Exhibit 10.3





Exhibit 10.3




TriMont Real Estate Advisors, Inc.

Monarch Tower

3424 Peachtree Road NE, Suite 2200

Atlanta, Georgia 30326




VIA FACSIMILE AND OVERNIGHT COURIER




October 9, 2009




HHRH Development Transferee, LLC

c/o Morgans Hotel Group Co.

475 Tenth Avenue

New York, New York 10018

Re: Hard Rock

Attention: Marc Gordon, Chief Investment Officer




	 	 	 
	Re:

	 	Modification and extension of that certain $50,000,000 mortgage loan (the “Loan”)
made pursuant to that certain Loan Agreement, dated as of August 1, 2008, by and between
Column Financial, Inc., a Delaware corporation (“Original Lender”), and HRHH
Development Transferee, LLC, a Delaware limited liability company (“Borrower”), as
amended by (i) that certain First Amendment to Loan Agreement, dated as of November 10, 2008,
between Borrower and Original Lender, (ii) that certain Letter Agreement, dated August 7,
2009, from Servicer (hereinafter defined) to Borrower, and (iii) that certain Letter
Agreement, dated September 4, 2009, from Servicer to Borrower (collectively, the “Loan
Agreement”; All capitalized terms used and not defined herein shall have the respective
meanings set forth in the Loan Agreement.)






Dear Mr. Gordon:



TriMont Real Estate Advisors, Inc., a Georgia corporation (in its capacity as Servicer and Asset
Manager on behalf of Lender (hereinafter defined), “Servicer”), is the Servicer and Asset
Manager of the Loan on behalf of Eastern Capital Fund I SPE (Vegas Paradise) LLC, a Delaware
limited liability company (together with its, successors and assigns, as successor in interest to
Original Lender, “Lender”). Each of Lender, Eastern Capital Fund I SPE (Vegas Paradise
Affiliate) LLC, a Delaware limited liability company, and NRFC UL Holdings, LLC, a Delaware limited
liability company, own a participation interest in the Loan.



Borrower has requested, and Servicer, on behalf of and at the direction of Lender, by this letter
(this “Letter Agreement”), hereby agrees to the following modifications to the Loan:




	 	1.	 	For all purposes of the Loan Agreement, as modified by this Letter Agreement,
except as otherwise expressly required or unless the context clearly indicates a
contrary intent:






 


 









 










“B Piece Additional Advance” shall mean, collectively, the B Piece Interest
Reserve Fund Advance and the B Piece Tax and Insurance Escrow Advance.




“B Piece Holder” shall mean the Participation B Holder as such term is defined
in the Participation Agreement.




“B Piece Interest Reserve Fund Advance” shall mean the advance of $253,260.57
by B Piece Holder as additional proceeds of the Loan pursuant to the terms of the
Loan Agreement, as modified by this Letter Agreement.




“B Piece Tax and Insurance Escrow Advance” shall mean the advance of $96,739.43
by B Piece Holder as additional proceeds of the Loan pursuant to the terms of the
Loan Agreement, as modified by this Letter Agreement.




	 	2.	 	The following definitions, as set forth in the Loan Agreement, shall be amended and
restated in their entirety as follows:







““A Piece Percentage” shall mean (a) prior to any Assumption, (i) in connection
with any prepayment of the Loan other than from the proceeds of the Five Acre
Release Price, thirty-nine and seven hundred twenty-two hundredths of one percent
(39.722%), and (ii) in connection with any prepayment of the Loan from the proceeds
of the Five Acre Release Price, one hundred percent (100%); and (b) in connection
with any prepayment of the Loan after any Assumption and payment in full of the Five
Acre Release Price, zero percent (0%).”




““B Piece Percentage” shall mean (a) prior to any Assumption, (i) in connection
with any prepayment of the Loan other than from the proceeds of the Five Acre
Release Price, sixty and two hundred seventy-eight hundredths of one percent
(60.278%), and (ii) in connection with any prepayment of the Loan from the proceeds
of the Five Acre Release Price, zero percent (0%); and (b) in connection with any
prepayment of the Loan after any Assumption and payment in full of the Five Acre
Release Price, one hundred percent (100%).”




	 	3.	 	The Initial Maturity Date shall be extended to October 22, 2009.







	 	4.	 	October 9, 2009 shall be deemed to be a Payment Date and a Monthly Interest
Payment shall be due and payable on such Payment Date. Notwithstanding anything to the
contrary contained in Section 2.2, Section 2.3 or elsewhere in the Loan Agreement, the
Monthly Interest Payment due on October 9, 2009 shall be the interest accrued on the
Outstanding Principal Balance of the Loan (expressly not including the B Piece
Additional Advance) at the Applicable Interest Rate for the period from and including
September 4, 2009 through and including October 8, 2009. The Monthly Interest Payment
due on October 9, 2009 shall be paid with funds from the Interest Reserve Account,
including, if necessary, funds advanced on the date hereof as the B Piece Interest
Reserve Fund Advance.





 


 









 











	 	5.	 	Except as otherwise provided in Paragraph 4 above, from and after the date
hereof, for all purposes under the Loan Agreement, as modified by this Letter
Agreement, the B Piece Additional Advance shall be included when calculating the
Outstanding Principal Balance of the Loan and the Outstanding Principal Balance of the
Loan (expressly including the B Piece Additional Advance) shall accrue interest at the
Applicable Interest Rate in accordance with Section 2.2 of the Loan Agreement, as
modified by this Letter Agreement.







	 	6.	 	On the date hereof, B Piece Holder shall advance the B Piece Interest Reserve
Fund Advance to Borrower. Such B Piece Interest Reserve Fund Advance shall be
deposited into the Interest Reserve Account and shall thereafter constitute a portion
of the Interest Reserve Fund for all purposes under the Loan Agreement, as modified by
this Letter Agreement, and the other Loan Documents. The B Piece Interest Reserve Fund
Advance shall be held as additional collateral for the Loan and disbursed from the
Interest Reserve Account in accordance with Section 7.2.2 of the Loan
Agreement, as modified by this Letter Agreement.







	 	7.	 	On the date hereof, B Piece Holder shall advance the B Piece Tax and Insurance
Escrow Advance to Borrower. Such B Piece Tax and Insurance Escrow Advance shall be
deposited into the Tax and Insurance Escrow Account and shall thereafter constitute a
portion of the Tax and Insurance Escrow Fund for all purposes under the Loan Agreement,
as modified by this Letter Agreement, and the other Loan Documents. The B Piece Tax and
Insurance Escrow Advance shall be held as additional collateral for the Loan and
applied in accordance with Section 7.1 of the Loan Agreement, as modified by
this Letter Agreement.







	 	8.	 	Notwithstanding anything to the contrary contained in Section 2.2.7 or
elsewhere in the Loan Agreement, Borrower shall not be required to purchase and deliver
or otherwise maintain an Interest Rate Cap Agreement or a Replacement Interest Rate Cap
Agreement with respect to the period from October 9, 2009 to and including the Initial
Maturity Date, as extended hereby.







	 	9.	 	Nothing herein shall obligate Lender to agree to any further extensions of the
term of the Loan, or any other modifications with respect to the Loan.






This Letter Agreement shall be deemed to constitute a “Loan Document” for all purposes under the
Loan Agreement and the other Loan Documents. All references in any other Loan Document to the
“Loan Agreement” shall be deemed to refer to the Loan Agreement as defined herein and as modified
by this Letter Agreement, and as the same may be further amended, restated, supplemented or
otherwise modified from time to time.



This Letter Agreement may be executed in counterparts, each of which shall constitute an original
but which together shall constitute one instrument. Executed facsimile copies of this Letter
Agreement shall constitute a binding agreement for all purposes. This Letter Agreement may be
amended only by an instrument in writing executed by each of the parties hereto.


 


 









 





If any provision of this Letter Agreement is determined to be unenforceable, the remaining
provisions shall remain enforceable to the extent permissible.



This Letter Agreement shall inure to the benefit of and be binding upon Servicer, on behalf of
Lender, Lender and Borrower, and their respective successors and assigns.



This Letter Agreement may not be modified, amended, waived, changed or terminated orally, but only
by an agreement in writing signed by the party(ies) against whom the enforcement of the
modification, amendment, waiver, change or termination is sought.



This Letter Agreement shall be governed by the terms and provisions of Section 10.3 of the Loan
Agreement.



This Letter Agreement embodies the entire agreement and understanding between Servicer. on behalf
of Lender, Lender and Borrower with respect to the subject matter hereof and supersedes all prior
or contemporaneous oral or written agreements and understandings relating to the subject matter
hereof. In the event of any inconsistency between the terms and provisions of this Letter
Agreement and the terms and provisions of any other agreement between or among the parties hereto
relating to the subject matter hereof (including the Loan Documents), the terms and provisions of
this Letter Agreement shall govern.




	 	 	 	 	 
	 	TRIMONT REAL ESTATE ADVISORS, INC.,

a Georgia corporation, as Servicer and Asset 

Manager on behalf of Lender

 	 
	 	By:  	/s/  L Alfred Battle
 	 
	 	 	Name:  	L Alfred Battle 	 
	 	 	Title:  	Authorized Signatory 	 
	 





 


 









 








Agreed and accepted this 9th day of October, 2009.



	 	 	 	 	 	 	 
	EASTERN CAPITAL FUND I SPE (VEGAS PARADISE) LLC, 

a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 
	By:	 	/s/ Raymond M. Murphy	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Raymond M. Murphy	 	 
	 

	 	Title:
	 	General Counsel	 	 






	 	 	 	 	 	 	 
	EASTERN CAPITAL FUND I SPE (VEGAS PARADISE AFFILIATE) LLC,
 a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 
	By:	 	/s/ Raymond M. Murphy	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Raymond M. Murphy	 	 
	 

	 	Title:
	 	General Counsel	 	 







 


 









 







Agreed
and accepted this 9th day of October, 2009.



	 	 	 	 	 	 	 
	NRFC UL HOLDINGS, LLC, 

a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 
	By:	 	/s/ Daniel R. Gilbert	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Daniel R. Gilbert	 	 
	 

	 	Title:
	 	Executive Vice President &
 Chief Investment Officer	 	 









 


 









 







Agreed
and accepted this 9th day of October, 2009.



	 	 	 	 	 	 	 
	HRHH DEVELOPMENT TRANSFEREE, LLC,

a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 
	By:	 	/s/ Richard Szymanski	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Richard Szymanski	 	 
	 

	 	Title:
	 	Vice President	 	 






	 	 	 	 	 
	 

	 	cc:
	 	Morgans Hotel Group Co.
	 

	 	 	 	475 Tenth Avenue
	 

	 	 	 	New York, New York 10018
	 

	 	 	 	Re: Hard Rock
	 

	 	 	 	Attention: David Smail
	 

	 	 	 	Facsimile No.: (212) 277-4172
	 
	 	 	 	 
	 

	 	 	 	DLJ Merchant Banking Partners
	 

	 	 	 	11 Madison Avenue
	 

	 	 	 	New York, New York 10010
	 

	 	 	 	Attention: Ryan Sprott
	 

	 	 	 	Facsimile No.: (212) 743-1667
	 
	 	 	 	 
	 

	 	 	 	Latham & Watkins LLP
	 

	 	 	 	885 Third Avenue
	 

	 	 	 	Suite 1000
	 

	 	 	 	New York, New York 10022
	 

	 	 	 	Attention: Michelle Kelban, Esq.
	 

	 	 	 	Facsimile No.: (212) 751-4864
	 
	 	 	 	 
	 

	 	 	 	Latham & Watkins LLP
	 

	 	 	 	355 South Grand Avenue
	 

	 	 	 	Los Angeles, California 90071
	 

	 	 	 	Attention: Tom Sadler, Esq.
	 

	 	 	 	Facsimile No.: (213) 891-8763






 


 









 





	 	 	 
	Kilpatrick Stockton LLP

	 	Eastern Capital Fund I SPE (Vegas Paradise) LLC
	1100 Peachtree Street, Suite 2800

	 	Eastern Capital Fund I SPE (Vegas
	Atlanta, GA 30309-4530

	 	Paradise Affiliate) LLC
	Telephone: (404) 815-6595

	 	c/o Eastern Real Estate LLC
	Telecopy: (404) 541-3490

	 	120 Presidential Way, Suite 300
	Attention: Richard W. White

	 	Woburn, Massachusetts 01801
	 

	 	Attention: Raymond M. Murphy,
	 

	 	                  General Counsel
	 

	 	Facsimile: (781) 926-6426
	 
	 	 
	NRFC WA HOLDINGS, LLC

	 	Goodwin Procter, LLP
	c/o NorthStar Realty Finance Corp.

	 	Exchange Place
	399 Park Avenue

	 	53 State Street
	New York, New York 10022

	 	Boston, Massachusetts 02109
	Attention: Daniel R. Gilbert

	 	Minta E. Kay, Esq.
	Facsimile: (212) 547-2700

	 	Facsimile: (617) 523-1231
	 
	 	 
	Wells Fargo Bank National

	 	NRFC UL Holdings, LLC
	Association, as trustee for the

	 	c/o NorthStar Realty Finance Corp.
	registered holders of

	 	399 Park Avenue, 18th Floor
	N-Star REL CDO VIII Grantor Trust,

	 	New York, New York 10022
	as successor in interest to NRFC WA

	 	Attention: Aaron Davis
	 Holdings, LLC

	 	Facsimile: (212) 547-2718
	c/o NorthStar Realty Finance Corp.
	 	 
	399 Park Avenue
	 	 
	New York, New York 10022
	 	 
	Attention: Daniel R. Gilbert
	 	 
	Facsimile: (212) 547-2700
	 	 
	 
	 	 
	Wells Fargo Bank National

	 	Sidley Austin LLP
	Association, as trustee for the

	 	787 Seventh Avenue
	registered holders of

	 	New York, New York 10019
	N-Star REL CDO VI Grantor Trust,

	 	Attention: Alan S. Weil, Esq.
	as successor in interest to NRFC WA

	 	Facsimile: (212) 839-5599
	 Holdings, LLC
	 	 
	c/o NorthStar Realty Finance Corp.
	 	 
	399 Park Avenue
	 	 
	New York, New York 10022
	 	 
	Attention: Daniel R. Gilbert
	 	 
	Facsimile: (212) 547-2700