time of the closing of an IP Sale;

(x) There shall only be one (1) IP Sale;

(xi) The IP Purchaser shall enter into one or more royalty free license agreements, in form and substance reasonably satisfactory to Borrowers and Lender, applying the standards of a prudent commercial mortgage loan lender, pursuant to which such IP Purchaser shall license to each Borrower all of the IP that is reasonably necessary or desirable to operate its Property as then being operated and as then contemplated to be operated in the future (collectively, the “Purchaser Licensed IP”), and each applicable Borrower, at Borrowers’ sole cost and expense, shall execute and deliver, or cause to be executed and delivered, to and for the benefit of Lender, a security interest agreement covering such Purchaser Licensed IP, together with such other financing statements, documents and/or instruments reasonably required by Lender in order to perfect its security

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interest in the Purchaser Licensed IP and to enable Lender to foreclose on such Purchaser Licensed IP upon the occurrence and during the continuance of an Event of Default, all of the foregoing to be in form and substance reasonably satisfactory to Lender; and

(xii) Borrowers 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 IP, 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 IP Sale 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 IP Sale will not close, or (B) the one hundred thirty-fifth (135th) day following the delivery to Lender of the related Sale 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 an IP Sale with respect to which a Sale Request was submitted to Lender does not close within one hundred thirty-five (135) days after the date of such Sale Request, if IP Borrower wishes to proceed with such IP Sale, IP Borrower shall be required to re-submit an updated Sale Request to Lender and satisfy the conditions set forth in Section 2.5.3(a) hereof with respect to the IP Sale which is the subject of such resubmitted Sale Request as of the date of such resubmission.

(d) With respect to an IP Sale, upon satisfaction of the conditions set forth in Section 2.5.3(a) hereof, Lender, at the sole cost and expense of Borrowers, shall execute and deliver to Borrowers releases, satisfactions, discharges and/or assignments, as applicable and as reasonably requested by Borrowers, of the Mortgage and the other Loan Documents relating to the IP.

2.5.4 Sale of Properties or IP during Event of Default. Notwithstanding the provisions of the foregoing Sections 2.5.1, 2.5.2 and 2.5.3 or any other provision to the contrary in this Agreement or the other Loan Documents, it is expressly acknowledged and agreed by Borrowers that, upon the occurrence and during the continuance of an Event of Default: (i) no Borrower shall have any right to sell any Property or any portion thereof or any IP 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 one or more of the Properties or any portion thereof and/or any IP shall be on such terms and conditions as to which Lender and Borrowers 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 2.5.4) shall not be applicable to any such sale of one or more of the Properties or any portion thereof and/or any IP consented to by Lender as aforesaid, Borrowers expressly acknowledging and agreeing that none of First Mezzanine Lender, Second Mezzanine Lender nor Third Mezzanine Lender shall be entitled to any Release Parcel Release Price, Adjacent Parcel Release Price or IP Release Price or any portion of any of the foregoing or any proceeds of any of the foregoing unless and until the Debt has been paid in full, and (iv) in the event that, following any such sale of one or more of the Properties or any portion thereof and/or any IP, the Debt shall have been paid in full,

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Borrowers and/or Lender, as applicable, shall distribute to First Mezzanine Lender any remaining proceeds thereof to be applied as provided in the First Mezzanine Loan Agreement, and thereafter, in the event that the First Mezzanine Debt shall have been paid in full, First Mezzanine Lender shall distribute to Second Mezzanine Lender any remaining proceeds thereof to be applied as provided in the Second Mezzanine Loan Agreement, and thereafter, in the event that the Second Mezzanine Debt shall have been paid in full, Second Mezzanine Lender shall distribute to Third Mezzanine Lender any remaining proceeds thereof to be applied as provided in the Third Mezzanine Loan Agreement, and thereafter, in the event that the Third Mezzanine Debt shall have been paid in full, Third Mezzanine Lender shall distribute any remaining proceeds to Borrowers.

2.5.5 Release on Payment in Full. Upon the written request and payment by Borrowers 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 Notes 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) Borrowers 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 Hotel/Casino, LLC, HRHH Cafe, LLC, HRHH Development, LLC, HRHH IP, LLC and HRHH Gaming, 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. Each 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. 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 Borrowers.

(b) Each Borrower shall, or shall cause its Manager and/or Sub-Manager, as applicable, to, deliver irrevocable written instructions to all commercial tenants under Leases of space at such Borrower’s Property (including, without limitation, the HRHI Lease) to deliver all Rents payable thereunder directly to the Lockbox Account. Hotel/Casino Borrower shall, or shall cause HRHI to, deliver irrevocable written instructions to the Gaming Operator to deliver all income and/or proceeds payable under the Gaming Sublease to HRHI directly to the Lockbox Account on account of the payments due from HRHI to Hotel/Casino Borrower under the HRHI Lease. Hotel/Casino Borrower shall deliver irrevocable written instructions to HRHI, as the Liquor Manager, to deliver an amount equal to all revenues earned by Liquor Manager pursuant to the Liquor Management Agreement to the Lockbox Account on account of the payments due from HRHI to Hotel/Casino Borrower. Each Borrower shall, and

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shall cause its Manager to deposit all amounts received by such Borrower or its Manager constituting Rents (including Rents from all non-commercial tenants under Leases of space at such Borrower’s Property) or any other Gross Income from Operations into the Lockbox Account within one (1) Business Day after receipt. Notwithstanding the foregoing, Adjacent Borrower shall cause Sub-Manager to deposit all amounts received by Sub-Manager constituting Rents (but excluding security deposits unless and until applied in accordance with the terms of the applicable Lease) or any other Gross Income from Operations from the Adjacent Property into the Lockbox Account within five (5) Business Days after receipt. Each Borrower shall, or shall cause its Manager to, deliver irrevocable written instructions to each of the credit card companies or credit card clearing banks with which such Borrower or its Manager and/or Sub-Manager, as applicable, has entered into merchant’s agreements to deliver all receipts payable with respect to any Property directly to the Lockbox Account.

(c) Borrowers 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.

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 – Hard Rock Cash Management Account” or such other title as shall be reasonably acceptable to Lender and the bank holding the Cash Management Account. Each 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. 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 Borrowers.

(b) Subject to Sections 2.6.2(c) and/or 2.6.2(d) hereof, as applicable, 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 Borrowers 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 Borrowers 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

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the order indicated, except to the extent already disbursed on account of clause (iii) and/or (iv) below:

(i) First, payments to Lender in respect of the Tax and Insurance Escrow Fund in accordance with the terms and conditions of Section 7.2 hereof;

(ii) Second, payment to Lender in respect of the Replacement Reserve Fund in accordance with the terms and conditions of Section 7.3 hereof;

(iii) Third, payment to Borrowers of an amount sufficient to pay the monthly Operating Expenses, including base management fees payable to any Manager but excluding incentive management fees payable to any Manager, and Capital Expenditures, in each instance as requested by Borrower in a written request (each, an “Operating Expense Request”) delivered to Lender no later than three (3) Business Days prior to such Payment Date (which shall not include (A) Taxes and Insurance Premiums to be paid for out of the Tax and Insurance Escrow Funds, and (B) Operating Expenses, Capital Expenditures and/or other expenses to be paid for out of any Reserve Funds); provided, however, that in no event shall the amount requested by Borrowers in any Operating Expense Request exceed the sum of (I) the monthly Operating Expenses and Capital Expenditures for the applicable month set forth in the Approved Annual Budget then in effect, plus, (II) if applicable, any Operating Expense Surplus(es) (or any remaining portion thereof that has not yet been applied to any prior Operating Expense Request) existing on such Payment Date;

(iv) Fourth, payment to Borrowers for Extraordinary Expenses approved by Lender, if any;

(v) Fifth, on the first Payment Date in each calendar quarter, payment to the Administrative Agent of the Administrative Agent Fee then due and payable;

(vi) Sixth, payment to Lender of the Unused Advance Fee then due and payable, if any;

(vii) Seventh, payment to Lender of the Reduced Acquisition Loan Monthly Interest Payment calculated at the Applicable Interest Rate and the Construction Loan Monthly Interest Payment computed at the Applicable Interest Rate;

(viii) Eighth, payment to Lender of (or reimbursement of Lender for) any 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;

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pursuant to the Intercreditor Agreement by First Mezzanine Lender to Lender at least five (5) days prior to such Payment Date, to be applied in accordance with the terms of the First Mezzanine Loan Documents;

(x) Tenth, a transfer by Lender to the Second Mezzanine Cash Management Account in the amount of the Second Mezzanine Monthly Interest Payment indicated in the then most recent written payment notice letter delivered pursuant to the Intercreditor Agreement by Second Mezzanine Lender to Lender at least five (5) days prior to such Payment Date, to be applied in accordance with the terms of the Second Mezzanine Loan Documents;

(xi) Eleventh, a transfer by Lender to the Third Mezzanine Cash Management Account in the amount of the Third Mezzanine Monthly Interest Payment indicated in the then most recent written payment notice letter delivered pursuant to the Intercreditor Agreement by Third Mezzanine Lender to Lender at least five (5) days prior to such Payment Date, to be applied in accordance with the terms of the Third Mezzanine Loan Documents;

(xii) Twelfth, payment to Lender in respect of the Interest Reserve Fund until the Minimum Balance has been reached;

(xiii) Thirteenth, payment to Lender in respect of the Interest Reserve Fund until the Targeted Minimum Balance has been reached;

(xiv) Fourteenth, payment to Borrowers of any incentive management fees payable to any Manager (the aggregate sum of the amounts required to fully fund items (i) through (xiii) above and this item (xiv), collectively, the “Aggregate Monthly Amount”; and such amounts as remain after application to fully fund the Aggregate Monthly Amount, the “Excess Cash Flow”); and

(xv) Fifteenth, as applicable, either (A) if the General Reserve Excess Cash Conditions are not then satisfied and the Excess Cash Release Date has not occurred, payment to Lender of all Excess Cash Flow for deposit into the Interest Reserve Fund, or (B) if the General Reserve Excess Cash Conditions are then satisfied but the Excess Cash Release Date has not occurred, payment to Lender of all Excess Cash Flow for deposit into the General Reserve Account, or (C) from and after the Excess Cash Release Date, all amounts remaining in the Cash Management Account after the application of the amounts required for the payments set forth above shall be remitted to Borrowers.

(c) Notwithstanding the provisions of Section 2.6.2(b) hereof, but subject to the provisions of Section 2.6.2(d) hereof, in the event that Borrowers shall construct the Project, from and after the earlier to occur of (i) the Payment Date as of which the interest Line Item has been fully advanced, or (ii) the Payment Date as of which the Excess Cash Termination Conditions have been satisfied, and 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

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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 Borrowers 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), (ii), (iii) and (iv) 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 Borrowers until such time, if ever, during such Interest Period as the total amounts that will be due on the next Payment Date under clause (v) and (vi) 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 (v) and/or (vi) below:

(i) First, payments to Lender in respect of the Tax and Insurance Escrow Fund in accordance with the terms and conditions of Section 7.2 hereof;

(ii) Second, payment to Lender of the Reduced Acquisition Loan Monthly Interest Payment calculated at the Applicable Interest Rate and the Construction Loan Monthly Interest Payment computed at the Applicable Interest Rate;

(iii) Third, payment to Lender of (or reimbursement of Lender for) any 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;

(iv) Fourth, payment to Lender in respect of the Replacement Reserve Fund in accordance with the terms and conditions of Section 7.3 hereof;

(v) Fifth, payment to Borrowers of an amount sufficient to pay the monthly Operating Expenses, including base management fees payable to any Manager but excluding incentive management fees payable to any Manager, and Capital Expenditures, in each instance as requested by Borrower in an Operating Expense Request delivered to the Servicer (with a copy to Lender) no later than three (3) Business Days prior to such Payment Date (which shall not include (A) Taxes and Insurance Premiums to be paid for out of the Tax and Insurance Escrow Funds, and (B) Operating Expenses, Capital Expenditures and/or other expenses to be paid for out of any Reserve Funds); provided, however, that in no event shall the amount requested by Borrowers in any Operating Expense Request exceed the sum of (I) the monthly Operating Expenses and Capital Expenditures for the applicable month set forth in the Approved Annual Budget then in effect, plus (II) if applicable, any Operating Expense Surplus(es) (or any remaining portion thereof that has not yet been applied to any prior Operating Expense Request) existing on such Payment Date;

(vi) Sixth, payment to Borrowers for Extraordinary Expenses approved by Lender, if any;

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(vii) Seventh, on the first Payment Date in each calendar quarter, payment to the Administrative Agent of the Administrative Agent Fee then due and payable, if any;

(viii) Eighth, payment to Lender of the Unused Advance Fee then due and payable, if any;

(ix) Ninth, a transfer by Lender to the First Mezzanine Cash Management Account in the amount of the First Mezzanine Monthly Interest Payment indicated in the then most recent written payment notice letter delivered pursuant to the Intercreditor Agreement by First Mezzanine Lender to Lender at least five (5) days prior to such Payment Date, to be applied in accordance with the terms of the First Mezzanine Loan Documents;

(xii) Twelfth, payment to Lender in respect of the Interest Reserve Fund until the Minimum Balance has been reached;

(xiii) Thirteenth, payment to Lender in respect of the Interest Reserve Fund until the Targeted Minimum Balance has been reached;

(xiv) Fourteenth, payment to Borrowers of any incentive management fees payable to any Manager; and

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(d) Notwithstanding anything to the contrary set forth in Section 2.6.2(b) or 2.6.2(c) hereof, if and when Gaming Borrower shall become the Gaming Operator in accordance with the terms of this Agreement, on each Payment Date, provided that no Event of Default shall have occurred and be continuing, the first disbursement that shall be made from the Cash Management Account, prior to the disbursement required pursuant to Section 2.6.2(b)(i) or 2.6.2(c)(i) hereof, as applicable, shall be a transfer of funds into the Casino Account (i) in an amount equal to any incremental increase in the amount of the Gaming Liquidity Requirement that is required to be maintained by Gaming Borrower under applicable Gaming Laws in the Casino Account as a result of any increase in gaming business at the Casino Component or due to any change in the applicable requirements under Gaming Laws generally, and/or (ii) in an amount equal to any incremental increase in the among of the Gaming Operating Reserve required under the Gaming Laws, in each of the foregoing instances, as set forth in the applicable Monthly Gaming Requirement Certificate.

(e) Subject to Sections 2.6.3, 3.20.1, 3.20.2 and 7.4.2 hereof, the insufficiency of funds on deposit in the Cash Management Account shall not relieve Borrowers 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 (xii), inclusive, in Section 2.6.2(b) or 2.6.2(c) hereof, as applicable, and such obligations shall be separate and independent, and not conditioned on any event or circumstance whatsoever.

(f) 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, pro rata between the Components in accordance with the Component Percentages (as calculated as of the date of such prepayment), and applied to each Component 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 (i) First Mezzanine Lender for application in accordance with the terms of the First Mezzanine Loan Documents if the First Mezzanine Debt (or any portion thereof) is then outstanding, until the First Mezzanine Debt is paid in full, and then (ii) Second Mezzanine Lender for application in accordance with the terms of the Second Mezzanine Loan Documents if the Second Mezzanine Debt (or any portion thereof) is then outstanding, until the Second Mezzanine Debt is paid in full, and then (iii) Third Mezzanine Lender for application in accordance with the terms of the Third Mezzanine Loan Documents if the Third Mezzanine Debt (or any portion thereof) is then outstanding, until the Third Mezzanine Debt is paid in full, and then (iv) any balance to Borrowers. Borrowers and Lender hereby agree and acknowledge that if (A) all of the Obligations have been satisfied, (B) there are funds remaining in any of the Reserve Funds, and (C) the First Mezzanine Debt (or any portion thereof) is outstanding, then Lender will not pay any such remaining funds in any of the Reserve Funds to Borrowers, but rather shall deliver such funds to First Mezzanine Lender to be held and applied in accordance with the terms of the First Mezzanine Loan Documents until the First Mezzanine Debt is paid in full, and then deliver any remaining funds to Second Mezzanine Lender to be applied in accordance with the Second Mezzanine Loan Documents, until the Second Mezzanine Debt is paid in full, and then deliver any remaining funds to Third Mezzanine Lender to be applied in accordance with the Third Mezzanine Loan Documents, until the Third Mezzanine Debt is paid in full, with any balance delivered to Borrowers.

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(g) Transfers of Borrowers’ funds from any of the Reserve Funds or any other source to or for the benefit of any First Mezzanine Borrower(s) or any Second Mezzanine Borrower(s) or any Third Mezzanine Borrower(s) shall constitute distributions to such First Mezzanine Borrower(s), and deemed distributions by such First Mezzanine Borrower(s) to such Second Mezzanine Borrower(s), or by such First Mezzanine Borrower(s) to such Second Mezzanine Borrower(s) to such Third Mezzanine Borrower(s), as applicable, and, in each case, must comply with the requirements as to distributions in the Delaware Limited Liability Company Act. The provisions of this Agreement, the Cash Management Agreement and the other Loan Documents shall not create a debtor-creditor relationship between any Borrower and First Mezzanine Lender, Second Mezzanine Lender and/or Third Mezzanine Lender.

2.6.3 Payments Received Under the Cash Management Agreement. Notwithstanding anything to the contrary contained in this Agreement and the other Loan Documents, and provided no Event of Default has occurred and is continuing, Borrowers’ obligations with respect to amounts due for the Tax and Insurance Escrow Fund, the Replacement Reserve Fund and any other payment reserves established pursuant to this Agreement or any other Loan Document shall be deemed satisfied to the extent sufficient amounts (together with any amounts paid by or on behalf of Borrowers) are deposited in the Cash Management Account established pursuant to the Cash Management Agreement to satisfy such obligations on the dates each such payment is required, regardless of whether any of such amounts are so applied by Lender. Provided that sufficient funds are on deposit in the Tax and Insurance Escrow Fund, Lender shall be responsible for any penalty or interest resulting from a failure to pay Taxes or Insurance Premiums when due.

2.6.4 Financial Determination Dates. Borrowers shall provide evidence to Lender of (i) the Debt Service Coverage Ratio for the Properties, and (ii) for purposes of determining whether the General Reserve Excess Cash Conditions have been satisfied, the results of operations at the Properties for the preceding calendar month, within thirty (30) days after the end of each calendar month (the “Financial Determination Date”). All calculations of Debt Service Coverage Ratio and results of operations shall be subject to verification by Lender.

Section 2.7 Extensions of the Initial Maturity Date.

2.7.1 Non-Qualified Extensions. As provided in this Section 2.7.1, in the event the Qualification Conditions have not been satisfied on or prior to the Construction Qualification Date, Borrowers shall have the option (each, a “Non-Qualified Extension Option”) to extend the term of the Loan beyond the Non-Qualified Initial Maturity Date for two (2) successive terms (each, a “Non-Qualified Extension Term”) of one (1) year each (the Non-Qualified Initial Maturity Date following the exercise of each Non-Qualified Extension Option being the “Non-Qualified Extended Maturity Date”).

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

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

(i) no monetary Default, Event of Default, monetary First Mezzanine Default, First Mezzanine Event of Default, monetary Second Mezzanine Default, Second Mezzanine Event of Default, monetary Third Mezzanine Default or Third Mezzanine Event of Default shall have occurred and be continuing at the time the First Non-Qualified Extension Option is exercised or on the date that the First Non-Qualified Extension Term commences;

(ii) Borrowers shall notify Lender of their irrevocable election to exercise the First Non-Qualified Extension Option not earlier than six (6) months, and not later than thirty (30) days, prior to the Non-Qualified Initial Maturity Date;

(iii) if any Interest Rate Cap Agreement is scheduled to mature prior to the First Non-Qualified Extended Maturity Date, Borrowers shall obtain and deliver to Lender not later than one (1) Business Day immediately preceding the first day of the First Non-Qualified Extension Term, one or more Replacement Interest Rate Cap Agreements (or extension(s) of the existing Interest Rate Cap Agreement(s)) from an Acceptable Counterparty, which Replacement Interest Rate Cap Agreement(s) (or extension(s) of the existing Interest Rate Cap Agreement(s)) shall (i) be effective commencing on the first day of the First Non-Qualified 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 Non-Qualified Extended Maturity Date;

(iv) not later than one (1) Business Day immediately preceding the first day of the First Non-Qualified 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;

(v) not later than one (1) Business Day immediately preceding the first day of the First Non-Qualified Extension Term, Borrowers shall have deposited with Lender in immediately available funds, for deposit by Lender into the Interest Reserve Account, an amount equal to the Extension Interest Shortfall with respect to the First Non-Qualified Extension Term, if any, 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 7.4 hereof;

(vi) not later than one (1) Business Day immediately preceding the first day of the First Non-Qualified Extension Term, Borrowers shall have deposited with Lender in immediately available funds, for deposit by Lender into the applicable Reserve Fund(s), any shortfalls in such Reserve Fund(s) with respect to the First Non-Qualified Extension Term, if any, as reasonably estimated and underwritten by Lender based on (A) the Approved Annual Budget then in effect

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and (B) underwriting criteria consistent with that used by Lender to determine the amount of the deposit to the applicable Reserve Fund(s) on the Closing Date (and throughout the term of the Loan), which amount thereafter shall constitute a part of the applicable Reserve Fund(s) and shall be held and disbursed by Lender as set forth in Article VII hereof;

(vii) not later than one (1) Business Day immediately preceding the first day of the First Non-Qualified Extension Term, Borrowers shall have deposited with Lender in immediately available funds, for deposit by Lender into one or more new Reserve Funds, such other reserves as Lender shall reasonably require in order to cover reasonably anticipated Operating Expense shortfalls during the First Non-Qualified Extension Term, if any, which amount thereafter shall constitute a part of the Reserve Funds and shall be held and disbursed by Lender as set forth in Article VII hereof and/or in an amendment to this Agreement reasonably negotiated and executed by Borrowers and Lender at such time and as a condition to the exercise of the First Non-Qualified Extension Option;

(viii) the maturity date of the First Mezzanine Loan, if the First Mezzanine Loan is then outstanding, shall be extended to not earlier than the First Non-Qualified Extended Maturity Date on the same terms and conditions as in effect on the date hereof;

(ix) the maturity date of the Second Mezzanine Loan, if the Second Mezzanine Loan is then outstanding, shall be extended to not earlier than the First Non-Qualified Extended Maturity Date on the same terms and conditions as in effect on the date hereof;

(x) the maturity date of the Third Mezzanine Loan, if the Third Mezzanine Loan is then outstanding, shall be extended to not earlier than the First Non-Qualified Extended Maturity Date on the same terms and conditions as in effect on the date hereof;

(xi) the Debt Yield immediately preceding the commencement of the First Non-Qualified Extension Term shall be equal to or greater than 10.25%; and

(xii) Borrowers 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 Borrowers be required to pay any such fees, costs or expenses in excess of Five Thousand Dollars ($5,000).

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

(i) no monetary Default, Event of Default, monetary First Mezzanine Default, First Mezzanine Event of Default, monetary Second Mezzanine Default, Second Mezzanine Event of Default, monetary Third Mezzanine Default or Third Mezzanine Event of Default shall have occurred and be continuing at the time the Second Non-Qualified Extension Option is exercised or on the date that the Second Non-Qualified Extension Term commences;

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(ii) Borrowers shall notify Lender of their irrevocable election to exercise the Second Non-Qualified Extension Option not earlier than six (6) months, and not later than thirty (30) days, prior to the First Non-Qualified Extended Maturity Date;

(iii) if any Interest Rate Cap Agreement is scheduled to mature prior to the Second Non-Qualified Extended Maturity Date, Borrowers shall obtain and deliver to Lender not later than one (1) Business Day immediately preceding the first day of the Second Non-Qualified Extension Term, one or more Replacement Interest Rate Cap Agreements (or extension(s) of the existing Interest Rate Cap Agreement(s)) from an Acceptable Counterparty, which Replacement Interest Rate Cap Agreement(s) (or extension(s) of the existing Interest Rate Cap Agreement(s)) shall (i) be effective commencing on the first day of the Second Non-Qualified 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 Non-Qualified Extended Maturity Date;

(iv) not later than one (1) Business Day immediately preceding the first day of the Second Non-Qualified 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;

(v) not later than one (1) Business Day immediately preceding the first day of the Second Non-Qualified Extension Term, Borrowers shall have deposited with Lender in immediately available funds, for deposit by Lender into the Interest Reserve Account, an amount equal to the Extension Interest Shortfall with respect to the Second Non-Qualified Extension Term, if any, 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 7.4 hereof;

(vi) not later than one (1) Business Day immediately preceding the first day of the Second Non-Qualified Extension Term, Borrowers shall have deposited with Lender in immediately available funds, for deposit by Lender into the applicable Reserve Fund(s), any shortfalls in such Reserve Fund(s) with respect to the Second Non-Qualified Extension Term, if any, as reasonably estimated and underwritten by Lender based on (A) the Approved Annual Budget

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then in effect and (B) underwriting criteria consistent with that used by Lender to determine the amount of the deposit to the applicable Reserve Fund(s) on the Closing Date (and throughout the term of the Loan), which amount thereafter shall constitute a part of the applicable Reserve Fund(s) and shall be held and disbursed by Lender as set forth in Article VII hereof;

(vii) not later than one (1) Business Day immediately preceding the first day of the Second Non-Qualified Extension Term, Borrowers shall have deposited with Lender in immediately available funds, for deposit by Lender into one or more new Reserve Funds, such other reserves as Lender shall reasonably require in order to cover reasonably anticipated Operating Expense shortfalls during the Second Non-Qualified Extension Term, if any, which amount thereafter shall constitute a part of the Reserve Funds and shall be held and disbursed by Lender as set forth in Article VII hereof and/or in an amendment to this Agreement reasonably negotiated and executed by Borrowers and Lender at such time and as a condition to the exercise of the Second Non-Qualified Extension Option;

(viii) the maturity date of the First Mezzanine Loan, if the First Mezzanine Loan is then outstanding, shall be extended to not earlier than the Second Non-Qualified Extended Maturity Date on the same terms and conditions as in effect on the date hereof;

(ix) the maturity date of the Second Mezzanine Loan, if the Second Mezzanine Loan is then outstanding, shall be extended to not earlier than the Second Non-Qualified Extended Maturity Date on the same terms and conditions as in effect on the date hereof;

(x) the maturity date of the Third Mezzanine Loan, if the Third Mezzanine Loan is then outstanding, shall be extended to not earlier than the Second Non-Qualified Extended Maturity Date on the same terms and conditions as in effect on the date hereof;

(xi) the Debt Yield immediately preceding the commencement of the Second Non-Qualified Extension Term shall be equal to or greater than 11.25%; and

2.7.2 Qualified Extensions. As provided in this Section 2.7.2, in the event the Qualification Conditions have been satisfied on or prior to the Construction Qualification Date, Borrowers shall have the option (each, a “Qualified Extension Option”) to extend the term of the Loan beyond the Qualified Initial Maturity Date for two (2) successive terms (each, a

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“Qualified Extension Term”) of one (1) year each (the Qualified Initial Maturity Date following the exercise of each Qualified Extension Option being the “Qualified Extended Maturity Date”).

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

(i) no monetary Default, Event of Default, monetary First Mezzanine Default, First Mezzanine Event of Default, monetary Second Mezzanine Default, Second Mezzanine Event of Default, monetary Third Mezzanine Default or Third Mezzanine Event of Default shall have occurred and be continuing at the time the First Qualified Extension Option is exercised or on the date that the First Qualified Extension Term commences;

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

(iii) if any Interest Rate Cap Agreement is scheduled to mature prior to the First Qualified Extended Maturity Date, Borrowers shall obtain and deliver to Lender not later than one (1) Business Day immediately preceding the first day of the First Qualified Extension Term, one or more Replacement Interest Rate Cap Agreements (or extension(s) of the existing Interest Rate Cap Agreement(s)) from an Acceptable Counterparty, which Replacement Interest Rate Cap Agreement(s) (or extension(s) of the existing Interest Rate Cap Agreement(s)) shall (i) be effective commencing on the first day of the First Qualified 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 Qualified Extended Maturity Date;

(iv) not later than one (1) Business Day immediately preceding the first day of the First Qualified 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;

(v) not later than one (1) Business Day immediately preceding the first day of the First Qualified Extension Term, Borrowers shall have deposited with Lender in immediately available funds, for deposit by Lender into the Interest Reserve Account, an amount equal to the Extension Interest Shortfall with respect to the First Qualified Extension Term, if any, 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 7.4 hereof;

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(vi) not later than one (1) Business Day immediately preceding the first day of the First Qualified Extension Term, Borrowers shall have deposited with Lender in immediately available funds, for deposit by Lender into the applicable Reserve Fund(s), any shortfalls in such Reserve Fund(s) with respect to the First Qualified Extension Term, if any, as reasonably estimated and underwritten by Lender based on (A) the Approved Annual Budget then in effect and (B) underwriting criteria consistent with that used by Lender to determine the amount of the deposit to the applicable Reserve Fund(s) on the Closing Date (and throughout the term of the Loan), which amount thereafter shall constitute a part of the applicable Reserve Fund(s) and shall be held and disbursed by Lender as set forth in Article VII hereof;

(vii) not later than one (1) Business Day immediately preceding the first day of the First Qualified Extension Term, Borrowers shall have deposited with Lender in immediately available funds, for deposit by Lender into one or more new Reserve Funds, such other reserves as Lender shall reasonably require in order to cover reasonably anticipated Operating Expense shortfalls during the First Qualified Extension Term, if any, which amount thereafter shall constitute a part of the Reserve Funds and shall be held and disbursed by Lender as set forth in Article VII hereof and/or in an amendment to this Agreement reasonably negotiated and executed by Borrowers and Lender at such time and as a condition to the exercise of the First Qualified Extension Option;

(viii) the maturity date of the First Mezzanine Loan, if the First Mezzanine Loan is then outstanding, shall be extended to not earlier than the First Qualified Extended Maturity Date on the same terms and conditions as in effect on the date hereof;

(ix) the maturity date of the Second Mezzanine Loan, if the Second Mezzanine Loan is then outstanding, shall be extended to not earlier than the First Qualified Extended Maturity Date on the same terms and conditions as in effect on the date hereof;

(x) the maturity date of the Third Mezzanine Loan, if the Third Mezzanine Loan is then outstanding, shall be extended to not earlier than the First Qualified Extended Maturity Date on the same terms and conditions as in effect on the date hereof;

(xi) there shall exist no Shortfall as of the Business Day immediately preceding the first day of the First Qualified Extension Term; and

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

(i) no monetary Default, Event of Default, monetary First Mezzanine Default, First Mezzanine Event of Default, monetary Second Mezzanine Default, Second Mezzanine Event of Default, monetary Third Mezzanine Default or Third Mezzanine Event of Default shall have occurred and be continuing at the time the Second Qualified Extension Option is exercised or on the date that the Second Qualified Extension Term commences;

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

(iii) if any Interest Rate Cap Agreement is scheduled to mature prior to the Second Qualified Extended Maturity Date, Borrowers shall obtain and deliver to Lender not later than one (1) Business Day immediately preceding the first day of the Second Qualified Extension Term, one or more Replacement Interest Rate Cap Agreements (or extension(s) of the existing Interest Rate Cap Agreement(s)) from an Acceptable Counterparty, which Replacement Interest Rate Cap Agreement(s) (or extension(s) of the existing Interest Rate Cap Agreement(s)) shall (i) be effective commencing on the first day of the Second Qualified 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 Qualified Extended Maturity Date;

(iv) not later than one (1) Business Day immediately preceding the first day of the Second Qualified 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;

(v) not later than one (1) Business Day immediately preceding the first day of the Second Qualified Extension Term, Borrowers shall have deposited with Lender in immediately available funds, for deposit by Lender into the Interest Reserve Account, an amount equal to the Extension Interest Shortfall with respect to the Second Qualified Extension Term, if any, 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 7.4 hereof;

(vi) not later than one (1) Business Day immediately preceding the first day of the Second Qualified Extension Term, Borrowers shall have deposited with

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Lender in immediately available funds, for deposit by Lender into the applicable Reserve Fund(s), any shortfalls in such Reserve Fund(s) with respect to the Second Qualified Extension Term, if any, as reasonably estimated and underwritten by Lender based on (A) the Approved Annual Budget then in effect and (B) underwriting criteria consistent with that used by Lender to determine the amount of the deposit to the applicable Reserve Fund(s) on the Closing Date (and throughout the term of the Loan), which amount thereafter shall constitute a part of the applicable Reserve Fund(s) and shall be held and disbursed by Lender as set forth in Article VII hereof;

(vii) not later than one (1) Business Day immediately preceding the first day of the Second Qualified Extension Term, Borrowers shall have deposited with Lender in immediately available funds, for deposit by Lender into one or more new Reserve Funds, such other reserves as Lender shall reasonably require in order to cover reasonably anticipated Operating Expense shortfalls during the Second Qualified Extension Term, if any, which amount thereafter shall constitute a part of the Reserve Funds and shall be held and disbursed by Lender as set forth in Article VII hereof and/or in an amendment to this Agreement reasonably negotiated and executed by Borrowers and Lender at such time and as a condition to the exercise of the Second Qualified Extension Option;

(viii) the maturity date of the First Mezzanine Loan, if the First Mezzanine Loan is then outstanding, shall be extended to not earlier than the Second Qualified Extended Maturity Date on the same terms and conditions as in effect on the date hereof;

(ix) the maturity date of the Second Mezzanine Loan, if the Second Mezzanine Loan is then outstanding, shall be extended to not earlier than the Second Qualified Extended Maturity Date on the same terms and conditions as in effect on the date hereof;

(x) the maturity date of the Third Mezzanine Loan, if the Third Mezzanine Loan is then outstanding, shall be extended to not earlier than the Second Qualified Extended Maturity Date on the same terms and conditions as in effect on the date hereof;

(xi) there shall exist no Shortfall as of the Business Day immediately preceding the first day of the Second Qualified Extension Term;

(xii) the Debt Yield immediately preceding the commencement of the Second Qualified Extension Term shall be equal to or greater than 13%;

(xiii) Borrowers shall have paid to Lender an extension fee equal to one-quarter of one percent (0.25%) of the Outstanding Principal Balance not later than one (1) Business Day immediately preceding the first day of the Second Qualified Extension Term; and

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(xiv) Borrowers 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 Borrowers be required to pay any such fees, costs or expenses in excess of Five Thousand Dollars ($5,000).

2.7.3 Achieving Required Debt Yields.

(a) Lender hereby acknowledges and agrees that nothing herein contained shall prohibit Borrowers, in accordance with the provisions of Section 2.4.1 hereof, and provided that no Event of Default, First Mezzanine Event of Default, Second Mezzanine Event of Default or Third Mezzanine Event of Default shall have occurred and be continuing, from satisfying any Debt Yield requirement set forth in Section 2.7.1 or 2.7.2 hereof by partially prepaying the Loan, the First Mezzanine Loan, the Second Mezzanine Loan and the Third Mezzanine Loan prior to the commencement of the First Non-Qualified Extension Term, the Second Non-Qualified Extension Term or the Second Qualified Extension Term, as applicable, which prepayment shall be applied in accordance with Section 2.4.3(a) hereof.

(b) Without limiting the generality of the foregoing Section 2.7.3(a), Borrowers shall also have the right to satisfy any Debt Yield requirement set forth in Section 2.7.1 or 2.7.2 hereof by delivering to Lender a Letter of Credit in an amount equal to the principal repayment of the Aggregate Outstanding Principal Balance that would be required in order to achieve the applicable required Debt Yield (each, a “Debt Yield Letter of Credit”). If Borrowers elect to deliver any Debt Yield Letter of Credit, the following shall apply to each such Debt Yield Letter of Credit:

(i) Borrowers shall pay to Lender all of Lender’s reasonable out-of-pocket costs and expenses in connection therewith, including, without limitation, any costs or expenses incurred in drawing down on such Debt Yield Letter of Credit. Borrowers shall not be entitled to draw from any such Debt Yield Letter of Credit. Upon five (5) days notice to Lender and provided that no Event of Default, First Mezzanine Event of Default, Second Mezzanine Event of Default or Third Mezzanine Event of Default shall have occurred and be continuing, Borrowers may replace such Debt Yield Letter of Credit with a partial prepayment of the Loan, the First Mezzanine Loan, the Second Mezzanine Loan and the Third Mezzanine Loan in an aggregate amount equal to such Debt Yield Letter of Credit, which prepayment shall be applied in accordance with Section 2.4.3(a) hereof, following which prepayment, Lender shall promptly return such Debt Yield Letter of Credit to Borrowers.

(ii) Each Debt Yield Letter of Credit delivered under this Agreement shall be additional security for the payment of the Debt. Upon the occurrence and during the continuance of an Event of Default, Lender shall have the right, at its option, to draw on any Debt Yield Letter of Credit and to apply all or any part thereof in accordance with the provisions of Section 2.4.3(a) hereof applicable to a prepayment following the occurrence and during the continuance of an Event of Default.

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(iii) In addition to any other right Lender may have to draw upon a Debt Yield Letter of Credit pursuant to the terms and conditions of this Agreement, Lender shall have the additional rights to draw in full on any Debt Yield Letter of Credit: (A) with respect to any evergreen Debt Yield Letter of Credit, if Lender has received a notice from the issuing bank that such Debt Yield Letter of Credit will not be renewed and a substitute Debt Yield Letter of Credit is not provided at least ten (10) Business Days prior to the date on which the outstanding Debt Yield Letter of Credit is scheduled to expire; (B) with respect to any Debt Yield Letter of Credit with a stated expiration date, if Lender has not received a notice from the issuing bank that it has renewed such Debt Yield Letter of Credit at least ten (10) Business Days prior to the date on which such Debt Yield Letter of Credit is scheduled to expire and a substitute Debt Yield Letter of Credit is not provided at least ten (10) Business Days prior to the date on which the outstanding Debt Yield Letter of Credit is scheduled to expire; (C) upon receipt of notice from the issuing bank that such Debt Yield Letter of Credit will be terminated and a substitute Debt Yield Letter of Credit is not provided at least ten (10) Business Days prior to the date on which the outstanding Debt Yield Letter of Credit is scheduled to be terminated; or (D) if Lender has received notice that the bank issuing any Debt Yield Letter of Credit shall cease to be an Eligible Institution and within ten (10) Business Days after Lender notifies Borrowers in writing of such circumstance, Borrowers shall fail to deliver to Lender a substitute Debt Yield Letter of Credit issued by an Eligible Institution. Notwithstanding anything to the contrary contained in the above, Lender is not obligated to draw upon any Debt Yield Letter of Credit upon the happening of an event specified in clause (A), (B), (C) or (D) above and shall not be liable for any losses sustained by Borrowers due to the insolvency of the bank issuing any such Debt Yield Letter of Credit if Lender has not drawn upon such Debt Yield Letter of Credit.

Section 2.8 Exit Fee.

(a) In all events and under all circumstances, except as set forth in subsection (b) below, Borrowers shall be obligated to pay to Lender an exit fee (the “Exit Fee”) in an amount equal to $1,395,000,000.00 multiplied by the Applicable Exit Fee Percentage, which amount shall be payable as follows: (i) subject to the following clause (ii), upon any (and each) partial prepayment of the Loan, the First Mezzanine Loan, the Second Mezzanine Loan and/or the Third Mezzanine Loan in accordance with the terms hereof, excluding, however, the Mezzanine Prepayments, the Quarterly Deficiency Relinquishment Prepayment, if applicable, and any prepayment with the proceeds of any Minimum Mandatory Prepayment (or any partial payment on account thereof), Non-Qualified Mandatory Prepayment, Additional Non-Qualified Mandatory Prepayment, Release Parcel Release Price, Adjacent Parcel Release Price and/or IP Release Price, if applicable, in addition to all other amounts payable to Lender under Section 2.4 hereof, Borrowers shall pay to Lender, on account of the Exit Fee, an amount equal to one percent (1%) of the amount so prepaid; (ii) upon any (and each) application of any Net Proceeds to the Debt in accordance with the terms of this Agreement, one percent (1%) of the amount thereof shall be retained by Lender on account of the Exit Fee and the balance thereof shall be applied to the Debt; and (iii) upon repayment in full of the Debt or the acceleration thereof in accordance with the terms of any of the Loan Documents, Borrowers shall pay to Lender the

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entire Exit Fee, calculated at the Applicable Exit Fee Percentage, less any amounts on account thereof previously paid to Lender under the foregoing clauses (i) and/or (ii) of this Section 2.8; provided, however, that if, upon the repayment in full of the Debt, the Applicable Exit Fee Percentage is one-half of one percent (0.50%) rather than one percent (1%), then Borrowers will receive a credit against the portion of the Exit Fee then due to make up for any overpayment on account of the Exit Fee under the foregoing clauses (i) and/or (ii) by virtue of having applied a one percent (1%) Applicable Exit Fee Percentage. In furtherance of the foregoing, each Borrower expressly acknowledges and agrees that (A) Lender shall have no obligation to accept any prepayment of the Loan, other than the Mezzanine Prepayments, the Quarterly Deficiency Relinquishment Prepayment, if applicable, and any prepayment with the proceeds of any Minimum Mandatory Prepayment (or any partial payment on account thereof), Non-Qualified Mandatory Prepayment, Additional Non-Qualified Mandatory Prepayment, Release Parcel Release Price, Adjacent Parcel Release Price and/or IP Release Price, if applicable, unless and until Borrowers shall have complied with this Section 2.8, and (B) Lender shall have no obligation to release any Loan Document upon payment of the Debt unless and until Lender shall have received the entire Exit Fee.

(b) Notwithstanding the foregoing subsection (a) of this Section 2.8, Lender expressly acknowledges and agrees that no Exit Fee shall ever be due to Lender with respect to the Mezzanine Prepayments, the Quarterly Deficiency Relinquishment Prepayment, if applicable, or any prepayment with the proceeds of any Minimum Mandatory Prepayment (or any partial payment on account thereof), Non-Qualified Mandatory Prepayment, Additional Non-Qualified Mandatory Prepayment, Release Parcel Release Price, Adjacent Parcel Release Price and/or IP Release Price, if applicable.

(c) Each Borrower expressly acknowledges and agrees that the Exit Fee (i) shall constitute additional consideration for the Loan, and (ii) shall, upon payment, be the sole and exclusive property of Lender.

Section 2.9 Unused Advance Fee. Unless Borrowers shall send a Relinquishment Notice in accordance with the terms hereof or a Deemed Relinquishment shall occur in accordance with the terms hereof, on each Payment Date Borrowers shall pay the following fee to Lender (whichever of the following applies at any given time, the “Unused Advance Fee”): (a) on each Payment Date commencing with the Closing Date and ending with the Payment Date on which the Initial Construction Loan Advance is advanced or the next Payment Date if the Initial Construction Loan Advance is advanced on a day other than a Payment Date, Borrowers shall pay to Lender a fee equal to the product of (i) one-fifth of one percent (0.20)% per annum multiplied by (ii) the then applicable Construction Loan Amount; and (b) on each Payment Date thereafter, Borrowers shall pay to Lender a fee equal to the product of (i) one-quarter of one percent (0.25%) per annum multiplied by (ii) the difference between (A) the then applicable Construction Loan Amount less (B) the aggregate amount of all Construction Loan Advances actually advanced as of such Payment Date (excluding any Construction Loan Advances made out of the Construction Loan Reserve Account). In the event Borrowers deliver a Relinquishment Notice in accordance with the terms hereof or a Deemed Relinquishment shall occur in accordance with the terms hereof, Borrowers shall continue to pay to Lender the Unused Advance Fee accrued through the Relinquishment Effective Date. The Unused Advance Fee shall be payable on the basis of the applicable annual rate set forth above and shall be calculated

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by multiplying (1) the actual number of days elapsed in the period for which the calculation is being made by (2) a daily rate based on a three hundred sixty (360) day year by (3) the amount set forth in the foregoing clause (a)(ii) or (b)(ii), as applicable.

ARTICLE III.

CONSTRUCTION LOAN.

Section 3.1 Construction Loan Advances.

(a) Subject to Section 3.1(c) hereof, provided no monetary Default or Event of Default shall have occurred and be continuing and subject to the terms and conditions of this Agreement, the Construction Loan shall be advanced to or for the account of Borrowers in Construction Loan Advances made in accordance with Section 3.6 hereof.

(b) Notwithstanding the foregoing, in the event that Borrowers have not satisfied the Qualification Conditions on or prior to the Construction Qualification Date, then all of Borrowers’ rights to request and receive any Construction Loan Advances hereunder shall terminate, Lender shall have no further obligation whatsoever under this Agreement to fund any portion of the Construction Loan to Borrowers and all provisions in this Agreement and the other Loan Documents relating to the Construction Loan shall be deemed deleted herefrom and therefrom.

(c) Notwithstanding the foregoing, provided that Borrowers have not yet received any Construction Loan Advance other than any Pre-Construction Advance, at any time prior to the earlier of (i) the Construction Qualification Date or (ii) the Project Cost Ceiling Date (the earlier to occur of the foregoing clauses (i) or (ii), the “Relinquishment Deadline”), Borrowers shall have the right to send a written notice to Lender (a “Relinquishment Notice”) that they do not desire to proceed with any Construction Loan Advances and will not use any portion of the Construction Loan. Additionally, provided that Borrowers have not yet received any Construction Loan Advance other than any Pre-Construction Advance, on the Relinquishment Deadline, if Borrowers have not previously sent a Relinquishment Notice, Borrowers shall be deemed to have relinquished all future rights to proceed with any Construction Loan Advances and to use any portion of the Construction Loan (a “Deemed Relinquishment”). Upon delivery of a Relinquishment Notice or the occurrence of a Deemed Relinquishment, as applicable, (A) Lender shall have no further obligation to fund any portion of the Construction Loan, and (B) Borrowers shall have no further right to request or obtain any portion of the Construction Loan, including, without limitation, any Pre-Construction Advance. Following the delivery of a Relinquishment Notice or the occurrence of a Deemed Relinquishment, as applicable, the provisions of Section 2.9 hereof shall continue to apply until such time as (1) Borrowers shall pay the Non-Qualified Mandatory Prepayment or Borrowers shall deliver a Non-Qualified Prepayment Letter of Credit to Lender, and (2) Borrowers shall pay to Lender all other applicable Pre-Construction Relinquishment Amounts (the “Relinquishment Effective Date”). At such time as (y) the Relinquishment Effective Date has occurred and (z) the provisions of Section 2.9 hereof have been fully satisfied, all of the terms and conditions of this Agreement and the other Loan Documents relating to advances of the Construction Loan shall be deemed to have terminated and be of no further force or effect.

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Within ten (10) days following Borrowers’ delivery of a Relinquishment Notice or within ten (10) days of the occurrence of a Deemed Relinquishment, as applicable, Borrowers shall deliver to Lender, for deposit into the Interest Reserve Account and thereafter to constitute a portion of the Interest Reserve Fund for all purposes under this Agreement and the other Loan Documents, an amount reasonably determined by Lender that, when added to the then existing Interest Reserve Fund, is sufficient to pay the aggregate amount of (A) Debt Service on the Reduced Acquisition Loan through the Non-Qualified Initial Maturity Date, at an interest rate equal to the Strike Price plus the Reduced Acquisition Loan Spread, (B) Debt Service on the Construction Loan through the Non-Qualified Initial Maturity Date, at an interest rate equal to the Strike Price plus the Construction Loan Spread, (C) debt service on the First Mezzanine Loan through the Non-Qualified Initial Maturity Date, at an interest rate equal to the Strike Price plus the First Mezzanine Spread, (D) debt service on the Second Mezzanine Loan through the Non-Qualified Initial Maturity Date, at an interest rate equal to the Strike Price plus the Second Mezzanine Spread, and (E) debt service on the Third Mezzanine Loan through the Non-Qualified Initial Maturity Date, at an interest rate equal to the Strike Price plus the Third Mezzanine Spread, taking into account the reasonably anticipated Net Cash Flow (and any interruption thereof or adverse impact thereon as a result of restoring the Properties as contemplated by Section 3.18 hereof) for the period following the delivery of the Relinquishment Notice or the occurrence of the Deemed Relinquishment, as applicable, and ending on the Non-Qualified Initial Maturity Date (the foregoing required deposit to the Interest Reserve Account being referred to herein as the “Relinquishment Interest Reserve Deposit”). In furtherance of the foregoing, Lender agrees that Borrowers shall have the right to use any existing portion of the General Reserve Fund to cover the Relinquishment Interest Reserve Deposit or any portion thereof.

(d) Notwithstanding anything to the contrary set forth in this Agreement or the other Loan Documents, in the event that, prior to the Second Anniversary, (i) Borrowers have not sent a Relinquishment Notice in accordance with the terms hereof, (ii) no Deemed Relinquishment has occurred in accordance with the terms hereof, (iii) Borrowers have satisfied the Qualification Conditions on or prior to the Construction Qualification Date, and (iv) Borrowers have not sent a Stop Notice under Section 3.22 hereof, then at any time on or after the Second Anniversary, Lender shall have the right to advance the entire unfunded portion of the Construction Loan (including the entire Construction Loan if no portion thereof has yet been advanced) into the Construction Loan Reserve Account (the “Second Anniversary Unfunded Construction Loan Advance”), following which (i) the unfunded portion of the Construction Loan shall be held in accordance with the provisions of Sections 7.7 and 7.8 hereof and shall constitute a Reserve Fund for all purposes under this Agreement and the other Loan Documents, and (ii) all subsequent Construction Loan Advances (including, without limitation, all Pre-Construction Advances) shall, at Borrowers’ option, either be advanced out of the Construction Loan or be advanced from the Construction Loan Reserve Account until there are no funds remaining on deposit therein, subject, in each instance, to the satisfaction of all conditions to funding with respect thereto set forth in this Agreement (and, even if advanced from the Construction Loan Reserve Account, shall continue to constitute Construction Loan Advances for all purposes under this Agreement (except where specifically excluded) notwithstanding that they are being advanced out of a Reserve Fund).

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(e) Attached hereto and made a part hereof as Schedule XIX is a schedule (the “Minimum Advance Schedule”) setting forth the minimum aggregate amount of the Construction Loan that must be advanced prior to the Payment Date immediately following the last day of each calendar quarter (each such Payment Date, a “Quarter-End Payment Date”), commencing with the calendar quarter ending on September 30, 2007. Notwithstanding anything to the contrary set forth in this Agreement or the other Loan Documents, and provided that (i) Borrowers have not sent a Relinquishment Notice in accordance with the terms hereof, (ii) no Deemed Relinquishment has occurred in accordance with the terms hereof, and (iii) Lender has not made the Second Anniversary Unfunded Construction Loan Advance, in the event that on any Quarter-End Payment Date the aggregate amount of the Construction Loan advanced prior to such Quarter-End Payment Date is less than the amount set forth on the Minimum Advance Schedule with respect to such Quarter-End Payment Date (such deficiency, a “Quarterly Deficiency”), Lender shall have the right on or after such Quarter-End Payment Date to advance the amount of such Quarterly Deficiency out of the Construction Loan into the Construction Loan Reserve Account (a “Quarterly Deficiency Advance”), following which (i) the amount of such Quarterly Deficiency Advance shall be held in accordance with the provisions of Sections 7.7 and 7.8 hereof and shall constitute a Reserve Fund for all purposes under this Agreement and the other Loan Documents, and (ii) all subsequent Construction Loan Advances (including, without limitation, all Pre-Construction Advances, but excluding any subsequent Quarterly Deficiency Advances), shall, at Borrowers’ option, either be advanced out of the Construction Loan or be advanced from the Construction Loan Reserve Account until there are no funds remaining on deposit therein, subject, in each instance, to the satisfaction of all conditions to funding with respect thereto set forth in this Agreement (and, even if advanced from the Construction Loan Reserve Account, shall continue to constitute Construction Loan Advances for all purposes under this Agreement (except where specifically excluded) notwithstanding that they are being advanced out of a Reserve Fund). In the event that Borrowers shall deliver a Relinquishment Notice to Lender in accordance with the terms hereof or a Deemed Relinquishment shall occur in accordance with the terms hereof, Lender shall apply any amounts representing Quarterly Deficiency Advances then on deposit in the Construction Loan Reserve Account as a voluntary prepayment of the Loan in accordance with the provisions of Section 2.4.1 hereof and to be allocated in accordance with Section 2.4.3(i) hereof (a “Quarterly Deficiency Relinquishment Prepayment”); provided, however, that no Spread Maintenance Premium and no Exit Fee shall be due in connection therewith.

(f) All Construction Loan Advances (including the Second Anniversary Unfunded Construction Loan Advance and all Quarterly Deficiency Advances), excluding, however, (i) any subsequent disbursement out of the Construction Loan Reserve Account of funds previously advanced into the Construction Loan Reserve Account pursuant to the Second Anniversary Unfunded Construction Loan Advance as contemplated under Section 3.1(d) hereof, if applicable, (ii) any subsequent disbursement out of the Construction Loan Reserve Account of funds previously advanced into the Construction Loan Reserve Account pursuant to any Quarterly Deficiency Advance as contemplated under Section 3.1(e) hereof, if applicable, and (iii) any subsequent disbursement out of the Construction Loan Reserve Account of the Third Mezzanine Construction Funds previously advanced into the Construction Loan Reserve Account pursuant to Section 3.4.2 of the Third Mezzanine Loan Agreement (the foregoing clauses (i), (ii) and (iii), collectively, the “Subsequent Construction Loan Reserve Disbursements”), shall for all purposes be deemed part of the Outstanding Principal Balance

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(and the Construction Loan Outstanding Principal Balance) upon the making of such Construction Loan Advance by Lender, it being understood and agreed that the Subsequent Construction Loan Reserve Disbursements are not to be deemed included in the Outstanding Principal Balance (and the Construction Loan Outstanding Principal Balance) because (A) in the case of the foregoing clause (i), the entire amount of the Second Anniversary Unfunded Construction Loan Advance was already included in the Outstanding Principal Balance (and the Construction Loan Outstanding Principal Balance) as of the date of its advance into the Construction Loan Reserve Account, (B) in the case of the foregoing clause (ii), the entire amount of each Quarterly Deficiency Advance was already included in the Outstanding Principal Balance (and the Construction Loan Outstanding Principal Balance) as of the date of its advance into the Construction Loan Reserve Account, and (C) in the case of the foregoing clause (iii), the entire amount of the Third Mezzanine Construction Funds was included in the Third Mezzanine Loan Outstanding Principal Balance as of the date of its advance under the Third Mezzanine Loan Agreement.

(g) In no event shall any Construction Loan Advance (excluding the Second Anniversary Unfunded Construction Loan Advance and any Quarterly Deficiency Advances) exceed the full amount of Project Costs theretofore paid or to be paid with the proceeds of such Construction Loan Advance, plus any Project Costs incurred by Borrowers through the date of the Draw Request for such Construction Loan Advance, minus (i) with respect to any Hard Costs, the applicable Retainage for each contract and subcontract, (ii) the aggregate amount of any Construction Loan Advances (excluding the Second Anniversary Unfunded Construction Loan Advance and any Quarterly Deficiency Advances) previously made by Lender, and (iii) any Shortfall payments required to be made by Borrowers pursuant to Section 3.12 hereof. It is further understood that, as between Lender and Borrowers, the Retainage described above is intended to provide a contingency fund protecting Lender against failure of Borrowers or Guarantors to fulfill any obligations under the Loan Documents, and that Lender may charge amounts against such Retainage in the event Lender is required or elects to expend funds to cure any continuing Event of Default.

(h) The Retainage, as applicable, shall be advanced on a contract by contract basis as follows: (i) with respect to Major Contracts which have been previously approved by Lender in accordance with the terms hereof, the Retainage shall be released in accordance with the Retainage release provisions contained therein, it being acknowledged and agreed by Borrowers, however, that Lender’s consent of any such Major Contract may reasonably take into account such Retainage release provisions and their relationship to the progress of the construction work required under such Major Contract, and (ii) with respect to any other contract or subcontract, after final completion of all construction work provided for under such contract or subcontract and pursuant to a Construction Loan Advance made in accordance with the provisions of Sections 3.2, 3.3 and/or 3.4 hereof, as applicable.

(i) No Construction Loan Advance by Lender shall be deemed to be an approval or acceptance by Lender of any work performed thereon or the materials furnished with respect thereto.

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(j) Lender shall not be required to disburse for any category or Line Item more than the amount specified therefor in the Loan Budget, subject to Sections 3.9, 3.10 and 3.15 hereof (or other reallocations approved by Lender in its sole and absolute discretion).

Section 3.2 Conditions Precedent to Initial Construction Loan Advance. Lender’s obligation to make the Initial Construction Loan Advance shall be subject to the satisfaction or Lender’s waiver in writing of the following conditions precedent:

(a) Construction Qualification Date; No Relinquishment. (i) The Construction Qualification Date shall not have occurred; (ii) Borrowers shall not have delivered a Relinquishment Notice to Lender; and (iii) no Deemed Relinquishment shall have occurred.

(b) Construction Documents. Lender shall have approved the Architect’s Contract, the Construction Management Agreement and all other Major Contracts, together with any Change Orders entered into as of the date of the Initial Construction Loan Advance to the extent Lender’s approval is required with respect thereto pursuant to Section 3.15 hereof, which consent shall not be unreasonably withheld.

(c) Disbursement Schedule. Lender and the Construction Consultant shall have received and approved the Disbursement Schedule.

(d) Construction Schedule. Lender and the Construction Consultant shall have received and approved the Construction Schedule.

(e) Loan Budget. Lender and the Construction Consultant shall have received and approved the Loan Budget.

(f) Deliveries. The following items or documents shall have been delivered to Lender:

(i) Three (3) complete sets of the Plans and Specifications in the form approved by Lender and the Construction Consultant and submitted to and approved by those Governmental Authorities charged with issuing the permits delivered pursuant to Section 3.2(f)(x) below.

(ii) An endorsement to the Title Insurance Policy dated the date of such requested Construction Loan Advance and showing the Mortgage as a prior and paramount Lien on each of the Properties, subject only to (A) the Permitted Encumbrances, (B) any other Liens or encumbrances consented to in writing by Lender, and (C) any other Liens which are then being contested in accordance with the provisions of Section 3.6(b) of the Mortgage, and which shall have the effect of increasing the coverage of the Title Insurance Policy by an amount equal to the amount of the Construction Loan Advance then being made, along with co-insurance or reinsurance in such forms and amounts as may be reasonably required by Lender. Any reinsurance agreements shall provide for direct access with the other title companies satisfactory to Lender.

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(iii) Any Policies (or certificates thereof) required by Section 6.1 hereof in connection with the construction of the Project, to the extent not previously delivered.

(iv) Two (2) fully-executed originals of the Construction Completion Guaranty.

(v) The Payment and Performance Bonds; provided, however, that Lender shall, at Borrowers’ request, review the financial statements of any proposed Major Contractor and reasonably consider a request by Borrowers either (A) not to require a Payment and Performance Bond with respect to such Major Contractor, or (B) to accept, in lieu of a Payment and Performance Bond with respect to such Major Contractor, a “Subguard Policy” issued by Zurich North America, together with a financial interest endorsement, all in form and content reasonably acceptable to Lender and subject to limits acceptable to Lender in its sole and absolute discretion.

(vi) A Draw Request complying with the provisions of this Agreement which shall constitute Borrowers’ representation and warranty to Lender that: (A) any completed construction is substantially in accordance with the Plans and Specifications, (B) all costs for the payment of which Lender has previously advanced funds have in fact been paid or are being held by Borrowers pending the resolution of a bonafide dispute with a Trade Contractor; provided, however, that (1) in such event, the Draw Request shall include a description of the dispute, the identity of the Trade Contractor and the maximum amount in dispute, (2) in no event shall Borrowers be holding, in the aggregate at any one time, Construction Loan proceeds of more than $1,500,000.00 on account of all such pending disputes with Trade Contractors, and (3) if the dispute is not resolved within sixty (60) days following the date on which the Construction Loan Advance which was intended to pay the disputed cost was advanced, Borrowers shall return to Lender the amount of Construction Loan proceeds advanced to pay such disputed cost, which amount may be requested again by Borrowers when the dispute is resolved, (C) all the representations and warranties contained in Article IV of this Agreement continue to be true and correct in all material respects (except to the extent of changes in circumstances or conditions which are not otherwise prohibited by this Agreement), (D) no monetary Default or any Event of Default shall have occurred and be continuing hereunder, and (E) Borrowers continue to be in compliance in all material respects with all of the other terms, covenants and conditions contained in this Agreement. The Draw Request shall also (1) have attached to it copies of the following documents (the “Material Construction Documents”) in the respective forms believed by Borrowers to be final: (aa) the Architect’s Contract and all amendments thereto, (bb) the Construction Management Agreement and all amendments thereto, (cc) a schedule of the Plans and Specifications, (dd) the Disbursement Schedule, (ee) the Construction Schedule, and (ff) the Loan Budget; and (2) contain a certification by Borrowers that Borrowers believe that the attached copies of the Material Construction Documents are in final form.

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(vii) An Advance Request accompanied by a completed and itemized Application and Certificate for Payment (AIA Document No. G702) attached hereto as Exhibit H or similar form approved by Lender, containing the certification of the Construction Manager or Trade Contractor to whom such payment is made, as applicable, and the Architect as to the material accuracy of same, together with invoices relating to all items of Hard Costs covered thereby and accompanied by a cost breakdown showing the cost of work on, and the cost of materials incorporated into, the Project to the date of the requisition. The cost breakdown shall also show the percentage of completion of each Line Item on the Loan Budget, and the accuracy of the cost breakdown shall be certified by Borrowers and by the Architect. All such applications for payment shall also show all Trade Contractors, including Major Contractors, by name and trade, the total amount of each contract or subcontract, the amount theretofore paid to each Trade Contractor as of the date of such application, and the amount to be paid from the proceeds of the Construction Loan Advance to each Trade Contractor.

(viii) All invoices relating to all items of Soft Costs identified in the Advance Request or Borrowers’ receipted bills therefor, or other reasonable proof of expenditure or payments for Soft Costs due reasonably acceptable to Lender.

(ix) An Anticipated Cost Report in respect of the Project prepared by the Construction Manager and/or the General Contractor, which shall be reasonably satisfactory in form and substance to Lender and the Construction Consultant.

(x) Reasonable evidence that all Government Approvals necessary to permit the construction of that/those portion(s) of the Project to be funded with the proceeds of the Initial Construction Loan Advance have been obtained, including, without limitation, one or more acceptable building permits.

(xi) A certificate from (A) the Architect (the “Architect’s Certificate”) substantially in the form attached hereto as Exhibit I, and (B) the Construction Manager (the “Construction Manager’s Certificate”) substantially in the form attached hereto as Exhibit J, (C) the General Contractor (the “General Contractor’s Certificate”) substantially in the form attached hereto as Exhibit N, and (D) at Lender’s request, from any Major Contractor (the “Contractor’s Certificate”) substantially in the form attached hereto as Exhibit K.

(xii) Evidence reasonably satisfactory to Lender that the notional amount of the Interest Rate Cap Agreement(s) with respect to the Construction Loan shall be no less than the Construction Loan Outstanding Principal Balance, after giving effect to the proposed Initial Construction Loan Advance, pursuant to one or more modified or new Interest Rate Cap Agreements complying with the terms of Section 2.2.7 hereof.

(xiii) To the extent reasonably requested by Lender, soil and geotechnical reports for the Hotel/Casino Property and the Adjacent Property,

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which reports (A) shall be dated within one (1) year preceding the Initial Construction Loan Advance, (B) shall be issued by an engineer reasonably acceptable to Lender, (C) shall state that Lender may rely thereon, and (D) shall be satisfactory to Lender in form and substance in Lender’s reasonable discretion.

(g) Payment of Fees and Expenses. Payment by Borrowers of all fees and expenses required by this Agreement, to the extent then due and payable, including, without limitation, (i) any fees and expenses referred to in Section 10.13 hereof then due and payable, (ii) any reasonable fees and expenses then due and payable to the Construction Consultant, (iii) any Unused Advance Fee then due and payable, (iv) any Administrative Agent Fee then due and payable, and/or (v) any title premiums and/or other title charges then due and payable.

(h) Required Equity. In the event that, as of the date of the Initial Construction Loan Advance, the total Project Costs set forth on the Loan Budget exceed the then applicable Construction Loan Amount (such excess being referred to herein as the “Required Equity Amount”), Borrowers shall be required to provide to Lender, as an additional equity contribution, the Required Equity Amount, which may be provided in one of, or by a combination of, the following manners: (i) a voluntary prepayment of the Loan in accordance with all of the terms of Section 2.4.1 hereof and to be applied as set forth in Section 2.4.3(a) hereof, (ii) the delivery to Lender of evidence satisfactory to Lender in its reasonable discretion that Borrowers or one or more Affiliates thereof have previously expended cash to satisfy Project Costs included on the Loan Budget, which shall result in a credit against the amount of the Required Equity Amount by the amount of such cash expended, (iii) the delivery of a Letter of Credit (each, a “Required Equity Letter of Credit”), and/or (iv) Borrowers’ election, by written notice to Lender, to have any one or more Pre-Construction Letter(s) of Credit previously delivered to Lender thereafter constitute a Required Equity Letter of Credit for all purposes under this Agreement.

If Borrowers elect to deliver any Required Equity Letter of Credit (including, without limitation, any Pre-Construction Letter of Credit which Borrowers have elected to have constitute a Required Equity Letter of Credit as provided above), the following shall apply to each such Required Equity Letter of Credit:

(A) Borrowers shall pay to Lender all of Lender’s reasonable out-of-pocket costs and expenses in connection therewith, including, without limitation, any costs or expenses incurred in drawing down on such Required Equity Letter of Credit. Borrowers shall not be entitled to draw from any such Required Equity Letter of Credit. Upon five (5) days notice to Lender and provided that no Event of Default, First Mezzanine Event of Default, Second Mezzanine Event of Default or Third Mezzanine Event of Default shall have occurred and be continuing, Borrowers may replace such Required Equity Letter of Credit with a voluntary prepayment of the Loan, the First Mezzanine Loan, the Second Mezzanine Loan and the Third Mezzanine Loan in an aggregate amount equal to such Required Equity Letter of Credit, which prepayment shall be applied in accordance with Section 2.4.3(a) hereof, following which prepayment,

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Lender shall promptly return such Required Equity Letter of Credit to Borrowers.

(B) Each Required Equity Letter of Credit delivered under this Agreement shall be additional security for the payment of the Debt. Upon the occurrence and during the continuance of an Event of Default, Lender shall have the right, at its option, to draw on any Required Equity Letter of Credit and to apply all or any part thereof in accordance with the provisions of Section 2.4.3(a) hereof applicable to a prepayment following the occurrence and during the continuance of an Event of Default.

(C) In addition to any other right Lender may have to draw upon a Required Equity Letter of Credit pursuant to the terms and conditions of this Agreement, Lender shall have the additional rights to draw in full on any Required Equity Letter of Credit: (1) with respect to any evergreen Required Equity Letter of Credit, if Lender has received a notice from the issuing bank that such Required Equity Letter of Credit will not be renewed and a substitute Required Equity Letter of Credit is not provided at least ten (10) Business Days prior to the date on which the outstanding Required Equity Letter of Credit is scheduled to expire; (2) with respect to any Required Equity Letter of Credit with a stated expiration date, if Lender has not received a notice from the issuing bank that it has renewed such Required Equity Letter of Credit at least ten (10) Business Days prior to the date on which such Required Equity Letter of Credit is scheduled to expire and a substitute Required Equity Letter of Credit is not provided at least ten (10) Business Days prior to the date on which the outstanding Required Equity Letter of Credit is scheduled to expire; (3) upon receipt of notice from the issuing bank that such Required Equity Letter of Credit will be terminated and a substitute Required Equity Letter of Credit is not provided at least ten (10) Business Days prior to the date on which the outstanding Required Equity Letter of Credit is scheduled to be terminated; or (4) if Lender has received notice that the bank issuing any Required Equity Letter of Credit shall cease to be an Eligible Institution and within ten (10) Business Days after Lender notifies Borrowers in writing of such circumstance, Borrowers shall fail to deliver to Lender a substitute Required Equity Letter of Credit issued by an Eligible Institution. Notwithstanding anything to the contrary contained in the above, Lender is not obligated to draw upon any Required Equity Letter of Credit upon the happening of an event specified in clause (1), (2), (3) or (4) above and shall not be liable for any losses sustained by Borrowers due to the insolvency of the bank issuing any such Required Equity Letter of Credit if Lender has not drawn upon such Required Equity Letter of Credit.

(D) With respect to any Required Equity Letter of Credit permitted to be delivered pursuant to this Section 3.2(h) and/or Section 3.3(d) and/or Section 3.12 hereof, instead of delivering separate Required

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Equity Letters of Credit, Borrowers shall have the right, at any time, to deliver a replacement Required Equity Letter of Credit in an amount which reflects the aggregate amount of the separate Required Equity Letters of Credit then in effect and/or then desired by Borrowers to be in effect and, upon delivery of any such replacement Required Equity Letter of Credit, Lender shall promptly return to Borrowers that/those previously issued Required Equity Letter(s) of Credit the amount of which has been included in such replacement Required Equity Letter of Credit. Without limiting the generality of the foregoing, Borrowers shall also have the right, at any time, to deliver a replacement Required Equity Letter of Credit, the amount of which may include the amount of any Pre-Construction Letter(s) of Credit which Borrowers have elected to have constitute a Required Equity Letter of Credit as provided above and, if applicable, any amendments thereto increasing the amount thereof, and upon delivery of any such replacement Required Equity Letter of Credit, Lender shall promptly return to Borrowers that/those previously issued Pre-Construction Letters of Credit and any amendments thereto.

(i) Shortfalls. Lender shall have received evidence reasonably satisfactory to Lender that no Shortfall shall then exist.

(j) Construction Documents.

(i) Architect’s Contract. Lender shall have received (i) a certified copy of the Architect’s Contract which (A) shall be in the form (including any Change Orders that require Lender’s approval pursuant to Section 3.15 hereof) previously approved by Lender, (B) shall have been duly executed and delivered by the parties thereto, and (C) shall be in full force and effect, and (ii) a duly executed and completed Architect’s Consent with respect to the Architect’s Contract, in the form required hereunder and otherwise reasonably acceptable to Lender and Construction Consultant.

(ii) Construction Management Agreement. Lender shall have received (i) a certified copy of the Construction Management Agreement which (A) shall be in the form (including any Change Orders that require Lender’s approval pursuant to Section 3.15 hereof) previously approved by Lender, (B) shall have been duly executed and delivered by the parties thereto, and (C) shall be in full force and effect, and (ii) a duly executed and completed Construction Manager’s Consent with respect to the Construction Management Agreement, in the form required hereunder and otherwise reasonably acceptable to Lender and Construction Consultant.

(iii) General Contract. Lender shall have received (i) a certified copy of the General Contract which (A) shall be in the form (including any Change Orders that require Lender’s approval pursuant to Section 3.15 hereof) previously approved by Lender, (B) shall have been duly executed and delivered by the parties thereto, and (C) shall be in full force and effect, (ii) a duly executed and

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completed General Contractor’s Consent, in the form required hereunder and otherwise reasonably acceptable to Lender and Construction Consultant, and (iii) copies of the General Contractor’s license(s) necessary to operate, which shall be reasonably acceptable to Lender and Construction Consultant.

(iv) Major Contracts. Lender shall have received with respect to each Major Contract then in effect (i) a certified copy of such Major Contract which (A) shall be in the form (including any Change Orders that require Lender’s approval pursuant to Section 3.15 hereof) previously approved by Lender, (B) shall have been duly executed and delivered by the parties thereto, and (C) shall be in full force and effect, (ii) a duly executed and completed Major Contractor’s Consent with respect to such Major Contract, in the form required hereunder and otherwise reasonably acceptable to Lender and Construction Consultant, and (iii) copies of each Major Contractor’s license(s) necessary to operate, which shall be reasonably acceptable to Lender and Construction Consultant.

(v) Other Contracts. Borrowers shall have delivered to Lender certified copies of all executed contracts and subcontracts for the Project which do not constitute Major Contracts (and Lender shall have approved the same in the case of Major Contractors), in each case certified by Borrower as correct and complete.

(vi) Other Work. Borrowers shall have delivered to Lender firm bids or estimates and other information reasonably satisfactory to Lender for any material work not covered by any of the foregoing agreements to enable Lender to ascertain the total estimated cost of all work done and to be done in connection with the Project.

(k) Trade Costs Under General Contract. Not less than seventy percent (70)% of the budgeted trade costs under the General Contract shall be subject to signed sub-contracts reasonably approved by Lender to the extent they constitute Major Contracts.

(l) Interest Line Item. The Loan Budget shall include, without limitation, a Line Item for interest in an amount equal to the Initial Maturity Extension Interest Shortfall.

(m) Certification Regarding Chattels. Lender shall have received, at Borrowers’ expense, a search of the public records that, subject to Section 3.11 hereof and the Permitted Encumbrances, discloses no conditional sales contracts, chattel mortgages, leases of personalty, financing statements or title retention agreements which affect any of the Properties.

(n) Notices. All notices required by any Governmental Authority or by any Legal Requirement to be filed prior to commencement of construction of the Project shall have been filed.

(o) No Monetary Default or Event of Default. On the date of the Initial Construction Loan Advance there shall exist no monetary Default or any Event of Default.

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(p) Representations and Warranties. All representations and warranties made by Borrowers and/or Guarantors in the Loan Documents or otherwise made by or on behalf of Borrowers and/or Guarantors in connection therewith or after the date thereof shall have been true and correct in all material respects on the date on which made and shall continue to be true and correct in all material respects on the date of the Initial Construction Loan Advance (except to the extent of changes in circumstances or conditions which are not otherwise prohibited by this Agreement).

(q) Lien Waivers. Borrowers shall have delivered a lien waiver log and duly executed Lien waivers in the form set forth in Exhibit L-2 (progress payment) or L-4 (final payment), as applicable, attached hereto from all Major Contractors for all work performed, and all labor or material supplied, for which payment thereof has been made prior to the date of the Initial Construction Loan Advance.

(r) Construction Consultant Approval. Lender shall have received a Construction Consultant Approval with respect to the Initial Construction Loan Advance, it being expressly agreed by Lender that Lender shall diligently pursue obtaining Construction Consultant’s response within a commercially reasonable time period following any Draw Request which includes all the required items as set forth herein.

(s) Loan Document Modifications. Modifications to any Loan Documents, in form and substance reasonably satisfactory to Lender, as shall be required in accordance with the terms of this Agreement, shall have been duly executed and delivered by the parties thereto and shall be in full force and effect, and Lender shall have received the originals or fully executed counterparts thereof.

(t) No Damage. The Improvements (including any partially constructed portion of the Project) shall not have been injured or damaged by fire, explosion, accident, flood or other casualty, unless (i) such injury or damage constitutes a Minor Casualty, or (ii) the damage therefrom shall have been fully Restored, or (iii) Net Proceeds in an amount sufficient for Restoration shall have been received by Borrowers or Lender as required pursuant to this Agreement.

(u) Transfer of Adjacent Property to Casino/Hotel Borrower. At Borrowers’ sole cost and expense, Adjacent Borrower shall have conveyed to Hotel/Casino Borrower any portion of the Adjacent Property that, pursuant to the Plans and Specifications, is anticipated to form a part of the Project (the “Deeded Adjacent Property”) and, in order to effectuate the foregoing, the following conditions shall be satisfied:

(i) (A) The Deeded Adjacent Property, after being added to the Hotel/Casino Property, and (B) the remaining portion of the Adjacent Property, after giving effect to such conveyance of the Deeded Adjacent Property, shall each (1) comply with all zoning ordinances, including, without limitation, those related to parking, lot size and density, (2) constitute one or more separate tax parcels, and not be subject to any lien for taxes due or not yet delinquent, and (3) comply in all material respects with all Legal Requirements, including, without limitation, those relating to land use and certificates of occupancy;

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(ii) Borrowers shall deliver to Lender, at Borrowers’ sole cost and expense, ALTA/ASCM surveys of each of (A) the Hotel/Casino Property including the Deeded Adjacent Property, and (B) the remaining portion of the Adjacent Property, which surveys shall include metes and bounds legal descriptions and shall conform to Lender’s then-current requirements for surveys to be delivered in connection with its loans; and

(iii) The Title Company shall issue an endorsement to the Title Insurance Policy regarding the validity of Lender’s lien on each of (A) the Hotel/Casino Property including the Deeded Adjacent Property, and (B) the remaining portion of the Adjacent Property.

Upon any such conveyance of the Deeded Adjacent Property to Hotel/Casino Borrower in accordance with the foregoing, thereafter the term “Hotel/Casino Property” shall be deemed to include the Deeded Adjacent Property for all purposes of this Agreement and the other Loan Documents.

Section 3.3 Conditions Precedent to Subsequent Construction Loan Advances. The obligation of Lender to make any Construction Loan Advances after the Initial Construction Loan Advance shall be subject to the satisfaction or waiver by Lender (in its sole discretion) of the following conditions precedent with respect to each subsequent Construction Loan Advance:

(a) Prior Conditions Satisfied. All conditions precedent to the Initial Construction Loan Advance, as set forth in Section 3.2 hereof, and any other prior Construction Loan Advances, as set forth in this Section 3.3, shall continue to be satisfied as of the date of such subsequent Construction Loan Advance.

(b) Deliveries. The following items or documents shall have been delivered to Lender:

(i) A Draw Request complying with the requirements of, and constituting the same representations and warranties as specified in, Section 3.2(f)(vi) hereof.

(ii) An Advance Request submitted in accordance with the requirements of Section 3.2(f)(vii) hereof.

(iii) A Construction Manager Affirmation of Payment (an “Affirmation of Payment”) (AIA Form G706) in the form attached hereto as Exhibit M.

(iv) All invoices relating to all items of Soft Costs identified in the Advance Request or Borrowers’ receipted bills therefor, or other reasonable proof of expenditure or payments for Soft Costs due reasonably acceptable to Lender.

(v) An Anticipated Cost Report in respect of the Project, which shall be reasonably satisfactory in form and substance to Lender and the Construction Consultant.

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(vi) An endorsement to the Title Insurance Policy dated the date of such requested Construction Loan Advance and showing the Mortgage as a prior and paramount Lien on each of the Properties, subject only to (A) the Permitted Encumbrances, (B) any other Liens or encumbrances consented to in writing by Lender, and (C) any other Liens which are then being contested in accordance with the provisions of Section 3.6(b) of the Mortgage, and which shall have the effect of increasing the coverage of the Title Insurance Policy by an amount equal to the amount of the Construction Loan Advance then being made, along with co-insurance or reinsurance in such forms and amounts as may be reasonably required by Lender. Any reinsurance agreements shall provide for direct access with the other title companies satisfactory to Lender.

(vii) (A) An updated lien waiver log, (B) duly executed conditional Lien waivers in the form set forth in Exhibit L-1 (progress payment) or L-3 (final payment) hereto, as applicable, from all Major Contractors who have performed work, for the work so performed, and/or who have supplied labor and/or materials, for the labor and/or materials so supplied, except for such work or labor and/or materials for which payment thereof is requested, as to which duly executed unconditional Lien waivers in the form set forth in Exhibit L-2 (progress payment) or L-4 (final payment) hereto, as applicable, shall be delivered to Lender with the next request for a Construction Loan Advance, and (C) duly executed unconditional Lien waivers in the form set forth in Exhibit L-2 (progress payment) or L-4 (final payment) hereto, as applicable, with respect to all payments which were requested to be paid with the immediately preceding Construction Loan Advance and from whom a conditional Lien waiver in the form set forth in Exhibit L-1 (progress payment) or L-3 (final payment) hereto, as applicable, was delivered in the immediately preceding request for a Construction Loan Advance.

(viii) An updated (A) Architect’s Certificate, (B) Construction Manager’s Certificate, (C) General Contractor’s Certificate, and (D) at Lender’s request, an updated Contractor’s Certificate from any Major Contractor.

(ix) A spreadsheet of Loan Budget Line Items in form reasonably satisfactory to Lender showing amounts expended under each Line Item to date and amounts under each Line Item remaining to be paid out.

(x) Evidence that all Government Approvals necessary to permit the construction of that/those portion(s) of the Project to be funded with the proceeds of the proposed Construction Loan Advance have been obtained, including, without limitation, one or more acceptable building permits.

(xi) A monthly progress report from the Construction Manager and/or the General Contractor, including, without limitation, a Loan Budget status (with respect to Hard Costs only), Construction Schedule status, Governmental Approval status, if applicable, and a description of any issues to be resolved

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between Borrowers and any designer or Trade Contractor, which report shall be reasonably satisfactory to Lender and Construction Consultant.

(xii) Evidence reasonably satisfactory to Lender that the notional amount of the Interest Rate Cap Agreement(s) with respect to the Construction Loan shall be no less than the Construction Loan Outstanding Principal Balance, after giving effect to the proposed Construction Loan Advance, pursuant to one or more modified or new Interest Rate Cap Agreements complying with the terms of Section 2.2.7 hereof.

(c) Payment of Fees and Expenses. Payment by Borrowers of all fees and expenses required by this Agreement, to the extent then due and payable, including, without limitation, (i) any fees and expenses referred to in Section 10.13 hereof then due and payable, (ii) any reasonable fees and expenses then due and payable to the Construction Consultant, (iii) any Unused Advance Fee then due and payable, (iv) any Administrative Agent Fee then due and payable, and/or (v) any title premiums and/or other title charges then due and payable.

(d) Required Equity. In the event that, as of the date of the proposed Construction Loan Advance, the sum of (i) $775,000,000.00 plus (ii) the then applicable Construction Loan Amount exceeds eighty-one percent (81%) of the Total Costs (the amount in excess of such eighty-one percent (81%) threshold being referred to herein as a “Subsequent Required Equity Amount”), Borrowers shall be required to provide to Lender, as an additional equity contribution, the Subsequent Required Equity Amount, which may be provided in one of, or by a combination of, the following manners: (A) a voluntary prepayment of the Loan in accordance with all of the terms of Section 2.4.1 hereof and to be applied as set forth in Section 2.4.3(a) hereof, (B) the delivery to Lender of evidence satisfactory to Lender in its reasonable discretion that Borrowers or one or more Affiliates thereof have previously expended cash to satisfy Project Costs included on the Loan Budget, which shall result in a credit against the amount of the Required Equity Amount by the amount of such cash expended, and/or (C) the delivery of a Required Equity Letter of Credit.

(e) Shortfalls. Lender shall have received evidence reasonably satisfactory to Lender that no Shortfall shall then exist.

(f) Change Orders. Lender shall have approved all Change Orders entered into since the last Construction Loan Advance that require Lender’s approval pursuant to Section 3.15 hereof.

(g) Certification Regarding Chattels. Lender shall have received, at Borrowers’ expense, a search of the public records that, subject to Section 3.11 hereof and the Permitted Encumbrances, discloses no conditional sales contracts, chattel mortgages, leases of personalty, financing statements or title retention agreements which affect any of the Properties.

(h) Notices. All notices required by any Governmental Authority or by any Legal Requirement to be filed prior to commencement of construction of that/those portion(s) of the Project to be funded with the proceeds of the proposed Construction Loan Advance shall have been filed.

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(i) No Monetary Default or Event of Default. On the date of the Construction Loan Advance there shall exist no monetary Default or any Event of Default.

(j) Representations and Warranties. All representations and warranties made by Borrowers and/or Guarantors in the Loan Documents or otherwise made by or on behalf of Borrowers and/or Guarantors in connection therewith or after the date thereof shall continue to be true and correct in all material respects on the date of the Construction Loan Advance (except to the extent of changes in circumstances or conditions which are not otherwise prohibited by this Agreement).

(k) No Damage. The Improvements (including any partially constructed portion of the Project) shall not have been injured or damaged by fire, explosion, accident, flood or other casualty, unless (i) such injury or damage constitutes a Minor Casualty, or (ii) the damage therefrom shall have been fully Restored, or (iii) Net Proceeds in an amount sufficient for Restoration shall have been received by Borrowers or Lender as required pursuant to this Agreement.

(l) Construction Consultant Approval. Lender shall have received a Construction Consultant Approval with respect to the Construction Loan Advance, it being expressly agreed by Lender that Lender shall diligently pursue obtaining Construction Consultant’s response within a commercially reasonable time period following any Draw Request which includes all the required items as set forth herein.

(m) Loan Document Modifications. Modifications to any Loan Documents, in form and substance reasonably satisfactory to Lender, as shall be required in accordance with the terms of this Agreement, shall have been duly executed and delivered by the parties thereto and shall be in full force and effect, and Lender shall have received the originals or fully executed counterparts thereof.

Section 3.4 Conditions of Final Construction Loan Advance. In addition to the conditions set forth in Section 3.3 hereof, Lender’s obligation to make the final Construction Loan Advance, including, without limitation, in respect of any Retainage pursuant to this Agreement, shall be subject to the occurrence of Final Completion as evidenced by Lender’s receipt (or waiver of receipt by Lender in its sole discretion) of the following:

(a) Approval by Construction Consultant. Notification from the Construction Consultant that the Project (including the Punch List Items) has been completed substantially in accordance with the Plans and Specifications, all Legal Requirements, all material Permitted Encumbrances and this Agreement.

(b) Certificates. An updated (A) Architect’s Certificate, (B) Construction Manager’s Certificate, and (C) at Lender’s request, an updated Contractor’s Certificate from any Major Contractor.

(c) Certificates of Occupancy. A copy of the Certificate(s) of Occupancy and all other material Governmental Approvals for the Project.

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(d) Lien Waivers. (i) An updated lien waiver log, (ii) duly executed conditional Lien waivers in the form set forth in Exhibit L-3 (final payment) hereto from all Major Contractors who have performed work, for the work so performed, and/or who have supplied labor and/or materials, for the labor and/or materials so supplied, except for such work or labor and/or materials for which payment thereof is requested, as to which duly executed unconditional Lien waivers in the form set forth in Exhibit L-4 (final payment) hereto shall be delivered to Lender within thirty (30) days following such final Construction Loan Advance, and (iii) duly executed unconditional Lien waivers in the form set forth in Exhibit L-4 (final payment) hereto with respect to all payments which were requested to be paid with the immediately preceding Construction Loan Advance and from whom a conditional Lien waiver in the form set forth in Exhibit L-1 (progress payment) or L-3 (final payment) hereto, as applicable, was delivered in the immediately preceding request for a Construction Loan Advance.

(e) Final Survey. Final Surveys of the Hotel/Casino Property and the Adjacent Property acceptable to Lender showing the as-built location of the completed Project Improvements (all of which shall be within lot lines of the real property comprising a portion of the applicable Property and in compliance with all set-back requirements) and all easements appurtenant thereto.

(f) Payment of Costs. Evidence satisfactory to Lender that (i) all sums due in connection with the construction of the Project have been paid in full (or will be paid out of the funds requested to be advanced in the final Construction Loan Advance), as evidenced by (A) with respect to any party with Lien rights, an executed Lien waiver substantially in the form attached hereto as Exhibit L-3 or L-4, as applicable (as required under the foregoing clause (d)), or (B) with respect to any party without Lien rights, an invoice and proof of payment or such other evidence of payment as shall be reasonably satisfactory to Lender, and (ii) except for any Lien then being contested pursuant to, and in accordance with, Section 3.6(b) of the Mortgage, no party claims or has a right to claim any statutory or common law Lien arising out of the construction of the Project or the supplying of labor, material and/or services in connection therewith.

(g) “As-Built” Plans and Specifications. A full and complete set of “as built” Plans and Specifications certified to by the Architect.

(h) Title Insurance Policy. Endorsements to the Title Insurance Policy referencing the final Surveys and indicating no Liens other than Permitted Encumbrances and including an update to the Form 9 Comprehensive Endorsement, in each case in form and substance reasonably acceptable to Lender.

(i) Payment of Fees and Expenses. Payment by Borrowers of all fees and expenses required by this Agreement, to the extent then due and payable, including, without limitation, (i) any fees and expenses referred to in Section 10.13 hereof then due and payable, (ii) any reasonable fees and expenses then due and payable to the Construction Consultant, (iii) any Unused Advance Fee then due and payable, (iv) any Administrative Agent Fee then due and payable, and/or (v) any title premiums and/or other title charges then due and payable.

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(j) Other Documents. If requested by Lender, a completed AIA Form G704 (Certificate of Substantial Completion) and/or a completed AIA Form G707 (Consent of Surety to Final Payments).

Section 3.5 No Reliance. All conditions and requirements of this Agreement with respect to any Construction Loan Advance are for the sole benefit of Lender and no other Person or party (including, without limitation, the Construction Consultant and Trade Contractors, including Major Contractors and materialmen engaged in the construction of the Project) shall have the right to rely on the satisfaction of such conditions and requirements by Borrowers. Lender shall have the right, in its sole and absolute discretion, to waive any such condition or requirement.

Section 3.6 Procedures for Construction Loan Advances.

(a) At such time as Borrowers shall desire to obtain a Construction Loan Advance (other than the Second Anniversary Unfunded Construction Loan Advance and/or any Quarterly Deficiency Advance), but in no event more frequently than twice every thirty (30) days, Borrower shall complete, execute and deliver to Lender and Construction Consultant a Draw Request not less than ten (10) Business Days prior to the date of the requested Construction Loan Advance (the “Requested Disbursement Date”).

(b) In addition to the conditions set forth in Sections 3.2, 3.3 and 3.4 hereof, as applicable, each Construction Loan Advance shall be conditioned on satisfaction of the following conditions precedent:

(i) The amount of any Construction Loan Advance shall not exceed the unfunded amount of the Construction Loan Amount; and

(ii) Lender shall have received from Borrowers a statement, duly acknowledged, certifying the Construction Loan Outstanding Principal Balance and the Reduced Acquisition Loan Outstanding Principal Balance, which may be included in the applicable Draw Request.

(i) a written request of Borrowers for any necessary changes in the Plans and Specifications, the Loan Budget, the Disbursement Schedule and/or the Construction Schedule; and

(ii) (A) copies of all executed Change Orders, (B) copies of all executed Major Contracts, (C) a list of all other contracts and subcontracts which are not Major Contracts and a copy of any such contract(s) and/or subcontract(s) requested by Lender, and (D) to the extent reasonably requested by Lender, copies of all inspection or test reports and other documents relating to the construction of the Project, in each of the foregoing instances, to the extent not previously delivered to Lender.

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(d) With respect to Construction Loan Advances for a deposit under any contract or subcontract for the purchase of materials or FF&E, the applicable Draw Request shall be accompanied by (i) a copy of the executed contract, subcontract or purchase order which requires such deposit, which contract or subcontract either (A) shall have been approved by Lender in its reasonable judgment prior to execution if it is a Major Contract, or (B) shall contain a deposit which is customary for similar materials or FF&E, as applicable, in similar projects as the Project (or such deposit is otherwise reasonably acceptable to Lender), and (ii) an invoice for payment of such deposit from the applicable contractor or subcontractor. Additionally, Borrowers shall not have outstanding at any one time aggregate deposits exceeding $5,000,000.00 (Lender agreeing that it shall not unreasonably withhold its consent to an increase of such limit), it being acknowledged and agreed by Lender and Borrowers that once a deposit is used to purchase materials or FF&E and Borrowers receive a xxxx of sale with respect thereto and/or the same are delivered on-site to the Hotel/Casino Property or the Adjacent Property, the amount thereof shall no longer constitute a deposit for purposes of the foregoing limit.

(e) Provided that all of the conditions for the disbursement of Construction Loan Advances set forth in Sections 3.2, 3.3 and/or 3.4 hereof, as applicable, have been satisfied, Lender shall make the Construction Loan Advance on the Requested Disbursement Date. Each Construction Loan Advance shall be made by wire transfer to a checking account of Borrowers or, at the option of Lender, as provided in Section 3.7 hereof. All proceeds of all Construction Loan Advances shall be used by Borrowers only for the purposes for which such Construction Loan Advances were made. Borrowers shall not commingle such funds with other funds of Borrowers.

Section 3.7 Direct Advances to Third Parties. Lender may make any or all Construction Loan Advances to (a) Construction Manager or any Major Contractor, as applicable, for construction expenses which shall theretofore have been approved by Lender and for which Borrowers shall have failed to make payment after receipt by Borrowers of such applicable Construction Loan Advance, (b) the Architect, to pay its fees to the extent funds are allocated thereto in the Loan Budget and for which Borrowers shall have failed to make payment after receipt by Borrowers of such applicable Construction Loan Advance, (c) the Construction Consultant, to pay its fees, (d) Lender’s counsel, to pay its fees, (e) the Administrative Agent, to pay its Administrative Agent Fee, (f) Lender, to pay (i) the Unused Advance Fee, (ii) any expenses incurred by Lender which are reimbursable by Borrowers under the Loan Documents, provided that Borrowers shall theretofore have received notice from Lender that such expenses have been incurred and Borrowers shall have failed to reimburse Lender for said expenses beyond any grace periods provided for said reimbursement under this Agreement or any of the other Loan Documents, and/or (iii) following the occurrence and during the continuance of an Event of Default, any other sums due to Lender under the Notes, this Agreement or any of the other Loan Documents, all to the extent that the same are not paid by the respective due dates thereof (including any applicable grace periods), and in each case subject to the approval of Lender, and (g) any other Person to whom Lender determines payment is due to the extent provided in the Loan Budget, after written notice to Borrowers and Borrowers failure to make such payment within ten (10) Business Days following such notice, subject to Borrowers’ right to dispute any such payment in accordance with the terms and provisions of this Agreement. The execution of this Agreement by Borrowers shall, and hereby does, constitute an irrevocable authorization to so advance the proceeds of the Construction Loan directly to any such Persons

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described in the foregoing clauses (a) – (g), above, as amounts become due and payable to them hereunder. No further authorization from Borrowers or any other Person shall be necessary to warrant such direct Construction Loan Advances as provided in this Section 3.7, and all such Construction Loan Advances shall be secured by the Mortgage and the other applicable Loan Documents as fully as if made directly to Borrowers.

Section 3.8 Construction Loan Advances Do Not Constitute a Waiver. No Construction Loan Advance shall constitute a waiver of any of the conditions of Lender’s obligation to make further Construction Loan Advances nor, in the event Borrowers are unable to satisfy any such condition, which inability also constitutes a Default or an Event of Default, shall any Construction Loan Advance have the effect of precluding Lender from thereafter declaring such inability (following any applicable notice and grace period) to be an Event of Default hereunder.

Section 3.9 Cost Overruns; Reallocation of Line Items.

(a) Subject to Borrowers’ rights to reallocate (i) among Line Item Components as provided in this Section 3.9, (ii) from Contingency Line Items as provided in Section 3.10 hereof, and (iii) with respect to Change Orders as provided in Section 3.15 hereof, if, at any time after the date of the Initial Construction Loan Advance, Borrowers become aware of any change in the Project Costs that will materially increase a category or Line Item reflected in the Loan Budget, Borrowers shall promptly notify Lender in writing and promptly submit to Lender for Lender’s and the Construction Consultant’s approval a revised Loan Budget; provided, however, that only those Line Items and components which are proposed to be changed shall be subject to Lender’s and the Construction Consultant’s approval at that time. Any reallocation of any category or Line Items in the Loan Budget in connection with cost overruns shall be subject to Lender’s approval in its reasonable discretion, subject to Borrowers’ rights under Section 3.15 hereof with respect to Change Orders that do not require Lender’s approval. Lender shall have no obligation to make any further Construction Loan Advances unless and until the proposed changes to the Loan Budget so submitted by Borrowers are approved by Lender in its reasonable discretion.

(b) Borrowers, without the consent of Lender but after notice to Lender, may reallocate to any Line Item all or any portion of any Cost Savings not previously reallocated, provided that (i) no single Line Item is increased by more than ten percent (10%), and (ii) except as provided in Section 3.10(b) hereof, under no circumstances shall Borrowers be entitled to reallocate any amount allocated to the interest or any Contingency Line Item without Lender’s approval, to be granted or withheld in Lender’s sole and absolute discretion. All other reallocations of Cost Savings shall require Lender’s prior consent, not to be unreasonably withheld. Upon any such reallocation of all or any portion of any such Cost Savings to any Line Item, the amount of such Cost Savings shall no longer be deemed “Cost Savings” hereunder, but shall be deemed to be part of the Line Item to which such amount was reallocated and the Loan Budget shall be deemed automatically amended without further action. As used in this Agreement, “Cost Savings” shall mean and be determined as follows:

(A) If Lender reasonably determines that any component of the construction of the Project which is the subject of a Line Item (a “Line

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Item Component”) has been completed without the expenditure by Borrowers of the entire amount allocated in the Loan Budget to such Line Item Component, and all Major Contractors have been paid in full for work performed and materials provided with respect to such Line Item Component, the difference between the amount of such Line Item Component in the Loan Budget and the amount so expended for such Line Item Component shall be deemed to be a “Cost Savings”; or

(B) If prior to the completion of the Line Item Component (other than the Line Item for interest or any Contingency Line Item), Borrowers shall demonstrate to Lender’s reasonable satisfaction that upon completion of such Line Item Component a Cost Savings will be realized pursuant to the foregoing clause (i) with respect to such Line Item Component, the amount of such Cost Savings which is demonstrated to Lender’s reasonable satisfaction shall also be deemed to be a “Cost Savings”. Lender shall not be required to allow such a reallocation with respect to a Line Item constituting Hard Costs unless (1) such Line Item has a firm or guaranteed maximum price or fixed price contract or sub-contract in place, (2) the work has commenced and is proceeding substantially in accordance with the Construction Schedule, and (3) the Construction Consultant is satisfied with said contract or sub-contract, including, without limitation, with regard to the scope of said contract or sub-contract.

(c) New Line Items may not be created without Lender’s prior written consent in its reasonable discretion and, if created with Lender’s consent, no portion of any Contingency Line Item shall be reallocated to any such new Line Item, except as provided in Section 3.10 hereof. To the extent not paid for by reallocating Cost Savings among Line Items or by reallocating any Contingency Line Item in accordance with Section 3.10 hereof, new Line Items must be paid for by Borrowers from sources other than the Loan.

Section 3.10 Contingency Reallocations.

(a) The amounts allocated as Contingency (Hard Costs) or Contingency (Soft Costs) in the Loan Budget and that are intended to cover the eventuality of unforeseen costs or cost overruns (the “Contingency Line Items”) shall be disbursed from time to time upon request by Borrowers and, subject to Section 3.10(b) below, upon approval by Lender, not to be unreasonably withheld, and may be used only for appropriate, as applicable, Hard Costs of, or Soft Costs associated with, the Project. Any expenditure of Contingency (Hard Costs) for Soft Costs or Contingency (Soft Costs) for Hard Costs shall be prohibited unless expressly approved by Lender in its sole and absolute discretion.

(b) Borrowers, without the consent of Lender but after notice to Lender, may (i) reallocate up to ten percent (10%) of the Contingency (Hard Costs) to any Hard Cost Line Item and/or may reallocate up to ten percent (10%) of the Contingency (Soft Costs) to any Soft Cost Line Item, provided that, in either event, no single Line Item is increased by more than ten percent (10%), and (ii) reallocate a portion of the Contingency (Hard Costs) to satisfy

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the amount of the contingency required under the General Contract and increase the Line Item for such General Contract by such amount, provided that (A) such reallocated portion of the Contingency (Hard Costs), together with the remaining amount of the Contingency (Hard Costs), shall be equal to or greater than ten percent (10%) of the aggregate amount of the Loan Budget, and (B) such remaining amount of the Contingency (Hard Costs) shall be equal to or greater than five percent (5%) of the aggregate amount of the Loan Budget. All other reallocations of any Contingency shall require Lender’s prior consent, not to be unreasonably withheld. Notwithstanding the foregoing, Lender expressly acknowledges that the General Contractor shall have the right to apply contingency under the General Contract as permitted thereunder. Upon any such reallocation of all or any portion of any Contingency to any Line Item, the amount of such Contingency shall no longer be deemed “Contingency” hereunder, but shall be deemed to be part of the Line Item to which such amount was reallocated. In giving or withholding its approval to any reallocation of any Contingency, Lender may take into account the then current state of completion of the Project, any existing cost overruns and any potential cost overruns as may then be reasonably foreseen or reasonably anticipated by Lender.

Section 3.11 Stored Materials. Lender shall not be required to authorize any disbursement of funds for any materials, machinery or other Personal Property not yet incorporated into the Project (the “Stored Materials”), unless the following conditions are satisfied or waived in writing by Lender:

(a) Borrowers shall deliver to Lender bills of sale or other evidence reasonably satisfactory to Lender of the cost of, and, subject to the payment therefor, Borrowers’ title in and to, such Stored Materials;

(b) The Stored Materials are identified to the Hotel/Casino Property or the Adjacent Property and Borrowers, are segregated so as to adequately give notice to all third parties of Borrowers’ title in and to such materials, and are components in substantially final form ready for incorporation into the Project;

(c) The Stored Materials are stored at the Hotel/Casino Property or the Adjacent Property or at such other third party owned and operated site as Lender shall reasonably approve (which shall specifically exclude any site located outside of the continental United States) and are protected against theft and damage in a manner reasonably satisfactory to Lender, including, if requested by Lender, storage in a bonded warehouse in Las Vegas, Nevada;

(d) The Stored Materials will be paid for in full with the funds to be disbursed and all Lien rights or claims of the supplier will be released upon full payment;

(e) Lender has or will have upon payment with disbursed funds a perfected, first priority security interest in the Stored Materials;

(f) The Stored Materials are insured for an amount equal to their replacement costs in accordance with Section 6.1 hereof;

(g) The aggregate cost of Stored Materials to be stored at the Hotel/Casino Property and/or the Adjacent Property at any one time shall not exceed $10,000,000.00; and

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(h) The aggregate cost of Stored Materials to be stored off-site from the Hotel/Casino Property and the Adjacent Property at any one time shall not exceed $20,000,000.00.

Section 3.12 Loan Balancing and Shortfalls.

(a) Notwithstanding anything contained herein to the contrary, if at any time or from time to time during the term of this Agreement, Lender shall reasonably determine that there exists any Shortfall, Lender shall deliver notice of such determination to Borrowers and thereafter until such Shortfall no longer exists, Lender will not be obligated to make any Construction Loan Advances (but may or may not, in its sole discretion, make any Quarterly Deficiency Advance(s) and/or the Second Anniversary Unfunded Construction Loan Advance), and, within ten (10) days of receipt of such notice of determination, Borrowers shall take any one of, or a combination of, the following actions: (i) deposit with Lender an amount equal to the Shortfall (such deposited funds, the “Shortfall Funds”), (ii) deliver a Required Equity Letter of Credit in the amount of the Shortfall, or (iii) make one or more payments on account of Hard Costs and/or Soft Costs until the Shortfall has been reduced to zero and deliver to Lender reasonably satisfactory evidence thereof.

(b) Any payment of Shortfall Funds made to Lender pursuant to Section 3.12(a)(i) hereof shall be deposited into an account with Lender (the “Shortfall Account”). Provided no Event of Default has occurred and is continuing, any funds held in the Shortfall Account will be advanced by Lender to Borrowers as though such funds were proceeds of the Construction Loan and subject to all of the conditions with respect thereto set forth in Sections 3.2, 3.3 and/or 3.4 hereof, as applicable, prior to any further Construction Loan Advances. Until so advanced to Borrowers pursuant to the provisions of Sections 3.2, 3.3 and/or 3.4 hereof, as applicable, all such Shortfall Funds on deposit in the Shortfall Account shall be held as cash collateral and additional security for the Debt and the Other Obligations and shall constitute a Reserve Fund in which Lender shall have a Lien and security interest pursuant to the provisions of Section 7.8 hereof.

(c) Upon the taking of any of the actions contemplated under Section 3.12(a) hereof to cure any Shortfall, such Shortfall shall be deemed to no longer exist for the purposes of this Agreement.

Section 3.13 Quality of Work. No Construction Loan Advance or any portion thereof shall be made with respect to materially defective work or to any Trade Contractor that has performed work that is materially defective and that has not been cured, as confirmed by the report of the Construction Consultant, but Lender may disburse all or part of any Construction Loan Advance before the sum shall become due if Lender reasonably believes it advisable to do so, and all such Construction Loan Advances or parts thereof shall be deemed to have been made pursuant to this Agreement.

Section 3.14 Imported Materials. No Construction Loan Advance or any portion thereof shall be made with respect to any materials imported from outside the domestic United States unless and until such materials clear United States customs and are either incorporated in the Project or stored in accordance with the provisions of Section 3.11 hereof.

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Section 3.15 Approval of Change Orders. Except as provided in this Section 3.15, Borrowers will not amend, alter or change (pursuant to Change Order, amendment or otherwise) the Plans and Specifications, the Loan Budget or any Major Contract unless the same shall have been approved in advance in writing by Lender, by all applicable Governmental Authorities and by each surety under the Payment and Performance Bonds (if required thereunder). Borrowers will provide to Lender upon execution, copies of approved Change Orders with respect to any Major Contract. Notwithstanding the foregoing, Borrowers shall be allowed to make changes in the Plans and Specifications without the consent of Lender upon and subject to all of the following conditions and requirements:

(a) The Change Order is not a Material Change Order;

(b) Until such time as the Project is forty percent (40%) complete as reasonably determined and certified by the Construction Consultant, (i) the combination of (A) Hard Costs paid for by Borrowers out of their own (or an Affiliate’s) funds exclusive of the Loan and (B) Hard Costs paid for out of the Contingency (Hard Costs) Line Item in accordance with the terms of this Agreement, does not exceed 50% of the original amount of the Contingency (Hard Costs) Line Item set forth in the Loan Budget, and/or (ii) the combination of (1) Soft Costs paid for by Borrowers out of their own (or an Affiliate’s) funds exclusive of the Loan and (B) Soft Costs paid for out of the Contingency (Soft Costs) Line Item in accordance with the terms of this Agreement, does not exceed 50% of the original amount of the Contingency (Soft Costs) Line Item set forth in the Loan Budget, it being acknowledged and agreed that this condition shall be deemed null and void once the Project is forty percent (40%) complete as reasonably determined and certified by the Construction Consultant;

(c) Such proposed Change Order, together with all other Change Orders theretofore entered into with respect to the Project, will not increase the guaranteed maximum price of any Major Contract in excess of $2,500,000.00 over the original amount;

(d) Such proposed Change Order will not cause any Line Item in the Loan Budget to be exceeded (after taking into account use of the Contingency Line Items to the extent permitted under Section 3.10 hereof, reallocations under Section 3.9 hereof and any other reallocations approved by Lender in its sole and absolute discretion), unless Borrowers eliminate the Shortfall caused thereby in accordance with the provisions of Section 3.12 hereof;

(e) Such proposed Change Order, together with all other Changes Orders in the aggregate, shall not, in any material fashion, alter or change (A) any structural components, construction design, layout, scope and/or square footage of the Project, and/or (B) the structural integrity, utility, quality of materials and/or asset quality of the Project;

(f) Such proposed Change Order, together with all other Changes Orders in the aggregate, shall not result in any material adverse differences in the Construction Schedule submitted to and approved by Lender; and

(g) With respect to any Change Order which does not satisfy one or more of the foregoing conditions in this Section 3.15, or which pursuant to such provisions require Lender’s approval, Borrower shall have submitted to Lender and the Construction

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Consultant, and the applicable Major Contractors and/or other Trade Contractors, the requested change, together with changes in the Plans and Specifications necessary to accomplish such change, a certificate of the Architect in regard to same, and a Change Order to the applicable Trade Contractor reflecting such change; and Lender shall have received the approval of such change by the Construction Consultant, and the approved and signed Change Order from the applicable Trade Contractor reflecting the increase in cost of construction of the Project and/or the extension of time for completion of the work to be performed under the applicable Major Contract or other contract or subcontract with a Trade Contractor, and Borrowers shall have received Lender’s written approval thereof, which approval shall not be unreasonably withheld.

(h) If a Change Order is permitted without Lender’s approval as provided in this Section 3.15 or is approved by Lender as required by this Section 3.15, then the Loan Budget shall be deemed amended by such Change Order and all references to the Loan Budget contained in this Agreement and the other Loan Documents shall be deemed to refer to the Loan Budget as so amended.

Section 3.16 Construction Covenants.

(a) Construction Management Agreement. The construction of the Project shall be managed by the Construction Manager pursuant to the Construction Management Agreement. The Construction Manager and the Construction Management Agreement shall be subject to approval by Lender in its reasonable discretion. Borrowers shall (i) enforce the Construction Management Agreement, (ii) waive none of the material obligations of any of the parties thereunder, (iii) do no act which would relieve the Construction Manager from its material obligations thereunder to construct the Project according to the Plans and Specifications, and (iv) make no material amendment to or Change Order under the Construction Management Agreement, except as permitted under Section 3.15 hereof, without the prior approval of Lender in its reasonable discretion.

(b) General Contract. The General Contractor and the General Contract shall be subject to approval by Lender in its reasonable discretion. Borrowers shall (i) use commercially reasonable efforts to enforce the General Contract, (ii) waive none of the material obligations of any of the parties thereunder, (iii) do no act which would relieve the General Contractor from its material obligations thereunder, and (iv) make no material amendment to or Change Order under the General Contract, except as permitted under Section 3.15 hereof, without the prior approval of Lender in its reasonable discretion.

(c) Architect’s Contract. Borrowers shall (i) enforce the Architect’s Contract, (ii) waive none of the material obligations of the Architect thereunder, (iii) do no act which would relieve the Architect from its material obligations under the Architect’s Contract, and (iv) make no material amendment to or Change Order under the Architect’s Contract, except as permitted under Section 3.15 hereof, without the prior approval of Lender in its reasonable discretion.

(d) Insurance. In addition to maintaining the Policies required under Section 6.1 hereof, prior to the commencement of any construction on the Project (including any demolition or site work), Borrowers shall also furnish Lender with evidence or certificates from

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insurance companies reasonably acceptable to Lender indicating that the Architect and the Major Contractors responsible for the design and/or construction of the Project are covered by professional liability insurance or other liability insurance, as applicable, as required by the applicable Architect’s Contract or Major Contract, as applicable, approved by Lender.

(e) Application of Construction Loan Proceeds. Borrowers shall use the proceeds of the Construction Loan and the Third Mezzanine Construction Funds solely and exclusively in accordance with the Loan Budget that shall not be subject to change, except as permitted hereby.

(f) Project Costs. Borrower shall promptly pay when due all Project Costs, unless and to the extent any such Project Cost is the subject of a good faith dispute; provided, however, that in such event (i) Borrowers shall diligently pursue resolution of such dispute, and (ii) to the extent applicable, Borrowers shall be contesting such Project Cost in accordance with the provisions of Section 5.1.1 or 5.1.2 hereof or Section 3.6(b) of the Mortgage.

(g) Completion of Construction. Once commenced, if ever, subject to Lender’s obligation to continue to fund the Construction Loan as and to the extent set forth in this Agreement, Borrowers shall diligently pursue construction of the entire Project to completion and obtain one or more Certificates of Occupancy (and to the extent the same are conditional or require performance by Borrowers, Borrowers shall diligently satisfy all conditions to the issuance of, and/or diligently perform all obligations required for the continued validity of, the same) for the Project and individual leasable space therein, if required by law, in accordance with the Plans and Specifications (subject to Change Orders thereto permitted under Section 3.15 hereof) and in compliance with all restrictions, covenants and easements affecting the Properties, all applicable Legal Requirements and all Governmental Approvals, in each case, in all material respects, and with all terms and conditions of the Loan Documents, free from any Liens (other than Permitted Encumbrances), claims or assessments (actual or contingent) asserted against any of the Properties for any material, labor or other items furnished in connection therewith unless (i) bonded and removed as a Lien on the affected Property or (ii) being contested in accordance with the provisions of Section 3.6(b) of the Mortgage. Reasonable evidence of satisfactory compliance with the foregoing shall be furnished by Borrowers to Lender upon Final Completion. In addition, if any such Certificate of Occupancy or other Governmental Approvals are temporary in nature, Borrowers shall diligently pursue procuring final Certificates of Occupancy and/or Governmental Approvals, as applicable.

(h) Inspection of Property. Borrowers shall permit Lender, the Construction Consultant and their respective representatives, upon reasonable advance notice (which may be given verbally) during business hours when possible, to enter upon any Property, inspect the progress of the Project and all materials to be used in the construction thereof and to examine the Plans and Specifications which are or may be kept at the construction site at all reasonable times and with reasonable advance written notice (which may be given verbally) and will cooperate, and use reasonable efforts to cause the Construction Manager and the Major Contractors to cooperate, with the Construction Consultant to enable him/her to perform his/her functions hereunder.

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(i) Construction Consultant. Borrowers acknowledge that (i) the Construction Consultant has been retained by Lender, at the sole expense of Borrowers, to act as a consultant and only as a consultant to Lender in connection with the construction of the Project and has no duty to Borrowers, (ii) the Construction Consultant shall in no event have any power or authority to give any approval or consent or to do any other act or thing which is binding upon Lender, (iii) Lender reserves the right to make any and all decisions required to be made by Lender under this Agreement and to give or refrain from giving any and all consents or approvals required to be given by Lender under this Agreement and to accept or not accept any matter or thing required to be accepted by Lender under this Agreement, and without being bound or limited in any manner or under any circumstance whatsoever by any opinion expressed or not expressed, or advice given or not given, or information, certificate or report provided or not provided, by the Construction Consultant with respect thereto, (iv) Lender reserves the right in its sole and absolute discretion to disregard or disagree, in whole or in part, with any opinion expressed, advice given or information, certificate or report furnished or provided by the Construction Consultant to Lender or any other Person or party, and (v) Lender reserves the right to replace the Construction Consultant with another inspecting engineer at any time and without prior notice to or approval by Borrowers (but Lender agrees to provide Borrowers with reasonably prompt notice of any decision to change the Construction Consultant). Lender hereby advises Borrowers that it has advised the Construction Consultant of the restrictions contained in this Section 3.16(i). Construction Consultant shall perform the following services on behalf of Lender:

(i) review and advise Lender whether, in the opinion of the Construction Consultant, the Plans and Specifications are satisfactory;

(ii) review Draw Requests, Advance Requests and Change Orders submitted by Borrowers; and

(iii) make periodic inspections (approximately at the date of each Draw Request) for the purpose of assuring that construction of the Project to date is in substantial accordance with the Plans and Specifications and to approve Borrowers’ then current Draw Request as being consistent with Borrowers’ obligations under this Agreement, including, among other things, an opinion as to whether a Shortfall exists at any time.

The reasonable fees of the Construction Consultant shall be paid by Borrowers within ten (10) days after billing therefor and expenses incurred by Lender shall be reimbursed to Lender within ten (10) days after request therefor, but neither Lender nor the Construction Consultant shall have any liability to Borrowers on account of (1) the services performed by the Construction Consultant, (2) any neglect or failure on the part of the Construction Consultant to properly perform its services, or (3) any approval by the Construction Consultant of construction of the Project, except that Construction Consultant shall be liable for any material physical damage to any Property caused directly by the actions of Construction Consultant or any agent or employee thereof. Neither Lender nor the Construction Consultant assumes any obligation to Borrowers or any other Person concerning the quality of construction of the Project or the absence therefrom of defects.

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(j) Correction of Defects. Borrowers shall promptly correct all defects in the Project or any departure from the Plans and Specifications not approved by Lender to the extent required hereunder unless any such departure is required under applicable Legal Requirements. Borrowers agree that the advance of any proceeds of the Construction Loan, whether before or after such defects or departures from the Plans and Specifications are discovered by, or brought to the attention of, Lender, shall not constitute a waiver of Lender’s right to require compliance with this covenant. Whether there exists a defect in the Project or a departure from the Plans and Specifications shall be reasonably determined by the Architect and the Construction Consultant or, if the Architect and the Construction Consultant cannot reasonably agree, then shall be determined pursuant to the most expedited form of arbitration available for such disagreement under the rules of the American Arbitration Association, such arbitration to be held in New York, New York.

(k) Books and Records. Borrowers shall keep and maintain, or cause to be kept and maintained, detailed, complete and accurate books, records and accounts reflecting all items of income and expense of Borrowers in connection with the construction of the Project and, upon the request of Lender, shall make such books, records and accounts available to Lender for inspection or independent audit at reasonable times upon reasonable advance written notice to Borrowers. Any independent audit conducted hereunder shall be at Lender’s expense unless such audit shall uncover a material error in statements previously delivered to Lender, in which case Borrowers shall pay all reasonable costs related thereto. Lender hereby agrees to keep, and to use reasonable efforts to cause its employees and consultants to keep, any information acquired hereby confidential unless already known to the general public or as required by law.

(l) Financing Publicity. Borrowers shall permit Lender to obtain publicity in connection with the construction of the Project through press releases and participation in such events as ground-breaking and opening ceremonies, and to give Lender ample advance notice of such events and to give Lender such assistance as is reasonable in connection with obtaining such publicity as Lender may reasonably request.

(m) Default Notice or Notice of Lien. Borrowers shall notify Lender promptly, and in writing, if any Borrower receives any written default notice or notice of Lien from any Trade Contractor.

(n) Further Assurance of Title. If at any time Lender has reason to believe in its reasonable opinion that any Construction Loan Advance is not secured or will or may not be secured by the Mortgage as a Lien on the Properties (subject only to the Permitted Encumbrances), then Borrowers shall, within ten (10) days after written notice from Lender, do all things and matters necessary (including execution and delivery to Lender of all further documents and performance of all other acts which Lender reasonably deems necessary or appropriate) to assure to the reasonable satisfaction of Lender that any Construction Loan Advances previously made hereunder or to be made hereunder are secured or will be secured by the Mortgage (subject only to the Permitted Encumbrances). Lender, at Lender’s option, may decline to make further Construction Loan Advances hereunder until Lender has received such assurance.

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Section 3.17 Pre-Construction Advances.

3.17.1 Conditions to Pre-Construction Advances. Notwithstanding anything to the contrary set forth in this Agreement, upon the request of Borrowers from time to time, Lender shall make Construction Loan Advances to Borrowers to fund pre-construction costs and expenses relating to the Project (each, a “Pre-Construction Advance”), subject to the satisfaction of the following conditions with respect to each such Pre-Construction Advance:

(a) such Pre-Construction Advance is for pre-construction costs or expenses (i) contemplated by the Pre-Construction Budget, or (ii) otherwise approved by Lender in its reasonable discretion (any of the foregoing, “Approved Pre-Construction Expenses”);

(b) prior to commencing any pre-construction work that consists of constructing or demolishing any improvements (“Pre-Construction Work”), (i) Lender shall have approved, which approval shall not be unreasonably withheld, (A) the Architect and the Architect’s Contract, (B) the Construction Manager and the Construction Management Agreement, to the extent the Construction Management Agreement applies to such Pre-Construction Work, (C) the General Contractor and the General Contract, to the extent the General Contract applies to such Pre-Construction Work, (D) all Major Contractors and Major Contracts relating to such Pre-Construction Work, (E) the plans and specifications for such Pre-Construction Work (which may be a part of the Plans and Specifications, if the same have theretofore been approved by Lender in accordance with the terms of this Agreement), and (F) a construction progress schedule reflecting the anticipated dates of completion of specified subcategories of the Pre-Construction Budget with respect to such Pre-Construction Work (which may be a part of the Construction Schedule, if the same has theretofore been approved by Lender in accordance with the terms of this Agreement); and (ii) Borrowers shall have obtained Payment and Performance Bonds covering each Major Contractor performing such Pre-Construction Work; provided, however, that Lender shall, at Borrowers’ request, review the financial statements of any such Major Contractor and reasonably consider a request by Borrowers either (A) not to require a Payment and Performance Bond with respect to such Major Contractor, or (B) to accept, in lieu of a Payment and Performance Bond with respect to such Major Contractor, a “Subguard Policy” issued by Zurich North America, together with a financial interest endorsement, all in form and content reasonably acceptable to Lender and subject to limits acceptable to Lender in its sole and absolute discretion;

(c) Borrowers shall submit Lender’s or Servicer’s standard form of draw request to Lender at least ten (10) days prior to the date on which Borrowers request such Pre-Construction Advance be made, which request shall specify the Approved Pre-Construction Expenses to be paid and shall be accompanied by copies of invoices for the amounts requested;

(d) on the date such request is received by Lender and on the date such Pre-Construction Advance is to be made, no Event of Default shall exist and remain uncured;

(e) all representations and warranties made by Borrowers and/or Guarantors in the Loan Documents or otherwise made by or on behalf of Borrowers and/or Guarantors in connection therewith or after the date thereof shall have been true and correct in all material respects on the date on which made and shall continue to be true and correct in all

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material respects on the date of such Pre-Construction Advance (except to the extent of changes in circumstances or conditions which are not otherwise prohibited by this Agreement);

(f) Lender shall have received:

(i) an Officer’s Certificate (A) stating that the items to be funded by the requested Pre-Construction Advance are Approved Pre-Construction Expenses, and a description thereof, (B) stating that the Pre-Construction Work at the applicable Property(ies) to be funded by the requested Pre-Construction Advance, if any, has been completed in a good and workmanlike manner and in accordance in all material respects with all applicable Legal Requirements, (C) identifying each Person that supplied materials or labor in connection with any Pre-Construction Work to be funded by the requested Pre-Construction Advance, and each Person who supplied services entitled to a commission, fee or other payment, as applicable, to be funded by the requested Pre-Construction Advance, (D) stating that each such Person has been paid in full or will be paid in full upon such Pre-Construction Advance, (E) stating that the Approved Pre-Construction Expenses to be funded have not been the subject of a previous Pre-Construction Advance, (F) stating that all previous Pre-Construction Advances have been used to pay or reimburse Borrowers for the previously identified Approved Pre-Construction Expenses, and (G) stating that, as of the date of such Officer’s Certificate, no Event of Default has occurred and is continuing and all representations and warranties made by Borrowers and/or Guarantors in the Loan Documents or otherwise made by or on behalf of Borrowers and/or Guarantors in connection therewith or after the date thereof were true and correct in all material respects on the date on which made and continue to be true and correct in all material respects on the date of such Officer’s Certificate (except to the extent of changes in circumstances or conditions which are not otherwise prohibited by this Agreement);

(ii) a copy of any license, permit or other approval by any Governmental Authority necessary to permit any Pre-Construction Work to be funded or reimbursed by the requested Pre-Construction Advance and not previously delivered to Lender;

(iii) if required by Lender for requests in excess of one hundred seventy-five thousand dollars ($175,000.00) for a single item of Pre-Construction Work, lien waivers or other evidence of payment satisfactory to Lender and releases from all parties furnishing materials and/or services in connection with the requested Pre-Construction Advance;

(iv) such other evidence as Lender shall reasonably request to demonstrate that the Approved Pre-Construction Expenses to be funded by the requested Pre-Construction Advance have been completed and are paid for or will be paid upon such Pre-Construction Advance to Borrowers;

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(v) an endorsement to the Title Insurance Policy dated the date of such requested Pre-Construction Advance and showing the Mortgage as a prior and paramount Lien on each of the Properties, subject only to (A) the Permitted Encumbrances, (B) any other Liens or encumbrances consented to in writing by Lender, and (C) any other Liens which are then being contested in accordance with the provisions of Section 3.6(b) of the Mortgage, and which shall have the effect of increasing the coverage of the Title Insurance Policy by an amount equal to the amount of the Pre-Construction Advance then being made, along with co-insurance or reinsurance in such forms and amounts as may be reasonably required by Lender. Any reinsurance agreements shall provide for direct access with the other title companies satisfactory to Lender;

(vi) payment by Borrowers of all fees and expenses required by this Agreement, to the extent then due and payable, including, without limitation, (i) any fees and expenses referred to in Section 10.13 hereof then due and payable, (ii) any reasonable fees and expenses then due and payable to the Construction Consultant, (iii) any Unused Advance Fee then due and payable, (iv) any Administrative Agent Fee then due and payable, and/or (v) any title premiums and/or other title charges then due and payable;

(vii) at Borrowers’ expense, a search of the public records that, subject to Section 3.11 hereof and the Permitted Encumbrances, discloses no conditional sales contracts, chattel mortgages, leases of personalty, financing statements or title retention agreements which affect any of the Properties;

(viii) Evidence reasonably satisfactory to Lender that the notional amount of the Interest Rate Cap Agreement(s) with respect to the Construction Loan shall be no less than the Construction Loan Outstanding Principal Balance, after giving effect to the proposed Pre-Construction Advance, pursuant to one or more modified or new Interest Rate Cap Agreements complying with the terms of Section 2.2.7 hereof; and

(ix) evidence reasonably satisfactory to Lender that Borrowers have obtained all Policies required by Section 6.1 hereof in connection with the construction of the Project, to the extent not previously delivered to Lender;

(g) Construction Consultant shall have reasonably approved the request for the Pre-Construction Advance, it being expressly agreed by Lender that Lender shall diligently pursue obtaining Construction Consultant’s response within a commercially reasonable time period following any such request which includes all the required items as set forth herein;

(h) Borrowers shall retain Retainage with respect to each contract or subcontract relating to the Pre-Construction Work as provided herein with respect to the Project;

(i) each Pre-Construction Advance shall be in a minimum amount of not less than one million dollars ($1,000,000.00);

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(j) there shall not be more than two (2) Pre-Construction Advances in any thirty (30) day period;

(k) (i) prior to making the first Pre-Construction Advance, Borrowers shall have delivered to Lender a Letter of Credit (a “Pre-Construction Letter of Credit”) in the aggregate amount of (A) such first Pre-Construction Advance plus (B) the amount of interest estimated to accrue on the amount of such first Pre-Construction Advance through the Initial Maturity Date at the Applicable Interest Rate; and (ii) prior to making each subsequent Pre-Construction Advance, Borrowers shall have delivered to Lender a replacement Pre-Construction Letter of Credit in the aggregate amount of (A) the aggregate amount of (1) such subsequent Pre-Construction Advance plus (2) the amount of interest estimated to accrue on the amount of such subsequent Pre-Construction Advance through the Initial Maturity Date at the Applicable Interest Rate, plus (B) the amount of the previously delivered Pre-Construction Letter of Credit (which, after the second Pre-Construction Advance, shall represent a replacement Pre-Construction Letter of Credit itself being replaced as aforesaid); provided, however, that in lieu of delivering any such replacement Pre-Construction Letter of Credit, Borrowers shall have the right, at their sole cost and expense, to provide an amendment to the then existing Pre-Construction Letter of Credit which increases the amount thereof in the aggregate amount set forth in the foregoing clauses (A) and (B), but only if Lender is not required to relinquish physical possession of the then existing Pre-Construction Letter of Credit and any amendments thereto until such amendment has been delivered to Lender;

(l) on the date such request is received by Lender and on the date such Pre-Construction Advance is to be made, (i) Borrowers shall not have delivered a Relinquishment Notice to Lender and no Deemed Relinquishment shall have occurred, and (ii) the Construction Qualification Date shall not have occurred; and

(m) in no event shall the aggregate amount of all Pre-Construction Advances exceed $110,000,000.00.

3.17.2 Pre-Construction Letters of Credit. The following shall apply to each Pre-Construction Letter of Credit delivered by Borrowers:

(a) Borrowers shall pay to Lender Lender’s reasonable out-of-pocket costs and expenses in connection therewith, including, without limitation, any costs or expenses incurred in drawing down on such Pre-Construction Letter of Credit. Borrowers shall not be entitled to draw from any such Pre-Construction Letter of Credit. Upon five (5) days notice to Lender and provided that no Event of Default, First Mezzanine Event of Default, Second Mezzanine Event of Default or Third Mezzanine Event of Default shall have occurred and be continuing, Borrowers may replace such Pre-Construction Letter of Credit with a voluntary prepayment of the Construction Loan in accordance with the provisions of Section 2.4.1 hereof, in an aggregate amount equal to such Pre-Construction Letter of Credit, which prepayment shall be applied in accordance with Section 2.4.3(j) hereof, following which prepayment, Lender shall promptly return such Pre-Construction Letter of Credit to Borrowers.

(b) Each Pre-Construction Letter of Credit delivered under this Agreement shall be additional security for the payment of the Debt. Upon the occurrence and

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during the continuance of an Event of Default, Lender shall have the right, at its option, to draw on any Pre-Construction Letter of Credit and to apply all or any part thereof in accordance with the provisions of Section 2.4.3(j) hereof applicable to a prepayment following the occurrence and during the continuance of an Event of Default.

(c) In addition to any other right Lender may have to draw upon a Pre-Construction Letter of Credit pursuant to the terms and conditions of this Agreement, Lender shall have the additional rights to draw in full on any Pre-Construction Letter of Credit: (A) with respect to any evergreen Pre-Construction Letter of Credit, if Lender has received a notice from the issuing bank that such Pre-Construction Letter of Credit will not be renewed and a substitute Pre-Construction Letter of Credit is not provided at least ten (10) Business Days prior to the date on which the outstanding Pre-Construction Letter of Credit is scheduled to expire; (B) with respect to any Pre-Construction Letter of Credit with a stated expiration date, if Lender has not received a notice from the issuing bank that it has renewed such Pre-Construction Letter of Credit at least ten (10) Business Days prior to the date on which such Pre-Construction Letter of Credit is scheduled to expire and a substitute Pre-Construction Letter of Credit is not provided at least ten (10) Business Days prior to the date on which the outstanding Pre-Construction Letter of Credit is scheduled to expire; (C) upon receipt of notice from the issuing bank that such Pre-Construction Letter of Credit will be terminated and a substitute Pre-Construction Letter of Credit is not provided at least ten (10) Business Days prior to the date on which the outstanding Pre-Construction Letter of Credit is scheduled to be terminated; or (D) if Lender has received notice that the bank issuing any Pre-Construction Letter of Credit shall cease to be an Eligible Institution and within ten (10) Business Days after Lender notifies Borrowers in writing of such circumstance, Borrowers shall fail to deliver to Lender a substitute Pre-Construction Letter of Credit issued by an Eligible Institution. Notwithstanding anything to the contrary contained in the above, Lender is not obligated to draw upon any Pre-Construction Letter of Credit upon the happening of an event specified in clause (A), (B), (C) or (D) above and shall not be liable for any losses sustained by Borrowers due to the insolvency of the bank issuing any such Pre-Construction Letter of Credit if Lender has not drawn upon such Pre-Construction Letter of Credit.

(d) Notwithstanding anything to the contrary set forth herein, promptly following Borrowers’ satisfaction of the Qualification Conditions on or prior to the Construction Qualification Date, including, without limitation, Borrowers providing to Lender the full Required Equity Amount in accordance with Section 3.2(h) hereof, Lender shall promptly return all Pre-Construction Letters of Credit and amendments thereto to Borrowers; provided, however, that if, pursuant to said Section 3.2(h) hereof, Borrowers have elected to have Lender retain any Pre-Construction Letter(s) of Credit to satisfy all or a portion of the Required Equity Amount, then such Pre-Construction Letter(s) of Credit and any amendments thereto shall not be returned to Borrowers and each such Pre-Construction Letter of Credit and any amendments thereto shall thereafter constitute a Required Equity Letter of Credit for all subsequent purposes under this Agreement and the other Loan Documents.

3.17.3 Pre-Construction Advance is a Construction Loan Advance. Once advanced, each Pre-Construction Advance shall constitute a Construction Loan Advance for all purposes under this Agreement.

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3.17.4 Pre-Construction Work.

(a) Nothing in this Section 3.17 shall (i) make Lender responsible for performing or completing any Pre-Construction Work; (ii) require Lender to expend any of its own funds to complete any Pre-Construction Work or pay any other Approved Pre-Construction Expenses; (iii) obligate Lender to proceed with any Pre-Construction Work; or (iv) obligate Lender to demand from any Borrower additional sums to complete any Pre-Construction Work or pay any other Approved Pre-Construction Expense.

(b) Each Borrower shall permit Lender and its agents and representatives (including its engineers, architects or inspectors) or third parties to enter onto such Borrower’s Property during normal business hours (subject to reasonable advance notice (which may be given verbally) and the rights of tenants under their Leases) to inspect the progress of any Pre-Construction Work and all materials being used in connection therewith and to examine all plans and shop drawings relating to such Pre-Construction Work. Each Borrower shall cause all contractors and subcontractors to cooperate with Lender and such other Persons described above in connection with inspections described in this Section 3.17.4(b).

3.17.5 Repayment of Pre-Construction Advances Following Relinquishment Notice or Deemed Relinquishment.

(a) In the event that Borrowers shall deliver a Relinquishment Notice to Lender or a Deemed Relinquishment shall occur, (i) Borrowers shall pay the Non-Qualified Mandatory Prepayment or deliver a Non-Qualified Prepayment Letter of Credit to Lender not later than the Construction Qualification Date, (ii) Borrowers shall make the Relinquishment Interest Reserve Deposit within ten (10) days following delivery of such Relinquishment Notice to Lender or within ten (10) days following the Construction Qualification Date if a Deemed Relinquishment shall have occurred, as applicable, and (iii) Borrowers shall pay to Lender, within ten (10) days following delivery of such Relinquishment Notice to Lender or within ten (10) days following the Construction Qualification Date if a Deemed Relinquishment shall have occurred, as applicable, a voluntary prepayment of the Loan in accordance with the provisions of Section 2.4.1 hereof, in an amount equal to the sum of all Pre-Construction Advances advanced to Borrowers prior to delivery of the Relinquishment Notice or the occurrence of the Deemed Relinquishment, as applicable, together with all other amounts due and payable under Section 2.4.1 hereof upon such prepayment, including, without limitation, (A) if such prepayment occurs on a date other than a Payment Date, all interest which would have accrued on the amount so prepaid to be paid 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, (B) any Breakage Costs, (C) if such prepayment is made prior to the Spread Maintenance Release Date, the Spread Maintenance Premium due with respect to the amount prepaid, (D) the applicable Exit Fee due with respect to the amount prepaid, and (E) all other sums due and payable under this Agreement, the Notes and the other Loan Documents, including, but not limited to, all of Lender’s costs and expenses (including reasonable attorney’s fees and disbursements) incurred by Lender in connection with such prepayment, which voluntary prepayment of the Loan shall be applied in accordance with the provisions of Section 2.4.3(i) hereof. In furtherance of the foregoing, Lender agrees that Borrowers shall have the right to use any existing funds then on deposit in the Construction Loan Reserve Account to cover the foregoing voluntary prepayment or any portion thereof.

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(b) In the event that Borrowers shall fail to pay to Lender any amount required under Section 3.17.5(a) hereof (collectively, the Pre-Construction Relinquishment Amounts”) within ten (10) days following Borrowers’ delivery of a Relinquishment Notice to Lender or within ten (10) days following the Construction Qualification Date if a Deemed Relinquishment shall have occurred, as applicable, Lender shall have the right (but not the obligation) to draw down on all of the Pre-Construction Letters of Credit then held by (or on behalf of) Lender and Lender shall pay itself such Pre-Construction Relinquishment Amounts owing to it out of the proceeds thereof; provided, however, that (i) any insufficiency in the proceeds of the Pre-Construction Letters of Credit to cover all of the Pre-Construction Relinquishment Amounts shall not relieve Borrowers of their obligation to pay all of such Pre-Construction Relinquishment Amounts to Lender, and (ii) if any such insufficiency exists that has not been paid to Lender with such ten (10) days following Borrowers’ delivery of a Relinquishment Notice or within ten (10) days following the Construction Qualification Date if a Deemed Relinquishment shall have occurred, as applicable, such failure shall constitute an Event of Default.

(c) In the event that (i) Borrowers shall pay to Lender all Pre-Construction Relinquishment Amounts, (ii) Borrowers shall fully pay and perform their obligations under Section 3.17.6 hereof, and (iii) no Event of Default shall occur and be continuing, Lender shall return to Borrowers all Pre-Construction Letters of Credit then held by (or on behalf of) Lender or the remaining proceeds thereof if Lender has previously drawn down on the Pre-Construction Letters of Credit and applied less than all of the proceeds thereof, and Lender shall, at Borrowers’ expense, execute such documents and take such actions as Borrowers shall reasonably request to evidence its release of the Pre-Construction Letters of Credit.

3.17.6 Restoration of Properties Following Relinquishment Notice or Deemed Relinquishment.

(a) Restoration Obligation. Notwithstanding Borrowers’ commencement and/or performance of any physical work at or on the Adjacent Property and/or the Hotel/Casino Property as a part of the Pre-Construction Work and as permitted in Section 3.18 hereof, in the event that either (i) Borrowers have delivered a Relinquishment Notice to Lender, or (ii) a Deemed Relinquishment has occurred, Borrowers shall, promptly thereafter, diligently and at their sole cost and expense, restore the Adjacent Property and the Hotel/Casino Property, as and to the extent each has been impacted by Borrower’s construction to date, to the condition in which it or they, as applicable, existed on the Closing Date or another condition satisfactory to Lender in its sole discretion, except if any of the apartment buildings on the Adjacent Property were demolished as permitted above, Borrowers shall not be obligated to rebuild such buildings.

(b) Completion of Restoration. Upon completion of the restoration of the Adjacent Property and the Hotel/Casino Property as contemplated in Section 3.17.6(a) hereof, Borrowers shall furnish to Lender the following: (i) a notice from Borrowers informing

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Lender that such restoration has been completed (a “Relinquishment Restoration Completion Notice”), (ii) confirmation from the Construction Consultant that such restoration has been fully completed substantially in accordance with all Legal Requirements, all material Permitted Encumbrances and this Agreement, (iii) copies of any material Governmental Approvals needed to confirm completion of such restoration, (iv) evidence satisfactory to Lender that all sums due in connection with the construction of the Project and/or such restoration have been paid in full, as evidenced by (A) with respect to any party with Lien rights, an executed Lien waiver in the form attached hereto as Exhibit L-4, or (B) with respect to any party without Lien rights, an invoice and proof of payment or such other evidence of payment as shall be reasonably satisfactory to Lender, and (v) evidence satisfactory to Lender that, except for any Lien then being contested pursuant to, and in accordance with, Section 3.6(b) of the Mortgage, no party claims or has a right to claim any statutory or common law Lien arising out of the construction of the Project or such restoration or the supplying of labor, material and/or services in connection therewith.

(c) Payment of Fees and Expenses. Without limiting the generality of Section 10.13 hereof, which shall apply throughout the term of the Loan, upon completion of such restoration, Borrowers shall pay to Lender, within ten (10) days following receipt of the Relinquishment Restoration Payment Statement, all actual out-of-pocket fees and expenses incurred by Lender in connection with the restoration of the Properties as contemplated by this Section 3.17.6 which have not theretofore been reimbursed to Lender by Borrowers, including, without limitation, Lender’s reasonable legal fees and expenses and the reasonable fees and expenses of the Construction Consultant, the total of all such fees and expenses to be evidenced by a written statement from Lender furnished to Borrowers following Lender’s receipt of Borrower’s Relinquishment Restoration Completion Notice (the “Relinquishment Restoration Payment Statement”).

(d) Use of Pre-Construction Letters of Credit. In the event that Borrowers shall fail to diligently complete restoration as contemplated herein and/or shall fail to cause the satisfaction of any of the conditions set forth in Section 3.17.6(b) hereof, in addition to all other rights and remedies available to Lender, including, without limitation, proceeding against Guarantors under the Closing Completion Guaranty, Lender shall have the right (but not the obligation) to draw down on all of the Pre-Construction Letters of Credit then held by (or on behalf of) Lender and use the proceeds thereof, or if Lender has previously drawn down on the Pre-Construction Letters of Credit, Lender shall have the right (but not the obligation) to use any remaining proceeds thereof not previously applied, to complete the restoration and/or to cause the satisfaction of any such conditions.

(e) Termination of Guaranty Obligations. In the event that Borrowers shall pay all of the amounts payable to Lender pursuant to Section 3.17.5(a) hereof and shall diligently perform all of its obligations under this Section 3.17.6, at such time as Borrowers are entitled to a return of the Pre-Construction Letters of Credit in accordance with Section 3.17.6(d) hereof, the guaranty obligations relating to the restoration of the Adjacent Property and the Hotel/Casino Property pursuant to this Section 3.17.6(d) in the Closing Completion Guaranty shall be deemed terminated. Lender shall, at Borrowers’ reasonable expense (including Lender’s reasonable attorneys’ fees), promptly execute and deliver such documents as may be reasonably requested by Borrowers or Guarantors to evidence the release of such provisions of the Closing Completion Guaranty.

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Section 3.18 Work at Adjacent Property.

(a) Until the Initial Construction Loan Advance is made, if ever, and in all events subject to Section 3.18(b) hereof, Borrowers shall not commence or conduct any physical work at or on the Adjacent Property which exceeds, in the aggregate, $2,400,000.00, whether funded out of any Borrower’s own funds, out of a Pre-Construction Advance or otherwise, without Lender’s consent in its reasonable judgment, other than (a) subject to Section 3.18(b) hereof, the currently contemplated demolition of the apartment buildings on the Adjacent Property and the construction of the contemplated temporary parking lot thereon, and (b) the contemplated construction of the foundation for the south tower to be constructed on the Adjacent Property. In any event, Borrowers shall notify and reasonably consult with Lender regarding any work to be undertaken at or on the Adjacent Property and shall conduct all work in accordance with all Legal Requirements and any applicable O&M Agreement.

(b) Notwithstanding anything to the contrary set forth in this Agreement or in any other Loan Document, (i) Borrowers shall not commence demolition of any building on the Adjacent Property, whether such demolition is to be funded out of any Borrower’s own funds, out of the Initial Renovation Reserve Fund, out of a Pre-Construction Advance, out of a Construction Loan Advance or otherwise, unless and until Borrowers have obtained, at their sole cost and expense, and delivered a copy to Lender of, an asbestos survey with respect to the buildings to be demolished, prepared by a firm reasonably acceptable to Lender, that complies with the requirements of the EPA Asbestos Hazard Emergency Response Act, 15 U.S.C. 2641 et seq. promulgated at 40 CFR 763 (an “Asbestos Survey”), and (ii) if any such Asbestos Survey discloses the presence of asbestos and/or any asbestos-containing material, Borrowers, at their sole cost and expense, shall cause all demolition activities to comply with the requirements of the EPA National Emission Standard for Hazardous Air Pollutants promulgated at 40 CFR Part 61 for asbestos-containing materials.

Section 3.19 Administrative Agent.

3.19.1 Appointment of Administrative Agent. At all times throughout the term of the Loan, including any Extension Terms, there shall be an administrative agent to administer the Loan and the Advances thereunder (the “Administrative Agent”). Column Financial, Inc. shall be the initial Administrative Agent on the Closing Date, but Lender shall have the right, from time to time, without the consent of any Borrower but upon written notice to Borrowers, to designate a replacement Administrative Agent, who may or may not own an interest in the Loan. Upon notice to Borrowers of the identity of a replacement Administrative Agent for Column Financial, Inc. or any subsequent replacement Administrative Agent and the address(es) for notice to such replacement Administrative Agent, Borrowers thereafter shall copy such replacement Administrative Agent on all Notices sent to Lender.

3.19.2 Responsibilities of Administrative Agent. The Administrative Agent shall have such responsibilities as shall be delegated by Lender to the Administrative Agent in a separate agreement between them; provided, however, that upon notice to Borrowers from

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Lender as to the identity of the Administrative Agent, such identified Administrative Agent shall have the right to send notices on behalf of Lender upon which Borrowers may rely. The Administrative Agent shall maintain, acting solely for this purpose as an agent of Borrowers, a register for the recordation of the names and addresses of the Lenders and principal portion of the Loan owing to each Lender. The entries in the register shall be conclusive, and the Administrative Agent, Borrowers and any Lender shall treat each Person whose name is recorded in the register pursuant to the terms hereof as a Lender for all purposes of this Agreement. Any assignment or transfer of any interest in the Loan shall be effective only upon proper entries with respect thereto being made in the register.

3.19.3 Non-Liability of Administrative Agent and Lender. Each Borrower acknowledges and agrees that with respect to each of Lender and the Administrative Agent carrying out its responsibilities hereunder and otherwise with respect to the Loan:

(a) any inspections of the construction of the Project made by or through the Administrative Agent or Lender are for purposes of administration of the Loan only and Borrowers are not entitled to rely upon the same with respect to the quality, adequacy or suitability of materials or workmanship, conformity to the Plans and Specifications, state of completion or otherwise; Borrowers shall make their own inspections of such construction to determine that the quality of the Project and all other requirements of such construction are being performed in a manner satisfactory to Borrowers and in conformity with the Plans and Specifications and all other requirements; and Borrowers shall immediately notify Lender, in writing, should the same not be in conformity in all material respects with the Plans and Specifications and all other requirements hereunder;

(b) by accepting or approving anything required to be observed, performed, fulfilled or given to Lender pursuant to the Loan Documents, including any certificate, statement of profit and loss or other financial statement, survey, appraisal, lease or insurance policy, neither the Administrative Agent nor Lender shall be deemed to have warranted or represented the sufficiency, legality, effectiveness or legal effect of the same, or of any term, provision or condition thereof and such acceptance or approval thereof shall not constitute a warranty or representation to anyone with respect thereto by the Administrative Agent or Lender;

(c) neither the Administrative Agent nor Lender undertake nor assume any responsibility or duty to Borrowers to select, review, inspect, supervise, pass judgment upon or inform Borrowers of any matter in connection with any of the Properties, including, without limitation, matters relating to the quality, adequacy or suitability of: (i) the Plans and Specifications, (ii) architects, contractors, subcontractors and materialmen employed or utilized in connection with the construction of the Project, or the workmanship of or the materials used by any of them, or (iii) the progress or course of construction and its conformity or nonconformity with the Plans and Specifications; and Borrowers shall rely entirely upon their own judgment with respect to such matters, and any review, inspection, supervision, exercise of judgment or supply of information to Borrowers by the Administrative Agent or Lender in connection with such matters is for the protection of the Administrative Agent and/or Lender only and neither Borrowers nor any third party is entitled to rely thereon;

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(d) neither the Administrative Agent nor Lender owe any duty of care to protect Borrowers against negligent, faulty, inadequate or defective building or construction; and

(e) neither the Administrative Agent nor Lender shall be directly or indirectly liable or responsible for any loss, claim, cause of action, liability, indebtedness, damage or injury of any kind or character to any Person or property arising from any construction on, or occupancy or use of, any of the Properties, including, without limitation, any loss, claim, cause of action, liability, indebtedness, damage or injury caused by, or arising from: (i) any defect in any building, structure, grading, fill, landscaping or other improvements thereon or in any on-site or off-site improvement or other facility therein or thereon; (ii) any act or omission of any Borrower, the parties comprising any Borrower or any of any Borrower’s agents, employees, independent contractors, licensees or invitees; (iii) any accident in or on any of the Properties or any fire, flood or other casualty or hazard thereon; (iv) the failure of any Borrower or any of any Borrower’s licensees, employees, invitees, agents, independent contractors or other representatives to maintain any of the Properties in a safe condition; and/or (v) any nuisance made or suffered on any part of any Property, in each of the foregoing instances, except to the extent directly resulting from the Administrative Agent’s or Lender’s fraud, willful misconduct or gross negligence (but Lender shall be solely liable for its fraud, willful misconduct or gross negligence and the Administrative Agent shall be solely liable for its fraud, willful misconduct or gross negligence).

3.19.4 Administrative Agent Fee. On the Closing Date and on the first Payment Date occurring in each calendar quarter thereafter, Borrower shall pay the Administrative Agent the sum of $50,000.00 in respect of the Administrative Agent Fee.

Section 3.20 Monthly Interest Payments During Construction.

3.20.1 Monthly Interest Advance in Construction Loan Advances. From and after any Payment Date following the Initial Construction Loan Advance (if the same shall ever occur) upon which the Interest Reserve Fund is in an insufficient amount to pay the Reduced Acquisition Loan Monthly Interest Payment, the Construction Loan Monthly Interest Payment, the First Mezzanine Monthly Interest Payment, the Second Mezzanine Monthly Interest Payment and the Third Mezzanine Monthly Interest Payment due on such Payment Date (collectively, the “Aggregate Monthly Interest Payment”) and to also maintain the Minimum Balance, each Draw Request for a Construction Loan Advance shall include, to the extent of the unfunded balance of the interest Line Item in the Loan Budget, an amount necessary to pay the Aggregate Monthly Interest Payment due on the Payment Date on or next following the date of the applicable Construction Loan Advance, as applicable (the “Monthly Interest Advance”). Thereafter, provided that (a) such Draw Request is approved in accordance with the terms of this Agreement, and (b) no Event of Default shall have occurred and be continuing, if on the Payment Date on or next following the date of the applicable Construction Loan Advance, as applicable, the funds available in the Cash Management Account are insufficient to pay the Aggregate Monthly Interest Payment after satisfying all items with a higher priority pursuant to Section 2.6.2(b) hereof, Lender shall automatically, without the necessity of notifying, or obtaining the approval of, any Borrower or any other Person, and without any Borrower’s specific request, advance directly to Lender such portion of the requested Monthly Interest Advance as is

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necessary to satisfy such insufficiency in the Cash Management Account, it being acknowledged and agreed by Borrowers that in the event that, with respect to any requested Monthly Interest Advance, less then the entire amount thereof is needed to satisfy any such insufficiency in the Cash Management Account, then the amount of the requested Monthly Interest Advance included within the related requested Construction Loan Advance shall be deemed automatically reduced by the amount not needed to satisfy such insufficiency, which unneeded amount shall be treated as having never been included in the requested Construction Loan Advance and shall remain available for subsequent advance in accordance with all of the terms and conditions of this Agreement. Notwithstanding the foregoing, Borrowers expressly acknowledge and agree that (i) in the event that on any day on which the Aggregate Monthly Interest Payment is due and payable (A) an Event of Default has occurred and is continuing, (B) the applicable requested Construction Loan Advance has not been approved as a result of the failure of any applicable condition set forth in this Agreement, or (C) Borrowers have not requested a Construction Loan Advance to cover such Aggregate Monthly Interest Payment or any portion thereof, in each of such instances, Borrowers shall remain liable for the payment of all Reduced Acquisition Loan Monthly Interest Payments and Construction Loan Monthly Interest Payments as and when due, First Mezzanine Borrowers shall remain liable for the payment of all First Mezzanine Monthly Interest Payments as and when due, Second Mezzanine Borrowers shall remain liable for the payment of all Second Mezzanine Monthly Interest Payments as and when due and Third Mezzanine Borrowers shall remain liable for the payment of all Third Mezzanine Monthly Interest Payments as and when due; and (ii) in the event that on any day on which the Aggregate Monthly Interest Payment is due and payable, and assuming none of the events set forth in the foregoing clauses (A), (B) or (C) has occurred and is continuing, the amount of such Aggregate Monthly Interest Payment exceeds the unfunded balance of the interest Line Item in the Loan Budget, Borrowers, First Mezzanine Borrowers, Second Mezzanine Borrowers and Third Mezzanine Borrowers, as applicable, shall remain liable for the difference between the applicable Monthly Interest Payment, First Mezzanine Monthly Interest Payment, Second Mezzanine Monthly Interest Payment and/or Third Mezzanine Monthly Interest Payment, as applicable, and the unfunded balance of the interest Line Item in the Loan Budget, such difference to be due and payable at the time the Aggregate Monthly Interest Payment is due and payable. Lender acknowledges that if Lender is obligated to advance a portion of any Construction Loan Advance for payment of all or any part of any Aggregate Monthly Interest Payment pursuant to this Section 3.20.1, then the failure of Borrowers to pay such Aggregate Monthly Interest Payment or the applicable portion thereof shall not be deemed an Event of Default.

3.20.2 Lender’s Right to Make Construction Loan Advance to Pay Monthly Interest. Notwithstanding the foregoing, from and after any Payment Date following the Initial Construction Loan Advance (if the same shall ever occur) upon which the Interest Reserve Fund is in an insufficient amount to pay the Aggregate Monthly Interest Payment due on such Payment Date and to also maintain the Minimum Balance, if (a) Borrowers fail to submit any Draw Request for a Construction Loan Advance or fail to submit a Draw Request for a Construction Loan Advance that includes a Monthly Interest Advance, (b) the applicable requested Construction Loan Advance has not been approved as a result of the failure of any applicable condition set forth in this Agreement, and/or (c) an Event of Default has occurred and is continuing, in any of the foregoing instances Lender shall have the right (but not the obligation), in its sole and absolute discretion, without the necessity of notifying, or obtaining the

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approval of, any Borrower or any other Person, and without any Borrower’s specific request, to advance a portion of the Construction Loan necessary to pay the Aggregate Monthly Interest Payment then due (a “Lender Monthly Interest Advance”); provided, however, that if an Event of Default has occurred and is continuing, Lender shall have the right (but not the obligation), in its sole and absolute discretion, without the necessity of notifying, or obtaining the approval of, any Borrower or any other Person, and without any Borrower’s specific request, to make a Lender Monthly Interest Advance to pay only that portion of the Aggregate Monthly Interest Payment that represents the Reduced Acquisition Loan Monthly Interest Payment and/or the Construction Loan Monthly Interest Payment then due. With respect to the foregoing, Borrowers and Lender expressly acknowledge and agree that (i) the fact that Lender makes a Lender Monthly Interest Advance shall not relieve Borrowers, First Mezzanine Borrowers, Second Mezzanine Borrowers and Third Mezzanine Borrowers from the obligation to make all future Reduced Acquisition Loan Monthly Interest Payments, Construction Loan Monthly Interest Payments, First Mezzanine Monthly Interest Payments, Second Mezzanine Monthly Interest Payments and Third Mezzanine Monthly Interest Payments, as applicable, subject to Section 3.20.1 hereof, (ii) the fact that Lender makes a Lender Monthly Interest Advance in any instance shall not obligate Lender to make any subsequent Lender Monthly Interest Advance in the same or in any other instance, (iii) a Lender Monthly Interest Advance, when made, shall constitute a Construction Loan Advance for all purposes under this Agreement and shall constitute one of the two (2) Construction Loan Advances available to Borrowers for the subsequent thirty (30) days, (iv) the amount of any Lender Monthly Interest Advance may exceed the unfunded balance of the interest Line Item in the Loan Budget and Lender shall determine, in its reasonable discretion, where to reallocate funds in the Loan Budget to cover any such excess, and (v) if Lender makes a Lender Monthly Interest Advance for payment of all or any part of any Aggregate Monthly Interest Payment pursuant to this Section 3.20.2, then the failure of Borrowers to pay such Aggregate Monthly Interest Payment or the applicable portion thereof shall not be deemed an Event of Default (but it shall not be deemed to cure any other existing Event of Default).

Section 3.21 Construction Loan Advances Once Construction Loan is Fully Advanced. Lender and Borrowers acknowledge and agree that because Lender is permitting Borrowers to delay Borrowers’ equity contribution in the Project in return for Borrowers posting the Required Equity Letter(s) of Credit, it is anticipated that at some point in time prior to Substantial Completion, the Construction Loan Amount, other than the interest Line Item, will be fully advanced (such time being referred to herein as the “Borrower Advance Date”). Accordingly, from and after the Borrower Advance Date and until Final Completion, the following shall apply to each subsequent Construction Loan Advance:

(a) Conditions to Advances.

(i) Satisfaction of Standard Conditions. Borrowers shall satisfy and/or cause to be satisfied the conditions to such Construction Loan Advance set forth in Section 3.3 (other than that relating to title endorsements) and, if applicable, 3.4 hereof.

(ii) Deposit of Funds. Not later than seven (7) days (or the next succeeding Business Day if such seventh (7th) day is not a Business Day) prior to

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the Requested Disbursement Date, Borrowers shall deliver to Lender, for deposit into the Construction Loan Reserve Account, funds in the amount of the requested Construction Loan Advance.

(iii) Letter of Credit Reduction Request. Borrowers’ Advance Request shall include a Letter of Credit Reduction Notice with the amount of the requested Construction Loan Advance and any other required information (other than Lender’s signature) filled in.

(b) Funding Construction Loan Advances. Subject to the satisfaction of each of the foregoing conditions, Lender shall fund the applicable Construction Loan Advance from the funds on deposit in the Construction Loan Reserve Account and otherwise in accordance with all of the terms of this Article III.

(c) Delivery of Letter of Credit Reduction Notice. Promptly following the funding of the applicable Construction Loan Advance from the Construction Loan Reserve Account, Lender shall deliver or cause Servicer or the Administrative Agent to deliver, the Letter of Credit Reduction Notice to the applicable issuing bank; provided, however, that none of Lender, Servicer or the Administrative Agent shall be liable to Borrowers for any delay in so delivering any such Letter of Credit Reduction Notice, other than any actual out-of-pocket losses, costs and damages resulting from their willful misconduct or fraud; and, provided, further, however, that Lender expressly acknowledges that upon Borrowers providing the funds to make a particular Construction Loan Advance, Lender agrees never to seek to recover the amount of such Construction Loan Advance in the event Lender shall ever draw down on any Required Equity Letter of Credit and apply the proceeds thereof.

(d) Failure to Deliver Funds for the Construction Loan Reserve Account. With respect to any Construction Loan Advance, in the event that Borrowers fail to deliver the applicable funds for deposit in the Construction Loan Reserve Account not later than seven (7) days (or the next succeeding Business Day if such seventh (7th) day is not a Business Day) prior to the Requested Disbursement Date, Lender shall have the right at any time thereafter, in its sole discretion, to draw down on such Required Equity Letter(s) of Credit in its/their entirety, without the consent of, or notice to, Borrowers or any other Person other than the issuing bank(s) of any such Required Equity Letter(s) of Credit, and to deposit the proceeds thereof in the Construction Loan Reserve Account, following which, all further Construction Loan Advances shall be funded in accordance with all of the terms of this Agreement from the Construction Loan Reserve Account.

(e) Provisions of this Agreement Continue to Apply. Borrowers and Lender expressly acknowledge and agree that the funding of any Construction Loan Advance in accordance with this Section 3.21 shall not affect the other provisions of this Article 3, and Borrowers, each Construction Loan Advance and the construction of the Project shall continue to be governed by the provisions of this Article III.

Section 3.22 Right of Borrowers to Halt Construction and Restore. Notwithstanding anything to the contrary set forth in this Agreement or in any other Loan Document, in the event that the Qualification Conditions have been satisfied on or prior to the Construction Qualification

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Date and Borrowers have commenced construction of the Project, Borrowers shall have the right, at any time prior to the earlier to occur of (1) the Non-Qualified Initial Maturity Date or (2) the Project Cost Ceiling Date, to permanently stop construction of the Project, subject to the conditions set forth in, and otherwise in accordance with the terms of, this Section 3.22.

(a) Conditions to Stopping Construction.

(i) Notice to Lender. Borrowers shall give Lender written notice of their intention to stop construction (a “Stop Notice”). Upon delivery of a Stop Notice, (A) Lender shall have no further obligation to fund any portion of the Construction Loan, and (B) Borrowers shall have no further right to request or obtain any portion of the Construction Loan.

(ii) Duty to Restore. Upon Borrowers’ delivery of a Stop Notice, Borrowers shall promptly commence and diligently proceed with the full restoration of the Adjacent Property and the Hotel/Casino Property, as and to the extent each has been impacted by Borrowers’ construction to date, including, without limitation, any Pre-Construction Work, to the condition in which it or they, as applicable, existed on the Closing Date or another condition satisfactory to Lender in its sole discretion, except if any of the apartment buildings on the Adjacent Property were demolished as permitted in Section 3.18 hereof, Borrowers shall not be obligated to rebuild such buildings.

(iii) Payments to Lender. Within ten (10) days following Borrowers’ delivery of a Stop Notice, Borrowers shall pay to Lender, as a voluntary prepayment of the Loan in accordance with the provisions of Section 2.4.1 hereof, an amount equal to the sum of: (A) the amount of all Pre-Construction Advances and Construction Loan Advances advanced to Borrowers prior to delivery of the Stop Notice, to be applied in accordance with the provisions of Section 2.4.3(i) hereof, and (B) the Non-Qualified Mandatory Prepayment, to be applied in accordance with the provisions of Section 2.4.3(b) hereof, in each instance, together with all other amounts due and payable under Section 2.4.1 hereof upon such prepayments, including, without limitation, (1) if such prepayments occur on a date other than a Payment Date, all interest which would have accrued on the amount so prepaid to be paid through, but not including, the next succeeding ninth (9th) day of a calendar month, or, if such prepayments occur on a Payment Date, through and including the last day of the Interest Period immediately prior to the applicable Payment Date, (2) any Breakage Costs, (3) if such prepayments are made prior to the Spread Maintenance Release Date, the Spread Maintenance Premium due with respect to the amount prepaid pursuant to clause (A) above, (4) the applicable Exit Fee due with respect to the amount prepaid pursuant to clause (A) above, and (5) all other sums due and payable under this Agreement, the Notes and the other Loan Documents, including, but not limited to, all of Lender’s costs and expenses (including reasonable attorney’s fees and disbursements) incurred by Lender in connection with such prepayments. In furtherance of the foregoing, Lender agrees that Borrowers shall have the right to use any existing funds then on deposit in the Construction Loan Reserve Account to cover the foregoing voluntary prepayment pursuant to clause (A) above or any portion thereof.

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(iv) Deposit to Interest Reserve. Within ten (10) days following Borrowers’ delivery of a Stop Notice, Borrowers shall deliver to Lender, for deposit into the Interest Reserve Account and thereafter to constitute a portion of the Interest Reserve Fund for all purposes under this Agreement and the other Loan Documents, an amount reasonably determined by Lender that, when added to the then existing Interest Reserve Fund, is sufficient to pay the aggregate amount of (A) Debt Service on the Reduced Acquisition Loan through the Revised Maturity Date, at an interest rate equal to the Strike Price plus the Reduced Acquisition Loan Spread, (B) Debt Service on the Construction Loan through the Revised Maturity Date, at an interest rate equal to the Strike Price plus the Construction Loan Spread, (C) debt service on the First Mezzanine Loan through the Revised Maturity Date, at an interest rate equal to the Strike Price plus the First Mezzanine Spread, (D) debt service on the Second Mezzanine Loan through the Revised Maturity Date, at an interest rate equal to the Strike Price plus the Second Mezzanine Spread, and (E) debt service on the Third Mezzanine Loan through the Revised Maturity Date, at an interest rate equal to the Strike Price plus the Third Mezzanine Spread, taking into account the reasonably anticipated Net Cash Flow (and any interruption thereof or adverse impact thereon as a result of stopping construction and restoring the Properties as contemplated by this Section 3.22) for the period following delivery of the Stop Notice and ending on the Revised Maturity Date. In furtherance of the foregoing, Lender agrees that Borrowers shall have the right to use any existing portion of the General Reserve Fund to cover the foregoing amount or any portion thereof.

(b) Reversion of Maturity Date to Non-Qualified Initial Maturity Date. Simultaneously with the delivery of a Stop Notice, the Initial Maturity Date shall, without notice to or consent of any Borrower or any other Person, automatically and for all purposes, revert from the Qualified Initial Maturity Date to the Non-Qualified Initial Maturity Date (the “Revised Maturity Date”).

(c) Completion of Restoration. Upon completion of the restoration of the Adjacent Property and the Hotel/Casino Property as contemplated in Section 3.22(a)(ii) hereof, Borrowers shall furnish to Lender the following: (i) a notice from Borrowers informing Lender that such restoration has been completed (a “Restoration Completion Notice”), (ii) confirmation from the Construction Consultant that such restoration has been fully completed substantially in accordance with all Legal Requirements, all material Permitted Encumbrances and this Agreement, (iii) copies of any material Governmental Approvals needed to confirm completion of such restoration, (iv) evidence satisfactory to Lender that all sums due in connection with the construction of the Project and/or such restoration have been paid in full, as evidenced by (A) with respect to any party with Lien rights, an executed Lien waiver in the form attached hereto as Exhibit L-4, or (B) with respect to any party without Lien rights, an invoice and proof of payment or such other evidence of payment as shall be reasonably satisfactory to Lender, and (v) evidence satisfactory to Lender that, except for any Lien then being contested pursuant to, and in accordance with, Section 3.6(b) of the Mortgage, no party claims or has a

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right to claim any statutory or common law Lien arising out of the construction of the Project or such restoration or the supplying of labor, material and/or services in connection therewith.

(d) Payment of Fees and Expenses. Without limiting the generality of Section 10.13 hereof, which shall apply throughout the term of the Loan, upon completion of such restoration, Borrowers shall pay to Lender, within ten (10) days following receipt of the Restoration Payment Statement, all actual out-of-pocket fees and expenses incurred by Lender in connection with the stopping of construction and the restoration of the Properties as contemplated by this Section 3.22 which have not theretofore been reimbursed to Lender by Borrowers, including, without limitation, Lender’s reasonable legal fees and expenses and the reasonable fees and expenses of the Construction Consultant, the total of all such fees and expenses to be evidenced by a written statement from Lender furnished to Borrowers following Lender’s receipt of Borrower’s Restoration Completion Notice (the “Restoration Payment Statement”).

(e) Required Equity Letter of Credit(s).

(i) In the event that Borrowers shall fail to make any of the payments required under this Section 3.22 by the date for payment set forth herein, Lender shall have the right (but not the obligation) to draw down on all of the Required Equity Letters of Credit then held by (or on behalf of) Lender and shall (A) pay itself the payments owing to it out of the proceeds thereof, and (b) deposit the balance of the proceeds in the Cash Management Account until required or permitted to be released pursuant to the further provisions of this Section 3.22(e).

(ii) In the event that Borrowers shall fail to diligently complete restoration as contemplated herein and/or shall fail to cause the satisfaction of any of the conditions set forth in Section 3.22(c) hereof, in addition to all other rights and remedies available to Lender, including, without limitation, proceeding against Guarantors under the Construction Completion Guaranty, Lender shall have the right (but not the obligation) to draw down on all of the Required Equity Letters of Credit then held by (or on behalf of) Lender and use the proceeds thereof, or if Lender has previously drawn down on the Required Equity Letters of Credit, Lender shall have the right (but not the obligation) to use any remaining proceeds thereof not previously applied as provided in Section 3.22(e)(i) hereof, to complete the restoration and/or to cause the satisfaction of any such conditions.

(iii) In the event that following delivery of a Stop Notice, an Event of Default shall occur and be continuing, Lender shall be entitled to exercise all of its right and remedies set forth in this Agreement, including those relating to the Required Equity Letters of Credit, including, without limitation, the right (but not the obligation) to draw down on all of the Required Equity Letters of Credit then held by (or on behalf of) Lender and apply the proceeds thereof to the Obligations, pro rata between the Components in accordance with the Component Percentages (as calculated as of the date of such prepayment), and applied to each Component in such order and priority as Lender shall elect in its sole discretion.

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(iv) In the event that Borrowers shall pay all of the amounts payable to Lender pursuant to this Section 3.22 and shall diligently perform all of its obligations under this Section 3.22, and provided that no Event of Default shall occur and be continuing, Lender shall return to Borrowers all Required Equity Letters of Credit then held by (or on behalf of) Lender or the remaining proceeds thereof if Lender has previously drawn down on the Required Equity Letters of Credit and applied less than all of the proceeds thereof, and Lender shall, at Borrowers’ expense, execute such documents and take such actions as Borrowers shall reasonably request to evidence its release of the Required Equity Letters of Credit.

(f) Termination of Guaranty Obligations. In the event that Borrowers shall pay all of the amounts payable to Lender pursuant to this Section 3.22 and shall diligently perform all of its obligations under this Section 3.22, at such time as Borrowers are entitled to a return of the Required Equity Letters of Credit in accordance with Section 3.22(d)(iv) hereof, the Non-Qualified Prepayment Guaranty shall be deemed terminated and the guaranty obligations relating to the restoration of the Project pursuant to this Section 3.22 in the Construction Completion Guaranty shall be deemed terminated. Lender shall, at Borrowers’ reasonable expense (including Lender’s reasonable attorneys’ fees), promptly execute and deliver such documents as may be reasonably requested by Borrowers or Guarantors to evidence such release of the Non-Qualified Prepayment Guaranty and such provisions of the Construction Completion Guaranty.

(g) Non-Qualified Prepayment Letter of Credit. In the event that, pursuant to the provisions of Section 2.4.2(c) hereof, Guarantors delivered the Non-Qualified Prepayment Letter of Credit to Lender, thus terminating the Non-Qualified Prepayment Guaranty, all of the provisions of this Section 3.22 relating to the Required Equity Letters of Credit shall be deemed equally applicable to the Non-Qualified Prepayment Letter of Credit and such Non-Qualified Prepayment Letter of Credit shall be deemed, for purposes of this Section 3.22 only, an additional Required Equity Letter of Credit.

(h) Additional Non-Qualified Mandatory Prepayment. Within three (3) calendar months following Borrowers’ delivery of a Stop Notice, Borrowers shall pay to Lender, to be applied by Lender as a voluntary prepayment of the Loan in accordance with the provisions of Section 2.4.1 hereof, the Additional Non-Qualified Mandatory Prepayment, together with all other amounts due and payable under Section 2.4.1 hereof upon such prepayment, including, without limitation, (i) if such prepayment occurs on a date other than a Payment Date, all interest which would have accrued on the amount so prepaid to be paid 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) any Breakage Costs, and (iii) all other sums due and payable under this Agreement, the Notes and the other Loan Documents, including, but not limited to, all of Lender’s costs and expenses (including reasonable attorney’s fees and disbursements) incurred by Lender in connection with such prepayments.

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ARTICLE IV.

REPRESENTATIONS AND WARRANTIES.

Section 4.1 Representations of Borrowers. Each Borrower represents and warrants as to itself that as of the Closing Date:

4.1.1 Organization. Such 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. Such 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. Such 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 such Borrower is the ownership, management and operation of its Property or the IP. The ownership interests of such Borrower are as set forth on the organizational chart attached hereto as Schedule VI.

4.1.2 Proceedings. Such 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 such Borrower and constitute legal, valid and binding obligations of such Borrower enforceable against such 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 such 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 such 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 such Borrower is a party or by which any of such 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 such Borrower or any of such 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 such 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 VIII attached hereto:

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

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the business operations, economic performance, assets, financial condition, equity, contingent liabilities, material agreements or results of operations of such Borrower, HRHI, any Guarantor, any Property or the IP, (ii) the enforceability or validity of any Loan Document, the perfection or priority of any Lien created under any Loan Document or the remedies of Lender under any Loan Document, (iii) the ability of such Borrower, HRHI or any Guarantor to perform, in all material respects, its obligations under each of the Loan Documents, or (iv) the value of, or cash flow from any Property or the IP.

(b) There is no proceeding, investigation or disciplinary action (including, without limitation, before any Gaming authority, under any Gaming Law or under any Gaming License or other Operating Permit) pending or, to Borrowers’ actual knowledge, threatened in writing, either (i) in connection with, or that seeks to restrain, enjoin, prevent the consummation of or otherwise challenge, any of the Loan Documents or any of the transactions contemplated therein, or (ii) to Borrower’s actual knowledge, that, either singly or in the aggregate, could reasonably be expected to have an adverse effect on any Gaming License currently in effect with respect to the Casino Component, including, without limitation, any such proceeding, investigation or disciplinary action pending or, threatened against Gaming Operator, any Borrower or any of their respective directors, members, managers, officers, key personnel or Persons holding a five percent (5%) or greater direct or indirect equity or economic interest in any Borrower. Additionally, there is no proceeding (including, without limitation, before any Gaming Authority, under any Gaming Law or under any Gaming License or other Operating Permit) pending or, to Borrowers’ actual knowledge, threatened in writing that could reasonably be expected to have a material adverse effect on any application for a Gaming License or other Operating Permit by Gaming Borrower or any Affiliate thereof or any officer, director, employee or agent of any Borrower or any Affiliate of any Borrower.

4.1.5 Agreements. Such Borrower is not a party to any agreement or instrument or subject to any restriction which would be reasonably likely to materially and adversely affect such Borrower or its Property or the IP, or such Borrower’s business, properties or assets, operations or condition, financial or otherwise. To the best of such Borrower’s actual knowledge, such Borrower is not in default in any material respect in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any agreement, license or instrument to which it is a party or by which such Borrower or any of the Properties or the IP are bound. Such Borrower has no material financial obligation under any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which such Borrower is a party or by which such Borrower or its Property or the IP is otherwise bound, other than (a) obligations incurred in the ordinary course of the operation of the Properties as permitted pursuant to clause (t) of the definition of “Special Purpose Entity” set forth in Section 1.1 hereof, (b) obligations under the Existing FF&E Leases, (c) obligations under the Loan Documents, (d) obligations pursuant to its Management Agreement and/or the Sub-Management Agreement, as applicable, and (e) as to Hotel/Casino Borrower, obligations pursuant to the Liquor Management Agreement.

4.1.6 Title. Such Borrower has good, marketable and insurable fee simple title to the real property comprising part of its Property and good title to the balance of such Property, free and clear of all Liens whatsoever except the Permitted Encumbrances, such other Liens as are permitted pursuant to the Loan Documents and the Liens created by the Loan Documents.

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To the best of each Borrower’s actual knowledge, the Permitted Encumbrances in the aggregate do not materially and adversely affect the operation or use of such Borrower’s Property (as currently used) or Borrowers’ ability to repay the Loan. The Mortgage, when properly recorded in the appropriate records, together with any Uniform Commercial Code financing statements required to be filed in connection therewith, will create (a) a valid, perfected first priority lien on the real property portion of the Properties, subject only to Permitted Encumbrances and the Liens created by the Loan Documents, and (b) together with the filing of the required Uniform Commercial Code financing statements and the proper recording of the Assignment of Leases, perfected security interests in and to, and perfected collateral assignments of, all personalty (including the Leases), all in accordance with the terms thereof, in each case subject only to any applicable Permitted Encumbrances, such other Liens as are permitted pursuant to the Loan Documents and the Liens created by the Loan Documents. To such Borrower’s actual knowledge after due inquiry, there are no claims for payment for work, labor or materials affecting any of the Properties that are or may become a Lien prior to, or of equal priority with, the Liens created by the Loan Documents, except any Lien then being contested pursuant to, and in accordance with, Section 3.6(b) of the Mortgage.

4.1.7 Solvency. Borrowers have (a) not entered into the transaction or executed the Notes, this Agreement or any other Loan Documents with the actual intent to hinder, delay or defraud any creditor and (b) received reasonably equivalent value in exchange for its obligations under such Loan Documents. Taking into account the Loan, the aggregate fair saleable value of Borrowers’ assets collectively exceeds and will exceed Borrowers’ total aggregate liabilities, including, without limitation, subordinated, unliquidated, disputed and contingent liabilities. Taking into account the Loan, the aggregate fair saleable value of Borrowers’ assets collectively is and will be greater than Borrowers’ probable aggregate liabilities, including the maximum amount of their contingent liabilities on their debts as such debts become absolute and matured. Taking into account the Loan, each Borrower’s assets do not and will not constitute unreasonably small capital to carry out its business as conducted or as proposed to be conducted. Borrowers do not intend to, and do not believe that they will, incur Indebtedness and liabilities (including contingent liabilities and other commitments) beyond their respective abilities to pay such Indebtedness and liabilities as they mature (taking into account the timing and amounts of cash to be received by each Borrower and the amounts to be payable on or in respect of obligations of each Borrower). No petition in bankruptcy has been filed against any Borrower, HRHI or any Guarantor, and none of any Borrower, HRHI nor any Guarantor has ever made an assignment for the benefit of creditors or taken advantage of any insolvency act for the benefit of debtors. None of any Borrower, HRHI nor any Guarantor are contemplating either the filing of a petition by it under any state or federal bankruptcy or insolvency laws or the liquidation of all or a major portion of its assets or properties, and no Borrower has any actual knowledge of any Person contemplating the filing of any such petition against it, HRHI or any Guarantor.

4.1.8 Full and Accurate Disclosure. To such Borrower’s actual knowledge, no statement of fact made by any Borrower in this Agreement or in any of the other Loan Documents contains any untrue statement of a material fact or omits to state any material fact necessary to make statements contained herein or therein not misleading. There is no fact or circumstance presently known to such Borrower which has not been disclosed to Lender and which will have a material adverse effect on (a) the use and operation of any of the Properties or the IP, (b) the enforceability or validity of any Loan Document, the perfection or priority of any

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Lien created under any Loan Document or the remedies of Lender under any Loan Document, or (c) the ability of any Borrower, HRHI or any Guarantor to perform, in all material respects, its obligations under each of the Loan Documents.

4.1.9 No Plan Assets. As of the date hereof and throughout the term of the Loan (a) no Borrower is nor will any Borrower be an “employee benefit plan,” as defined in Section 3(3) of ERISA, subject to Title I of ERISA, (b) none of the assets of any Borrower constitutes or will constitute “plan assets” of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101, (c) no Borrower is nor will any Borrower be a “governmental plan” within the meaning of Section 3(32) of ERISA, and (d) none of the assets of any Borrower constitute “plan assets” of a governmental plan within the meaning of 29 C.F.R. Section 2510.3-101 for purposes of any state law provisions regulating investments of, or fiduciary obligations with respect to, governmental plans.

4.1.10 Compliance. Except as set forth in the applicable Zoning Report, such Borrowers and, to the best of such Borrower’s actual knowledge after due inquiry, the Land and Improvements (including the use thereof) comply in all material respects with all applicable Legal Requirements, including, without limitation, building and zoning ordinances and codes and Prescribed Laws. No Borrower is in default or violation of any order, writ, injunction, decree or demand of any Governmental Authority. There has not been committed by any Borrower or, to any Borrower’s actual knowledge, any other Person in occupancy of or involved with the operation or use of any of the Properties any act or omission affording the federal government or any other Governmental Authority the right of forfeiture as against any Property or any part thereof or any monies paid in performance of Borrowers’ obligations under any of the Loan Documents.

4.1.11 Financial Information. To such Borrower’s actual knowledge, all historical financial data, including, without limitation, the statements of cash flow and income and operating expense, that have been delivered to Lender in connection with the Loan (i) are true, complete and correct in all material respects, (ii) accurately represent in all material respects the financial condition of the Properties (and each Property) as of the date of such reports, and (iii) to the extent prepared or audited by an independent certified public accounting firm, have been prepared in accordance with the Uniform System of Accounts and reconciled with GAAP throughout the periods covered, except as disclosed therein. Except for Permitted Encumbrances and except as referred to or reflected in said financial statements previously delivered to Lender in connection with the Loan, no Borrower has any contingent liabilities, liabilities for taxes, unusual forward or long-term commitments or unrealized or anticipated losses from any unfavorable commitments that are known to any Borrower and are reasonably likely to have a materially adverse effect on any Property or (a) the operation of the Hotel/Casino Property as a hotel and casino at a standard at least equal to Comparable Hotel/Casinos, including, without limitation, comparable food and beverage outlets and other amenities, and/or (b) the operation of the Café Property and the Adjacent Property for a use or uses that is/are consistent with the operation of the Hotel/Casino Property as a hotel and casino at a standard at least equal to Comparable Hotel/Casinos, which use may include, without limitation, expansion of the Hotel/Casino Property, restaurants, retail and residential complexes (the “Permitted Adjacent/Café Uses”). Since the date of such financial statements, there has been no material adverse change in the financial condition, operation or business of any Borrower or, to each Borrower’s actual knowledge after due inquiry, to the extent not prohibited by the Merger Agreement, any Property from that set forth in said financial statements.

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4.1.12 Condemnation. No Condemnation or other proceeding has been commenced or, to each Borrower’s actual knowledge, is threatened in writing received by such Borrower or contemplated with respect to all or any portion of any Property or for the relocation of any roadway providing direct access to any Property.

4.1.13 Federal Reserve Regulations. No part of the proceeds of the Loan will be used for the purpose of purchasing or acquiring any “margin stock” within the meaning of Regulation U of the Board of Governors of the Federal Reserve System or for any other purpose which would be inconsistent with such Regulation U or any other Regulations of such Board of Governors, or for any purposes prohibited by any Legal Requirements or by the terms and conditions of this Agreement or the other Loan Documents.

4.1.14 Utilities and Public Access. To such Borrower’s actual knowledge after due inquiry, each Property has rights of access to public ways and is served by water, sewer, sanitary sewer and storm drain facilities adequate to service such Property for its intended uses. All public utilities necessary to the continued current use and enjoyment of each Property are located either in the public right-of-way abutting such Property (which are connected so as to serve such Property without passing over other property) or in recorded easements serving such Property and such easements are set forth in and insured by the Title Insurance Policy covering such Property. To such Borrower’s actual knowledge after due inquiry, all roads necessary for the use of each Property for its current purpose have been completed and dedicated to public use and accepted by all Governmental Authorities or are located in recorded easements serving such Property and such easements are set forth in and insured by the Title Insurance Policy.

4.1.15 Not a Foreign Person. No Borrower is a “foreign person” within the meaning of §1445(f)(3) of the Code.

4.1.16 Separate Lots. Each Property is comprised of one (1) or more parcels which constitute a separate tax lot or lots and does not constitute a portion of any other tax lot not a part of such Property.

4.1.17 Assessments. Except as disclosed in the Title Insurance Policy, to each Borrower’s actual knowledge, there are no pending or proposed special or other assessments for public improvements or otherwise affecting any Property, nor are there any contemplated improvements to any Property that may result in such special or other assessments.

4.1.18 Enforceability. The Loan Documents are not subject to any right of rescission, set-off, counterclaim or defense by any Borrower, HRHI or any Guarantor, including the defense of usury, nor would the operation of any of the terms of the Loan Documents, or the exercise of any right thereunder, render the Loan Documents unenforceable (subject to principles of equity and bankruptcy, insolvency and other laws generally affecting creditors’ rights and the enforcement of debtors’ obligations), and none of any Borrower, HRHI nor any Guarantor has asserted any right of rescission, set-off, counterclaim or defense with respect thereto.

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4.1.19 No Prior Assignment. There are no prior assignments by Borrowers of the Leases or any portion of the Rents due and payable or to become due and payable which are presently outstanding.

4.1.20 Insurance. Borrowers have obtained and have delivered to Lender certified copies of all Policies (or “Accord” certificates evidencing coverage thereof) reflecting the insurance coverages, amounts and other requirements set forth in this Agreement. No claims have been made under any such Policies, and no Person, including any Borrower, has done, by act or omission, anything which would impair the coverage of any such Policies.

4.1.21 Use of the Properties. (a) The Hotel/Casino Property is used exclusively as a hotel and casino at a standard at least equal to Comparable Hotel/Casinos, including, without limitation, comparable food and beverage outlets and other amenities, and otherwise as a top-end hotel and other appurtenant and related uses, and (b) the Café Property and the Adjacent Property are used for Permitted Adjacent/Café Uses and other appurtenant and related uses.

4.1.22 Certificate of Occupancy; Operating Permits. To the best of each Borrower’s actual knowledge after due inquiry, all certifications, permits, licenses and approvals, including, without limitation, certificates of completion and occupancy permits, all environmental, health and safety licenses, gaming licenses and permits and any applicable liquor license necessary to permit the legal use, occupancy and operation of (a) the Hotel/Casino Property as a hotel and casino at a standard at least equal to Comparable Hotel/Casinos, including, without limitation, comparable food and beverage outlets and other amenities, and (b) the Café Property and the Adjacent Property as currently operated on the date hereof, or, subsequent to the date hereof, for Permitted Adjacent/Café Uses (collectively, the “Operating Permits”), have been obtained and are in full force and effect. Each Borrower shall keep and maintain, or cause to be kept and maintained, all Operating Permits necessary for the operation of (i) the Hotel/Casino Property as a hotel and casino at a standard at least equal to Comparable Hotel/Casinos, and (ii) the Café Property and the Adjacent Property for one or more Permitted Adjacent/Café Purposes. To the best of each Borrower’s actual knowledge after due inquiry, the use being made of each Property is in conformity with the Certificate(s) of Occupancy issued for such Property. Attached hereto as Schedule IX is, to the best of each Borrower’s actual knowledge after due inquiry, a true and complete list of all current Operating Permits and those which are subject to renewal.

4.1.23 Flood Zone. None of the Improvements on any Property are located in an area identified by the Federal Emergency Management Agency as an area having special flood hazards or, if so located, the flood insurance required pursuant to Section 6.1(a)(i) hereof is in full force and effect with respect to each such Property.

4.1.24 Physical Condition. Except as provided in the Physical Conditions Reports, to the each Borrower’s actual knowledge after due inquiry, (a) each Property, including, without limitation, all buildings, improvements, parking facilities, sidewalks, storm drainage systems, roofs, plumbing systems, HVAC systems, fire protection systems, electrical systems, equipment, elevators, exterior sidings and doors, landscaping, irrigation systems and all structural components, are in good condition, order and repair in all material respects; (b) there exists no material structural or other material defects or damages in any Property, whether latent

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or otherwise; and (c) no Borrower has received notice from any insurance company or bonding company of any defects or inadequacies in any Property, or any part thereof, which would adversely affect the insurability of the same or cause the imposition of extraordinary premiums or charges thereon or of any termination or threatened termination of any policy of insurance or bond.

4.1.25 Boundaries. Except as disclosed on the Surveys, to each Borrower’s actual knowledge, all of the Improvements which were included in determining the appraised value of each Property lie wholly within the boundaries and building restriction lines of such Property, and no improvements on adjoining properties encroach upon such Property, and no easements or other encumbrances upon any Property encroach upon any of the Improvements, so as to materially and adversely affect the value or marketability of such Property except those which are insured against by the applicable Title Insurance Policy for such Property.

4.1.26 Leases. To each Borrower’s actual knowledge after due inquiry and except as set forth on Schedule X attached hereto or as otherwise disclosed in the estoppel certificates delivered to Lender in connection with the closing of the Loan, (a) the Properties are not subject to any Leases other than the HRHI Lease and the other Leases described in said Schedule X, (b) each Borrower is the owner and lessor of the landlord’s interest in each such Lease affecting its Property, (c) no Person has any possessory interest in any Property or any right to occupy the same except under and pursuant to the provisions of such Leases, (d) all commercial Leases are in full force and effect and there are no material defaults thereunder by either party and there are no conditions that, with the passage of time or the giving of notice, or both, would constitute material defaults thereunder, (e) the copies of the commercial Leases delivered to Lender are true and complete, and there are no oral agreements with respect thereto, (f) no Rent (including security deposits) has been paid more than one (1) month in advance of its due date, (g) all work to be performed by the landlord under each Lease has been performed as required in such Lease and has been accepted by the applicable tenant, and any payments, free rent, partial rent, rebate of rent or other payments, credits, allowances or abatements required to be given by any Borrower to any tenant has already been received by such tenant, (h) there has been no prior sale, transfer or assignment, hypothecation or pledge of any Lease or of the Rents received therein which is still in effect, (i) no commercial tenant listed on Schedule X has assigned its Lease or sublet all or any portion of the premises demised thereby, no such commercial tenant holds its leased premises under assignment or sublease, nor does anyone except such commercial tenant and its employees occupy such leased premises, (j) no tenant under any Lease has a right or option pursuant to such Lease or otherwise to purchase all or any part of the Property of which the leased premises are a part, and (k) no tenant under any Lease has any right or option for additional space in the Improvements.

4.1.27 Intentionally Omitted.

4.1.28 Principal Place of Business; State of Organization. Each Borrower’s principal place of business as of the date hereof is the address set forth in the introductory paragraph of this Agreement. Each Borrower is organized under the laws of the State of Delaware.

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4.1.29 Filing and Recording Taxes. All transfer taxes, deed stamps, intangible taxes or other amounts in the nature of transfer taxes required to be paid by any Person under applicable Legal Requirements currently in effect in connection with the transfer of the Properties and/or the IP to Borrowers have been paid as of the Closing Date. Borrowers and each of their Affiliates have filed or caused to be filed all reports relating to gaming taxes or fees to any Gaming Authority required to be filed by them on or prior to the date hereof. All mortgage, mortgage recording, stamp, intangible or other similar tax required to be paid by any Person under applicable Legal Requirements currently in effect in connection with the execution, delivery, recordation, filing, registration, perfection or enforcement of any of the Loan Documents, including, without limitation, the Mortgage, have been paid as of the Closing Date, and the Mortgage and the other Loan Documents are enforceable against Borrowers in accordance with their respective terms by Lender (or any subsequent holder thereof), subject to principles of equity and bankruptcy, insolvency and other laws generally applicable to creditors’ rights and the enforcement of debtors’ obligations.

4.1.30 Special Purpose Entity/Separateness. (a) Until the Debt has been paid in full and the obligations under the First Mezzanine Loan Documents, the Second Mezzanine Loan Documents and the Third Mezzanine Loan Documents have been paid in full, each Borrower hereby represents, warrants and covenants that such Borrower is, shall be and shall continue to be a Special Purpose Entity.

(b) The representations, warranties and covenants set forth in Section 4.1.30(a) hereof shall survive for so long as any amount remains payable to Lender under this Agreement or any other Loan Document.

(c) All of the assumptions made in the Insolvency Opinion, including, but not limited to, any exhibits attached thereto, are true and correct in all respects. Each Borrower has complied and will comply with all of the assumptions made with respect to such Borrower in the Insolvency Opinion.

(d) Each Borrower hereby covenants and agrees that (i) any assumptions made in any subsequent non-consolidation opinion required to be delivered in connection with the Loan Documents (an “Additional Insolvency Opinion”), including, but not limited to, any exhibits attached thereto, shall be true and correct in all respects, (ii) each Borrower will comply with all of the assumptions made with respect to each Borrower in any Additional Insolvency Opinion, and (iii) each Person other than any Borrower with respect to which an assumption shall be made in any Additional Insolvency Opinion will comply with all of the assumptions made with respect to it in any Additional Insolvency Opinion.

4.1.31 Management Agreements; Liquor Management Agreement.

(a) Each of the Management Agreements is in full force and effect and there is no default thereunder by any party thereto and no event has occurred that, with the passage of time and/or the giving of notice would constitute a default thereunder. Following the date hereof, there shall be no material default thereunder.

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(b) The Sub-Management Agreement is in full force and effect and there is no material default thereunder by any party thereto and no event has occurred that, with the passage of time and/or the giving of notice would constitute a material default thereunder.

(c) The Liquor Management Agreement is in full force and effect and there is no default thereunder by any party thereto and no event has occurred that, with the passage of time and/or the giving of notice would constitute a default thereunder.

4.1.32 Illegal Activity. No portion of any Property or the IP has been or will be purchased by any Borrower or any other Restricted Party with proceeds of any illegal activity.

4.1.33 No Change in Facts or Circumstances; Disclosure. To each Borrower’s actual knowledge, all material information submitted by any Borrower to Lender and in all financial statements, rent rolls, reports, certificates and other documents submitted in connection with the Loan or in satisfaction of the terms thereof and all statements of fact made by any Borrower in this Agreement or in any other Loan Document, are accurate, complete and correct in all material respects. To each Borrower’s actual knowledge, there has been no material adverse change in any condition, fact, circumstance or event that would make any such information inaccurate, incomplete or otherwise misleading in any material respect or that otherwise materially and adversely impairs, or is reasonably likely to do so after the date hereof, the use or operation of the Properties or the IP or the business operations or the financial condition of any Borrower. Each Borrower has disclosed to Lender all material facts actually known to such Borrower and has not failed to disclose any material fact actually known to such Borrower that could cause any Provided Information or representation or warranty made herein to be materially misleading.

4.1.34 Investment Company Act. No Borrower is (a) an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended; or (b) subject to any other federal or state law or regulation which purports to restrict or regulate its ability to borrow money.

4.1.35 Embargoed Person. At all times throughout the term of the Loan, including after giving effect to any Transfers permitted pursuant to the Loan Documents, (a) none of the funds or other assets of any Borrower, HRHI or any Guarantor shall constitute property of, or shall be beneficially owned, directly or indirectly, by, any Person subject to trade restrictions under United States law, including, but not limited to, the International Emergency Economic Powers Act, 50 U.S.C. § 1701 et seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Orders or regulations promulgated under any such United States laws (each, an “Embargoed Person”), with the result that the Loan made by Lender is or would be in violation of law; (b) no Embargoed Person shall have any interest of any nature whatsoever in any Borrower, HRHI or any Guarantor, as applicable, with the result that the Loan is or would be in violation of law; and (c) none of the funds of any Borrower, HRHI or any Guarantor, as applicable, shall be derived from any unlawful activity with the result that the Loan is or would be in violation of law; provided, however, that Borrowers’ representation in this clause (c) shall not extend to gaming revenues generated at the Hotel/Casino Property from the general public unless any Borrower or any other Restricted Party has actual knowledge that such revenues are derived from any unlawful activity.

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4.1.36 Cash Management Account. (a) This Agreement, together with the other Loan Documents, creates a valid and continuing security interest (as defined in the Uniform Commercial Code of the State of New York) in the Lockbox Account and the Cash Management Account in favor of Lender, which security interest is prior to all other Liens and is enforceable as such against creditors of and purchasers from any Borrower. Other than in connection with the Loan Documents, no Borrower has sold or otherwise conveyed the Lockbox Account and/or the Cash Management Account;

(b) Each of the Lockbox Account and the Cash Management Account constitute “deposit accounts” within the meaning of the Uniform Commercial Code of the State of New York; and

(c) The Lockbox Account and the Cash Management Account are not in the name of any Person other than Borrowers, as pledgors, or Lender, as pledgee.

4.1.37 Intellectual Property.

(a) The Intellectual Property Security Agreement creates a valid and continuing security interest (as defined in the Uniform Commercial Code of the State of New York) in all of IP Borrower’s and HRHI’s rights, title and interest in and to all of the following (collectively, the “IP”):

(i) all trademarks, service marks, domain names, trademark registrations, service xxxx registrations, domain name registrations, applications for trademark registrations, applications for service xxxx registrations, applications for domain name registrations, trade names, brand names, product names and common law marks, and the renewals thereof owned or used by any Borrower or any Affiliated IP Party in connection with the operation and/or use of one or more of the Properties, including for each such trademark, service xxxx or domain name the registration number or application number and country;

(ii) all copyrights, and the renewals thereof, owned or used by any Borrower or any Affiliated IP Party in connection with the operation and/or use of one or more of the Properties, including for each such copyright the registration number or application number and country;

(iii) all trade secrets, discoveries, formulae, proprietary processes, improvements and inventions for which no patent applications are pending and all other industrial property rights presently owned, in whole or in part, or used, by any Borrower or any Affiliated IP Party in connection with the ownership, operation and/or use of one or more of the Properties; and

(iv) all trademark licenses, service xxxx licenses, copyright licenses, royalty agreements, assignments, grants and contracts with employees or others relating in whole or in part to any of the foregoing IP to which any Borrower and/or any Affiliated IP Party is a party, which is related to the ownership, operation and/or use of one or more of the Properties (collectively, the “IP Agreements”).

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(b) Schedule XI attached hereto is a true, correct and complete list of all the Registered IP used by any Borrower in connection with the ownership, operation and/or use of one or more of the Properties. Part I of said Schedule XI is a true, correct and complete list of all Registered IP owned by IP Borrower or any Affiliated IP Party, including Registered IP and that has been assigned to Borrower by Xxxxxx pursuant to that certain Trademark Assignment dated as of February 2, 2007 from Xxxxxx in favor of IP Borrower (the “Xxxxxx Assigned IP”; and all of the foregoing, collectively, the “Owned IP”). Part II of said Schedule XI is a true, correct and complete list of all Registered IP that is licensed from Rank Licensing, Inc. (“Rank”) to Xxxxxx pursuant to that certain Trademark License and Cooperation Agreement, dated June 7, 1996, between Rank and Xxxxxx and which has been assigned from Xxxxxx to IP Borrower pursuant to that certain Assignment and Assumption Agreement dated as of February 2, 2007 (the “Rank License”) from Xxxxxx in favor of IP Borrower (all such IP listed on Part II of said Schedule XI, the “Rank IP”). Part III of said Schedule XI is a true, correct and complete list of all Registered IP that is licensed from Xxxxxx to IP Borrower pursuant to that certain License Agreement, dated as of February 2, 2007 (the “Pink Taco License”) from Xxxxxx in favor of IP Borrower (all such IP listed on Part IV of said Schedule XI, the “Pink Taco IP”; and the Pink Taco IP, together with the Rank IP, the “Licensed IP”).

(d) Except as set forth on Part IV of Schedule XI, Borrowers or an Affiliated IP Party owns or possesses licenses or other rights in or under all patents, trademarks, service marks, trade names, domain names, copyrights and any other IP, which is necessary for the use, ownership, management, promotion and operation of its Property and associated merchandising as currently so used, except where the failure to so own or possess such IP, licenses or other rights could not reasonably be expected to have a material adverse effect on such use, ownership or operations (a “IP Material Adverse Effect”).

(e) Part V of said Schedule XI hereto sets forth:

(i) any written communications from any Borrower or any Affiliate thereof to one or more third parties, or from one or more third parties to any Borrower or any Affiliate thereof, alleging infringement by any third party or any Borrower or any Affiliate thereof, of any of the IP or alleging related acts of unfair competition or activities or actions of any anti-competitive nature, together with all responses to such communications and a description of the status of each such alleged infringement, in each case, which the failure to resolve such alleged infringement or competition could reasonably be expected to have a IP Material Adverse Effect; and

(ii) a complete list of any goods and/or services sold by any Person other than any Borrower and of whom any Borrower has actual knowledge, which in the opinion of any Borrower infringes upon any IP listed in said Schedule XI hereof.

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(f) Except as disclosed in said Schedule XI:

(i) IP Borrower or an Affiliated IP Party owns the Owned IP, and IP Borrower has a valid and enforceable license to use the Licensed IP, in each case free and clear of any Liens other than the Permitted IP Encumbrances;

(ii) no Borrower or an Affiliated IP Party has granted nor is obligated to grant any other Person any rights (including, without limitation licenses) with respect to any of the IP other than the Permitted IP Encumbrances;

(iii) to Borrowers’ actual knowledge, the trademarks, service marks, domain names and copyrights included in the Owned IP and in the Licensed IP are valid;

(iv) to Borrowers’ actual knowledge, the trademark registrations, service xxxx registrations, domain name registrations and copyright registrations included in the Owned IP and Licensed IP have been duly issued and have not been canceled, abandoned or otherwise terminated;

(v) to Borrowers’ actual knowledge, the trademark applications, service xxxx applications, domain name applications and copyright applications included in the Owned IP have been duly filed; and

(vi) to Borrowers’ actual knowledge, all material IP Agreements are valid and binding in accordance with their terms (except as the enforceability thereof may be limited by any applicable bankruptcy, reorganization, insolvency or other laws affecting creditors’ rights generally or by general principles of equity) and are in full force and effect.

(g) To Borrowers’ actual knowledge, no Borrower or Affiliated IP Party is obligated to disclose any of the IP to any other Person.

(h) To Borrowers’ actual knowledge, except for the Licensed IP, no Borrower requires a license or right under or in respect of any intellectual property of any other Person (except another Borrower) to conduct such Borrower’s business as presently conducted and no substantial part of such business is carried on under the agreement or consent of any other Person nor is there any agreement to which any Borrower is a party which significantly restricts the fields in which such business may be carried on.

(i) To Borrowers’ actual knowledge, there are and have been no proceedings, actions or claims and no proceedings, actions or claims are pending or threatened, impugning the title, validity or enforceability of any of the IP.

(j) To Borrowers’ actual knowledge, none of the processes currently used by any Borrower or any Affiliated IP Party or any of the properties or products currently sold by any Borrower or any Affiliated IP Party, and none of the IP or Licensed IP, infringes the patent, industrial property, trademark, trade name, domain name, label, other xxxx, right or copyright or any other similar right of any other Person, except where such infringement could not reasonably be expected to have an IP Material Adverse Effect.

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(k) To Borrowers’ actual knowledge, no basis exists for any adverse claim by any third party with respect to any of the IP, and no act has been done or has been omitted to be done by any Borrower or any Affiliate thereof to entitle any Person to make such a claim or to cancel, forfeit or modify any of the IP.

(l) Except the Licensed IP, no Borrower requires a license or right under or in respect of any intellectual property of any other Person (except another Borrower) to conduct such Borrower’s business as presently conducted and no substantial part of such business is carried on under the agreement or consent of any other Person nor is there any agreement to which any Borrower is a party which significantly restricts the fields in which such business may be carried on.

(m) To Borrowers’ actual knowledge, no disclosure has been made to any Person of the know-how or financial or trade secrets of any Borrower, except properly and in the ordinary course of business and on condition that such disclosure is to be treated as being of a confidential nature and except where such disclosure would not reasonably be expected to have an IP Material Adverse Effect; and to Borrowers’ actual knowledge, none of the IP is being infringed by any other Person, except where such infringement could not reasonably be expected to have an IP Material Adverse Effect.

4.1.38 No Franchise Agreement. None of the Borrowers or Managers or Sub-Manager has entered into, and none of the Properties are subject to, any franchise, trademark or license agreement with any Person with respect to the name and/or operation of any Property, other than the IP, the Rank License and the Pink Taco License.

4.1.39 Merger Agreement. The Acquisition and the Other Transaction Closings (as such capitalized terms are defined in the Merger Agreement) were consummated in accordance with all of the material terms and conditions of the Merger Agreement and the Other Transaction Documents (as defined in the Merger Agreement), with only such amendments, supplements and/or modifications thereto, and waivers and extensions thereof, as Lender has approved in writing, to the extent such approval is required under that certain Commitment Letter dated December 22, 2006 between Morgans Hotel Group Co., MHG HR Acquisition Corp, DLJ Merchant Banking, Inc. and Lender.

4.1.40 Xxxxxx Indemnification and PWR/RWB Escrow Agreement. Borrowers have delivered to Lender true, correct and complete copies of each of the Xxxxxx Indemnification and the PWR/RWB Escrow Agreement and all amendments thereto. Except for such amendments thereto as have been delivered to Lender, the Xxxxxx Indemnification and the PWR/RWB Escrow Agreement have not been amended or modified and are in full force and effect. No Borrower nor any Affiliate thereof has (a) made any claim under the Xxxxxx Indemnification, or (b) requested any disbursement of funds under the PWR/RWB Escrow Agreement with respect to any claim under the Xxxxxx Indemnification or otherwise. No Borrower nor any Affiliate thereof knows of any state of facts currently existing that would be reasonably likely to result in a claim under the Xxxxxx Indemnification.

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4.1.41 Gaming Licenses and Other Operating Permits.

(a) HRHI possesses all Operating Permits (including, but not limited to, all liquor licenses) which are necessary for the execution, delivery and performance of the Liquor Management Agreement, the HRHI Lease and the Gaming Sublease. All of such Operating Permits are in and will be in full force and effect; Borrowers and each of their Affiliates, as applicable, including, without limitation, HRHI, are in compliance in all material respects with all such Operating Permits; and no event, including, without limitation, any violation of any Legal Requirement, has occurred which would be reasonably likely to lead to the suspension, revocation or termination of any such Operating Permit or the imposition of any restriction thereon.

(b) To Borrowers’ actual knowledge, Gaming Operator possesses all Operating Permits (including, without limitation, all Gaming Licenses) which are material to the execution, delivery and performance of the Gaming Sublease and the use, occupation and operation of the Casino Component; to Borrowers’ actual knowledge, each such Operating Permit and Gaming License (or any replacement thereof) is and will be in full force and effect; and, to Borrowers’ actual knowledge, Gaming Operator is in compliance in all material respects with the Gaming Sublease, all Gaming Licenses and all other Operating Permits applicable to the operation of the Casino Component as contemplated herein. Further, Borrowers hereby represent and warrant as follows:

(c) Borrowers have no reason to believe that Gaming Operator will not be able to maintain in effect all Gaming Licenses and other Operating Permits necessary for the lawful conduct of its business or operations as now conducted and as planned to be conducted at the Hotel/Casino Property, including the Gaming Sublease and operation of the Casino Component, pursuant to all applicable Legal Requirements.

(d) To Borrowers’ actual knowledge, all Gaming Licenses are in full force and effect and have not been amended or otherwise modified in any material adverse respect or suspended, rescinded or revoked.

(e) Neither Borrowers nor, to Borrowers’ actual knowledge, Gaming Operator are in default in any material respect under, or in violation in any material respect of, any Gaming License or other Operating Permit, and no event has occurred, and no condition exists, which, with the giving of notice or passage of time or both, would constitute such a default thereunder or such a violation thereof, that has caused or would reasonably be expected to cause the loss, suspension, revocation, impairment, forfeiture, non-renewal or termination of any Gaming License or the imposition of any restriction thereon.

(f) Neither Borrowers nor, to Borrowers’ actual knowledge, Gaming Operator have received any notice of any violation of any Legal Requirement which has caused or would reasonably be expected to cause any Gaming License or other Operating Permit to be modified in

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AMENDED AND RESTATED LOAN AGREEMENT Dated as of November 6, 2007 Among HRHH HOTEL/CASINO, LLC, as Hotel/Casino Borrower and HRHH CAFE, LLC, as Café Borrower and HRHH DEVELOPMENT, LLC, as Adjacent Borrower and HRHH IP, LLC, as IP Borrower and HRHH...