Exhibit 10.4
CLOSING GUARANTY OF COMPLETION
This CLOSING GUARANTY OF COMPLETION (this "Guaranty") is executed as of February
2, 2007, by MORGANS GROUP LLC, a Delaware limited liability company, having an
address at 475 Tenth Avenue, New York, New York 10018, Attention: Marc Gordon,
Chief Investment Officer ("Morgans Guarantor"), and by DLJ MB IV HRH, LLC, a
Delaware limited liability company, having an address c/o DLJ Merchant Banking
Partners, 11 Madison Avenue, New York, New York 10010, Attention: Ryan Sprott
("DLJ Guarantor"; and collectively with Morgans Guarantor, each individually, a
"Guarantor", and collectively, "Guarantors"), jointly and severally, for the
benefit of COLUMN FINANCIAL, INC., a Delaware corporation, having an address at
11 Madison Avenue, New York, New York 10010 (together with its successors and
assigns, "Lender").
RECITALS:
A.
PURSUANT TO THAT CERTAIN PROMISSORY NOTE, DATED OF EVEN DATE
HEREWITH, EXECUTED BY HRHH HOTEL/CASINO, LLC, A DELAWARE LIMITED LIABILITY
COMPANY ("HOTEL/CASINO BORROWER"), HRHH CAFE, LLC, A DELAWARE LIMITED LIABILITY
COMPANY ("CAFÉ BORROWER"), HRHH DEVELOPMENT, LLC, A DELAWARE LIMITED LIABILITY
COMPANY ("ADJACENT BORROWER"), HRHH IP, LLC, A DELAWARE LIMITED LIABILITY
COMPANY ("IP BORROWER"), AND HRHH GAMING, LLC, A NEVADA LIMITED LIABILITY
COMPANY ("GAMING BORROWER"; AND EACH OF HOTEL/CASINO BORROWER, CAFÉ BORROWER,
ADJACENT BORROWER, IP BORROWER AND GAMING BORROWER, INDIVIDUALLY, A "BORROWER",
AND COLLECTIVELY, "BORROWERS"), AND PAYABLE TO THE ORDER OF LENDER IN THE
ORIGINAL PRINCIPAL AMOUNT OF UP TO ONE BILLION THREE HUNDRED SIXTY MILLION AND
00/100 DOLLARS ($1,360,000,000.00) (AS THE SAME MAY BE AMENDED, RESTATED,
REPLACED, SUPPLEMENTED, OR OTHERWISE MODIFIED FROM TIME TO TIME, THE "NOTE"),
BORROWERS HAVE BECOME INDEBTED, AND MAY FROM TIME TO TIME BE FURTHER INDEBTED,
TO LENDER WITH RESPECT TO A LOAN (THE "LOAN") MADE PURSUANT TO THAT CERTAIN LOAN
AGREEMENT, DATED AS OF THE DATE HEREOF, AMONG BORROWERS AND LENDER (AS THE SAME
MAY BE AMENDED, RESTATED, REPLACED, SUPPLEMENTED, OR OTHERWISE MODIFIED FROM
TIME TO TIME, THE "LOAN AGREEMENT"), WHICH LOAN IS SECURED BY, AMONG OTHER
THINGS, THAT CERTAIN CONSTRUCTION DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FINANCING STATEMENT (FIXTURE FILING), DATED AS OF THE
DATE HEREOF (AS THE SAME MAY BE AMENDED, RESTATED, REPLACED, SUPPLEMENTED, OR
OTHERWISE MODIFIED FROM TIME TO TIME, THE "SECURITY INSTRUMENT"), GIVEN BY
BORROWERS, AS GRANTEES, FOR THE BENEFIT OF LENDER, ENCUMBERING, AMONG OTHER
PROPERTIES, CERTAIN REAL PROPERTY AND THE IMPROVEMENTS THEREON LOCATED IN LAS
VEGAS, NEVADA AND MORE PARTICULARLY DESCRIBED ON EXHIBITS A-1 (THE "HOTEL/CASINO
PROPERTY") AND A-2 (THE "ADJACENT PROPERTY"; AND THE HOTEL/CASINO PROPERTY AND
THE ADJACENT PROPERTY, INDIVIDUALLY, A "PROPERTY", AND COLLECTIVELY, THE
"PROPERTIES" ) ATTACHED HERETO AND MADE A PART HEREOF, AND FURTHER EVIDENCED,
SECURED OR GOVERNED BY OTHER INSTRUMENTS AND DOCUMENTS EXECUTED IN CONNECTION
WITH THE LOAN (TOGETHER WITH THE NOTE, THE LOAN AGREEMENT AND THE SECURITY
INSTRUMENT, COLLECTIVELY, THE "LOAN DOCUMENTS").
B.
LENDER IS NOT WILLING TO MAKE THE LOAN, OR OTHERWISE EXTEND
CREDIT, TO BORROWERS UNLESS EACH GUARANTOR UNCONDITIONALLY GUARANTEES PAYMENT
AND PERFORMANCE TO LENDER OF THE GUARANTEED OBLIGATIONS (AS HEREIN DEFINED).
C.
EACH GUARANTOR IS THE OWNER OF