Document:

Joint Venture Agreement

 EXHIBIT 10.51 
 [Execution Copy] 
  
 MORGANS LAS
VEGAS, LLC 
  
 LIMITED LIABILITY COMPANY AGREEMENT 
  
 dated as of 
  
 January 3, 2006 
  
 between 
  
 MORGANS/LV INVESTMENT LLC 
  
 and 
  
 ECHELON RESORTS CORPORATION

 TABLE OF CONTENTS 
  

					
	 	  	PAGE

	Article 1 DEFINITIONS	  	1
	 Section 1.01
	    	Definitions	  	1
	 Section 1.02
	    	Certain Other Terms	  	14
	 Section 1.03
	    	Accounting Terms	  	15
		
	 Article 2 FORMATION AND PURPOSE OF THE COMPANY
	  	15
	 Section 2.01
	    	 Formation of the Company
	  	15
	 Section 2.02
	    	 Name of the Company
	  	15
	 Section 2.03
	    	 Purpose of the Company
	  	15
	 Section 2.04
	    	 Place of Business of the Company
	  	16
	 Section 2.05
	    	 Registered Office and Registered Agent
	  	16
	 Section 2.06
	    	 Duration of the Company
	  	16
	 Section 2.07
	    	 Title to the Company Property
	  	16
	 Section 2.08
	    	 Filing of Certificates
	  	16
	 Section 2.09
	    	 Limitation on Liability
	  	16
	 Section 2.10
	    	 No Responsibility for Liability of Other Member
	  	16
		
	 Article 3 REPRESENTATIONS AND WARRANTIES
	  	16
	 Section 3.01
	    	 Representations and Warranties of Morgans
	  	16
	 Section 3.02
	    	 Representations and Warranties of Boyd
	  	17
		
	 Article 4 PREDEVELOPMENT MATTERS
	  	19
	 Section 4.01
	    	 Predevelopment
	  	19
	 Section 4.02
	    	 Echelon Place Master Plan and Components
	  	20
	 Section 4.03
	    	 Outside Start Date
	  	22
		
	 Article 5 CAPITAL CONTRIBUTIONS
	  	22
	 Section 5.01
	    	 Initial Capital Contributions
	  	22
	 Section 5.02
	    	 Additional Capital Contributions
	  	23
	 Section 5.03
	    	 Procedures for Capital Contributions
	  	24
	 Section 5.04
	    	 Failure to Fund Capital Contributions
	  	24
	 Section 5.05
	    	 Dilution
	  	25
	 Section 5.06
	    	 Payment of Cost Overruns
	  	25
	 Section 5.07
	    	 Withdrawals of Capital
	  	26
	 Section 5.08
	    	 Negative Capital Accounts
	  	26
		
	 Article 6 CAPITAL ACCOUNTS AND ALLOCATIONS
	  	27
	 Section 6.01
	    	 Capital Accounts
	  	27
	 Section 6.02
	    	 Allocations of Profits and Losses
	  	27
		
	 Article 7 DISTRIBUTIONS
	  	28
	 Section 7.01
	    	 Net Operating Cash Flow
	  	28
	 Section 7.02
	    	 Net Capital Proceeds
	  	28

  

 i 

					
	 	    	 	  	PAGE

	 Section 7.03
	    	 Amounts Withheld
	  	28
	 Section 7.04
	    	 Assignment of Distributions
	  	28
	 Section 7.05
	    	 Dissolution
	  	29
		
	 Article 8 MANAGEMENT
	  	29
	 Section 8.01
	    	 Morgans Duties
	  	29
	 Section 8.02
	    	 Affiliate Agreement Control
	  	29
	 Section 8.03
	    	 Morgans’ Additional Duties
	  	29
	 Section 8.04
	    	 Bank Accounts
	  	30
	 Section 8.05
	    	 Duties and Conflicts
	  	30
	 Section 8.06
	    	 Financing
	  	31
	 Section 8.07
	    	 Expenses of Members
	  	31
	 Section 8.08
	    	 Removal of Morgans as a Managing Member
	  	32
		
	 Article 9 DEVELOPMENT DURING CONSTRUCTION PERIOD
	  	32
	 Section 9.01
	    	 General
	  	32
	 Section 9.02
	    	 Budget, Schedule and Plans
	  	32
	 Section 9.03
	    	 Monitoring of Development
	  	32
	 Section 9.04
	    	 Changes
	  	34
	 Section 9.05
	    	 Participation of Boyd
	  	34
	 Section 9.06
	    	 Loan Guaranties
	  	35
	 Section 9.07
	    	 Activities Following Disputes
	  	35
		
	 Article 10 ACCOUNTING, BOOKS AND RECORDS AND TAX MATTERS
	  	36
	 Section 10.01
	    	 Books and Records
	  	36
	 Section 10.02
	    	 Reports
	  	36
	 Section 10.03
	    	 Company Accountant
	  	37
	 Section 10.04
	    	 Reserves
	  	37
	 Section 10.05
	    	 Fiscal Year
	  	37
	 Section 10.06
	    	 Partnership for Tax Purposes
	  	37
	 Section 10.07
	    	 Tax Matters
	  	37
	 Section 10.08
	    	 Audit Rights
	  	38
		
	 Article 11 LIMITATION OF LIABILITY AND INDEMNIFICATION
	  	38
	 Section 11.01
	    	 Limitation of Liability
	  	38
	 Section 11.02
	    	 Indemnification
	  	38
	 Section 11.03
	    	 Certain Waivers
	  	39
		
	 Article 12 TRANSFERS
	  	40
	 Section 12.01
	    	 General
	  	40
	 Section 12.02
	    	 Permitted Transfers of Interests
	  	40
	 Section 12.03
	    	 Transferees
	  	41
	 Section 12.04
	    	 Admission of Additional Members
	  	41
	 Section 12.05
	    	 Boyd Right to Purchase
	  	42

  

 ii 

					
	 	    	 	  	PAGE

	 Article 13 TERMINATION, DISSOLUTION AND LIQUIDATION
	  	44
	 Section 13.01
	    	 Term
	  	44
	 Section 13.02
	    	 Liquidating Events
	  	44
	 Section 13.03
	    	 Winding Up
	  	45
	 Section 13.04
	    	 Acts in Furtherance of Liquidation
	  	45
		
	 Article 14 MISCELLANEOUS
	  	45
	 Section 14.01
	    	 Notices
	  	45
	 Section 14.02
	    	 Amendments; No Waivers; Entire Agreement
	  	46
	 Section 14.03
	    	 Expenses
	  	47
	 Section 14.04
	    	 Consents and Approvals
	  	47
	 Section 14.05
	    	 Successors and Assigns
	  	47
	 Section 14.06
	    	 Governing Law
	  	47
	 Section 14.07
	    	 Counterparts
	  	48
	 Section 14.08
	    	 Severability
	  	48
	 Section 14.09
	    	 Further Assurances
	  	48
	 Section 14.10
	    	 Publicity
	  	48
	 Section 14.11
	    	 Confidentiality
	  	48
	 Section 14.12
	    	 Third Parties Not Benefited
	  	49
	 Section 14.13
	    	 Time of the Essence
	  	49
	 Section 14.14
	    	 Waiver of Jury Trial
	  	49
	 Section 14.15
	    	 Jurisdiction; Choice of Forum
	  	49

  

 iii 

 LIMITED LIABILITY COMPANY AGREEMENT 
  
 This LIMITED LIABILITY COMPANY AGREEMENT dated as of January 3, 2006 (this “Agreement”), between
Morgans/LV Investment LLC, a Delaware limited liability company having an address at 475 Tenth Avenue, New York, New York 10018 (“Morgans”), and Echelon Resorts Corporation, a Nevada limited liability company having an address at
2950 Industrial Road, Las Vegas, Nevada 89109 (“Boyd”), each in its capacity as a Member (as hereinafter defined). 
  
 WITNESSETH: 
  
 WHEREAS, Morgans Las Vegas, LLC, a Delaware limited liability company (the “Company”), has been formed under the Delaware Limited
Liability Company Act (the “Delaware Act”) by filing a Certificate of Formation with the Delaware Secretary of State on January 3, 2006 (the “Certificate”); and 
  
 WHEREAS, the Members desire to enter into this Agreement to govern the
operations of the Company; 
  
 NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 
  
 ARTICLE 1 
 DEFINITIONS

  
 Section 1.01 Definitions. As used herein, the
following terms shall have the respective meanings set forth below: 
  
 “Affiliate” shall mean, when used with respect to any Person, any other Person controlling, controlled by or under common control with such Person. For purposes of this definition, (a) the term
“control” shall mean, with respect to any Person, possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities,
by contract or otherwise, and (b) a Person shall specifically be deemed to have “control” over a partnership or limited liability company (as the case may be) if such Person is a general partner of a partnership or a managing
member of a limited liability company. 
  
 “Annual Plan” shall mean the annual budget and forecast of operations prepared by the Hotel Manager in accordance with Section 9.4 of the Morgans Hotel Management Agreement and approved by Boyd on behalf of the
Company. 
  
 “Approved Cost
Overruns” shall mean unbudgeted Development Costs that (a) are not Permitted Cost Overruns and (b) are approved by the Members. 
  
 “approve,” “approved” or “approval” shall mean, as to the subject matter thereof and as
the context may require or permit, an express consent or approval contained in a written statement signed by the approving Person. 

 “Architects” shall mean architects and/or designers performing work on
the Project. 
  
 “Bankruptcy
Code” shall mean Title 11 of the United States Code entitled “Bankruptcy,” as now and hereafter in effect, or any successor statute. 
  
 “Boyd Controlled Affiliate” shall mean any Person, directly or indirectly, 100 percent owned and controlled by the Boyd
Parent or any successor thereto. 
  
 “Boyd Parent” shall mean Boyd Gaming Corporation, a Nevada corporation. 
  
 “Budgeted Development Costs” shall mean aggregate amount of the Development Costs shown on the Development Budget
including the amount of all contingencies and reserves set forth in the Development Budget but specifically excluding (i) any Financing Costs contained therein or (ii) the Company’s allocable share of the costs of the Echelon Place
Master Plan Improvements. 
  
 “Business
Day” shall mean any day other than a Saturday, a Sunday or a day on which banking institutions in the City of New York, New York are authorized by law, regulation or executive order to remain closed. 
  
 “Capital Call” shall mean a written notice
from a Member to both Members requesting a Capital Contribution. 
  
 “Capital Contribution” shall mean, with respect to any Member, a contribution of capital made by such Member to the Company pursuant to Article 5. 
  
 “Cash Disbursements” shall mean, for any
period, (a) all cash payments made by or on behalf of the Company (other than from reserve or escrow accounts, if any, maintained by the Company) during such period, excluding expenses incurred which are a deduction from proceeds or receipts in
determining Net Capital Proceeds, plus (b) the amount, if any, added during such period to reserve or escrow accounts maintained by the Company. 
  
 “Cash Receipts” shall mean, for any period, (a) cash received by or on behalf of the Company from any source during
such period, excluding proceeds or receipts which are used in determining Net Capital Proceeds, plus (b) the amount of any cash released to the Company during such period from reserve and escrow accounts (or no longer set aside by the
Company in a reserve or escrow account), if any, maintained by the Company. 
  
 “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time. 
  
 “Company Accountant” shall mean a nationally recognized accounting firm approved by the Members to act as accountants for
the Company. 
  

 2 

 “Completion” shall mean the occurrence of the following: 
  
 (a) issuance by all applicable Governmental Authorities of a
certificate of occupancy (which may be a temporary certificate of occupancy), certificate of completion or similar document authorizing the occupancy of the Hotels and the opening of the Hotels for business; 
  
 (b) final completion of all construction work for the
Improvements, including punchlist items and other non-material items, (i) in accordance with the Plans and Specifications, (ii) in accordance with the Construction Loan Documents, and (iii) consistent and in compliance with all Legal
Requirements; 
  
 (c) final payment for all work
and materials involved in the construction of all portions of the Project as evidenced by a final affidavit and lien release from the general contractor and all other trade contractors, subcontractors, material suppliers and vendors furnishing
services or materials to the Company in connection with the construction of the Project, or any similar document under Nevada law which has the effect of removing from the title to the Project all liens, inchoate or otherwise, which could have
arisen on account of work done on, or materials delivered to, the Property in connection with the construction of the Project, including payment for all punchlist items, excepting affidavits and/or lien releases for non-material amounts that the
Company has not been able to obtain notwithstanding Morgans’ good faith efforts to do so; 
  
 (d) receipt by Boyd of a title examination certificate from the Company’s title examiner that, as of the date of the latest to occur
of (a), (b) or (c) above, no liens have been filed against the Project which have not been satisfied in full, discharged from the Project by bonding or insured over by the title insurance company; and 
  
 (e) the Opening Date of both Hotels has occurred.

  
 “Completion Date” shall mean
the date on which Completion shall have occurred. 
  
 “Construction Lender” shall mean the lender (or lending group or syndicate) providing the Construction Loan. 
  
 “Construction Loan” shall mean the construction loan, and (if applicable) permanent loan from the Construction Lender to
the Company to finance property taxes, insurance, the design, construction, installation, furnishing and equipping of the Improvements and the payment of certain pre-opening expenses to be incurred by the Company during the Construction Period, on
the terms for such loan set forth in the Construction Loan Documents. 
  
 “Construction Loan Agreement” shall mean the loan agreement between the Company and the Construction Lender relating to the Construction Loan. 
  
 “Construction Loan Documents” shall mean,
collectively, the Construction Loan Agreement, the promissory notes evidencing the Company’s indebtedness in respect of the Construction Loan, the Mortgage securing such indebtedness, the Construction Loan Guaranty, and all other instruments
and documents executed by the Company or any Member evidencing, securing, guaranteeing or otherwise relating to the Construction Loan. 
  

 3 

 “Construction Loan Guaranty” shall mean, collectively, any guaranty
executed by Morgans or any Affiliate thereof, in favor of the Construction Lender, guaranteeing (i) lien-free completion (or, if applicable, substantial completion) of the Project in accordance with the Plans and Specifications and the
Construction Schedule and (ii) customary carve outs for fraud and other “bad boy” acts, environmental matters arising after the Contribution Date and interest carry in connection with otherwise non-recourse financing. 
  
 “Construction Period” shall mean the period
commencing on the Contribution Date and ending on the Completion Date. 
  
 “Construction Schedule” shall mean the preliminary design and construction timetable for the Project as approved, amended, modified or supplemented pursuant to the terms of this Agreement. 

 
 “Contributed Assets” shall mean the
Land. 
  
 “Contribution Date”
shall mean the date on or after the closing of the Construction Loan that all conditions for the initial funding under the Construction Loan are satisfied. 
  
 “Cost Overruns” shall mean an amount equal to the excess of (i) the total Development Costs for the Project actually
incurred by the Company over (ii) the sum of (A) the Budgeted Development Costs, (B) Approved Cost Overruns to the extent such costs are not included in the Budgeted Development Costs as a result of any amendment, modification or
supplement to the Development Budget approved by the Members and (C) Permitted Cost Overruns to the extent such costs are not included in the Budgeted Development Costs as a result of any amendment, modification or supplement to the Development
Budget approved by the Members. For purposes of this definition, and of any guaranties of Cost Overruns hereunder by Morgans Parent, the terms “Cost Overruns” and “Development Costs” shall not include (i) any Financing Costs
incurred by the Company for the period commencing on the date hereof and ending six months after the Target Opening Date or (ii) the Company’s allocable share of the costs of the Echelon Place Master Plan Improvements. 
  
 “Development Budget” shall mean the final
development budget for the Project, setting forth by line item all Development Costs and indicating the Budgeted Development Costs, as such final budget shall be approved, amended, modified or supplemented pursuant to the terms of this Agreement.
The proposed form of Development Budget is attached hereto as Exhibit A. 
  
 “Development Costs” shall mean all Predevelopment Costs, Financing Costs and all other direct and indirect costs and
expenses actually incurred by or on behalf of the Company through the Completion Date with respect to the acquisition and carrying costs for the Property, designing, constructing, permitting installing, furnishing and equipping the Hotels and the
Improvements, and opening the Hotels for business, and pre-opening sales, marketing and training costs, the Company’s allocable share (as approved by the Members) of the costs of the Echelon Place Master Plan Improvements, including all costs
and expenses of the types enumerated as line items in the Development Budget and all other costs and expenses of any 

  

 4 

 
kind or nature incurred to cause Completion of the Project in accordance with the Plans and Specifications and the Pre-Opening Plan. 
  
 “Echelon Place” shall mean a master plan
development on the Echelon Place Parcel comprising the Echelon Place Components and the Echelon Place Master Plan Improvements. 
  
 “Echelon Place Components” shall mean each of the individual projects developed on the Echelon Place Parcel, including
the Hotels, a casino, casino-hotels, convention center, theater, retail, dining area, parking facilities and any other projects pursued by Boyd or an Affiliate thereof on the Echelon Place Parcel. 
  
 “Echelon Place Components Site Plan” shall
mean the preliminary site plan for the Echelon Place Parcel, showing each of the Echelon Place Components as currently configured, which is attached hereto as Exhibit B. 
  
 “Echelon Place Cost Overrun” shall mean the amount, if any, by which the Company’s
actual allocable share of the costs of the Echelon Place Master Plan Improvements through the Completion Date exceed the amount budgeted for such costs as set forth in the Development Budget. Notwithstanding the foregoing, such excess shall not
include and there shall be no Echelon Place Cost Overrun to the extent such excess costs (i) arise from acts of God, (ii) would not have otherwise been incurred but for delays in the Completion Date occurring after the date specified in
the Construction Schedule, or (iii) arise from changes to the Echelon Master Plan or the Plans and Specifications approved by both Members. 
  
 “Echelon Place Master Plan” shall mean the engineering, design and specifications for (i) the entirety of the
infrastructure and other improvements that will jointly benefit or be used in common by the Echelon Place Components, including without limitation, all common amenities, landscaping, irrigation, signage, lighting and fencing, all roads leading to
and from the porte-cochères and the preparation of sub-grade up to the underside of the porte-cochère road paving surface, all traffic, shared parking, and circulation improvements (including, without limitation, roads, bridges,
walkways, monorail systems and other means of transportation within, adjoining or servicing the Echelon Place Parcel and all landscaping, lighting and fencing related thereto); and (ii) all Government Improvements; excluding only the
engineering and design of those improvements that specifically, solely, and individually comprise each Echelon Place Component. The Echelon Place Master Plan, as currently configured, is attached hereto as Exhibit C. 
  
 “Echelon Place Master Plan Improvements”
shall mean any and all improvements included in or built or to be built pursuant to the Echelon Place Master Plan. 
  
 “Echelon Place Parcel” shall mean approximately 63 acres of land located at 3000 Las Vegas Boulevard South, Las Vegas
more specifically described on Exhibit D. 
  
 “Emergency Costs” shall mean costs and expenses required to (a) correct a condition that if not corrected would endanger the preservation or safety of the Hotel or the Property or the safety of tenants, guests,
employees or other persons at or using the Hotel or the Property, (b) avoid the imminent suspension of any necessary service in or to the Hotel or the 

  

 5 

 
Property, or (c) prevent any of the Members from being subjected to criminal or substantial civil penalties or damage. 
  
 “Entitlements” shall mean any and all
present and future approvals, permits, licenses and other entitlements, whether discretionary or of a ministerial or administrative nature, now or hereafter given or issued by any Governmental Authority, including, without limitation, any
development agreement and all related conditions of approval and mitigation measures, in connection with or relating in any respect to the development, construction, opening, use, ownership, management, marketing, operation or occupancy of the
Hotel, the Improvements or the Project. 
  
 “Event of Bankruptcy” shall mean, with respect to any Person, (a) the commencement by such Person of a proceeding seeking relief under any provision or chapter of the Bankruptcy Code or any other federal or state law
relating to insolvency, bankruptcy or reorganization; (b) an adjudication that such Person is insolvent or bankrupt; (c) the entry of an order for relief under the Bankruptcy Code with respect to such Person; (d) the filing of any
such petition or the commencement of any such case or proceeding against such Person, unless such petition and the case or proceeding initiated thereby are dismissed within ninety (90) days from the date of such filing; (e) the filing of
an answer by such Person admitting the material allegations of any such petition; (f) the appointment of a trustee, receiver or custodian for all or substantially all of the assets of such Person unless such appointment is vacated or dismissed
within ninety (90) days from the date of such appointment but not less than five (5) days before the proposed sale of any assets of such Person; (g) the insolvency of such Person or the execution by such Person of a general assignment
for the benefit of creditors; (h) the convening by such Person of a meeting of its creditors, or any class thereof, for purposes of effecting a moratorium upon or composition of its debts or an extension of its debts; (i) the failure of
such Person to pay its debts generally as they mature; (j) the levy, attachment, execution or other seizure of substantially all of the assets of such Person where such seizure is not discharged within ten (10) days thereafter; or
(k) the admission by such Person in writing of its inability to pay its debts generally as they mature or that it is generally not paying its debts as they become due. 
  
 “FF&E” shall mean all furniture, furnishings, fixtures and equipment, systems,
apparatus, goods and other personal property used in, or held in storage for use in or required in connection with the operation of the Hotels, and shall include Operating Equipment, specialized hotel equipment, guest room, corridor, restaurant, and
lounge furnishings, office furniture and equipment, carpets, electrical appliances, kitchen appliances and apparatus, floor coverings, soft furnishings, artwork, decorative lighting, beverage and bar apparatus and appliances, telephones and
telephone systems, television receivers and other electrical and electronic equipment, computer hardware and software, laundry apparatus and appliances, maintenance and engineering apparatus and appliances, function, banquet and conference furniture
and apparatus, exterior and interior signage, office and back of house apparatus and appliances, motor vehicles and courtesy vehicles, and all alterations, substitutions, additions and replacements therefor. 
  
 “Financing Costs” shall mean all costs of
obtaining financing for the Company including, interest carry, origination fees, commitment fees, interest rate swap and lock fees, reimbursement of lender expenses, closing costs, title insurance premiums, lender and borrower 

  

 6 

 
attorneys fees, transaction or recording taxes, agent or syndication fees and mortgage brokerage fees. 
  
 “Governmental Authority” shall mean the
United States of America or any State thereof, and any agency, quasi-governmental agency, department, commission, board, bureau, instrumentality or political subdivision (including any city, county or district) of any of the foregoing, now existing
or hereafter created, having jurisdiction over the Company, any of the Members or their Affiliates, the Hotel or the Property or any portion thereof, including, without limitation, the Nevada Gaming Control Board and the Nevada Gaming Commission.

  
 “Government Improvements”
shall mean all off-site and on-site improvements required by any federal, state, county, municipal or other governmental or quasi-governmental agency or by any utility provider, in order to enable the construction of each of the Echelon Place
Components, including without limitation, the construction or relocation of any required common air and water quality infrastructure, solid waste, ground water and storm water runoff facilities and other similar improvements or projects, and the
construction of all improvements required to bring all necessary utilities to Echelon Place (including without limitation, water, gas, electricity, sewer and telephone), and the relocation of any existing utility service or installation located upon
the Echelon Place Parcel that would obstruct the intended development thereof. 
  
 “Hotels” shall mean the two full service hotels to be developed on the Land consisting of (1) the Delano Las Vegas,
an approximately 600-room hotel to be similar in design, service, and market position to the Delano hotel operated by MHG in South Beach, Miami Beach, Florida, and (2) an as-yet untitled approximately 1000-room business-focused hotel, which
shall be similar in design, service, and market position to the “Mondrian” hotel brand, together with all meeting space, business centers, restaurants, spas, retail stores, concessions, pools, recreational facilities, driveways, parking
areas, FF&E, Operating Supplies, and other facilities and equipment contained therein or appurtenant thereto, as any of the foregoing may be improved, modified, altered or expanded during the term hereof. The Members acknowledge and agree that
(i) the Company is not the owner of the “Delano” brand and proprietary marks or the Morgans’ to be developed business brand and proprietary marks and (ii) the Company’s entitlement to use such brands and other
proprietary marks shall be as provided in the Morgans Hotel Management Agreement. 
  
 “Hotel Management Agreement” shall mean (a) the Morgans Hotel Management Agreement, or (b) in the event that
the agreement described in the preceding clause (a) shall no longer be in effect, any new management agreement between the Company and any other manager or operator of the Hotel. 
  
 “Hotel Manager” shall mean (a) for so long as the Morgans Hotel Management Agreement
shall be in effect, Morgans/LV Management LLC, a Delaware limited liability company, and its permitted successors and assigns under the Morgans Hotel Management Agreement, or (b) if the Morgans Hotel Management Agreement shall no longer be in
effect, any other Person operating or managing the Hotels pursuant to a new hotel management agreement with the Company. 
  

 7 

 “Improvements” shall mean the Hotels, together with all roads,
sidewalks, parking areas, landscaping, utilities and related equipment and other infrastructure set forth on the Plans and Specifications or subsequently constructed on, at or underneath the Property. 
  
 “Initial Capital Contributions” shall mean
the Capital Contributions of the Members funded pursuant to Section 5.01. 
  
 “Interest” shall mean, with respect to any Member, such Member’s beneficial ownership interest in the Company as
provided in this Agreement. 
  
 “Interior
Designer” shall mean the interior design firm or firms retained by the Company in connection with the Project. 
  
 “Joint Decisions” shall mean those decisions or actions, to be jointly approved by Morgans and Boyd, which are set forth
on Exhibit E. 
  
 “Land”
shall mean the real property (including any easements, rights of way, access rights, approvals and Entitlements, and any other rights, benefits or obligations appurtenant thereto) located on an approximately 6.5 acre parcel of land (which acreage
amount shall be subject to modification as provided in the next sentence) at the southernmost boundary of Echelon Place as more particularly described on the Preliminary Site Plan. The Members acknowledge that the site shape and area of the Land may
change during the Predevelopment Period, such changes to be subject to the approval of both Members, but the area of the Land will not be less than a minimum of 6 acres or such other area as mutually agreed by the Members. 
  
 “Landscape Architect” shall mean the
landscape architect(s) or landscape planner(s) retained by the Company in connection with the Project. 
  
 “Legal Requirements” shall mean any and all laws, rules, regulations, constitutions, orders, ordinances, charters,
statutes, codes, executive orders and requirements, (including any Entitlements) of any Governmental Authority having jurisdiction over a Person (as applicable) and/or the Property or any street, road, avenue or sidewalk comprising a part of, or
lying in front of, the Property or any vault in, or under the Property (including, without limitation, any of the foregoing relating to handicapped or disabled access, accommodations, or parking, and the laws, rules, regulations, orders, ordinances,
statutes, codes and requirements of any applicable fire rating bureau or other body exercising similar functions). 
  
 “Loan Documents” shall mean, collectively, the Construction Loan Documents and any other documents, instruments or
agreements evidencing, securing or guaranteeing any other indebtedness or financing obtained by the Company. 
  
 “Managing Member” shall mean Morgans and its successors and permitted assigns. 
  
 “Management Fee” shall mean, with respect
to any period, the management fee paid by the Company to the Hotel Manager with respect to such period, in the amount set forth in the Hotel Management Agreement. 
  

 8 

 “Material Vendor” shall mean each of the following: (i) any
lobbyist engaged by the Company, (ii) any supplier or vendor receiving payments from the Company in excess of $500,000 during any twelve month period, (iii) any consultant receiving payments from the Company in excess of $50,000 during any
twelve month period and (iv) any lessee or tenant of the Company if aggregate rental due during the term of the lease, including renewals, exceeds $350,000. Notwithstanding the foregoing, term “Material Vendor shall not include any
licensed attorney, certified public accountant, law firm, accounting firm, financial institution regulated by any federal or state law, investment banker regulated by any state and any licensed real estate broker). 
  
 “Member” shall mean Morgans, Boyd or any
other Person who, at such time, is admitted to the Company as a member in accordance with the terms of this Agreement. 
  
 “Morgans Capital Commitment” shall mean an amount equal to the Capital Contribution funded by Morgans pursuant to
Section 5.01(b), and which amount shall equal the fair market value of the Land contributed by Boyd to the Company on the Contribution Date, as determined pursuant to Section 5.01(c). 
  
 “Morgans Competitive Hotel” shall mean the
following hotels or hotel brands, and other hotels that are substantially similar to the following hotels or hotel brands: Mondrian, Delano, W Hotels, 60 Thompson, Soho Grand, Tribeca Grand or Hotel Gansevoort. The Members agree that the following
hotel brands, and those substantially similar thereto, are not substantially similar to the foregoing hotel brands and shall not be deemed a Morgans Competitive Hotel: Ritz Carlton, Fairmont, St. Regis, Four Seasons, Solis, Capella, Bulgari,
Rosewood, and Raffles. 
  
 “Morgans
Controlled Affiliate” shall mean any Person, directly or indirectly, 100 percent owned and controlled by the Morgans Parent. 
  
 “Morgans Hotel Management Agreement” shall mean the Hotel Management Agreement between the Company and Morgans/LV
Management LLC, dated as of the date hereof, as amended, modified or supplemented. 
  
 “Morgans Parent” shall mean Morgans Hotel Group LLC, a Delaware limited liability company, or any successor thereto,
including any successor arising from or in connection with the pending initial public offering of substantially all of the assets owned or controlled by Morgans Hotel Group LLC. 
  
 “Mortgage” shall mean any mortgage, deed of trust, security agreement or other instrument
in the nature thereof at any time and from time to time constituting a lien or grant of security title or a security interest in and upon any interest or estate in the Property or any portion thereof. 
  
 “Necessary Expenditures” shall mean
(a) all Emergency Costs, and (b) all other expenditures whether or not of a recurring nature that are necessary for the Company to preserve, operate, maintain, improve or protect the Property consistent with the Annual Plan, including
payments in respect of liens, payments of principal, interest and any other amounts pursuant to any Loan Documents, payments of mechanics’ liens (unless the Company is diligently and continuously prosecuting a proceeding contesting the payment
of the lien by a proper legal 

  

 9 

 
proceeding which operates to suspend collection of such lien, the Company has sufficient funds reserved for such payment and such contest shall not be
prohibited by the Loan Documents), insurance payments, real estate tax payments, utility costs, repair and maintenance costs, costs of compliance with federal, state and local laws, codes, rules or regulations, and any other operating expenses or
capital expenses set forth in the Annual Plan or otherwise approved by the Members. 
  
 “Net Capital Proceeds” shall mean any Net Disposition Proceeds or Net Refinancing Proceeds. 
  
 “Net Disposition Proceeds” shall mean the
gross receipts (including condemnation and casualty insurance proceeds) from the sale, exchange, transfer, conveyance, lease, or other disposition of a Hotel, the Property, FF&E, or any other assets of the Company other than in the ordinary
course of business, less (a) any indebtedness relating to or secured by such assets (other than Priority Loans) which is repaid out of such gross receipts, (b) the costs and expenses incurred by the Company in connection with the sale,
exchange, transfer, conveyance, lease or other disposition, including brokerage commissions, and (c) in the case of condemnation or casualty, the costs incurred by the Company in connection with any collection of condemnation or casualty
proceeds, or repair or restoration of the Property. 
  
 “Net Operating Cash Flow” shall mean, for any period, the excess of Cash Receipts for such period over Cash Disbursements for such period. 
  
 “Net Refinancing Proceeds” shall mean, with respect to any financing or refinancing of any
loan or encumbrance now or hereafter placed on the Property, all cash received by the Company from such financing or refinancing, less the sum of (a) all costs incurred by the Company in connection with such financing or refinancing,
(b) all amounts paid to the holder of any Mortgage or other encumbrance on the Property, or to the holder of any other indebtedness of the Company (other than Priority Loans), as a consequence of such financing, (c) all amounts which are
required to be held in reserve by the Company, or which are otherwise not made unconditionally available to the Company for distribution to the Members pursuant to the terms of such financing or refinancing, and (d) amounts applied by the
Company to pay its costs and expenses or set aside in connection with such financing or refinancing as a reserve and/or escrow by the Company for its reasonably anticipated expenses and obligations. 
  
 “Opening Date” shall mean the date on which
all of the following has occurred (i) the Hotel is opened for business to the public, (ii) the Company has obtained all material licenses and permits required by Legal Requirements, the Hotel Management Agreement and this Agreement for the
occupancy and operation of the Hotel (including, without limitation, certificates of occupancy (which may be temporary), restaurant licenses, and liquor licenses); (iii) all FF&E and Operating Supplies reasonably required to operate the
Hotel in accordance with the Hotel Management Agreement and this Agreement have been delivered to and, as applicable, installed in the Hotel and are in working order; (iv) all elements of the building comprising the Hotel and all other
structures necessary for operation, access to, and use of the Hotel in accordance with this Agreement and the Hotel Management Agreement, shall have been substantially completed and the Company shall have obtained certificates of occupancy (which
may be temporary) and all other licenses and permits required by applicable Legal Requirements for the operation and management thereof, with respect to same; (v) the Company has received 

  

 10 

 
all consents and approvals from all governmental and regulatory authorities and all other Persons as are necessary for the operation of the Hotel in
accordance with this Agreement and the Hotel Management Agreement. 
  
 “Operating and Capital Budget” shall mean, collectively, the consolidated operating and capital budgets for the Company for any Fiscal Year (or portion thereof) following the Opening Date, as set
forth in the Annual Plan for such Fiscal Year and as approved by Boyd. 
  
 “Operating Equipment” means all cooking utensils, chinaware, glassware, linens, silverware, uniforms, menus and other similar items used at the Hotels. 
  
 “Operating Supplies” means all paper
supplies, cleaning materials, fuel, food and beverages, light bulbs and other consumable and expendable items used at, or stored for usage at, the Hotels. 
  
 “Outside Start Date” shall mean June 30, 2008. 
  
 “Percentage Interest” shall mean, with respect to any Member, such Member’s Percentage
Interest as set forth in Section 5.01(d), as such Percentage Interest may be modified from time to time in accordance with the terms hereof. 
  
 “Permitted Cost Overruns” shall mean unbudgeted Development Costs (i) arising from acts of God or (ii) that
would not have otherwise been incurred but for changes made by Boyd or its Affiliates in Echelon Place following the approval of the Development Budget. 
  
 “Permitted Encumbrances” shall means the title exceptions set forth in Exhibit F attached hereto, but only to the
extent that such title exceptions do not, individually or in the aggregate, have a material adverse effect on the use, utility or value of the Land for the purposes of the development and operation of the Hotels and the other Project improvements
thereon. 
  
 “Person” shall mean
an individual, corporation, partnership, association, trust, limited liability company or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof. 
  
 “Plans and Specifications” shall mean the
drawings, plans and specifications for the Project (including any applicable site plan, master plan or similar document) prepared by the Architects and Project Consultants, as approved, amended, modified or supplemented pursuant to the terms of this
Agreement. 
  
 “Predevelopment
Budget” shall mean the predevelopment budget for the Project, setting forth by line item all Predevelopment Costs, a copy of which is attached hereto as Exhibit G, as such budget shall be amended, modified or supplemented pursuant to
the terms of this Agreement. 
  
 “Predevelopment Costs” shall mean all costs incurred in connection with (i) the Plans and Specifications and construction documents for the Project including, without limitation, all architectural, engineering,
attorneys’ and other professionals’ fees relating thereto; (ii) obtaining all construction permits; (iii) obtaining the Construction Loan, including, without 

  

 11 

 
limitation, all application fees, discount points, commitment fees, appraisal fees, documentary stamp and intangible taxes, recording costs, marketing,
equity requirements, and other costs of meeting the lender’s requirements to funding the Construction Loan and lender’s attorneys’ fees; and (iv) obtaining all Entitlements and satisfying all Legal Requirements for the Project
together with any other development approvals and permits necessary to pursue the Project, including, without limitation, the cost of all presentations and presentation materials, architectural, engineering, and attorneys’, consultants’
and other professionals’ fees relating thereto. 
  
 “Predevelopment Period” shall mean the period commencing on the date of this Agreement and ending on the Contribution Date. 
  
 “Preliminary Site Plan” shall mean the preliminary site plan for the Project attached hereto as Exhibit H.

  
 “Pre-Opening Plan” shall
mean the written statement, prepared by Hotel Manager and approved by Boyd on behalf of the Company detailing a program of pre-opening activities to be undertaken by the Hotel Manager through and including the Opening Date to prepare the Hotel for
the Opening Date and which will include, without limitation: (i) using commercially reasonable efforts to recruit, relocate, train, and compensate employees (including the executive staff); (ii) pre-opening advertising, promotion and
literature; (iii) using commercially reasonable efforts to assist the Company in obtaining all necessary licenses and permits for the operation of the Hotel; (iv) preparing the administrative offices including telephone, telex and fax
services; (v) entertaining prospective business clients (including opening celebrations and ceremonies); (vi) purchasing Operating Supplies and FF&E necessary for the Hotel to commence operations; and (vii) other activities deemed
reasonably necessary by the Hotel Manager to ensure that the Hotel and its operation will be in accordance with the applicable brand standard. 
  
 “Project” shall mean the design, development, construction, financing, equipping, furnishing, pre-opening and opening of
the Hotels and the other new Improvements as provided in the Plans and Specifications and the Pre-Opening Plan. 
  
 “Project Consultant” shall mean, collectively, any design consultant, engineering consultant or other consultant retained
by the Company in connection with the Project. 
  
 “Property” shall mean the Land and all improvements existing or constructed thereon from time to time (including the Hotel and other Improvements). 
  
 “Pro Rata” shall mean, with respect to the Members as of any relevant date, in proportion
to such Members’ respective Percentage Interests as of such date. 
  
 “REA” shall mean a reciprocal easement agreement and/or master covenants and restrictions recorded by Boyd or its Affiliate against the Echelon Place Parcel detailing (i) the obligation of the
Affiliate of Boyd that owns the Echelon Place Parcel to construct and operate the Echelon Place Components and the infrastructure and improvements set forth in the Echelon Place Master Plan (which obligation shall be subject to the limitations set
forth in the REA), (ii) the services and amenities that will be provided to the Echelon Place Components in accordance with the Echelon Place Master Plan and (iii) the allocable share of the each Echelon Place Component of the expenses and
costs associated with such services and amenities. The REA 

  

 12 

 
shall be consistent with the terms and conditions set forth on Exhibit I and shall be subject to the approval of Morgans (acting on behalf of the
Company). 
  
 “Regulations”
shall mean the Treasury Regulations, including Temporary or Proposed Regulations, promulgated under the Code, as such regulations are in effect from time to time. References to specific provisions of the Regulations include references to
corresponding provisions of successor regulations. 
  
 “Reserve Parcel” shall mean the area identified on the Echelon Place Components Site Plan as the Reserve Parcel. 
  
 “Structural Engineer” shall mean the structural engineer or engineers retained by the Company in connection with the
Project. 
  
 “Target Opening
Date” shall mean the date approved by the Members in the Construction Schedule as the projected date of the opening of the Hotels to the public, as such date may be modified with the approval of the Members. 
  
 “Transfer” shall mean any direct or
indirect sale, assignment, conveyance, disposition, exchange, mortgage, pledge or granting of a security interest. 
  
 “Uniform System” shall mean the “Uniform System of Accounts for the Lodging Industry (9th revised edition, Copyright
1996)” by the Hotel Association of New York City, Inc. and published by the Educational Institute of the American Hotel & Motel Association, as the same may be revised from time to time. 
  
 Each of the following terms is defined in the Section set
forth opposite such term: 
  

			
	 Term

	  	 Section

	 Act
	  	Recitals
	 Additional Member
	  	12.04(a)
	 Affiliate Agreement
	  	8.02
	 Agreement
	  	Preamble
	 Appointment Notice
	  	12.05(e)
	 Boyd
	  	Preamble
	 Boyd Cost Overrun
	  	5.06(a)
	 Boyd Default Loan
	  	5.06(b)
	 Capital Account
	  	6.01(a)
	 Capital Call Due Date
	  	5.03
	 Capital Call Notice
	  	5.03
	 CERCLA
	  	3.02(k)
	 Certificate
	  	Recitals
	 Change
	  	9.04
	 Company
	  	Recitals

  

 13 

			
	 Term

	  	 Section

	 Confidential Information
	  	14.11
	 Contributing Member
	  	5.04(a)
	 Conversion Notice
	  	5.04(c)
	 Defaulting Member
	  	5.04(d)
	 Environmental Laws
	  	3.02(k)
	 Environmental Liabilities
	  	3.02(k)
	 Failed Contribution
	  	5.04(a)
	 Fair Market Value
	  	12.05(d)
	 Fiscal Year
	  	10.05
	 Funded Amount
	  	5.04(a)
	 Hazard Materials
	  	3.02(k)
	 Indemnified Party
	  	11.02(a)
	 Laws
	  	3.02(k)
	 Liquidating Event
	  	13.02
	 Morgans
	  	Preamble
	 Morgans Cost Overrun Funding
	  	5.06(b)
	 Morgans Default Loan
	  	5.06(a)
	 Morgans Indemnified Party
	  	11.02(b)
	 Morgans Transfer Closing Date
	  	12.05(c)
	 Non-Contributing Member
	  	5.04(a)
	 Permitted Transfer
	  	12.02
	 Priority Loan
	  	5.04(b)
	 Sophisticated Purchaser
	  	12.05(d)
	 Substitute Member
	  	12.03
	 Tax Matters Member
	  	10.07(a)

  
 Section 1.02
Certain Other Terms. In this Agreement, unless otherwise specified (a) singular words include the plural and plural words include the singular; (b) words which include a number of constituent parts, things or elements, including the
terms “Project” or “Property” shall be construed as referring separately to each constituent part, thing or element thereof, as well as to all such constituent parts, things or elements as a whole; (c) words importing any
gender include the other gender; (d) references to any Member include such Member’s permitted successors and assigns; (e) references to any statute or other law include all applicable rules, regulations and orders adopted or made
thereunder and all statutes or other laws amending, consolidating or replacing the statute or law referred to; (f) references to any agreement or other document, including this Agreement, include all subsequent amendments, modifications, or
supplements to such agreement or document; (g) the words “include” and “including” and words of similar import, shall be deemed to be followed by the words “without limitation”; (h) the words
“hereto,” “herein,” “hereof,” “hereunder” and words of similar import, refer to this Agreement in its entirety; (i) references to Articles, Sections, paragraphs, Schedules 

  

 14 

 
and Exhibits are to the Articles, Sections, paragraphs, Schedules and Exhibits of this Agreement; (j) numberings and headings of Articles, Sections,
paragraphs, Schedules and Exhibits are inserted as a matter of convenience and shall not affect the construction of this Agreement; and (k) all Schedules and Exhibits to this Agreement are incorporated herein by this reference thereto as if
fully set forth herein, and all references herein to this Agreement shall be deemed to include all such incorporated Schedules and Exhibits. 
  
 Section 1.03 Accounting Terms. Unless otherwise specified, (a) all accounting terms used herein shall be interpreted, (b) all accounting
determinations hereunder shall be made and (c) all financial statements required to be delivered hereunder shall be prepared, in accordance with generally accepted accounting principles as modified by the Uniform System, as in effect from time
to time, consistently applied. 
  
 ARTICLE 2 
 FORMATION AND PURPOSE OF THE COMPANY 
  
 Section 2.01 Formation of the Company. The Company has been formed and established under the provisions of the Act. Effective as of the date
hereof, the rights and liabilities of the Members shall be as provided in this Agreement and, except as herein otherwise expressly provided, in the Act. 
  
 Section 2.02 Name of the Company. The name of the Company shall be “Morgans Las Vegas, LLC.” 
  
 Section 2.03 Purpose of the Company. The purpose of the Company is to
engage in any lawful activity permitted under the Act, including, without limitation, the following: 
  
 (a) entering into and performing its obligations and exercising its rights under the agreements with Architects and Project Consultants,
the Construction Loan Documents, the Hotel Management Agreement and any other agreements or contracts contemplated by the foregoing or this Agreement or required in connection with the development, design, construction, operation, financing,
maintenance, management, improvement, repair, renovation, alteration, leasing and/or sale of the Hotels and the Property, and carrying out the terms of and engaging in the transactions contemplated by such agreements, in each case either directly or
through subsidiaries; 
  
 (b) owning, designing,
developing, constructing, managing, servicing, maintaining, repairing, renovating, improving, leasing, restructuring, financing (including entering into and performing its obligations and exercising its rights under any loan financing documents),
refinancing, selling or otherwise dealing with and disposing of the Hotels and the Property and any proceeds of the Hotels and the Property, in each case either directly or through subsidiaries; and 
  
 (c) entering into, making and performing all contracts and
undertakings, and engaging in any activity and executing any powers permitted under the Act that are incidental to, or connected with, the foregoing and necessary, suitable or convenient to accomplish the foregoing. 
  

 15 

 Section 2.04 Place of Business of the Company. The principal place of business of the Company
shall be located c/o Morgans, 475 Tenth Avenue, 11th Floor, New York, New York 10018; provided, however, that as
soon as reasonably practicable the Company shall establish its principal place of business on the Land. 
  
 Section 2.05 Registered Office and Registered Agent. The Company shall establish and maintain a registered office and agent for the Company in the
State of Delaware. 
  
 Section 2.06 Duration of the
Company. The Company shall continue until its termination in accordance with the provisions of Article 13. 
  
 Section 2.07 Title to the Company Property. All property of the Company, whether real or personal, tangible or intangible, shall be deemed to be
owned by the Company as an entity, and no Member, individually, shall have any direct ownership interest in such property. 
  
 Section 2.08 Filing of Certificates. Morgans shall file and publish all such certificates, notices, statements or other instruments required by law
for the formation and operation of a limited liability company in all jurisdictions where the Company may elect to do business. 
  
 Section 2.09 Limitation on Liability. Except as required by the Act or as expressly provided in this Agreement, the debts, obligations and
liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and no Member shall be obligated personally for any such debt, obligation or liability of the Company
solely by reason of being a Member. 
  
 Section 2.10 No
Responsibility for Liability of Other Member. Except as expressly provided herein, neither the Company nor any Member shall be responsible or liable for any indebtedness or obligation of another Member incurred either before or after the
execution of this Agreement, except as to those responsibilities, liabilities and obligations incurred pursuant to the terms of this Agreement, and each Member shall indemnify and hold each other Member harmless from such obligations and
indebtedness incurred or assumed by the indemnifying Member except as aforesaid. This Agreement shall not be deemed to create a joint venture between the Members with respect to any activities or enterprises whatsoever other than those within the
purposes of the Company as specified in Section 2.03. 
  
 ARTICLE 3 
 REPRESENTATIONS AND WARRANTIES 
  
 Section 3.01 Representations and Warranties of Morgans. Morgans represents and warrants to Boyd as follows:

  
 (a) It is duly organized, validly existing
and in good standing under the laws of its jurisdiction of formation with all requisite power and authority to enter into this Agreement and to conduct the business of the Company. 
  
 (b) This Agreement constitutes the legal, valid and binding obligation of Morgans enforceable in accordance
with its terms, subject to the application of principles of equity and laws governing insolvency and creditors’ rights generally. 
  

 16 

 (c) No consents or approvals are required from any Governmental Authority or other Person
for Morgans to enter into this Agreement. All limited liability company, corporate or partnership action on the part of Morgans necessary for the authorization, execution and delivery of this Agreement, and the consummation of the transactions
contemplated under this Agreement, have been duly taken. 
  
 (d) The execution and delivery of this Agreement by Morgans, and the consummation of the transactions contemplated under this Agreement, do not conflict with or contravene any provision of Morgans’ organizational
documents or any agreement or instrument by which it or its properties are bound or any law, rule, regulations, order or decree to which it or its properties are subject. 
  
 (e) Morgans has not retained any broker, finder or other commission or fee agent, and no such person has
acted on its behalf in connection with the execution and delivery of this Agreement or the acquisition (directly or indirectly) by the Company of the Property. 
  

(f) Morgans is an indirect wholly-owned subsidiary of the Morgans Parent. 
  
 Section 3.02 Representations and Warranties of Boyd. Boyd represents and warrants to Morgans as follows: 

 
 (a) It is duly organized, validly existing and in good
standing under the laws of its jurisdiction of formation with all requisite power and authority to enter into this Agreement and to conduct the business of the Company. 
  
 (b) This Agreement constitutes the legal, valid and binding obligation of Boyd enforceable in accordance
with its terms, subject to the application of principles of equity and laws governing insolvency and creditors’ rights generally. 
  
 (c) No consents or approvals are required from any Governmental Authority or other Person for Boyd to enter into this Agreement. All
limited liability company, corporate or partnership action on the part of Boyd necessary for the authorization, execution and delivery of this Agreement, and the consummation of the transactions contemplated under this Agreement, have been duly
taken. 
  
 (d) The execution and delivery of this
Agreement by Boyd, and the consummation of the transactions contemplated under this Agreement, do not conflict with or contravene any provision of Boyd’s organizational documents or any agreement or instrument by which it or its properties are
bound or any law, rule, regulations, order or decree to which it or its properties are subject. 
  
 (e) Boyd has not retained any broker, finder or other commission or fee agent, and no such person has acted on its behalf in connection
with the execution and delivery of this Agreement or the acquisition (directly or indirectly) by the Company of the Property. 
  
 (f) Boyd is a wholly-owned subsidiary of the Boyd Parent. 
  

 17 

 (g) Boyd or an Affiliate holds good and marketable fee simple title to the Echelon Place
Parcel and the Land, in each case free and clear of all liens, except for the Permitted Encumbrances. 
  
 (h) Boyd will, prior to the Contribution Date, operate and maintain the Land in a reasonable commercial manner and substantially in
accordance with the past practices of Boyd and its Affiliates with respect to the Land, and shall not further encumber the Land or permit the Land to be further encumbered. 
  
 (i) There is no litigation pending or, to the best knowledge of Boyd, threatened in writing against the
Land, the Echelon Place Parcel or Boyd or its Affiliates which would affect the Land or the Echelon Place Parcel. No petition in bankruptcy (voluntary or otherwise), assignment for the benefit of creditors, or petition seeking reorganization or
arrangement or other action under Federal or state bankruptcy or insolvency law is pending against or contemplated by Boyd or its Affiliates. 
  
 (j) There are no existing condemnation proceedings affecting the Land or the Echelon Place Parcel (or any portion thereof) and neither
Boyd nor any Affiliate of Boyd has received written notice of the threatened commencement of any such action affecting the Land or the Echelon Place Parcel (or any portion thereof). To the best of Boyd’s knowledge, there are no proffers,
development agreements or other restrictions affecting the use or development of the Land or the Echelon Place Parcel other than the Project. 
  
 (k) The Land and the Echelon Place Parcel are in compliance in all material respects with all Legal Requirements of any Governmental
Authority or any insurance carrier (“Laws”) affecting the Land, the Echelon Place Parcel or any portion thereof (including, without limitation, Comprehensive Environmental Response, Compensation and Liability Act of 1980
(“CERCLA”), 42 U.S.C. 9601(14), or any Laws regulating pollutants or contaminants as defined in CERCLA, 42 U.S.C. 9601(33), or hazardous waste as defined by the Resource Conservation and Recovery Act, 42 U.S.C. 6903(5), or other
Laws regulating or relating to Hazardous Materials (as defined below) or human health or safety or the environment (collectively, the “Environmental Laws”)), and neither Boyd nor any Affiliate of Boyd has received notice of any
violations of any of the foregoing Laws with respect to the Land or the Echelon Place Parcel. In connection with or relating to the Land or the Echelon Place Parcel, no written notice, notification, demand, request for information, citation, summons
or order has been received, no complaint has been filed, no penalty has been assessed and no suit or action is pending or, to Boyd’s knowledge, threatened by any Governmental Authority or other Person with respect to any matters relating to or
arising out of any Environmental Law, except to the extent any of the foregoing has been withdrawn, rescinded, dismissed, overruled, terminated, expired, completed, resolved, satisfied, discharged or otherwise rendered inoperative or ineffective. In
connection with or relating to the Land or the Echelon Place Parcel, to Boyd’s knowledge, there are no Environmental Liabilities or facts, events, conditions, situations or set of circumstances which would reasonably be expected to result in or
be the basis for any Environmental Liabilities. “Environmental Liabilities,” as used in this subparagraph, means any and all liabilities to the extent arising in connection with or relating to the Land or the Echelon Place Parcel or
any activities or operations occurring or conducted thereon (including offsite disposal), whether accrued, contingent, absolute, determined, determinable or otherwise, which arise under or relate 

  

 18 

 
to any applicable Environmental Law. For purposes of this Agreement, the term “Hazardous Materials” includes, without limitation,
(a) any chemical, material or other substance defined as or included within the definition of “hazardous substances,” “hazardous wastes,” “extremely hazardous substances,” “toxic substances,” “toxic
material,” “restricted hazardous waste,” “special waste,” or words of similar import under any Environmental Law; (b) any oil, petroleum, or petroleum-derived substances, any flammable substances or explosives, any
radioactive materials, any asbestos or any substances containing more than 0.1 percent asbestos, any oil or dielectric fluid containing levels of polychlorinated biphenyls in excess of 50 parts per million, and any urea formaldehyde insulation; and
(c) any other chemical, material or substance, exposure to which is prohibited, limited or regulated under any Environmental Law. 
  
 (l) To the best of Boyd’s knowledge, no work has been performed at the Land, and no materials have been furnished to the Land, which
though not presently the subject of a lien, might give rise to mechanics’, materialmen’s or other liens against Boyd’s interest in the Land or any portion thereof if not paid as agreed. 
  
 (m) Boyd is not, and as of the Contribution Date will not
be, a party to any agreement or undertaking of any kind whatsoever, written or oral, which will be binding upon the Company from and after the Contribution Date or which will adversely affect the Land, other than those furnished to Morgan and
approved by Morgan in writing. 
  
 (n) There are
no commercial or residential leases, subleases, licenses, occupancy agreements, or any other agreements or licenses in effect as of the date of this Agreement, nor shall there be as of the Contribution Date, granting to any person, entity or party a
right to possess, occupy, use or purchase the Land or any portion thereof. 
  
 (o) Except as otherwise expressly set forth in this Agreement, the Land is being contributed in an “AS IS, WHERE IS” condition and “WITH ALL FAULTS” as of the date of this Agreement and the
Contribution Date. Except as expressly set forth in this Agreement, no representations or warranties, express or implied, have been made or are being made and no responsibility has been or is being assumed by Boyd or by any partner, officer,
employee, director, shareholder, person, firm, agent, attorney, or representative acting or purporting to act on behalf of Boyd as to the condition or fitness for any particular purpose or merchantability or repair of the Land or the value, expense
of operation, or income potential thereof or as to any other fact or condition which has or might affect the Land or the condition, repair, value, expense of operation or income potential of the Land or any portion thereof. This Agreement has been
entered into by the parties after full investigation, or with the parties satisfied with the opportunity afforded for investigation, and neither party is relying upon any statement or representation made by, or made by any person or entity
purporting to act on behalf of, the other, unless such statement or representation is specifically and expressly embodied in this Agreement. 
  
 ARTICLE 4 
 PREDEVELOPMENT MATTERS

  
 Section 4.01 Predevelopment. During the
Predevelopment Period, subject to the approval of Boyd to the extent required hereunder, Morgans shall use commercially reasonable 

  

 19 

 
efforts to perform all predevelopment duties customarily performed by a developer of projects of like size and scope in accordance with the Predevelopment
Budget and shall use reasonable commercial efforts to take or cause to be taken all action and promptly to do or cause to be done all things necessary, proper or advisable to facilitate the overall goal of causing (i) the Contribution Date to
occur no later than the Outside Start Date and (ii) the opening the Hotels to the public in the first quarter of 2010 contemporaneously with completion of Echelon Place, including, without limitation, the following: 
  
 (a) Identifying and selecting the Architects, Interior
Designer, Landscape Architects, Structural Engineer and other Project Consultants and overseeing all such parties; 
  
 (b) Together with Boyd, interfacing with all Governmental Authorities and determining all Entitlements required in order to pursue the
Project and the timeline for obtaining the same; 
  
 (c) Approving, on behalf of the Company, those provisions of the REA affecting the Company and/or the Property; 
  
 (d) Taking all action necessary, proper or advisable to plan, design and obtain Entitlements for the construction of the Project;

  
 (e) Preparing or causing to be prepared for
approval by Boyd, (i) the concept and program development and specific site boundaries for the Land consistent with the Preliminary Site Plan with the goal of obtaining Boyd’s approval on or before, March 31, 2006, (ii) schematic
designs and timeline with the goal of obtaining Boyd’s approval on or before, July 31, 2006, (iii) the Plans and Specifications, the Pre-Opening Plan, the Development Budget and the Construction Schedule with the goal of obtaining
Boyd’s approval on or before January 1, 2007 and both parties agree to use reasonable commercial, good faith efforts to obtain such approvals on or prior to such dates, and any such approvals shall not be unreasonably delayed, withheld or
conditioned; 
  
 (f) Obtaining clearance from
Boyd’s governmental compliance committee for any Person that may be a Material Vendor before engaging such Person; 
  
 (g) On or before the Outside Start Date, identifying Construction Lenders and identifying, completing and endeavoring to cause the Company
to satisfy all requirements in order for the Company to commence construction of the Project and close the Construction Loan and receive funding thereunder. 
  
 Section 4.02 Echelon Place Master Plan and Components. 
  
 (a) Boyd and its Affiliates shall use commercially reasonable efforts to assist and cooperate with Morgans in connection with the
performance of Morgans’ predevelopment duties set forth in Section 4.01. During the Predevelopment Period, Boyd and its Affiliates shall also use commercially reasonable efforts to proceed with the expeditious design and planning of
Echelon Place, and to complete timely and provide to Morgans, the planning of the material components of the Echelon Place Master Plan that are reasonably necessary for Morgans to satisfy its predevelopment obligations as set forth in
Section 4.02. In amplification of, and not in 

  

 20 

 
limitation of, the foregoing, during the Predevelopment Period, Boyd and its Affiliates shall use reasonable commercial efforts to take or cause to be taken
all action and promptly to do or cause to be done all things necessary, proper or advisable to facilitate the overall goal of closing the Construction Loan no later than the Outside Start Date and opening the Hotels to the public in the first
quarter of 2010 contemporaneously with completion of the other material components of the Echelon Place Master Plan and the Echelon Place Components, including, without limitation, the following: 
  
 (i) provide assistance and advice as reasonably requested by
Morgans, and otherwise fully cooperate in all respects with Morgans, to apply for and obtain the Entitlements for the Project; 
  
 (ii) take all action necessary, proper or advisable to plan, design and obtain Entitlements for the construction of the Echelon Place
Components and the Echelon Place Master Plan Improvements, including obtaining all approvals, licenses and permits in connection therewith; 
  
 (iii) take all action necessary, proper or advisable to safely demolish and remove the existing structures on the Land and to remove and
or remediate, in accordance with applicable Laws, any Hazardous Materials on the Land and to convey the Land to the Company on the Contribution Date vacant of any and all structures and debris. 
  
 (b) Without limiting any of the foregoing, during the
Predevelopment Period Boyd shall not and shall not permit any Affiliate to (i) sell, contribute, assign or create any right, title or interest in or to the Land or cause any additional Lien or liability to be placed in record against the Land
that is inconsistent with the Project or that would materially affect the ability of Boyd or its Affiliates to comply with its obligations hereunder, (ii) enter into any new (or extend or renew any existing) permit, covenant, restriction,
agreement or obligation affecting the Land that is inconsistent with the Project or that would materially affect the ability of Boyd or its Affiliates to comply with its obligations hereunder or (iii) take or commit any action that could likely
result in a violation or breach of any agreement, covenant, representation or warranty contained in this Agreement. 
  
 (c) Boyd and its Affiliates and Morgans (on behalf of the Company) shall use all reasonable commercial efforts, and shall work
expeditiously and in good faith, to finalize, execute and record against the Echelon Place Parcel (as soon as reasonably practicable after the execution of this Agreement, which the Members understand may take 12 to 18 months) an REA on terms and
conditions consistent with the terms set forth in Exhibit I hereof. 
  
 (d) Notwithstanding the foregoing or anything in this Agreement to the contrary and although it is the present intention of Boyd and its Affiliates to proceed in good faith with the planning, development and ultimate
construction of Echelon Place, each of the Members acknowledge and agree: (i) the development of Echelon Place as currently proposed is in a preliminary stage, (ii) there are many factors both within and outside of the control of the
Members that could preclude the successful development of Echelon Place, (iii) there is no assurance that the Boyd or any Affiliate of Boyd will ultimately develop, construct and/or 

  

 21 

 
operate Echelon Place; (iv) there is no assurance that the Boyd or any Affiliate of Boyd will not materially modify Echelon Place as it is presently
proposed and (v) in the event Boyd or its Affiliate elects, in its sole discretion, to modify Echelon Place in any manner or not to proceed with the construction of any portion of Echelon Place, nothing in this Agreement shall be deemed to bind
Boyd or any Affiliate thereof to complete Echelon Place or any part thereof, nor shall such election by Boyd or its Affiliate give rise to any cause of action against Boyd, or any Affiliate thereof, by Morgans under this Agreement; provided,
however, that (A) if the Company and an Affiliate of Boyd approve an REA and the development and construction of Echelon Place proceeds, then the obligations of Boyd and its Affiliates to the Company with respect to the design (including any
modifications thereto), construction, completion and operation of Echelon Place shall be as set forth in, and governed by, the REA, and (B) in the event that any failure of Boyd or its Affiliates to proceed with the development of Echelon
Place, or any modification by Boyd or its Affiliates of the master plan or site plan for Echelon Place, shall result in a failure of the Company to obtain or close the Construction Loan or to satisfy any conditions to the Construction Loan or the
Contribution Date prior to the Outside Start Date, then the provisions of Section 4.03 shall apply. 
  
 Section 4.03 Outside Start Date. Notwithstanding anything to the contrary contained herein, if for any reason the Contribution Date has not
occurred on or prior to the Outside Start Date, then, as provided in Section 13.02(d), either Member may dissolve the Company and upon such dissolution this Agreement shall terminate, and neither Member shall have any claim against the other
Member for any costs or expenses incurred or spent as of such dissolution date, including but not limited to the Predevelopment Costs funded by such Member and any other pursuit costs incurred by such Member nor shall either Member have any other
liability or obligation to each other of any kind pursuant to this Agreement, excepting any obligations or liabilities that expressly survive the termination of this Agreement as provided in this Section 4.03; provided, however, if the failure
to satisfy this condition is specifically due to the actions of a Member in material breach of this Agreement, then the non breaching Member shall have claim against the other Member for any out of pocket costs or expenses incurred by the
non-breaching Member as of the dissolution date. In the event of any dissolution of the Company and termination of this Agreement pursuant to this Section 4.03, neither Member shall have the right to use the plans, specifications, reports, test
results or other work product prepared in connection with the Project without the consent of the other Member. The provisions of this Section 4.03 shall survive the dissolution of the Company or the termination or expiration of this Agreement.

  
 ARTICLE 5 
 CAPITAL CONTRIBUTIONS 
  
 Section 5.01 Initial Capital Contributions. 
  
 (a) During the Predevelopment Period, Boyd and Morgans shall be required to make Capital Contributions, on a Pro Rata basis, from time to
time for funding Predevelopment Costs in accordance with the Predevelopment Budget. 
  
 (b) On the Contribution Date and provided as of such date (i) the representations and warranties of Boyd herein shall be true and
correct in all material respects as 

  

 22 

 
if made on the Contribution Date and Boyd is not in breach of any material provision of this Agreement, (ii) the Members have approved the Plans and
Specifications, the Development Budget, the Construction Schedule and the Pre-Opening Plan, and (iii) the REA has been executed, delivered and recorded in the local land records, Morgans shall fund to the Company by wire transfer of immediately
available funds an amount equal to the excess of (A) the Morgans Capital Commitment over (B) the Predevelopment Costs previously funded by Morgans. 
  

(c) Contemporaneously with Morgans funding the Capital Contribution required of Morgans pursuant to Section 5.01(b) and provided,
as of such date, (i) the representations and warranties of Morgans herein shall be true and correct in all material respects as if made on the Contribution Date and Morgans is not in breach of any material provision of this Agreement,
(ii) the Members have approved the Plans and Specifications, the Development Budget, the Construction Schedule and the Pre-Opening Plan, and (iii) the REA has been executed, delivered and recorded in the local land records, Boyd shall
convey the Land to the Company pursuant to normal and customary deeds and other conveyance instruments consistent with local practices and subject only to the Permitted Encumbrances, and with all improvements thereon having been demolished and
removed at Boyd’s cost. Boyd shall be deemed to have made a Capital Contribution to the Company in an amount equal to the fair market value of Land. The Members acknowledge and agree that the fair market value of the Land shall be equal to $15
Million for each acre (or proportionate share thereof for any fractional acre) comprising Land that is conveyed to the Company. For example, and for illustration purposes only, if the Land consists of 6.5 acres then the Capital Contribution of Boyd
would equal Ninety Seven Million Five Hundred Thousand Dollars ($97,500,000) and, in such event, the Morgans Capital Commitment would equal Ninety Seven Million Five Hundred Thousand Dollars ($97,500,000). The Company, out of the Capital
Contribution funded by Morgans pursuant to Section 5.01(b) and simultaneously with the conveyance of the Land to the Company, shall reimburse Boyd the amount of Predevelopment Costs funded by Boyd through such date. 
  
 (d) As of the Contribution Date, the Percentage Interests of
the Members shall be as follows: 
  

				
	 Name

	  	Percentage Interest

	 
	 Morgans
	  	50	%
	 Boyd
	  	50	%

  
 Section 5.02
Additional Capital Contributions. From and after the Contribution Date, Morgans and Boyd shall be required to make additional Capital Contributions, on a Pro Rata basis, from time to time during the Construction Period for the following
purposes: (a) Capital Contributions for Permitted Cost Overruns; and (b) Capital Contributions for Approved Cost Overruns. Subsequent to the Construction Period, Morgans and Boyd shall be required to make Capital Contributions, on a Pro
Rata basis, for Necessary Expenditures. All such Capital Contributions shall be made in accordance with the procedures set forth in this Article 5. 
  

 23 

 Section 5.03 Procedures for Capital Contributions. 
  
 Morgans shall issue Capital Calls to the Members in writing
(a “Capital Call Notice”) to fund any Capital Contributions required pursuant to Section 5.01(a) or Section 5.02. Each such Capital Call Notice shall set forth the amount of the required Capital Contribution, and shall
specify a date (the “Capital Call Due Date”) for contribution of such funds. Morgans shall make Capital Calls for Predevelopment Costs consistent with the Predevelopment Budget. Upon receipt of a Capital Call Notice, each Member
shall be required to fund its Pro Rata share of the total funds specified in the Capital Call Notice. The Capital Call Due Date shall be at least (x) two (2) Business Days after receipt of the Capital Call Notice, for Emergency Costs and
(y) ten (10) Business Days after receipt of the Capital Call Notice, for all other funds, unless a shorter time is reasonably designated by Morgans. All Capital Contributions shall be made by wire transfer of immediately available funds to
an account of the Company specified by Morgans in the Capital Call Notice. If, for any reason, Morgans fails to issue a Capital Call as required in this Section 5.03, then Boyd shall also have the right to issue a Capital Call if Morgans fails
to make a Capital Call for such items within ten (10) Business Days after notice from Boyd of such failure. 
  
 Section 5.04 Failure to Fund Capital Contributions. 
  
 (a) Subject to Section 5.04(d) hereof, if any Member shall fail to timely make a Capital Contribution required pursuant to this
Article 5 in the amount specified in the applicable Capital Call Notice (such Member is hereinafter referred to as a “Non-Contributing Member”), Morgans or Boyd shall give notice of such failure to the other Member and the amount of
the Capital Contribution not funded by the Non-Contributing Member (such amount is hereinafter referred to as the “Failed Contribution”), and the Member that shall have funded its Capital Contribution may, at its sole election and
as the sole and exclusive remedy of the Company and any Member under this Agreement on account of the failure of any Member to make a Capital Contribution (other than as set forth in Section 5.05 hereof), fund, at any time thereafter, all or
part of such Failed Contribution (any such funded amount is hereinafter referred to as the “Funded Amount,” and each such funding Member is hereinafter referred to as a “Contributing Member”). 
  
 (b) The Funded Amount will be treated as a recourse loan (a
“Priority Loan”) by the Contributing Member to the Non-Contributing Member, which Priority Loan shall bear interest at the rate of 15% per annum, compounded monthly, prorated for any partial year. Any such Priority Loan (to the
extent of unpaid principal and interest), shall be repaid directly by the Company to the Contributing Member from the share of distributions of Net Operating Cash Flow and Net Capital Proceeds as set forth in Sections 7.01 and 7.02 hereof to
which the Non-Contributing Partner would otherwise be entitled. 
  
 (c) With respect to any Priority Loan made in connection with a Failed Contribution, in the event that a Contributing Member shall have made a Priority Loan and the Priority Loan (plus all accrued and unpaid interest
thereon) shall not have been repaid in full (either by the Non-Contributing Member and/or by the Company out of distributions to which the Non-Contributing Member would otherwise be entitled) within one hundred eighty (180) days after the
making of such Priority Loan, such Contributing Member may, by delivering a 

  

 24 

 
notice (the “Conversion Notice”) to the Non-Contributing Member at any time after the expiration of such 180-day period, elect to terminate
such Priority Loan, convert the Priority Loan to equity and have the Non-Contributing Member’s Percentage Interest reduced as set forth in Section 5.05; provided, however, that the Non-Contributing Member shall have the right
during the ten (10) day period following the delivery by the Contributing Member of the Conversion Notice to repay in full the Priority Loan or the unpaid portion thereof (together with all accrued and unpaid interest thereon), and if such
repayment shall occur within such ten (10) day period, the Contributing Member shall have no further rights under this Section 5.04(c) with respect to such Priority Loan. 
  
 (d) Notwithstanding anything to the contrary contained herein, if either Member shall fail to make any
Capital Contribution required of it under Section 5.01 (the “Defaulting Member”), then the other Member, at its sole election, in addition to exercising any of the other remedies set forth in Sections 5.04 and 5.05, may cause
the Company to be dissolved in accordance with Article 13 hereof, and in connection therewith the Defaulting Member shall be deemed to have no Percentage Interest, Interest or Capital Account hereunder. 
  
 Section 5.05 Dilution. If a Contributing Member elects to terminate a
Priority Loan pursuant to Section 5.04(c) hereof and the Non-Contributing Member shall fail to repay in full to the Contributing Member the unpaid portion of the Funded Amount (plus all accrued and unpaid interest on the Priority Loan) within
the ten (10) day period referred to in such Section 5.04(c), the Percentage Interest of the Contributing Member shall be increased by an amount equal to the percentage equivalent of a fraction, the numerator of which is equal to 150% of
the unpaid portion of the Priority Loan (plus all accrued and unpaid interest thereon) and the denominator of which is equal to the aggregate amount of the Capital Contributions made by all Members through and including the date such Contributing
Member contributed the Funded Amount. The Percentage Interest of the Non-Contributing Member shall be reduced by the percentage by which the Contributing Member’s Percentage Interest is increased pursuant to the preceding sentence. Exhibit
J attached hereto illustrates the manner in which the Members intend this dilution formula to be calculated. 
  
 Section 5.06 Payment of Cost Overruns. 
  
 (a) Within fifteen (15) Business Days after receipt of the written notice from Boyd, Morgans shall pay any Development Costs giving
rise to a Cost Overrun. Morgans shall not be entitled to any reimbursement or other benefit for funding any Cost Overrun. Any Cost Overrun payment which is required to be made by Morgans under this Section 5.06 shall not constitute a Capital
Contribution, a loan to the Company or any other entitlement for any purpose of this Agreement. The obligations of Morgans pursuant to this Section 5.06 shall be guaranteed by the Morgans Parent pursuant to the form of guaranty agreement
attached as Exhibit K to be entered into on or before the Contribution Date. If Morgans fails to pay any Development Costs giving rise to a Cost Overrun within fifteen (15) Business Days after receipt of written notice from Boyd of such
failure then, in addition to any other remedies at law or equity available to Boyd, Boyd may, in its sole and absolute discretion, elect to fund to the Company all or any portion of the amount of the Cost Overrun that Morgans failed to fund (the
“Boyd Cost Overrun Funding”). Upon the occurrence of a Boyd Cost Overrun Funding then (i) the amount of the Boyd Cost Overrun Funding shall be deemed a loan to Morgans (a “Morgans Default Loan”) 

  

 25 

 
bearing interest at fifteen percent (15%) per annum and payable out of Morgans share of any distributions under this Agreement to which it may be
entitled and (ii) if the Morgans Default Loan (together with all accrued interest thereon) shall not have been repaid in full (either by Morgans and/or by the Company out of distributions to which Morgans would otherwise be entitled) within
thirty (30) days after the making of such Morgans Default Loan, Boyd may, by delivering a notice to Morgans at any time after the expiration of such 30 day period, elect to terminate such Morgans Default Loan in which case the Percentage
Interest of Boyd shall increase, and the Percentage Interest of Morgans shall decrease by an amount equal to the product of (A) Morgans’ Percentage Interest and (B) a fraction, the numerator of which is 150 percent of the Boyd Cost
Overrun Funding and the denominator of which is the aggregate Capital Contributions funded by Morgans to the Company. 
  
 (b) Within fifteen (15) Business Days after receipt of the written notice from Morgans, Boyd and the Boyd Parent, jointly and
severally, shall be responsible to pay any Development Costs giving rise to a Echelon Place Cost Overrun. Neither Boyd nor any Affiliate of Boyd shall be entitled to any reimbursement or other benefit for funding any Echelon Place Cost Overrun. Any
Echelon Place Cost Overrun payment which is required to be made by Boyd or the Boyd Parent under this Section 5.06 shall not constitute a Capital Contribution, a loan to the Company or any other entitlement for any purpose of this Agreement. If
Boyd or the Boyd Parent fails to pay any Development Costs giving rise to an Echelon Place Cost Overrun within fifteen (15) Business Days after receipt of written notice from Morgans of such failure then, in addition to any other remedies at
law or equity available to Morgans, Morgans may, in its sole and absolute discretion, elect to fund to the Company all or any portion of the amount of the Cost Overrun that Boyd failed to fund (the “Morgans Cost Overrun Funding”).
Upon the occurrence of a Morgans Cost Overrun Funding then (i) the amount of the Morgans Cost Overrun Funding shall be deemed a loan to Boyd (a “Boyd Default Loan”) bearing interest at fifteen percent (15%) per annum and
payable out of Boyd’s share of any distributions under this Agreement to which it may be entitled and (ii) if the Boyd Default Loan (together with all accrued interest thereon) shall not have been repaid in full (either by Boyd and/or by
the Company out of distributions to which Boyd would otherwise be entitled) within thirty (30) days after the making of such Boyd Default Loan, Morgans may, by delivering a notice to Boyd at any time after the expiration of such 30 day period,
elect to terminate such Boyd Default Loan in which case the Percentage Interest of Morgans shall increase, and the Percentage Interest of Boyd shall decrease by an amount equal to the product of (A) Boyd’s Percentage Interest and
(B) a fraction, the numerator of which is 150 percent of the Morgans Cost Overrun Funding and the denominator of which is the aggregate Capital Contributions funded by Boyd to the Company. 
  
 Section 5.07 Withdrawals of Capital. Except as expressly provided in
this Agreement, (i) no Member shall be entitled to withdraw any part of its Capital Account, (ii) no Member shall be entitled to receive any interest on its Capital Account or distributions from the Company, and (iii) no Member shall
be entitled to demand or receive any property from the Company other than cash. 
  
 Section 5.08 Negative Capital Accounts. In no event shall any Member be obligated to make any Capital Contribution to the Company solely as a result of the existence at any time of a negative Capital Account
balance for such Member. 
  

 26 

 ARTICLE 6 
 CAPITAL ACCOUNTS AND ALLOCATIONS 
  
 Section 6.01 Capital Accounts. 
  
 (a) Separate capital accounts (each, a “Capital Account”) shall be maintained for each Member in accordance with the rules of Section 1.704-1(b)(2)(iv) of the Regulations, and this Section 6.01 shall be
interpreted and applied in a manner consistent with said Section of the Regulations. The Company may adjust the Capital Accounts of its Members to reflect revaluations of the Company property whenever the adjustment would be permitted under Treasury
Regulations Section 1.704-1(b)(2)(iv)(f). In the event that the Capital Accounts of the Members are so adjusted, (i) the Capital Accounts of the Members shall be adjusted in accordance with Regulations
Section 1.704-1(b)(2)(iv)(g) for allocations of depreciation, depletion, amortization and gain or loss, as computed for book purposes, with respect to such property, (ii) the Members’ distributive shares of depreciation,
depletion, amortization and gain or loss, as computed for tax purposes, with respect to such property shall be determined so as to take account of the variation between the adjusted tax basis and book value of such property in the same manner as
under Section 704(c) of the Code, and (iii) the amount of upward and/or downward adjustments to the book value of the Company property shall be treated as income, gain, deduction and/or loss for purposes of applying the allocation
provisions of this Section 5.3. In the event that Code Section 704(c) applies to Company property, the Capital Accounts of the Members shall be adjusted in accordance with Regulations Section 1.704-1(b)(2)(iv)(g) for
allocations of depreciation, depletion, amortization and gain and loss, as computed for book purposes, with respect to such property. The Capital Accounts shall be maintained for the sole purpose of allocating items of income, gain, loss and
deduction among the Members and shall have no effect on the amount of any distributions to any Members in liquidation or otherwise. The amounts of all distributions to Members shall be determined pursuant to Article 7. 
  
 (b) If all or any portion of an Interest is transferred in
accordance with this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent such Capital Account relates to the transferred Interest (or portion thereof). 
  
 Section 6.02 Allocations of Profits and Losses. All items of Company
income, gain, loss and deduction as determined for book purposes shall be allocated among the Members and credited or debited to their respective Capital Accounts in accordance with Regulations Section 1.704-1(b)(2)(iv), so as to ensure to the
maximum extent possible (i) that such allocations satisfy the economic effect equivalence test of Regulations Section 1.704-1(b)(2)(ii)(i) (as provided hereinafter) and (ii) that all allocations of items that cannot have economic
effect (including credits and nonrecourse deductions) are allocated to the Members in accordance with the Members’ interests in the Company, which, unless otherwise required by Code Section 704(b) and the Regulations promulgated
thereunder, shall be in proportion to their Percentage Interests. To the extent possible, items that can have economic effect shall be allocated in such a manner that the balance of each Member’s Capital Account at the end of any taxable year
(increased by the sum of (a) such Member’s “share of partnership minimum gain” as defined in Treasury Regulations Section 1.704-2(g)(1) and (b) such Member’s share of “partner nonrecourse debt minimum
gain” as defined in Treasury Regulations Section 1.704-2(i)(5)) would be positive to the extent of the amount of cash that such Member would receive (or would be negative to the 

  

 27 

 
extent of the amount of cash that such Member would be required to contribute to the Company) if the Company sold all of its property for an amount of cash
equal to the book value (as determined pursuant to Regulations Section 1.704-1(b)(2)(iv)) of such property (reduced, but not below zero, by the amount of nonrecourse debt to which such property is subject) and all of the cash of the Company
remaining after payment of all liabilities (other than nonrecourse liabilities) of the Company were distributed in liquidation immediately following the end of such taxable year in accordance with Section 7.02. 
  
 ARTICLE 7 
 DISTRIBUTIONS 
  
 Section 7.01 Net Operating Cash Flow. At such times as are set forth in the Annual Plan or at such other times as are reasonably determined by the Members, the Company shall make a distribution of Net Operating
Cash Flow of the Company to Morgans and Boyd, Pro Rata. 
  
 Section 7.02 Net Capital Proceeds. Except as otherwise expressly provided in Section 13.03(d), all Net Capital Proceeds shall be distributed by the Company, as soon as reasonably practicable following the closing of the event
giving rise to the Net Capital Proceeds to Morgans and Boyd, Pro Rata. 
  
 Section 7.03 Amounts Withheld. The Tax Matters Member is authorized to withhold from distributions to the Members and to pay over to any federal, state, local or foreign government any amounts which it reasonably determines may be
required to be so withheld pursuant to the Code or any provisions of any other federal, state, local or foreign law. All amounts withheld pursuant to the Code or any provision of any state, local or foreign tax law with respect to any allocation or
distribution to any Member shall be treated as amounts distributed to such Member pursuant to this Article for all purposes under this Agreement. 
  
 Section 7.04 Assignment of Distributions. In the event that a Priority Loan has not been fully satisfied and discharged then, in any such event, a
Contributing Member shall receive directly any distributions under this Article 7 to which the Non-Contributing Member would otherwise be entitled up to the amount of the outstanding balance of any such Priority Loan plus accrued and unpaid interest
thereon. Any distributions made pursuant to this Section 7.04 shall be applied first to interest and then to principal and shall be deemed to have been made directly to the Non-Contributing Member and then deemed paid by the Non-Contributing
Member to the Contributing Member in repayment of the Priority Loan. In the event that a Morgans Default Loan has not been fully satisfied and discharged then, in any such event, Boyd shall receive directly any distributions under this Article 7 to
which Morgans would otherwise be entitled up to the amount of the outstanding balance of any such Morgans Default Loan plus accrued and unpaid interest thereon. Any distributions made pursuant to the preceding sentence shall be applied first to
interest and then to principal and shall be deemed to have been made directly to Morgans and then deemed paid by Morgans to Boyd in repayment of the Morgans Default Loan. In the event that a Boyd Default Loan has not been fully satisfied and
discharged then, in any such event, Morgans shall receive directly any distributions under this Article 7 to which Boyd would otherwise be entitled up to the amount of the outstanding balance of any such Boyd Default Loan plus accrued and unpaid
interest thereon. Any distributions made pursuant to the 

  

 28 

 
preceding sentence shall be applied first to interest and then to principal and shall be deemed to have been made directly to Boyd and then deemed paid by
Boyd to Morgans in repayment of the Boyd Default Loan. 
  
 Section
7.05 Dissolution. Upon dissolution and winding up of the Company, the Company shall make distributions in accordance with Section 13.03(d). 
  
 ARTICLE 8 
 MANAGEMENT 

 
 Section 8.01 Morgans Duties. 
  
 (a) Except as otherwise provided herein, and subject only to
the approval by of Joint Decisions by both Members, (i) Morgans shall have the responsibility for the control of the Company’s business and affairs and (ii) Morgans shall have the power and authority to take such action for and on
behalf of the Company as Morgans shall from time to time deem necessary or appropriate to carry on the Company business and to carry out the purposes for which the Company was organized. 
  
 (b) Notwithstanding the foregoing provisions of this Section 8.01 or any other provision of this
Agreement to the contrary, Morgans shall not be empowered to, and shall not (i) undertake any act in violation of this Agreement or the Construction Loan Documents or any other Loan Documents, (ii) possess or take title to any assets of
the Company; (iii) take any action that makes it illegal or impossible for the Company to carry on its business; or (iv) take any action with respect to a Joint Decision without the approval of Boyd. 
  
 Section 8.02 Affiliate Agreement Control. Notwithstanding anything to
the contrary contained herein, with respect to any separate agreement between the Company and any Member and/or Affiliate of such Member (an “Affiliate Agreement”) including, without limitation, the Morgans Hotel Management
Agreement and the REA, any and all decisions, actions, and/or enforcement rights, to be made or taken by the Company with respect to, or arising under, any Affiliate Agreement (in accordance with the terms of such agreement) including, without
limitation amending, modifying, supplementing, renewing or terminating, enforcing, exercising any right or remedy, granting any waiver, release, consent or approval, giving of any notice or the taking of any other action required or permitted to be
taken under the Affiliate Agreement, shall be vested solely and exclusively with the unaffiliated Member and no prior approval of the affiliated Member will be necessary prior to making such decisions and/or taking any such actions. Notwithstanding
the foregoing, approval of both Members shall be required for any Joint Decisions, other than the Joint Decision described in subparagraph (n) of Exhibit E regarding claims, suits and actions, decisions with respect to which shall be made by
the unaffiliated Member on behalf of the Company if such claim, suit or action is against the affiliated Member or its Affiliate pursuant to the Affiliate Agreement. 
  
 Section 8.03 Morgans’ Additional Duties. Morgans shall use all reasonable commercial efforts to perform, or
cause to be performed, the following functions in a manner consistent with the interests of the Company, and with customs and practices for first-class resort 

  

 29 

 
hotels in the Las Vegas, Nevada area subject to the Pre-Opening Plan, any applicable Annual Plan and the other provisions of this Agreement: 
  
 (a) protect and preserve the titles and interests of the
Company with respect to the Project and other assets now or hereafter owned by the Company; 
  
 (b) monitor, in accordance with Article 9 hereof, the design and construction of the Project, including the performance of the
Architects and any Project Consultants; 
  
 (c)
when permitted or required by this Agreement or otherwise approved by the Members, make distributions periodically to the Members in accordance with the provisions of this Agreement; 
  
 (d) represent, and exercise any right or approval or disapproval on behalf of the Company in connection with
the REA or any modifications to the REA and promptly notify Boyd with respect to any increases in Development Costs that would occur as a result of any modifications to the REA; 
  
 (e) obtain clearance from Boyd’s governmental compliance committee for any Person that may be a
Material Vendor before engaging such Person; and 
  
 (f) perform any other duties provided elsewhere in this Agreement to be performed by Morgans. 
  
 Section 8.04 Bank Accounts. Morgans shall open and thereafter maintain, for the Company, a commercial checking account and such other accounts at
one or more banks or trust companies organized and existing under the laws of the United States or any state thereof, each having combined capital and surplus aggregating at least $500,000,000 and none of which is an Affiliate of any Member, which
accounts shall be interest-bearing to the extent practicable. All funds of the Company shall be promptly deposited in such accounts and no funds other than funds of the Company shall be deposited therein. All withdrawals from any such bank account
or investment account established by Morgans hereunder shall be made on such signature or signatures as may from time to time be designated by Morgans. 
  
 Section 8.05 Duties and Conflicts. 
  
 (a) Subject to the provisions of Section 3.5 of the Morgans Hotel Management Agreement and Sections 8.05(b) and 8.05(c),
(i) each Member recognizes that the other Members and their Affiliates have or may have other business interests, activities and investments, some of which may be in conflict or competition with the business of the Company, and that such
Persons are entitled to carry on such other business interests, activities and investments; (ii) the Members and their Affiliates may engage in or possess an interest in any other business or venture of any kind, independently or with others,
on their own behalf or on behalf of other entities with which they are affiliated or associated, and such Persons may engage in any activities, whether or not competitive with the Company, without any obligation to offer any interest in such
activities to the Company or to any Member; and (iii) neither the Company nor any Member shall have any right, by virtue of this Agreement, in or to such activities, or the 

  

 30 

 
income or profits derived therefrom, and the pursuit of such activities, even if competitive with the business of the Company, shall not be deemed wrongful
or improper. 
  
 (b) Notwithstanding anything to
the contrary contained herein and as a material inducement to Boyd entering in this Agreement, Morgans covenants and agrees that, until the fifth anniversary of the Opening Date (for the Hotel for which the Opening Date occurs the latest), Morgans
or an Affiliate of Morgans shall not, directly or indirectly, within the greater Las Vegas metropolitan area, including, but not limited to, the City of Las Vegas and Clark County, Nevada, acquire, manage, license develop, own, lease or operate any
hospitality properties competitive to either of the Hotels, either for its own account, as a partner, joint venturer, consultant, employee, manager, agent or independent contractor of any Person, through any Affiliate, as an officer, director or
shareholder of any corporation or otherwise. 
  
 (c) Notwithstanding anything to the contrary contained herein and as a material inducement to Morgans entering in this Agreement, Boyd covenants and agrees that, until the fifth anniversary of the Opening Date (for the Hotel for which the
Opening Date occurs the latest), Boyd or an Affiliate of Boyd shall not, directly or indirectly, within the Reserve Parcel, develop, own, lease or operate, or permit the development or operation by a third party of, any Morgans Competitive Hotel,
either for its own account, as a partner, joint venturer, consultant, employee, manager, agent or independent contractor of any Person, through any Affiliate, as an officer, director or shareholder of any corporation or otherwise. 
  
 (d) Morgans and Boyd each agrees, for itself and its
Affiliates, to (i) act in good faith, (ii) perform its duties hereunder diligently and without regard to competing or conflicting projects not owned by the Company, and (iii) spend such time and effort performing its duties as
hereunder as may be required in order to appropriately and effectively carry out the obligations of such party as described in this Agreement. 
  
 (e) Boyd shall use commercially reasonable efforts to promptly review for compliance purposes any Material Vendor submitted to Boyd by
Morgans and to promptly advise Morgans of the results of such compliance review. Morgans shall not engage any Material Vendor unless such Material Vendor has been cleared by Boyd’s compliance committee. 
  
 Section 8.06 Financing. The Members shall jointly, on behalf of the
Company, arrange, negotiate and enter into, on commercially reasonable terms, any borrowing or financing (including any refinancing) transactions for the Company, including (a) the Construction Loan, (b) any refinancing of the Construction
Loan or other “take out” financing relating to the Construction Loan, (c) any permanent financing, (d) any other instruments or obligations required by a lender in connection with any such financing, and (e) any Mortgage,
security agreement or other document or instrument pursuant to which the Company shall pledge any of its assets (including the Property) to secure any borrowing or financing. 
  
 Section 8.07 Expenses of Members. The Company shall periodically reimburse each Member for such Member’s
reasonable, actual out-of-pocket costs and expenses such as travel, incurred by the Member in the performance of its duties and obligations hereunder, upon notice from the one Member to the other Member accompanied by reasonably detailed
substantiation of 

  

 31 

 
such costs and expenses. Morgans shall be reimbursed by the Company, in accordance with the Development Budget, for its costs and expenses incurred in the
design, development and pre-opening of the Hotels. 
  
 Section
8.08 Removal of Morgans as a Managing Member. In the event that Morgans, or any Affiliate of Morgans, takes any action which constitutes fraud, willful misconduct, malfeasance, breach of fiduciary duty or breach of a material provision of
this Agreement (after written notice and an opportunity to cure; provided, however, (i) the cost of such cure shall be at Morgans’ expense and (ii) the period to cure shall not exceed 60 days unless the matter in question requires a
period in excess of 60 days to cure, in which case Morgans shall have such longer period, but not in excess of 120 days, as long as Morgans commences such cure within the 60 day period and continues to diligently pursue such cure in good faith)
then, in such event and notwithstanding anything to the contrary contained herein, Boyd, may, in its sole discretion and without the approval or consent of Morgans, (i) become the Managing Member and perform any duties otherwise designated
under this Agreement to be performed by Morgans and/or (ii) take any and all actions on behalf of the Company that would otherwise be Joint Decisions other than those Joint Decisions set forth in the following paragraphs of Exhibit E which
Morgans retains the right to approve (as modified below): 
  
 (1)
paragraphs (a), (b), (c) and (d); 
  
 (2) paragraphs
(g) or (h) but only to the extent such action materially increases Morgan’s liability under any completion guaranty or other guaranty executed by Morgans Parent or any Morgans Affiliate in connection with the Construction Loan;

  
 (3) paragraph (k) but only to the extent that the
admission does not dilute each of the Members proportionally; and 
  
 (4) paragraph (p) but only to the extent the terms of such agreements or contracts are not arms-length and consistent with third party market terms and conditions. 
  
 ARTICLE 9 
 DEVELOPMENT DURING CONSTRUCTION PERIOD 
  
 Section
9.01 General. Subject in all respects to the rights of Boyd set forth in this Article 9, Morgans shall have the primary responsibility, power and authority, on behalf of the Company, to monitor the design, development, construction,
furnishing and equipping of the Project, and to monitor the compliance of the Project with all Legal Requirements, the Development Budget, the Construction Schedule, the Plans and Specifications, and the requirements of the Construction Loan
Documents. 
  
 Section 9.02 Budget, Schedule and Plans.
During the Predevelopment Period, the Members shall have approved the Development Budget, the Construction Schedule and the Plans and Specifications. 
  
 Section 9.03 Monitoring of Development. Morgans shall monitor the development and construction of the Project, and shall use commercially
reasonable efforts to cause construction to be accomplished in accordance in all material respects with this Agreement, the Construction 

  

 32 

 
Loan Documents, the Development Budget, the Construction Schedule, any Legal Requirements, and the Plans and Specifications. In connection with the
foregoing, Morgans shall use commercially reasonable efforts to perform all duties customarily performed by a developer of projects of like size and scope, including, without limitation, the following: 
  
 (a) assemble and track invoices and direct the payment or
rejection thereof; 
  
 (b) arrange for the timely
issuance of all necessary governmental permits, licenses, certificates and approvals and the compliance with all Legal Requirements (including without limitation, zoning, land use, water, sewer, environmental and other requirements) relating to the
development, construction and occupancy of the Project; 
  
 (c) coordinate, review, administer and manage the work and activities of the Architect, Project Consultants, any contractors, subcontractors, vendors, and all other Persons employed in the design, development and
construction of the Project; 
  
 (d) maintain
books of account and records (financial and otherwise) with respect to the design, development and construction of the Project; 
  
 (e) manage and approve disbursement of funds of the Company (including draw requests under the Construction Loan) to pay for the design,
development, construction, furnishing and equipping of the Project in accordance in all material respects with the Development Budget and this Agreement (it being understood that the Company funds shall be disbursed subject to and in accordance with
protections and conditions that are substantially similar to those applicable to the disbursement of loan proceeds under the Construction Loan); 
  
 (f) make requisitions to the Construction Lender for the disbursement of Construction Loan proceeds, and otherwise take necessary and
appropriate actions on behalf of the Company to cause the Company to comply in all material respects with the terms and requirements of the Construction Loan Documents; 
  
 (g) arrange for and monitor the bidding, purchase and installation of all furniture, fixtures, equipment and
supplies in accordance with this Agreement and the Plans and Specifications; 
  
 (h) inspect each portion of the Project as the same is substantially completed and create or cause to be created a punchlist of items requiring additional or corrective work and exercise the Company’s rights and
authority to seek compliance by the contractors and by other parties rendering services or furnishing materials in connection with the construction and fit-out of the Improvements, consistent with such party’s obligations to perform all work
necessary to cure all defects or deficiencies; 
  
 (i) obtain in the name and for the account of the Company all such insurance as the Members may determine shall be necessary or appropriate, and all insurance required to be obtained pursuant to the Construction Loan Documents; 

 

 33 

 (j) coordinate the preparation of all applications for, otherwise arrange for, and pay
all charges imposed necessary to obtain commitments for water, sewer, electric, gas, telephone, and other utility services necessary for the construction and operation of the Project; 
  
 (k) file all real and personal property tax returns with respect to the Property and the Project and pay all
ad valorem taxes on and assessments against the Property and the Project; 
  
 (l) reasonably promptly following the completion of the development and construction of the Project, (i) arrange for the preparation of as-built plans for the Project, and (ii) provide the Company with
audited financial statements with respect to such development and construction; 
  
 (m) obtain clearance from Boyd’s governmental compliance committee for any Person that may be a Material Vendor before engaging such
Person; and 
  
 (n) cause all warranty work and
correction work to be undertaken in accordance with any contract or agreement pertaining to the construction and installation of the Improvements, whether prior to or subsequent to the Completion Date. 
  
 Section 9.04 Changes. During the Construction Period, Morgans may
propose, implement and/or adopt (i) any change, amendment, modification, supplement, addition, alteration or deletion to the Development Budget, the Construction Schedule or the Plans and Specifications (including any revised or more detailed
version of any of the foregoing), or (ii) any modification to the scope of work to be performed by the Developer, the Architect or any contractor, subcontractor, vendor, material supplier or Project Consultant in connection with the Project
(each, a “Change”); provided, however, that any Change that is inconsistent in any material respect with the Plans and Specifications or Construction Schedule then in effect in accordance with this Agreement shall be
subject to the prior written approval of Boyd. 
  
 Section 9.05
Participation of Boyd. Boyd shall have reasonable access to the design, development and construction process of the Project in order for Boyd to exercise its rights under this Agreement. In furtherance of the foregoing, Boyd shall have
reasonable rights of inspection, notice, access and review with respect to the Project (and the documents relating thereto) in order to allow Boyd to exercise its rights under this Agreement, including, without limitation, the right to attend any
significant meetings of the project team and any significant meetings with architects, engineers and other consultants. Morgans agrees to meet and otherwise consult with Boyd, at reasonable intervals and at reasonable times following a request by
Boyd, with respect to the status of the construction work. In furtherance of the foregoing, Morgans shall make available to Boyd, at the Property or at Morgans’ offices, the following: 
  
 (a) all agreements with contractors, subcontractors,
consultants, suppliers and vendors and other Persons supplying labor, materials and services in connection with the Project; 
  
 (b) copies of all Plans and Specifications and modifications and proposed modifications thereto; 
  
 (c) all working drawings; 
  

 34 

 (d) all insurance certificates and insurance contracts required or obtained in connection
with the Project; 
  
 (e) all requisitions for
payments received during the applicable period from any of the Company’s contractors, together with all supporting documentation provided by such contractors (including, without limitation, partial lien waivers from all construction contractors
and, to the extent obtainable, from all major construction subcontractors), and an update of the schedule of values for the Project; 
  
 (f) prior to submission thereof to the Construction Lender, all requisitions for the disbursement of Construction Loan proceeds;

  
 (g) all other material documentation with
respect to payments made by the Company for design and construction costs for the Project, whether such payments were made from drawdowns of equity or from loan proceeds; 
  
 (h) monthly construction cost-to-date reports; 
  
 (i) periodic (but not less than monthly) updates to the
Development Budget and Construction Schedule showing all variances; 
  
 (j) all interior design control books; 
  
 (k) all certificates, authorizations, permits and licenses which are required to permit the construction and completion of the Project, as issued by the appropriate Governmental Authorities; and 
  
 (l) any other documents and information relating to the
design and construction of the Project as may be reasonably requested by Boyd, provided, however, the same are in Morgans’ possession or can be obtained without undue effort or expense. 
  
 Boyd shall provide Morgans with reasonable access to material documents and information
regarding the status of the Echelon Place development project to the extent reasonably necessary for Morgans to carry out its duties hereunder. 
  
 Section 9.06 Loan Guaranties. To the extent required by the Construction Loan Documents, Morgans and its creditworthy Affiliates shall provide the
Construction Loan Guaranty with no liability or obligation on the part of Boyd to provide such guaranty. 
  
 Section 9.07 Activities Following Disputes. If the Members cannot agree upon any Change which pursuant to this Article 9 requires agreement between
the Members, Morgans will have the right to continue the activities of the Company related to construction of the Project, but only in accordance with the Plans and Specifications, Construction Schedule and Development Budget then in effect in
accordance with this Article 9, and, without derogating from the generality of the foregoing, Morgans may, under such circumstances, cause the Company to continue the development of the Project in accordance with such Plans and Specifications,
Development Budget and Construction Schedule. 
  

 35 

 ARTICLE 10 
 ACCOUNTING, BOOKS AND RECORDS AND TAX MATTERS 
  
 Section 10.01 Books and Records. Morgans shall maintain or cause to be maintained, at the expense of the Company, in a manner customary and consistent with good accounting principles, practices and procedures,
a comprehensive system of office records, books and accounts (which records, books and accounts shall be and remain the property of the Company) in which shall be entered fully and accurately all financial transactions with respect to the operations
of the Company and the ownership and operation of the Project. Bills, receipts and vouchers shall be maintained on file by the Company. Morgans shall maintain or caused to be maintained such books and accounts in a safe manner and separate from any
records not having to do directly with the Company or the Project. Morgans shall cause audits to be performed and audited financial statements and income tax returns to be prepared as required by Section 10.02. Such books and records of account
shall be prepared and maintained by Morgans at a location or locations designated by Morgans. Each Member or its duly authorized representative shall have the right to inspect, examine and copy such books and records of account at the Company’s
office during normal business hours. 
  
 Section 10.02
Reports. 
  
 (a) Morgans shall prepare or
cause to be prepared, at the Company’s expense, the financial reports and other information, including audited financial statements, that the Members may determine are appropriate. All financial reports shall include (as applicable) information
with respect to the Company as a whole and with respect to the Project. Unless otherwise determined by the Members, Morgans shall prepare or cause to be prepared at the expense of the Company and furnish to each of the Members the following:

  
 (i) Within forty five (45) following the
close of each Fiscal Year, audited financial statements, including related notes to financial statements, a balance sheet of the Company dated as of the end of such Fiscal Year, a related statement of income and expense, a statement of cash flow and
a statement of changes in Members’ capital for the Company for such Fiscal Year and information for such Fiscal Year as to the balance in each Member’s Capital Account, and all other information reasonably required by each Member (provided
such “other information” shall be delivered as soon as reasonably practicable after the close of each Fiscal Year), all of which shall be certified by the Company Accountant as being, to the best of its knowledge, true and correct and
prepared in accordance with generally accepted accounting principles applied on a consistent basis (and which firm shall provide such balance sheet, statement of income and expense, statement of cash flow, statement of changes in Members’
capital and other information in draft form to the Members for review prior to finalization and certification thereof); 
  
 (ii) Within fifteen (15) days after the close of each fiscal quarter (other than the last fiscal quarter in any Fiscal Year), a
balance sheet of the Company dated as of the end of such fiscal quarter, a related statement of income and expense, a statement of cash flow and a statement of changes in Members’ capital for such fiscal quarter and information for such fiscal
quarter as to the balance in each Member’s Capital Account, 

  

 36 

 
and all other information, including a market update, reasonably required by each Member, all of which shall be certified by Morgans as being, to its actual
knowledge, true and correct in all material respects; and 
  
 (iii) As soon as practicable after the end of each month but in all events within seven (7) days after the end of each month, a monthly profit and loss statement for the Company for the immediately preceding
month (which statements shall not be subject to the requirements of Section 1.03 hereof). 
  
 (b) All decisions as to accounting principles shall be made by jointly by the Members, subject to the provisions of this Agreement. All
financial information provided hereunder shall be in the formats mutually agreed to by the Members. 
  
 Section 10.03 Company Accountant. The Company shall retain the Company Accountant as the regular accountant and auditor for the Company. The fees
and expenses of the Company Accountant shall be a Company expense. 
  
 Section 10.04 Reserves. The Company shall not maintain any cash reserves unless otherwise approved by both Members. 
  
 Section 10.05 Fiscal Year. The fiscal year of the Company (the “Fiscal Year”) shall begin on January 1 and end on
December 31 of each year. 
  
 Section 10.06 Partnership
for Tax Purpose. The Members hereby agree that the Company shall be treated as a partnership for tax purposes under United States federal, state and local income tax laws or other laws, and further agree not to take any position or to make any
election, in a tax return or otherwise, inconsistent herewith. 
  
 Section 10.07 Tax Matters. 
  
 (a) Boyd is hereby designated as the “Tax Matters Member” for the Company (and in such capacity shall act as the “tax matters partner” as such term is defined in Section 6231(a)(7) of the Code), and all federal,
state and local tax audits and litigation shall be conducted under the joint direction of Boyd and Morgans in their sole but reasonable discretion. Boyd shall keep Morgans informed of its activities as Tax Matters Member, including by promptly
providing to Morgans copies of any correspondence from any taxing authority and permitting Morgans to participate in conferences or meetings with any taxing authority and in any tax proceedings. In addition, Boyd shall obtain Morgans approval with
respect to any action taken as Tax Matters Member. 
  
 (b) All elections required or permitted to be made by the Code or other applicable tax laws shall be made with the approval of both Members. All decisions with respect to taxable income or tax loss under the Code or any other applicable tax
laws shall be approved by both Members. 
  
 (c)
Boyd will cause the Company Accountant to prepare and deliver to each Member, as soon as practicable after the end of the Company’s Fiscal Year, a report setting forth in sufficient detail all such information and data as will enable the
Company and each Member to 

  

 37 

 
timely prepare its federal, state and local income tax returns in accordance with the laws, rules and regulations then prevailing. 
  
 Section 10.08 Audit Rights. Boyd shall be entitled, at its own
expense, to conduct or cause to be conducted an audit of the books and records of the Company for the purpose of verifying the correctness of the information contained in the reports and financial statements described in Section 10.02 hereof.
Any such audit shall be conducted (a) following reasonable prior notice to Morgans, and (b) during normal business hours in a manner that does not unduly disrupt the business or operations of the Company. 
  
 ARTICLE 11 
 LIMITATION OF LIABILITY AND INDEMNIFICATION 
  
 Section 11.01 Limitation of Liability. Notwithstanding anything in this Article 11 or elsewhere in this Agreement to the contrary (but subject to
Section 11.02(b)), no Member shall, in the performance of its obligations under this Agreement, including its obligations with respect to the development of the Project pursuant to Article 9 hereof, be liable to any other Member or any other
Person for any act or omission, negligent, tortious, or otherwise, (a) of any agent or employee of the Company, or (b) of the Member or any of its Affiliates, unless such act or omission on the part of the Member or its Affiliates
constitutes gross negligence, a material breach of this Agreement, breach of fiduciary duty or willful misconduct, and then only to the extent that the damages resulting therefrom are not covered by the insurance carried by the Company. 

 
 Section 11.02 Indemnification. 
  
 (a) The Company shall, to the fullest extent permitted by
applicable law, indemnify, defend and hold harmless each Member, and each general or limited partner of any Member, shareholder, member or other holder of any equity interest in such Member or any officer or director of any of the foregoing
(collectively, the “Indemnified Party”), against any losses, claims, damages or liabilities to which such Indemnified Party may become subject in connection with any matter arising out of or incidental to any act performed or
omitted to be performed by any such Indemnified Party in connection with this Agreement or the Company’s business or affairs (including any claims relating to the design and development of the Project as described in Article 9 hereof);
provided; however, that such act or omission was taken in good faith, was reasonably believed by the applicable Indemnified Party to be in the best interest of the Company and was within the scope of authority granted to such Member or
applicable Indemnified Party, and was not attributable in whole or in part to such Indemnified Party’s fraud, bad faith, willful misconduct, gross negligence, material breach of this Agreement or breach of fiduciary duty. If an Indemnified
Party becomes involved in any capacity in any action, proceeding or investigation in connection with any matter arising out of or in connection with this Agreement or the Company’s business or affairs, the Company shall reimburse such
Indemnified Party for its reasonable attorneys’ fees and expenses and other reasonable out-of-pocket expenses (including the cost of any investigation and preparation) as they are incurred in connection therewith, provided that such Indemnified
Party shall promptly repay to the Company the amount of any such reimbursed expenses paid to it if it shall ultimately be determined that such Indemnified Party was not entitled to be indemnified by the Company pursuant to this 

  

 38 

 
Section 11.02 in connection with such action, proceeding or investigation. If for any reason (other than the gross negligence, material breach of this
Agreement or breach of fiduciary duty, fraud, bad faith or willful misconduct of such Indemnified Party) the foregoing indemnification is unavailable to such Indemnified Party, or insufficient to hold it harmless, then the Company shall contribute
to the amount paid or payable by such Indemnified Party as a result of such loss, claim, damage, liability or expense in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and such Indemnified
Party on the other hand or, if such allocation is not permitted by applicable law, to reflect not only the relative benefits referred to above but also any other relevant equitable considerations. 
  
 (b) Boyd and Boyd Parent, jointly and severally, shall, to
the fullest extent permitted by applicable law, indemnify, defend and hold harmless Morgans, Morgans Parent, each general or limited partner of Morgans, any shareholder, member or other holder of any equity interest in Morgans or any officer or
director of any of the foregoing (collectively, the “Morgans Indemnified Party”), against any losses, claims, damages or liabilities to which such Morgan Indemnified Party may become subject in connection with any matter arising out
of (i) any Hazardous Materials on, in or under the Land or the Echelon Place Parcel the presence of which (x) arose during the period commencing on the date Boyd’s Affiliate first acquired ownership (or, if earlier, first obtained
management or occupancy) of the applicable portion of the Land and/or the Echelon Place Parcel and ending on the Contribution Date, or (y) constitutes a breach or inaccuracy of Boyd’s representation set forth in Section 3.02(k), or
(ii) the ownership, use, occupancy, operation, management, maintenance, construction, renovation, repair, closure, and demolition of the Stardust Hotel or any other improvements or facilities on the Land or the Echelon Place Parcel prior to the
Contribution Date, including any claims of employees of the Stardust Hotel. 
  
 (c) The provisions of this Section 11.02 shall survive the dissolution of the Company or the termination or expiration of this Agreement. 
  
 (d) Notwithstanding anything to the contrary contained in this Agreement, the obligations of the Company or
any Member under this Section 11.02 shall (i) be in addition to any liability which the Company or such Member may otherwise have and (ii) inure to the benefit of the other Member, its Affiliates and their respective members,
directors, officers, employees, agents and Affiliates and any successors, assigns, heirs and personal representatives of such Persons. 
  
 (e) In no event shall any general or limited partner of any member, shareholder, member or other holder of an equity interest in such
Member or officer or director of any of the foregoing be liable for any obligation of any Member under this Agreement. 
  
 Section 11.03 Certain Waivers. To the extent that, at law or in equity, a Member has duties (including fiduciary duties) and liabilities relating
thereto to the Company or to any other Member, a Member acting under this Agreement shall not be liable to the Company or to any other Member for its good faith reliance on the provisions of this Agreement. The provisions of this Agreement, to the
extent that they restrict or reduce the duties and liabilities of a Member otherwise existing at law or in equity, shall replace the other duties and liabilities of such Member. 
  

 39 

 ARTICLE 12 
 TRANSFERS 
  
 Section 12.01
General. 
  
 (a) Except for Transfers made
or effected pursuant to Sections 12.02, 12.05 or any other express provision of this Agreement: (i) no Member may Transfer all or any portion of its Interest, whether directly or indirectly, or (ii) permit any direct or indirect ownership
interest in the Member to be Transferred, in either case, without the written consent of the other Member (which may be withheld or granted in the sole discretion of the other Member). 
  
 (b) Any Transfer by a Member of its Interest in contravention of this Article 12 shall be null and void. No
Member shall withdraw from the Company except in connection with a Permitted Transfer. 
  
 (c) The Members acknowledge and agree that they are relying on the experience, reputation and financial condition of each other in
entering into this Agreement, that the nature of the relationship between the Members is personal and that the amount of damages that would be sustained by the Members in the event of a breach of the restrictions on Transfers imposed by this
Agreement would not be readily ascertainable. Accordingly, upon any breach of this Article 12 by any Member, the other Member (in addition to all rights and remedies it may have under this Agreement, at law or in equity) shall be entitled to a
decree or order from a court of competent jurisdiction specifically enforcing the restrictions on Transfers contained herein. Each Member further agrees to hold the Company and the other Member (including their respective directors, officers,
employees, Affiliates, successors and assigns) harmless for, from and against any and all claims, losses, damages, liabilities and costs, including without limitation, reasonable attorneys’ fees (which shall be reimbursed as incurred), and
liabilities for income taxes and costs of enforcing this indemnity, incurred by any of such indemnified parties as a result of a Transfer or purported Transfer in violation of this Agreement. 
  
 Section 12.02 Permitted Transfers of Interests. Certain Transfers
shall be permitted as follows (each, a “Permitted Transfer”): 
  
 (a) Morgans, from time to time and in its sole discretion, without the consent of Boyd, may Transfer its Interest in whole or in part,
(i) to any Morgans Controlled Affiliate, (ii) to any Person as part of, or in connection with, a direct or indirect transfer of ownership or control of Morgans Parent, or (iii) in connection with the pending initial public offering of
all or substantially all of the assets owned or controlled by the Morgans Parent, provided, however, such transferee agrees to be bound by all the terms, conditions and provisions of this Agreement (including the provisions of this
Article 12). 
  
 (b) Boyd, from time to time and
in its sole discretion, without the consent of Morgans, may Transfer its Interest in whole, but not in part, to (i) any Boyd Controlled Affiliate, or (ii) any Person as part of, or in connection with, a direct or indirect transfer of
ownership or control of Boyd Parent or a sale of all or substantially all of the assets owned or controlled by Boyd Parent, provided, however, such transferee agrees to be bound by all the terms, conditions and provisions of this
Agreement (including the provisions of this Article 12). 
  

 40 

 (c) Transfers of ownership interests in Boyd Parent or Morgans Parent are permitted.

  
 (d) Any Permitted Transfer shall not relieve
the transferor of any of its obligations prior to such Transfer. Subject to Section 12.03, any transferee of a direct Interest pursuant to this Section 12.02 shall become a substitute Member of the Company. Each Member and its permitted
transferees shall be treated as one Member for all purposes of this Agreement. 
  
 (e) In the event of a Permitted Transfer, the Member making the Transfer shall notify the other Member of the Transfer and shall furnish
the Company with the transferee’s taxpayer identification number and sufficient information to determine the transferee’s Interest and tax basis in the Company and any other information reasonably necessary to permit the Company to file
all required tax returns. 
  
 Section 12.03 Transferees.
Notwithstanding anything to the contrary contained in this Agreement, no Transfer of all or any part of any Interest shall be made if, as a result thereof, any income of the Company will be subject to corporate federal income tax or would violate
any Loan Documents or any other loan commitment or Mortgage. If any loan commitment or Mortgage precludes, restricts or otherwise requires a consent for a Transfer of an Interest, the Members agree, upon written request by the Member desiring such
Transfer, to submit a request for such consent from the applicable lender or other holder of a security interest provided the desired Transfer of such Interest is expressly permitted under the terms of this Agreement or is otherwise approved by the
other Member. No transferee of all or any portion of any Interest shall be admitted as a Member unless such Interest is Transferred in compliance with the applicable provisions of this Agreement and any applicable Loan Documents, such transferee
shall have furnished evidence of satisfaction of the requirements of Section 12.02 reasonably satisfactory to the other Member, and such transferee shall have executed and delivered to the Company such instruments necessary to effectuate the
admission of such transferee as a Member and to confirm the agreement of such transferee to be bound by all of the terms and provisions of this Agreement with respect to such Interest. At the request of the other Member prior to such Transfer, each
such transferee shall also cause to be delivered to the Company, at the transferee’s sole cost and expense, a favorable opinion of legal counsel reasonably acceptable to the Company, to the effect that such transferee has the legal right, power
and capacity to own the Interest proposed to be Transferred. As promptly as practicable after the admission of any Person as a Member, the books and records of the Company shall be changed to reflect such admission. Upon satisfaction of the
requirements of this Section 12.03, such transferee shall be a substitute member (a “Substitute Member”) of the Company. All reasonable costs and expenses incurred by the Company in connection with any Transfer of any Interest
and, if applicable, the admission of any transferee as a Member shall be paid by such transferee. 
  
 Section 12.04 Admission of Additional Members. 
  
 (a) No Person may be admitted as an additional Member (an “Additional Member”) of the Company (in contrast with admission
as a Substitute Member in connection with a Permitted Transfer) without the prior written consent of each of the Members, which consent may be given or withheld in the sole discretion of such Member. 
  

 41 

 (b) Any Additional Member admitted to the Company shall execute and deliver documentation
in form satisfactory to Morgans accepting and agreeing to be bound by this Agreement, and such other documentation as Morgans shall require in order to effect such Person’s admission as an Additional Member. The admission of any person as an
Additional Member shall become effective as of the date upon which the name of such person is recorded on the books and records of the company following the consent of Morgans to such admission. 
  
 Section 12.05 Boyd Right to Purchase. 
  
 (a) If Morgans is determined by any gaming authority, any
authority regulating alcoholic beverages or in Boyd’s reasonable discretion, to be an unsuitable Member of the Company as a consequence of any criminal or quasi-criminal act committed by Morgans, any Affiliate of Morgans, or any employee of
Morgans or its Affiliate, or as a consequence of the association by Morgans, any Affiliate of Morgans, or any employee of Morgans or its Affiliate with a Person deemed in Boyd’s reasonable discretion to be disreputable occurring (i) after
the date of this Agreement or (ii) prior to the date of this Agreement to the extent (A) Boyd had no knowledge of such act and could not have obtained such knowledge through the exercise of reasonable due diligence or (B) attributable
to a Person for which Boyd did not receive a completed compliance questionnaire on or prior to December 20, 2005, then Boyd shall provide Morgans with reasonably prompt written notice of such determination that Morgans is an unsuitable Member
(together with a reasonable explanation or substantiation therefor), and Morgans will have the right, within a timeline established by any such authority or, if applicable within a reasonable timeline established by Boyd, to remedy or cure the
offense or unsuitable conduct to the satisfaction of such authority and Boyd. If such offense is not remedied or cured within the established timelines, then Boyd, in its sole discretion, may by written notice to Morgans (the “Morgans
Purchase Notice”), remove Morgans as Member and purchase Morgans Interest for an amount equal to its Fair Market Value and otherwise in the manner provided in this Section 12.05. Each of Boyd and Morgans shall be solely responsible for
any fines or fees assessed against the Company but due to the conduct or dealings of the responsible parties or their personnel. 
  
 (b) Payment for the Morgans Interest purchased by Boyd to this Section 12.05 hereof shall be made in lawful money of the United
States by bank cashier’s or certified check or wire transfer delivered at the time of the closing to be held at 10:00 o’clock a.m. (local time) at the principal office of Boyd on such date, within one hundred and twenty (120) days
after Boyd shall have delivered the Morgans Purchase Notice. At the closing of such sale, Morgans shall deliver documents conveying the Morgans Interest free and clear of any liens or encumbrances. Any closing with respect to a purchase of the
Morgans Interest under this Section 12.05 shall be subject to receipt of all consents, orders, approvals and authorizations of any Governmental Authorities applicable to such purchase, which conditions may not be waived without the consent of
all parties to such transactions and which consents, orders, approvals and authorizations each Member will use commercially reasonable efforts to obtain. 
  
 (c) Morgans shall pay to the Company, on the date it consummates a sale pursuant to this Section 12.05 (the “Morgans Transfer
Closing Date”), any amounts owed, whether or not currently due and payable, by Morgans to the Company (including accounts payable arising out of transactions between Morgans or its Affiliates and the Company); 

  

 42 

 
provided, however, that Boyd may (upon prior notice to and approval by Morgans) elect to deduct such amounts from any payment due to Morgans on
such date from the Company or Boyd in which case such amounts owed by Morgans shall be deemed paid to the extent of such deductions. If any such amounts owed to the Company have not yet been established, Boyd shall be entitled to create reasonable
reserves therefor subject to the consent of Morgans which shall not be unreasonably withheld, conditioned or delayed and such payments to Morgans shall be net of such reserves until such amount has been established. To the extent that the actual
amount of such obligations owed by Morgans to the Company is greater than or less than the amount of such reserves, then Morgans or the Company, as the case may be, shall promptly pay to the other the amount of such difference. Any amounts owed, and
not currently due and payable, by the Company to Morgans (other than loans from Morgans and its Affiliates to the Company which have otherwise been taken into account in determining the purchase price of Morgans’ Interest and are to be
transferred or extinguished in connection therewith) shall, to the extent known, be accelerated and paid at the time of the closing contemplated by this Section 12.05. 
  
 (d) The fair market value of the Morgans Interest (the “Fair Market Value”) shall mean the
Net Disposition Proceeds that would be distributed to Morgans pursuant to this Agreement following a sale by the Company of the Hotels, the Property and the other assets of the Company, on the date of the giving of the Morgans Purchase Price Notice,
for a cash price which a Sophisticated Purchaser (as defined below) would pay for the Hotels, the Property and such other assets. The determination of such value shall be (i) based on the assumptions that the assets of the Company are subject
to any agreements (other than this Agreement) then in effect, but recognizing that the transaction is not deemed to be on a forced liquidation basis, and (ii) without regard to the identity of the Sophisticated Purchaser or any value that could
be attributable to a specific purchaser or its related interests. A “Sophisticated Purchaser” shall mean a Person who would, in considering such a purchase, take into account the entire nature, scope and value of Hotels, the
Property and any other assets and businesses of the Company, and the nature, extent, maturity date, and other terms of the liabilities of the Company whether fixed or contingent, including the favorable or unfavorable nature of any financing to
which the Company or its assets are subject, and the prospect that the income from the Company assets would be sufficient to satisfy such liabilities when due. 
  

(e) Boyd and Morgans shall determine Fair Market Value as follows: each of Boyd and Morgans shall have the opportunity to appoint, at
their own cost, a Qualified Appraiser (as hereinafter defined) within ten (10) Business Days following the delivery of the Morgans Purchase Notice by written notice to the other party (the “Appointment Notice”). If either party
shall fail to appoint a Qualified Appraiser within the later of such ten (10) Business Day period or five (5) Business Days from receipt of the Appointment Notice, the other Qualified Appraiser shall unilaterally establish the Fair Market
Value for the Morgans Interest in a written opinion. If both shall appoint a Qualified Appraiser within such applicable period, such Qualified Appraisers shall forthwith establish the Fair Market Value in a single written opinion agreed to by both
of them. If the two (2) Qualified Appraisers so chosen cannot agree on the Fair Market Value of the Morgans Interest within thirty days (30) days of the appointment of the latter of them, the two (2) appointed Qualified Appraisers
shall, within ten (10) days of the expiration of the above mentioned thirty (30) day period (i) each submit a written opinion setting forth such Qualified Appraiser’s determination of the Fair Market Value and (ii) together
appoint a third Qualified Appraiser, whose sole purpose will be select one of the two written opinions as the 

  

 43 

 
Fair Market Value based upon such third Qualified Appraiser’s determination that such selected written opinion most accurately reflects Fair Market
Value. If the Qualified Appraisers shall fail to mutually appoint a third Qualified Appraiser within such time period, then the American Arbitration Association shall appoint the third Qualified Appraiser. For purposes of this Section 12.05, a
“Qualified Appraiser” means a nationally known investment banking firm, experienced in such valuations which at the time of retention is not providing services to either of the Members or any of their Affiliates, and within the two
(2) years prior to such retention did not receive more than $500,000 (as adjusted for inflation) of revenues from such Persons. 
  
 ARTICLE 13 
 TERMINATION, DISSOLUTION
AND LIQUIDATION 
  
 Section 13.01 Term. The term of the
Company shall continue until the earlier of (a) December 31, 2055, or (b) the Company is dissolved pursuant to this Article 13. 
  
 Section 13.02 Liquidating Events. The Company shall dissolve and commence winding up upon the first to occur of any of the following events (each a
“Liquidating Event”): 
  
 (a)
if, after the resignation, expulsion, or dissolution of a Member or the occurrence of any other event which terminates the continued membership of a Member in the Company, the remaining Member within ninety (90) days following the occurrence of
any such event elects in writing to dissolve the Company, and if such election is not timely made, the Company shall continue without dissolution; 
  
 (b) the unanimous vote of the Members to dissolve, wind up and liquidate the Company; 
  
 (c) upon the written election of a Member to dissolve, wind
up and liquidate the Company as provided in Section 5.04(d); 
  
 (d) upon the written election of any Member if the Contribution Date and the funding of the Capital Contributions specified in Sections 5.01(b) and 5.01(c) have not occurred by the Outside Start Date; 
  
 (e) upon the written election of a Member made within sixty
(60) days following the occurrence of an Event of Bankruptcy with respect to the other Member; 
  
 (f) the entry of a decree of judicial dissolution pursuant to the Act; or 
  
 (g) the sale or other Transfer of all or substantially all of the assets of the Company. 
  
 Section 13.03 Winding Up. In cases of dissolution of the Company, the
business of the Company shall be wound up and the Company terminated as promptly as practicable thereafter, and each of the following shall be accomplished: 
  
 (a) Morgans shall cause to be prepared a statement setting forth the assets and liabilities of the Company as of the date of dissolution,
a copy of which statement shall be furnished to all of the Members. 
  

 44 

 (b) The property and assets of the Company shall be liquidated by Morgans as promptly as
possible, but in an orderly and businesslike and commercially reasonable manner. 
  
 (c) Any income, gain, profit or loss realized by the Company upon the sale or other disposition of its property pursuant to paragraph
(b) above shall be allocated to the Members as and to the extent required by Article 6 hereof. 
  
 (d) The proceeds of sale and all other assets of the Company shall be applied and distributed as follows and in the following order of
priority: 
  
 (i) To the payment of the
Company’s outstanding liabilities, which shall be set forth on a statement as provided in paragraph (a) above. 
  
 (ii) To the setting up of any reserves which the Members shall determine in the exercise of its good faith business judgment to be
necessary for contingent, unliquidated or unforeseen liabilities or obligations of the Company or the Members arising out of or in connection with the Company. Such reserves, may, in the discretion of Morgans, be paid over to a national bank or
national title company as escrowee for the purposes of disbursing such reserves to satisfy the liabilities and obligations described above, and at the expiration of such period as the Members may reasonably deem advisable, distribute any remaining
balance in the manner set forth below. 
  
 (iii)
To the Members in accordance with Section 7.02. 
  
 No payment or
distribution in any of the foregoing categories shall be made until all payments in each prior category shall have been made in full. If the payments due to be made in any of the foregoing categories exceed the remaining assets available for such
purpose, such payment shall be made to the Persons entitled to receive the same pari passu in proportion to the respective amounts due to such Persons. 
  
 Section 13.04 Acts in Furtherance of Liquidation. Each Member, upon the request of the other Member, shall promptly
execute, acknowledge and deliver all such documents and other instruments as such Member shall reasonably request to effectuate the proper dissolution and termination of the Company, including the winding up of the business of the Company. Upon the
completion of the dissolution of the Company and the distribution of any proceeds of sale as provided in this Section 13, this Agreement shall terminate and neither party shall have any further rights or obligations hereunder, except as
specifically provided to the contrary herein. 
  
 ARTICLE 14

 MISCELLANEOUS 
  
 Section 14.01 Notices. All notices, requests and other communications to any party or to the Company shall be in writing (including facsimile or
similar writing) and shall be given, 
  

 45 

 if to Morgans, to: 
  
 c/o Morgans Hotel Group LLC 
 475 Tenth Avenue 
 11th Floor 
 New York, New York 10018 
 Attention: Marc Gordon 
 Facsimile: (212) 277-4270 
  
 With a copy to: 
  
 Stephen Gellman, Esq. 
 Wachtell Lipton Rosen & Katz 
 51 West 52nd Street, 29th Floor 
 New York, New York 10019-6150 
 Facsimile: 212-403-2246 
  
 if to Boyd, to: 
  
 c/o Boyd Gaming Corporation 
 2950 Industrial Road 
 Las Vegas, Nevada 89109-1150 
 Attention: General Counsel 
 Facsimile: (702) 792-7335 
  
 with a copy to: 
  
 Greenberg Traurig, P.A. 
 450 S. Orange Avenue, Suite 650 
 Orlando, Florida 32801 
 Attention: Joel D. Maser, Esq. 
 Facsimile: (407) 420-5909 
  
 or to such other address or facsimile number as such party or the Company may hereafter specify for the purpose by notice to the other parties and the Company. Each such
notice, request or other communication shall be sent by certified mail (return receipt requested), recognized overnight courier service, or by facsimile (immediately followed by transmittal of such notice by certified mail, return receipt requested
or by recognized overnight courier service). Notices shall be effective when delivered to the respective addresses specified in this Section. 
  
 Section 14.02 Amendments; No Waivers; Entire Agreement. 
  

(a) Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the
case of an amendment, by all the Members, or in the case of a waiver, by the Member against whom the waiver is to be effective. 
  

 46 

 (b) No failure or delay by any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law. 
  
 (c) This instrument contains all of the understandings and agreements of whatever kind and nature existing between the parties hereto with respect to this Agreement and the rights, interests, understandings,
agreements and obligations of the parties pertaining to the Company. 
  
 Section 14.03 Expenses. All costs and expenses incurred by the parties hereto in connection with this Agreement shall be paid by the party incurring such cost or expense. 
  
 Section 14.04 Consents and Approvals. 
  
 (a) All consents and approvals which may be given under this Agreement shall, as a condition of their
effectiveness, be in writing. The granting by a party hereto of any consent to or approval of any act requiring consent or approval under the terms of this Agreement, or the failure on the part of a party to object to any such action taken without
the required consent or approval, shall not be deemed a waiver by the party whose consent was required of its right to require such consent or approval for any other act. 
  
 (b) Unless expressly provided herein to be in a Member’s “sole discretion” or otherwise to
the contrary, all consents and approvals which may be given by a Member under this Agreement shall not (whether or not so indicated elsewhere in this Agreement) be unreasonably withheld or conditioned by such party and shall be given or denied
within the time period provided, and if no such time period has been provided, within a reasonable time. Upon disapproval of any request for a consent or approval, the disapproving party shall, together with notice of such disapproval, submit to the
requesting party a written statement setting forth with reasonable specificity its reasons for such disapproval. 
  
 (c) Except as specifically provided herein, no fees or charges of any kind or amount shall be required by either party hereto as a
condition of the grant of any consent or approval which may be required under this Agreement. 
  
 Section 14.05 Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and assigns. This Agreement
is for the sole benefit of the parties hereto and, except as otherwise contemplated herein, nothing herein expressed or implied shall give or be construed to give any Person, other than the parties hereto, any legal or equitable rights hereunder.

  
 Section 14.06 Governing Law. This Agreement shall be
construed in accordance with and governed by the law of the State of Delaware without giving effect to the principles of conflicts of laws thereof. This choice of governing law shall not be determinative of the site of venue for any litigation
between the Members arising out of or connected with this Agreement. 
  

 47 

 Section 14.07 Counterparts. This Agreement may be signed in any number of counterparts, each of
which shall be deemed an original. 
  
 Section 14.08
Severability. If any provision of this Agreement or the application thereof to any Person or circumstance shall be invalid or unenforceable to any extent, the remainder of this Agreement and the application of such provisions to other Persons
or circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law. 
  
 Section 14.09 Further Assurances. In connection with this Agreement, as well as all transactions contemplated by this Agreement, and in compliance
with all laws applicable to this Agreement, each Member agrees to execute and deliver such additional documents and instruments, and to perform such additional acts as may be necessary or appropriate to effectuate, carry out and perform all of the
terms, provisions and conditions of this Agreement, and all such transactions. 
  
 Section 14.10 Publicity. No Member, nor any of its Affiliates, officers, employees or advisors, may issue any press release or public statement relating to the Project, or otherwise publicize the Project or the
terms of this Agreement without the approval of the other Member, except as provided in the Morgans Hotel Management Agreement. 
  
 Section 14.11 Confidentiality. The terms of this Agreement, the identity of any person with whom the Company may be holding discussions with
respect to any investment, acquisition, disposition or other transaction, and all other business, financial or other information relating directly to the conduct of the business and affairs of the Company (including any and all information regarding
the customers of the Hotels) or the relative or absolute rights or interests of any of the Members (collectively, the “Confidential Information”) that has not been publicly disclosed pursuant to authorization by the Members is
confidential and proprietary information of the Company, the disclosure of which would cause irreparable harm to the Company and the Members. Accordingly, each Member represents that it has not and agrees that it will not direct its members,
shareholders, partnership, directors, officers, agents, advisors and Affiliates not to, disclose to any Person any Confidential Information or confirm any statement made by third Persons regarding Confidential Information until the Company has
publicly disclosed the Confidential Information pursuant to authorization by the Members and has notified each Member that it has done so; provided, however, that any Member (or its Affiliates) may disclose such Confidential
Information if required by law (it being specifically understood and agreed that (a) anything set forth in a registration statement or any other document filed pursuant to law will be deemed required by law (including, without limitation, any
proxy or registration statement filed by the Morgans Parent or any Affiliate thereof in connection with the pending initial public offering of all or substantially all of the assets of the Morgans Parent), and (b) before making any disclosure
of Confidential Information required by law, the disclosing Member will notify the other Members and provide them with a copy of the proposed disclosure and an opportunity to comment thereon before the disclosure is made) or necessary for it to
perform any of its duties or obligations hereunder. If a Member receives a request to disclose any Confidential Information under the terms of a valid and effective order issued by a court or governmental agency and the order was not sought by or on
behalf of or consented to by such Member, then such Member may disclose the Confidential Information to the extent required if the Member as promptly as practicable (i) notifies the other Members of the existence, terms and 

  

 48 

 
circumstances of the of the order, (ii) consults in good faith with the other Member on the advisability of taking legally available steps to resist or
to narrow the order, and (iii) if disclosure of the Confidential Information is required, exercises its best efforts to obtain a protective order or other reliable assurance that confidential treatment will be accorded to the portion of the
disclosed Confidential Information that the other Member designates. The cost (including, without limitation, attorneys’ fees and expenses) of obtaining a protective order covering Confidential Information designated by such other Member will
be borne by the Company. Notwithstanding the foregoing or anything else contained in this Agreement, the Members may disclose Confidential Information as appropriate to any prospective or actual purchaser of, investor in, or lender to the Company or
the Hotels, or any consultant, agent, attorney, accountant or other professional advisor to or for any of the foregoing. 
  
 Section 14.12 Third Parties Not Benefited. Nothing contained in this Agreement is intended or shall be deemed to benefit any creditor of the
Company or any Member, and no creditor of the Company shall be entitled to require the Company or the Members to solicit or accept any additional Capital Contributions for the Company or to enforce any right which the Company or any Member may have
against any Member under this Agreement or otherwise. Except as expressly set forth herein, nothing in this Agreement is intended to confer on any Person other than the parties any rights or remedies. 
  
 Section 14.13 Time of the Essence. Time shall be of the essence with
respect to each of the dates and time periods set forth in this Agreement, other than the time periods set forth in Section 8.08 hereof. 
  
 Section 14.14 Waiver of Jury Trial. Each of the Members hereby waives trial by jury in any action arising out of matters related to this Agreement,
which waiver is informed and voluntary. 
  
 Section 14.15
Jurisdiction; Choice of Forum. Each Member, and party hereto, hereby irrevocably (a) submits to the exclusive jurisdiction (and agrees not to contest jurisdiction) of any (i) Federal Court sitting in the Clark County of Nevada or
(ii) if for any reason such Federal Court (on its own initiative) denies jurisdiction, then any State Court sitting in the County of Nevada, in any action or proceeding arising out of or relating to this Agreement, the relations between the
Members and any matter, action or transaction described in this Agreement, (b) agrees that any such courts (as described in the preceding clause (a)) shall have exclusive jurisdiction over such actions or proceedings, (c) waives the
defense of inconvenient forum to the maintenance and continuation of such action or proceeding, (d) consents to the service of any and all process in any such action or proceeding by the mailing of copies (certified mail, return receipt
requested and postage prepaid) of such process to them at their addresses specified in Article 14 and (e) agrees that a final and non-appealable judgment rendered by a court of competent jurisdiction in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. 
  
 [Remainder of page intentionally left blank] 
  

 49 

 IN WITNESS WHEREOF, the parties hereto have entered into this Agreement or have caused this Agreement to
be duly executed by their respective authorized officers, in each case as of the day and year first above written. 
  

			
	 MORGANS/LV INVESTMENT LLC

		
	 By:
	 	 Morgans Hotel Group LLC

		
	 By:
	 	 /s/ Marc S. Gordon

	 Name:
	 	 Marc S. Gordon

	 Title:
	 	Chief Investment Officer and Executive Vice
President of Capital Markets

  
 [Signatures
Continue on Next Page] 

			
	[Signatures Continued]
	
	 AS TO SECTION 5.06(a) ONLY:

	
	 Morgans Hotel Group LLC

		
	 By:
	 	 /s/ Marc S. Gordon

	 Name:
	 	 Marc S. Gordon

	 Title:
	 	Chief Investment Officer and Executive Vice
President of Capital Markets

  
 [Signatures
Continue on Next Page] 
  

 2 

			
	[Signatures Continued]
	
	 ECHELON RESORTS CORPORATION

		
	 By:
	 	 /s/ Robert Boughner

	 Name:
	 	 Robert Boughner

	 Title:
	 	President
	
	AS TO SECTIONS 4.02(c), 5.06(b),
8.05(c) AND 11.02(b) ONLY:
	
	 BOYD GAMING CORPORATION

		
	 By:
	 	 /s/ Brian A. Larson

	 Name:
	 	 Brian A. Larson

	 Title:
	 	Senior Vice President

  

 3 

 EXHIBITS 
  

	A	Form of Development Budget 

	B	Echelon Place Components Site Plan 

	C	Echelon Place Master Plan 

	D	Echelon Place Parcel Legal Description 

	E	Joint Decisions 

	F	Permitted Encumbrances 

	G	Predevelopment Budget 

	H	Preliminary Site Plan 

	I	REA Terms and Conditions 

	J	Dilution Formula Illustration 

	K	Morgans Cost Overrun Guaranty 

 Exhibit A 
  

Form of Development Budget 

 MORGANS HOTELS 
 LAS VEGAS BUDGET 
 PRE-DEVELOPMENT 
  
 Budget Summary 
  

				
	 	  	Budget

	 Land & Improvements
	  	 	 
	 Offsite/Gov’t Improvements
	  	$	—  
	 Land
	  	$	—  
	 	  	
	

	 Total Land & Improvements
	  	$	—  
	 Construction Hard Costs
	  	 	 
	 Low Rise Core & Shell & Fit Out
	  	$	—  
	 High Rise Core & Shell & Fit Out
	  	$	—  
	 Valet Parking Garage
	  	$	—  
	 Employee Parking Garage
	  	$	—  
	 Site Work
	  	$	—  
	 General Conditions
	  	$	—  
	 Construction Managers Fee
	  	$	—  
	 	  	
	

	 Total Construction Hard Costs
	  	$	—  
	 Soft Costs
	  	 	 
	 Professional Fees & Reimbursables
	  	$	—  
	 Property Taxes
	  	$	—  
	 FF&E
	  	$	—  
	 Financing Costs
	  	$	—  
	 Systems
	  	$	—  
	 Working Capital
	  	$	—  
	 Pre-Opening Expenses
	  	$	—  
	 	  	
	

	 Total Soft Costs
	  	$	—  
	 Unallocated Contingency (10%)
	  	$	—  
	 	  	
	

	 Pre-Development Grand Total
	  	$	—  
	 	  	
	

  

 MORGANS HOTELS 
 LAS VEGAS BUDGET 
 December 19, 2005 
 1 

 MORGANS HOTELS 
 LAS VEGAS BUDGET 
  
 Land &
Improvements 
  

				
	 	  	Budget

	 Land
	  	$	—  
	 Site Work
	  	$	—  
	 Master Plan Improvements
	  	$	—  
	 Off Site Government Improvements
	  	$	—  
	 	  	
	

	 Total
	  	$	—  

  

 Las Vegas Budget 
 12-19-05 
 Page 2 

 Morgans Hotels 
 Las Vegas Budget 
  
 CONSTRUCTION HARD COSTS

  

				
	 	  	Budget

	 Construction Hard Costs
	  	 	 
	 Low Rise Core & Shell & Fit Out
	  	$	—  
	 High Rise Core & Shell & Fit Out
	  	$	—  
	 Valet Parking Garage
	  	$	—  
	 Employee Parking Garage
	  	$	—  
	 Site Work
	  	$	—  
	 General Conditions
	  	$	—  
	 Construction Managers Fee
	  	$	—  
	 	  	
	

	 Total Construction Hard Costs
	  	$	—  

  

 Morgans Hotels 
 Las Vegas Budget 
 December 19, 2005 
 Construction 
 1 

 Morgans Hotels 
 Las Vegas Budget 
  
 Soft Costs-Professional
Fees and Reimbursables 
  

				
	 	  	Budget

	 Audit Fees
	  	$	—  
	 Design Architect Fee
	  	 	 
	 Environmental Consultant
	  	 	 
	 Estimating + Pre-Con Fees
	  	 	 
	 Executive Architect Fees
	  	 	 
	 Geotechnical
	  	 	 
	 Construction Insurance
	  	 	 
	 Landscape Design
	  	 	 
	 Construction Legal
	  	 	 
	 Back of House Interior Designer
	  	 	 
	 Retail Design Fees
	  	 	 
	 Principal Interior Designer Fees
	  	 	 
	 Rooms Interior Designer Fees
	  	 	 
	 Spa Interior Designer Fees
	  	 	 
	 Restaurant Consultant Fees
	  	 	 
	 Entertainment Consultant Fees
	  	 	 
	 Engineering - MEPS
	  	 	 
	 Employee Parking Garage Design Fees
	  	 	 
	 Structural Designer Fees
	  	 	 
	 Kitchen Design Fees
	  	 	 
	 Lighting Designer Fees
	  	 	 
	 Testing & Inspection
	  	 	 
	 Project Management Fees
	  	 	 
	 Permits & Fees
	  	 	 
	 Total Fees & Reimbursables
	  	$	—  

  

 Morgans Hotels 
 Las Vegas Budget 
 December 19, 2005 
 Fees Reimbursables 
 1 

 Morgans Hotels 
 Las Vegas Budget 
  
 Property Tax

  

				
	 	  	Budget

	 Property Tax
	  	$	—  

  

 Morgans Hotels 
 Las Vegas Budget 
 December 19, 2005 
 Property Tax 
 1 

 Morgans Hotels 
 Las Vegas Budget 
  
 Furniture Fixtures &
Equipment 
  

				
	 	  	Budget

	 Hotel
	  	 	 
	 Corridors
	  	$	—  
	 Model Rooms
	  	 	 
	 Lobby
	  	$	—  
	 Suites
	  	$	—  
	 Warehouse & Installation
	  	$	—  
	 Freight
	  	$	—  
	 Tax
	  	$	—  
	 	  	
	

	 Subtotal Hotel
	  	$	—  
	 Owner Operated Food Outlets
	  	 	 
	 Restaurant #1
	  	$	—  
	 Restaurant #2
	  	$	—  
	 Room Service
	  	$	—  
	 	  	
	

	 Subtotal Food Outlets
	  	$	—  
	 Beverage
	  	 	 
	 Bar 1
	  	$	—  
	 Bar 2
	  	$	—  
	 	  	
	

	 Subtotal Beverage
	  	$	—  
	 Entertainment
	  	 	 
	 	  	 	 
	 	  	
	

	 Subtotal Entertainment
	  	$	—  
	 Banquet/Meeting Facilities
	  	 	 
	 Business Office
	  	$	—  
	 Event Center
	  	$	—  
	 	  	
	

	 Subtotal Banquets
	  	$	—  
	 Back of House
	  	 	 
	 Employee Dining
	  	$	—  
	 General Facilities
	  	$	—  
	 	  	
	

	 Subtotal Back of House
	  	$	—  
	 Spa
	  	 	 
	 Fitness Room
	  	$	—  
	 Lobby/Reception
	  	$	—  
	 Locker/Showers
	  	$	—  
	 Offices
	  	$	—  
	 Restrooms
	  	$	—  

  

 Morgans Hotels 
 Las Vegas Budget 
 December 19, 2005 
 FFE 
 1 

 Morgans Hotels 
 Las Vegas Budget 
  
 Furniture Fixtures &
Equipment 
  

				
	 	  	Budget

	 Salon Treatment
	  	$	—  
	 Swimming Pool Area
	  	$	—  
	 	  	
	

	 Subtotal Spa
	  	$	—  
	 Operating FF&E and Supplies
	  	 	 
	 Banquet/Meeting Facility
	  	$	—  
	 Food Beverage
	  	$	—  
	 General Administrative
	  	$	—  
	 Hotel
	  	$	—  
	 Marketing
	  	$	—  
	 Property Operations
	  	$	—  
	 Spa
	  	$	—  
	 	  	
	

	 Subtotal OS&E
	  	$	—  
	 Procurement Agents
	  	 	 
	 Tower
	  	$	—  
	 Lowrise
	  	$	—  
	 	  	
	

	 Subtotal Procurement
	  	$	—  
	 Other Areas
	  	 	 
	 Valet Lounge
	  	$	—  
	 Elevators & Parking Garage
	  	$	—  
	 Retail Outlets
	  	$	—  
	 Restrooms
	  	$	—  
	 	  	
	

	 Subtotal Other
	  	$	—  
	 Tower FF&E installation
	  	$	—  
	 Lowrise FF&E Installation
	  	$	—  
	 Misc Installation
	  	$	—  
	 	  	
	

	 Subtotal installation
	  	$	—  
	 Total FF&E
	  	$	—  

  

 Morgans Hotels 
 Las Vegas Budget 
 December 19, 2005 
 FFE 
 2 

 Morgans Hotels 
 Las Vegas Budget 
  
 Financing 

 

				
	 	  	Budget

	 Presentation Materials
	  	$	—  
	 Legal Expenses
	  	 	 
	 	  	
	

	 Subtotal
	  	$	—  
	 Excess Liability Insurance
	  	$	—  
	 	  	
	

	 Subtotal Insurance
	  	$	—  
	 Interest Income
	  	$	—  
	 	  	
	

	 Subtotal Interest Income
	  	$	—  
	 Swap Expense
	  	$	—  
	 Interest Expense
	  	$	—  
	 Notes Payable
	  	$	—  
	 	  	
	

	 Subtotal Interest Expense
	  	$	—  
	 Commitment Fees
	  	$	—  
	 One Time Fees
	  	$	—  
	 Collar Purchase
	  	$	—  
	 Administration Fees
	  	$	—  
	 Bank Fees
	  	$	—  
	 Strategic Analysis
	  	$	—  
	 Credit Rating Fees
	  	$	—  
	 	  	
	

	 Subtotal Loan Fees
	  	$	—  
	 Total
	  	$	—  

  

 Morgans Hotels 
 Las Vegas Budget 
 December 19, 2005 
 Financing 
 1 

 Morgans Hotels 
 Las Vegas Budget 
  
 Systems 
  

				
	 	  	Budget

	 Infrastructure
	  	 	 
	 E-mail
	  	$	—  
	 Hardware / Servers
	  	$	—  
	 Hardware / Desktop / Other
	  	$	—  
	 Office Systems-Software
	  	$	—  
	 Data Center
	  	$	—  
	 Networking
	  	$	—  
	 Software
	  	$	—  
	 Business Intelligence / Reports
	  	$	—  
	 Portal and Collaboration
	  	$	—  
	 Media control system
	  	$	—  
	 Help Desk / Asset Management
	  	$	—  
	 	  	
	

	 Subtotal IT
	  	$	—  
	 Professional Services & Training
	  	 	 
	 Professional Services
	  	$	—  
	 	  	
	

	 Subtotal IT
	  	$	—  
	 Hotel
	  	 	 
	 Hotel Management System
	  	$	—  
	 Activities / Events System
	  	$	—  
	 Facilities software
	  	$	—  
	 High Speed Internet Access
	  	$	—  
	 Kiosks
	  	$	—  
	 	  	
	

	 Subtotal Hotel
	  	$	—  
	 Marketing
	  	 	 
	 Marketing
	  	$	—  
	 Internet
	  	$	—  
	 	  	
	

	 Subtotal Marketing
	  	$	—  
	 Spa
	  	 	 
	 Spa Management System
	  	$	—  
	 Hardware POS
	  	$	—  
	 	  	
	

	 Subtotal SPA
	  	$	—  

  

 Morgans Hotels 
 Las Vegas Budget 
 December 19, 2005 
 Systems 
 1 

 Morgans Hotels 
 Las Vegas Budget 
  
 Systems 
  

				
	 	  	Budget

	 Food
	  	 	 
	 Beverage Control System
	  	$	—  
	 Catering
	  	$	—  
	 Table/Dining Management
	  	$	—  
	 Point of Sale System
	  	$	—  
	 	  	
	

	 Subtotal Food
	  	$	—  
	 Convention Center / Meeting Rooms / Support
	  	 	 
	 Business Center
	  	$	—  
	 Catering
	  	$	—  
	 Point of Sale System
	  	$	—  
	 	  	
	

	 Subtotal Food
	  	$	—  

  

 Morgans Hotels 
 Las Vegas Budget 
 December 19, 2005 
 Systems 
 2 

 Morgans Hotels 
 Las Vegas Budget 
  
 Systems 
  

				
	 	  	Budget

	 Communications
	  	 	 
	 Employee Beeper System
	  	$	—  
	 Employee Voice Mail
	  	$	—  
	 Hotel PBX
	  	$	—  
	 Cellular support/ coverage
	  	$	—  
	 Surveillance
	  	$	—  
	 Radios
	  	$	—  
	 	  	
	

	 Subtotal Communications
	  	$	—  
	 Human Resources
	  	 	 
	 Applicant Tracking
	  	$	—  
	 Employee Badge System
	  	$	—  
	 Employee Intranet
	  	$	—  
	 Time Attendance System
	  	$	—  
	 	  	
	

	 Subtotal Human Resources
	  	$	—  
	 Finance
	  	 	 
	 G/I
	  	$	—  
	 Payroll
	  	$	—  
	 Purchasing
	  	$	—  
	 	  	
	

	 Subtotal Finance
	  	$	—  
	 Retail
	  	 	 
	 Retail System
	  	$	—  
	 	  	
	

	 Subtotal Retail
	  	$	—  
	 	  	$	—  
	 	  	
	

	 Subtotal Event Center
	  	$	—  
	 Total Systems
	  	$	—  

  

 Morgans Hotels 
 Las Vegas Budget 
 December 19, 2005 
 Systems 
 3 

 Morgans Hotels 
 Las Vegas Budget 
  
 Working Capital

  

				
	 	  	Budget

	 Food Inventories
	  	$	—  
	 Hotel Impressment’
	  	$	—  
	 Licenses
	  	$	—  
	 	  	
	

	 Total
	  	$	—  

  

 Morgans Hotels 
 Las Vegas Budget 
 December 19, 2005 
 Working Capital 
 1 

 Morgans Hotels 
 Las Vegas Budget 
  
 Pre-Opening Expense

  

				
	 	  	Budget

	 Business Licenses
	  	$	—  
	 Investigative Fees
	  	$	—  
	 Contract Labor
	  	$	—  
	 Worker’s Comp Insurance
	  	$	—  
	 Liability Insurance
	  	$	—  
	 Lodging
	  	$	—  
	 Meals
	  	$	—  
	 Travel
	  	$	—  
	 Repairs & Maint.
	  	$	—  
	 Development Office Rent
	  	$	—  
	 Auto Expense
	  	$	—  
	 Dues & Fees
	  	$	—  
	 Equipment Rental
	  	$	—  
	 Postage
	  	$	—  
	 Maintenance Contracts
	  	$	—  
	 Office Equipment
	  	$	—  
	 Internet & Related
	  	$	—  
	 Office Supplies
	  	$	—  
	 Miscellaneous
	  	$	—  
	 Service Agreements
	  	$	—  
	 Subscriptions
	  	$	—  
	 Business Plan Expense
	  	$	—  
	 Telephone
	  	$	—  
	 Outside Services
	  	$	—  
	 Seminars
	  	$	—  
	 Computer Supplies
	  	$	—  
	 Stationary
	  	$	—  
	 Printing
	  	$	—  
	 Living Expenses
	  	$	—  
	 Office Cleaning
	  	$	—  
	 Interior Landscape
	  	$	—  
	 Research
	  	$	—  
	 Lobbying Expense
	  	$	—  
	 Charitable Contributions
	  	$	—  
	 Community Relations
	  	$	—  
	 Organizational Dues
	  	$	—  
	 	  	
	

	 Subtotal Development
	  	$	—  
	 Payroll
	  	 	 
	 Development
	  	$	—  
	 	  	
	

	 Subtotal Payroll
	  	$	—  
	 Marketing
	  	 	 

  

 Morgans Hotels 
 Las Vegas Budget 
 December 19, 2005 
 Preopening 
 1 

 Morgans Hotels 
 Las Vegas Budget 
  
 Pre-Opening Expense

  

				
	 	  	Budget

	 Advertising Fees & Production
	  	 	 
	 Direct Marketing
	  	$	—  
	 Television
	  	$	—  
	 Magazine
	  	$	—  
	 Newspaper
	  	$	—  
	 Outdoor
	  	$	—  
	 Internet
	  	$	—  
	 Website
	  	$	—  
	 Photography
	  	$	—  
	 Agency Fees
	  	$	—  
	 Agency Reimbursables
	  	$	—  
	 	  	
	

	 Subtotal Production
	  	$	—  
	 Advertising Paid Media
	  	 	 
	 Radio
	  	$	—  
	 Television
	  	$	—  
	 Magazine
	  	$	—  
	 Newspaper
	  	$	—  
	 Outdoor
	  	$	—  
	 Internet
	  	$	—  
	 Website
	  	$	—  
	 	  	
	

	 Subtotal Paid Media
	  	$	—  
	 Advertising Other
	  	 	 
	 Television
	  	$	—  
	 Magazine
	  	$	—  
	 Website
	  	$	—  
	 	  	
	

	 Subtotal Other
	  	$	—  
	 Public Relations Fees
	  	$	—  
	 Public Relations Reimbursables
	  	$	—  
	 	  	
	

	 Subtotal Public Relations
	  	$	—  

  

 Morgans Hotels 
 Las Vegas Budget 
 December 19, 2005 
 Preopening 
 2 

 Morgans Hotels 
 Las Vegas Budget 
  
 Pre-Opening Expense

  

				
	 	  	Budget

	Brand Identity Collateral	  	 	 
	 Design Fees
	  	$	—  
	 Tradeshow Collateral/Booth
	  	$	—  
	 Restaurants & Bars
	  	$	—  
	 Design Fees
	  	$	—  
	 Loyalty Program
	  	$	—  
	 Spa/Recreation
	  	$	—  
	 Administration & Support
	  	$	—  
	 Sales & Bus Program
	  	$	—  
	 	  	
	

	 Subtotal Design Fees
	  	$	—  
	 Production & Printing
	  	 	 
	 Restaurants & Bars
	  	$	—  
	 Hotel
	  	$	—  
	 Administration & Support
	  	$	—  
	 Sales & Bus Program
	  	$	—  
	 	  	
	

	 Subtotal P & P
	  	$	—  
	 Loyalty Program
	  	 	 
	 Fees
	  	$	—  
	 Production, Printing & Mailing
	  	$	—  
	 Database
	  	$	—  
	 Other
	  	$	—  
	 	  	
	

	 Subtotal Other
	  	$	—  
	Customer Development	  	 	 
	 Fees
	  	 	 
	 Bus Program
	  	$	—  
	 Player Development
	  	$	—  
	 	  	
	

	 Subtotal Fees
	  	$	—  
	 Other
	  	 	 
	 Player Development
	  	$	—  
	 	  	
	

	 Subtotal Other
	  	$	—  
	Sales	  	 	 
	 Meetings & Events
	  	 	 
	 Dues & Fees
	  	$	—  
	 Lodging
	  	$	—  
	 Meals
	  	$	—  
	 Travel
	  	$	—  

  

 Morgans Hotels 
 Las Vegas Budget 
 December 19, 2005 
 Preopening 
 3 

 Morgans Hotels 
 Las Vegas Budget 
  
 Pre-Opening Expense

  

				
	 	  	Budget

	 Other
	  	$	—  
	 	  	
	

	 Subtotal Mtg & Events
	  	$	—  
	 	  	
	

	 Subtotal Sales
	  	$	—  
	Market Research	  	 	 
	 Market Research
	  	$	—  
	 	  	
	

	 Subtotal Research
	  	$	—  
	Special Events	  	 	 
	 Entertainment
	  	$	—  
	 Groundbreaking
	  	$	—  
	 Office Opening
	  	$	—  
	 Topping Off
	  	$	—  
	 Special Events
	  	$	—  
	 Public Presentations
	  	$	—  
	 Press Conferences
	  	$	—  
	 	  	
	

	 Subtotal Sp. Events
	  	$	—  
	 Total Marketing
	  	$	—  
	Professional Fees	  	 	 
	 Accounting
	  	$	—  
	 Constr. Review D&T
	  	$	—  
	 Consultants
	  	$	—  
	 Legal
	  	$	—  
	 	  	
	

	 Subtotal Prof. Fees
	  	$	—  

  

 Morgans Hotels 
 Las Vegas Budget 
 December 19, 2005 
 Preopening 
 4 

 Morgans Hotels 
 Las Vegas Budget 
  
 Pre-Opening Expense

  

				
	 	  	Budget

	 Other Locations Expenses
	  	 	 
	 Office Space
	  	$	—  
	 Warehouse Rent
	  	$	—  
	 	  	
	

	 Subtotal Other Loc.
	  	$	—  
	HR Planning	  	 	 
	 Collateral
	  	$	—  
	 Compensation Program
	  	$	—  
	 Contract Labor
	  	$	—  
	 Contract Programming
	  	$	—  
	 Drug Testing
	  	$	—  
	 Employment Center Maint.
	  	$	—  
	 Employment Center Phone
	  	$	—  
	 Employment Center Rent
	  	$	—  
	 Employment Center Security
	  	$	—  
	 Employment Center Office Supplies
	  	$	—  
	 Investigation Fees
	  	$	—  
	 Job Fairs
	  	$	—  
	 Postage/Mailings
	  	$	—  
	 Recruiting
	  	$	—  
	 Relocation Expenses
	  	$	—  
	 Training
	  	$	—  
	 Outside Consultants
	  	$	—  
	 Training-Food & Beverage
	  	$	—  
	 	  	
	

	 Subtotal HR Planning
	  	$	—  

  

 Morgans Hotels 
 Las Vegas Budget 
 December 19, 2005 
 Preopening 
 5 

 Morgans Hotels 
 Las Vegas Budget 
  
 Pre-Opening Expense

  

				
	 	  	Budget

	Fixed Assets	  	 	 
	 Trucks
	  	$	—  
	 Limousines
	  	$	—  
	 Dev Office FF&E
	  	$	—  
	 Dev office T.I.
	  	$	—  
	 Employment Center FF&E
	  	$	—  
	 Employment Center TI
	  	$	—  
	 Warehouse TI
	  	$	—  
	 	  	
	

	 Subtotal Fixed Assets
	  	$	—  
	 Total Pre-Opening
	  	$	—  

  

 Morgans Hotels 
 Las Vegas Budget 
 December 19, 2005 
 Preopening 
 6 

 Morgans Hotels 
 Las Vegas Budget 
  

				
	 	  	Budget

	 Unallocated Contingency
	  	$	—  
	 	  	
	

	 	  	$	—  

  

 Morgans Hotels 
 Las Vegas Budget 
 December 19, 2005 
 Contingencies 
 1 

 Exhibit B 
  

Echelon Place Components Site Plan 

 

 

 Exhibit C 
  

Echelon Place Master Plan 
  
 [To Be Agreed Upon By The Parties And Delivered Subsequent To Signing] 

 Exhibit D 
  

Echelon Place Parcel Legal Description 

 

 

 EXHIBIT E 
  

Joint Decisions 
  
 (a) Altering the purpose of the Company, as set forth in this Agreement; 
  
 (b) Doing any act in contravention of this Agreement or the Certificate, or which would make it impossible to carry out the
purposes of the Company, as set forth in this Agreement, or using Company property for other than a purpose of the Company, as set forth in this Agreement; 
  
 (c) The acquisition by the Company of any land or other real property or interest therein other than the Land or entering into any contract of sale for
any such acquisition or acquiring any personal property other than in connection with the Property and in accordance with the Annual Plan; 
  
 (d) Merging or consolidating the Company with or into another Person, engaging in business combination transactions, including any joint venture,
partnership or profit-sharing arrangement with any Person (or taking any action which has substantially the same effect); 
  
 (e) Making any other decision or taking any action on behalf of the Company which, by any provision of this Agreement, is specifically required to be
approved by the Members. 
  
 (f) Any sale, transfer, exchange,
conveyance or other disposition of all or any portion of a Hotel or the Property, granting any lien or encumbrance upon a Hotel or the Property in connection with any financing or otherwise providing the a Hotel or the Property as collateral for any
financing, or entering into any material lease for all or any portion of a Hotel or the Property; 
  
 (g) Entering into, negotiating and approving the material economic terms and conditions of the Construction Loan or any material agreement with a
Governmental Authority, amending, modifying, supplementing, renewing or terminating in any material respect the Construction Loan or material agreement with a Governmental Authority; 
  
 (h) Exercising any material right or remedy, granting any waiver, release, consent or approval, giving any notice or the
taking of any other action required or permitted to be taken under the Construction Loan Documents or other financing documents or with any agreement with any Governmental Authority, in each case only to the extent that such action would have a
material adverse effect on the Project; 
  
 (i) Entering into,
negotiating and approving the material economic terms and conditions of any financing or refinancing of the Property or the Company and the use of any proceeds thereof, including, without limitation, interim and permanent financing, including any
loan to finance part or all of the costs or expenses of any development or construction activities to be undertaken with regard to the Hotels, and any other financing or refinancing of the operations of the Company and any modification, extension,
renewal or any recasting thereof; 

 (j) The incurrence of any indebtedness, except for liabilities which are normal and customary in the
operation of the Hotels, including but not limited to the incurrence of trade payables in the ordinary course of business; 
  
 (k) Approving the admission to the Company of an additional Member; 
  
 (l) The retention or termination of the Architect, Interior Designer, construction manager, Project Consultant or legal
counsel to the Company; 
  
 (m) Negotiating, approving or
materially modifying any Entitlements and filing any material applications or other material documents in connection therewith; 
  
 (n) Instituting, adjusting, settling, submitting to arbitration or compromising any claim, demand, debt, obligation, suit, action, judgment or any other
legal proceeding where the amount in controversy exceeds $250,000; 
  
 (o) (A) The filing of any voluntary petition in bankruptcy on behalf of the Company, (B) the consenting to the filing of any involuntary petition in bankruptcy against the Company, (C) the filing of any petition seeking, or the
consenting to, reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, on behalf of the Company, (D) the consenting to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of the Company or a substantial part of the property of either, (E) the making of any assignment for the benefit of creditors on behalf of the Company, (F) the admission in writing of the Company’s inability to
pay its debts generally as they become due or (G) the taking of any action by the Company in furtherance of any such action; 
  
 (p) Except for the Morgans Hotel Management Agreement, entering into any agreement or contract with, or paying any compensation to, any Member or any
Affiliate of a Member; 
  
 (q) The appointment of the Company
Accountant or any change in the Company Accountant or the selection of any other auditor or independent accounting firm for the Company or the making of any decision to change any other auditor or independent accounting firm of the Company;

  
 (r) Establish insurance requirements or permitting the
cancellation or lapse of any material insurance policy; 
  
 (s)
Approving the Development Budget, Plans and Specifications, Pre-Opening Plan and Construction Schedule and/or amending, altering, adding to, deleting from, revising, modifying or supplementing any of the foregoing in any material respect;

  
 (t) Determining whether or not to rebuild a Hotel (or material
portion thereof) following a major casualty and the nature, scope and cost of any such rebuilding; and 
  
 (u) Selecting a Hotel Manager in the event an Affiliate of Morgans is no longer the Hotel Manager and approving the terms of the Hotel Management
Agreement to be entered into by the Company with such new Hotel Manager. 

 Exhibit F 
  

Permitted Encumbrances 

 SCHEDULE B 
 PART I 
  
 This policy does not insure
against loss or damage (and the Company will not pay costs, attorneys’ fees or expenses which arise by) reason of: 
  

	1.	Taxes for the fiscal year 2004-2005 a lien not yet due or payable. Assessor’s Parcel No: 162-09-303-004 (Parcel I) & 162-09-303-007 (Parcel II)

  

	2.	A Special Assessment by the Improvement District shown below: 

  

			
	District No.:	  	97A-LV BLVD
	Name:	  	Median landscape and Maintenance
	Term:	  	96-15
	Initial Principal:	  	$89,984.87
	Current Principal	  	$52,876.67
	Last Payment Made:	  	-0-
	Last Installment Paid	  	-0-
	Due Dates:	  	02-05 and 08-04
	NO DELINQUENT PAYMENTS AS OF POLICY DATE

  

	3.	A Special Assessment by the Improvement District shown below: 

  

			
	District No.:	  	97B-LV BLVD
	Name:	  	Maintenance
	Term:	  	98-15
	Initial Principal:	  	$2,552.86
	Current Principal	  	$927.09
	Last Payment Made:	  	-0-
	Last Installment Paid	  	-0-
	Due Dates:	  	03-05 and 09-04
	NO DELINQUENT PAYMENTS AS OF POLICY DATE

  

	4.	A Special Assessment by the Improvement District shown below: 

  

			
	District No.:	  	97A-LV BLVD
	Name:	  	Median Landscape and Maintenance
	Term:	  	96-15
	Initial Principal:	  	$452,173.96
	Current Principal	  	$279,655.30
	Last Payment Made:	  	-0-
	Last Installment Paid	  	-0-
	Due Dates:	  	02-05 and 08-04
	NO DELINQUENT PAYMENTS AS OF POLICY DATE

  

	5.	A Special Assessment by the Improvement District shown below: 

  

			
	District:	  	No. 97B - Las Vegas Blvd. Beautification Maint.
	Name:	  	Maintenance
	Term:	  	1996-2015
	Initial Principal:	  	$12,828.12
	Current Principal	  	$4,658.62
	Last Payment Made:	  	-0-
	Last Installment Paid	  	-0-
	Due Dates:	  	03-05 and 09-04

  

	6.	The lien of supplemental taxes, if any, assessed pursuant to the provision of Nevada Revised Statute 361.260. (none due as of the date hereof) 

  

 Page 5 

 SCHEDULE B 
 PART I - Continued 
  

	7.	The property described herein is located within the boundaries of the Clark County Sanitation District and is subject to any fees that may be charged against property in said
districts. 

  

	8.	Water rights, claims or title to water. 

  

	9.	Reservations as contained in Patent conveying said land. 

  

	10.	An easement for the purpose shown below and rights incidental thereto as set forth in a document granted to SOUTHERN NEVADA POWER COMPANY for the purpose of Pole lines Recorded
April 5, 1949 in Book 59 of Deeds, Page 549, Doc/Inst. No. 309619 of Official Records. Affects the Northeasterly ten (10) feet of the Easterly 1173.30 feet of a portion of said land. 

  
 By Partial Relinquishment of Right-of-way Grant the NEVADA POWER COMPANY, a
Nevada corporation (formerly known as SOUTHERN NEVADA POWER CO.) relinquish and reconvey unto the person or person legally entitled thereto a portion of that certain right-of-way, a strip of land 10.00 feet in width, being 5.00 feet on each side of
the following described centerline; 
  
 COMMENCING at the
intersection of the Westerly boundary line of U.S. Highway No. 91, (100.00 feet wide), with the North line of the Southwest Quarter (SW 1/4) of the Southeast Quarter (SE 1/4) of said Section 9; thence North 28°00’00” East,
along the Westerly boundary of said U.S. Highway No. 91, a distance of 316.13 feet to the POINT OF BEGINNING; thence North 62°00’00” West 1079.92 feet to the Point of Ending, recorded May 20, 1991 in Book 910520 as Document No. 01053, Official Records. 
  

	11.	An easement for the purpose shown below and rights incidental thereto as set forth in a document granted to SOUTHERN NEVADA POWER COMPANY for the purpose of Power and communication
lines recorded April 18,1949 in Book 59 of Deeds, Page 595, Doc/Inst. No. 310506 of Official Records. Affects a portion of the following described land: 

  
 COMMENCING at the intersection of the Westerly boundary line of U.S. Highway No. 91, as now established across said
Section. 9, with the North line of the Southwest Quarter (SW 1/4) of said Section 9; thence North 28°00’00” East, along the Westerly boundary line of said U.S. Highway No. 91, a distance of 316.12 feet to a point; thence North
62°00’00” West, a distance of 1173.30 to a point, said point being -the TRUE POINT OF BEGINNING; thence North 62°00’00” West a distance of 949.86 feet to a point; thence North 28°00’00” East, a distance of
25.00 feet to a point; thence North 62°00’00” West, a distance of 125.00 feet, plus or minus, to a point en -the Easterly boundary line of the U.P.R.R. 00. right of way; thence South 28°00’00” West along the said Easterly
boundary line of the U.P.R.R. 00. right of way a distance of 100.00 feet to a point; thence South 62°00’00” East, a distance of 125.00 feet to a point; thence North 28°00’00” East, a distance of 65.00 feet to a point;
thence South 62°00’00” East, a distance of 949.86 feet; thence North 28°00’00” East, a distance of 10.00 feet to a point, said point being the TRUE POINT OF BEGINNING. 
  
 By Partial Relinquishment of Right-of-Way Grant, the NEVADA POWER COMPANY, a
Nevada corporation (formerly known as SOUTHERN NEVADA POWER CO.) relinquish and reconvey unto the person, or persons legally entitled thereto a part of that certain right of way described as follows: 
  
 COMMENCING at the intersection of the westerly boundary line of U.S. Highway
No. 91, (100.00 feet wide), with the North line of the Southwest Quarter (SW 1/4) of the Southeast Quarter (SE 1/4) of said Section, 9; thence North 28°00’00” East, along the Westerly boundary line of said U.S. Highway
No. 91, a distance of 321.13 feet; thence North 62°00’00” West, 1163.30 feet to the POINT OF BEGINNING; thence North 28°00’00” East, 418.52 feet; thence South 28°00’00” West, 10.00 feet; thence South
62°00’00” East, 418.52 feet; thence North 28°00’00” East, 10.00 feet to the POINT OF BEGINNING, recorded May 20,1991 in Book 910520 as Document No. 01052 and re-recorded June 26, 1991 in Book 910626 as Document
No. 01006 of Official Records. 
  

 Page 6 

 SCHEDULE B 
 PART I - Continued 
  

	12.	A Lease with certain terms, covenants, conditions and provisions set forth therein dated March 29, 1956 between STARDUST HOTEL, INC., a Nevada corporation and BOARD OF
COMMISSIONERS OF CLARK COUNTY, NEVADA for a term of Ninety-Nine (99) years from March 29, 1956 recorded May 1, 1962 in Book 357, Doc/Inst. 288774 of Official Records. 

  

	13.	An easement for the purpose shown below and rights incidental thereto as set forth in a document granted to SOUTHERN NEVADA TELEPHONE DIVISION, CENTRAL TELEPHONE CO. for pole lines
and cables recorded September 19, 1963 in Book 478, Doc/Inst. No. 385185 of Official Records. 

  
 Affects: The following portion of said land: 
  
 COMMENCING at the point of intersection of the South line of the North Half (N 1/2) of the Southeast Quarter (SE 1/4) of the Southwest Quarter (SW 1/4) of
said Section 9 with the Westerly right-of-way line of U.S. Highway 91, said Highway 91 being 100.00 feet in width; thence North 28°00’00” East, a distance of 44.78 feet to the TRUE POINT OF BEGINNING; thence North
62°00’00” West, a distance of 10.00 feet to a point; thence 
  
 North 28° 00’00” East, a distance of 10.00 feet to a point; thence South 62°00’00” East, a distance of 10.00 feet to a point en the West line of Highway 91; thence South
28°00’00” West, a distance of 10.00 feet to the POINT OF BEGINNING. 
  

	14.	An easement for the purpose shown below and rights incidental thereto as set forth in a document granted to COUNTY OF CLARK for the purpose of perpetual avigation recorded
April 11, 1973 in Book 317, Doc/Inst. No. 276633 of Official Records. 

  

	15.	An easement for the purpose shown below and rights incidental thereto as set forth in a document granted to NEVADA POWER COMPANY for the purpose of power and communication lines
recorded June 4, 1976 in Book 627, Doc/Inst. No. 586929 of Official Records. 

  
 Affects: A strip of land 10.00 feet in width being 5.00 feet on each side of the following described centerlines: 
  
 COMMENCING at the Southwest (SW) corner of the Northwest Quarter (NW 1/4) of
the Southwest Quarter (SW 1/4) of said Section 9; thence South 88°35’58” East, 402.87 feet to a point in the centerline of Industrial Road; thence North 27° 59’14” East, 711.01 feet; thence South
62°00’46” East, 40.00 feet to the POINT OF BEGINNING; thence continuing South 62°00’46” East, 785.89 feet to the point of ending of Centerline No. 1. 
  
 CENTERLINE NO. 2: 
  
 COMMENCING at the Southwest (SW) corner of the Northwest Quarter (NW 1/4) of the Southwest Quarter (SW 1/4) of said Section 9; thence South
88°35’58” East, 402.87 feet to a point in the centerline of Industrial Road; thence North 27°59’14” East, 711.01 feet; thence South 62°00’46” East, 825.89 feet to the POINT OF BEGINNING; thence South 68°19’46” East, 217.00 feet to the point of ending of Centerline
No. 2. 
  
 ALSO: 
  
 We, Argent Corporation, a Delaware corporation, for one dollar and other
valuable consideration, do hereby grant and convey to NEVADA POWER COMPANY, its successors and assigns, forever, an easement with the right, privilege and authority to construct, erect, operate, and maintain an electrical substation upon, over,
under and across the parcel of land hereinafter described; together with the right of ingress and egress to said parcel. 
  
 COMMENCING at the Southwest (SW) corner of the Northwest Quarter (NW 1/4) of the Southwest Quarter (SW 1/4) of said Section 9; thence South
88°35’58” East, 402.87 feet to a point in the centerline of Industrial Road; thence North 27°59’14” East 711.01 feet; thence South 62°00’46” East, 825.89 feet; thence South 68°19’46” East
217.00 feet to the POINT OF BEGINNING; thence South 65°35’21” East 16.00 feet; thence South 24°24’39” West, 29.50 feet; thence North 65°35’21” West, 26.00 feet; thence North 

  

 Page 7 

 SCHEDULE B 
 PART I - Continued 
  

 
24°24’39”
East, 29.50 feet; thence South 65°35’21” East 10.00 feet to the point of beginning. 
  
 By Partial Relinquishment of Right-of-Way Grant the NEVADA POWER COMPANY, a Nevada corporation, relinquish and reconvey unto the person or persons legally
entitled thereto a portion of that certain right of way, a strip of land 10.00 feet in width, being 5.00 feet on each side of the following described centerline: 
  
 COMMENCING at the Southwest (SW) earner of the Northwest Quarter (NW 1/4) of the Southwest Quarter (SW 1/4) of said
Section 9; thence South 88°35’58” East, 402.87 feet to a point in the centerline of Industrial Road; thence North 27°59’14” East, 711.01 feet; thence South 62°00’46” East, 40.00 feet to the POINT OF
BEGINNING; thence continuing South 62°00’46” East, 752.57 feet to the point of ending, recorded May 20, 1991 in Book 910520 as Document No. 1054, Official Records. 
  

	16.	An easement for the purpose shown below and rights incidental thereto as set forth in a document granted to COUNTY OF CLARK for the purpose of perpetual avigation recorded
December 23, 1980 in Book 1332, Doc/Inst. No. 1291681 of Official Records. 

  

	17.	An easement for the purpose shown below and rights incidental thereto as set forth in a document granted to NEVADA POWER COMPANY AND CENTRAL TELEPHONE COMPANY for the purpose of
power and communication lines recorded May 20, 1982 in Book 1569, Doc/Inst. No. 1528108 of Official Records. 

  
 Reference is made to said document for full particulars. 
  

	18.	An easement for the purpose shown below and rights incidental thereto as set forth in a document granted to NEVADA POWER COMPANY AND CENTRAL TELEPHONE COMPANY for the purpose of
power and communication lines recorded May 20, 1982 in Book 1569, Doc/Inst. No. 1528109 of Official Records. 

  
 Reference is made to said document for full particulars. 
  

	19.	The terms, covenants and provisions of that certain “Agreement” recorded March 3, 1987 in Book 870303 as Document No. 00688, of Official Records, and the effect
and failure to comply with the same. 

  

	20.	An easement for the purpose shown below and rights incidental thereto as set forth in a document granted to COUNTY OF CLARK for the purpose of perpetual avigation recorded
June 19, 1989 in Bock 890619, Doc/Inst. No. 03601 of Official Records. 

  

	21.	An easement for the purpose shown below and rights incidental thereto as set forth in a document granted to COUNTY OF CLARK for the purpose of perpetual avigation recorded
July 10, 1989 in Book 890710, Doc/Inst. No. 00448 of Official Records. 

  

	22.	An easement for the purpose shown below and rights incidental thereto as set forth in a document granted to LAS VEGAS VALLEY WATER DISTRICT for the purpose of pipelines for
conducting water recorded August 22, 1989 in Book 890822, Doc/Inst. No. 00644 of Official Records. 

  
 Affects: Being a portion of the Southwest Quarter (SW 1/4) of Section 9, Township 21 South, Range 61 East, M.D.M., Clark County, Nevada. 

 
 COMMENCING at the Southwest (SW) corner of the Northwest Quarter (NW 1/4)
of the Southwest Quarter (SW 1/4) of said Section 9; thence South 88°36’19” East, along the South line thereof 447.61 feet to a point on the East right-of-way line of Industrial Road; thence North 28°00’00” East
along said East line 114.45 feet; thence South 62°00’00” East a distance of 10.00 feet to the TRUE
POINT OF BEGINNING. Thence South 62°00’00” East, continuing along said line 15.00 feet; thence North 28°00’00” West, 100.00 feet to the TRUE POINT OF BEGINNING. 
  

 Page 8 

 SCHEDULE B 
 PART I - Continued 
  

	23.	An easement for the purpose shown below and rights incidental thereto as set forth in a document granted to LAS VEGAS VALLEY WATER DISTRICT for the purpose of water pipelines and
facilities recorded August 22, 1989 in Book 890822, Doc/Inst. No. 00645 of Official Records. 

  
 Affects: Being a portion of the Southwest Quarter (SW 1/4) of Section 9, Township 21, South, Range 61 East, M.D.M., Clark County, Nevada. 

 
 COMMENCING at the Southwest (SW) corner of the Northwest Quarter (NW 1/4)
of the Southwest Quarter (SW 1/4) of said Section 9; thence South 88°36’19” East, along the South line thereof 447.61 feet to a point on the East right-of-way line of Industrial Read; thence North 28°00’00” East
along said East line 924.33 feet; thence South 62°00’00” East a distance of 10.00 feet to the TRUE POINT OF BEGINNING. Thence South 62°00’00” East, continuing along said line 15.00 feet; thence North
28°00’00” East, 10.00 feet; thence North 62°00’00” West 15.00 feet; thence South 28°00’00” West, 10.00 feet to the TRUE POINT OF BEGINNING. 
  

	24.	An easement for the purpose shown below and rights incidental thereto as set forth in a document granted to NEVADA POWER COMPANY for the purpose of power lines recorded
April 10, 1990 in Book 900410, Doc/Inst. No. 00700 of Official Records. 

  
 Affects: A strip of land 6.00 feet in width, being 3.00 feet on each side of the following described centerline: 
  
 COMMENCING at the most Westerly corner of the leased parcel per File 31 of
Surveys, Page 60, recorded September 7, 1977 as Document No. 744267 in Book 785, Official Records, Clark County, Nevada; thence South 62°00’00” East, along the Southwesterly line thereof. 212.81 feet to the POINT OF
BEGINNING; thence North 64°22’50” East, 15.78 feet to the point of ending, hereinafter referred to as Point “A”. 
  
 The sideline boundaries of said strips are to be lengthened or shortened so as to begin on the Southwesterly line of said leased parcel. 
  
 Also the following described parcel: 
  
 BEGINNING at said Point “A”; thence North 26°39’01”
East, 12.11 feet; thence South 62°40’09” East, 12.43 feet; thence South 26°39’01” West, 12.11 feet; thence North 62°40’09” West, 12.43 feet to the POINT OF BEGINNING. 
  

	25.	An easement far the purpose Shown below and rights incidental thereto as set forth in a document granted to LAS VEGAS VALLEY WATER DISTRICT for the purpose of pipelines for
conducting water recorded June 28, 1990 in Book 900628, Doc/Inst. No. 00930 of Official Records. 

  
 Affects: A portion of the South Half (S 1/2) of Section 9, Township 21 South, Range 61 East, M.D.M., City of Las Vegas, Clark County, Nevada
described as follows: 
  
 COMMENCING at the Southeast corner of
the Southwest Quarter (SW 1/4) of said Section 9, thence North 88°49’21” West along the South line thereof, 739.53 feet to a point on the Westerly right-of-way line of Las Vegas Boulevard South; thence North
28°00’00” East along said right-of-way line 1112.78 feet to the TRUE POINT OF BEGINNING; thence North 62°00’00” West, 20.00 feet; thence North 28°00’00” East 25.00 feet; thence South 62°00’00”
East, 20.00 feet; thence South 28°00’00” West, 25.00 feet to the TRUE POINT OF BEGINNING. 
  

	26.	An easement for the purpose shown below and rights incidental thereto as set forth in a document granted to LAS VEGAS VALLEY WATER DISTRICT for the purpose of pipelines for
conducting water recorded June 28, 1990 in Book 900628, Doc/Inst. No. 00936 of Official Records. 

  

 Page 9 

 SCHEDULE B 
 PART I - Continued 
  

 Affects: A portion of the South Half (S 1/2) of Section 9, Township 21 South, Range 61 East of
M.D.M., City of Las Vegas, Clark County, Nevada, described as follows: 
  
 COMMENCING at the Southeast corner of the Southwest Quarter (SW 1/4) of said Section 9, thence North 88°49’21” West along the South line thereof, 739.53 feet to a point on the Westerly right-of-way line of Las Vegas
Boulevard South; thence North 28°00’00” East along said right-of-way line 1684.03 feet to the TRUE POINT OF BEGINNING; thence North 62°00’00” West 20.00 feet; thence North 28°00’00” East, 15.00 feet; thence
South 62°00’00” East, 20.00 feet; thence South 28°00’00” West, 15.00 feet, to the TRUE POINT OF BEGINNING. 
  

	27.	Terms, covenants and provisions of that certain “Traffic Control Improvements Cost Participation Agreement” and the effect of any failure to comply with same between
MARE-BEAR, INC./dba STARDUST HOTEL recorded December 10, 1990 in Book 901210, Doc/Inst. No. 00475 of Official Records. 

  

	28.	Terms, covenants and provisions of that certain “Traffic Control Improvements Cost Participation Agreement” and the effect of any failure to comply with same between
MARE-BEAR, INC./dba STARDUST HOTEL recorded December 14, 1990 in Book 901214 Doc/Inst. No. 00659 of Official Records. 

  

	29.	An easement for the purpose shown below and rights Incidental thereto as set forth in a document granted to NEVADA POWER COMPANY for the purpose of power lines recorded
December 18, 1990 in Book 901218, Doc/Inst. No. 00902 of Official Records. 

  
 Affects: 
  
 Strips of land 12.00 feet in width, being 6.00 feet on each side of the following described centerlines: 
  
 CENTERLINE 1: 
  
 COMMENCING at the point of intersection of the South line of the North Half (N 1/2) of the Southeast Quarter (SE 1/4) of the
Southwest Quarter (SW 1/4) of said Section 9, with the West line of U.S. Highway No. 91 (original alignment - 80 feet wide); thence North 28°00’00” East, along said West line, 1044.79 feet; thence North
62°00’00” West, along the Northeasterly line of Grantor’s property, 1089.92 feet to the POINT OF BEGINNING; thence South 29°12’12” West, 49.06 feet to the point of ending, hereinafter referred to as Point
“A”. 
  
 The sideline boundaries of said strip are to
be lengthened or shortened so as to begin on the Northeasterly line of Grantor’s property. 
  
 CENTERLINE 2: 
  
 BEGINNING at Point “A”; thence North 64°59’06” West, 62.61 feet; thence South 64°29’09” West, 117.74 feet; thence
South 58°09’34” West, 191.89 feet; thence South 16°43’25” West, 39.38 feet; thence South 62°05’38” East, 587.19 feet; thence South 75°00’15” East, 14.89 feet; thence South
61°17’36” East, 62.04 feet; thence South 13°27’12” East, 41.83 feet; thence South 74°38’58” East, 15.12 feet; thence North 72°51’42” East, 6.50 feet to the point of ending hereinafter referred
to a Point “B”. 
  
 The sideline boundaries of said
strip are to be lengthened or shortened so as to intersect at all angle points. 
  
 The strip described above as Centerline 2 shall be for underground electrical facilities only. 
  
 ALSO, the following described parcel of land, which is an electrical equipment room located within building outlines; 
  
 BEGINNING at Point “B”; thence North 18°10’57” West,
6.00 feet; thence North 71°49’03” East, 10.00 feet; thence South 18°10’57” East, 12.00 feet; thence South 71°49’03” West, 10.00 feet; thence North 18°10’57” West, 6.00 feet to the point of
beginning. 
  

 Page 10 

 SCHEDULE B 
 PART I - Continued 
  

	30.	An easement for the purpose shown below and rights incidental thereto as set forth in a document granted to NEVADA POWER COMPANY for the purpose of power lines recorded
February 21, 1991 in Book 910221, Doc/Inst. No. 00840 of Official Records. 

  
 Strips of land 10.00 feet in width, being 5.00 feet en each side of the following described centerlines: 
  
 Affects: 
  
 CENTERLINE 1: 
  
 COMMENCING at the point of Intersection of the South line of the North Half (N 1/2) of the Southeast Quarter (SE 1/4) of the Southwest Quarter (SW 1/4) of
said Section 9, with the West line of U.S. Highway No. 91 (original alignment 80.00 feet wide); thence North 28°00’00” East, along said West line, 1044.79 feet; thence North 62°00’00” West, along the
Northeasterly line of Grantor’s property, 1089.92 feet; thence along the following described courses, which are on the centerline of existing Nevada Power Company Document No. 00902 in Book 901218, Official Records, Clark County: Thence
south 29°12’12” West, 49.06 feet; thence North 64°59’06” West, 62.61 feet; thence South 64°29’09” West, 117.74 feet; thence South 58°09’34” West, 191.89 feet; thence South
16°43’25” West, 39.38 feet to the POINT OF BEGINNING; thence South 16°26’04” West, 278.97 feet to a point hereinafter referred to as Point “A”; thence South 72°02’21” East, 101.20 feet to the point
of ending. The sideline boundaries of said strip are to be lengthened or shortened so as to intersect at the angle points. 
  
 CENTERLINE 2: 
  
 BEGINNING at Point “A”; thence South 89°39’41” West, 4.32 feet; thence North 62°38’01” West, 72.93 feet; thence
North 69°18’34” West, 22.35 feet; thence North 61°51’31” West, 125.02 feet; thence North 62°06’35” West, 78.04 feet; -thence North 65°32’48” West, 39.77 feet; thence North
73°22’53” West 27.51 to the point of ending, said point hereafter referred to as Point “B”. 
  
 The sideline boundaries of said strip are to be lengthened or shortened so as to intersect at the angle points. 
  
 A strip of land 12.00 feet in width, being 6.00 feet en each side of the
following described centerline: 
  
 CENTERLINE 3: 
  
 BEGINNING at Point “B”; thence North 71°18’44” West,
19.46 feet; thence North 81°52’38” West, 42.46 feet to a point hereinafter referred to as Point “C”; thence South 81°11’16” West, 16.44 feet to the point of ending, said point hereinafter referred to as Point
“D”. 
  
 The sideline boundaries of said strip are to
be lengthened or shortened so as to intersect at the angle points. 
  
 Strips of land 10.00 feet in with, being 5.00 feet on. each side of the following described centerlines: 
  
 CENTERLINE 4: 
  
 BEGINNING at Point “C”; thence North 14°32’01” West, 168.06 feet to the point of ending. 
  
 CENTERLINE 5: 
  
 BEGINNING at Point “D”; thence North 81°24’47” West, 36.25 feet; thence North
77°12’48” West, 28.80 feet; thence North 72°11’17” West, 24.43 feet; thence North 70°27’05” West, 38.34 feet; thence North 61°21’20” West, 63.40 feet; thence North 62°08’07” West,
52.28 feet to the point of ending on the East right of way line of Industrial Road. 
  

 Page 11 

 SCHEDULE B 
 PART I - Continued 
  

	31.	An easement for the purpose shown below and rights incidental thereto as set forth in a document granted to NEVADA POWER COMPANY for the purpose of power lines recorded
April 30, 1991 in Book 910430, Doc/Inst. No. 01049 of Official Records. 

  
 Affects: Strips of land 10.00 feet in width, being 5.00 feet on each side of the following described centerlines: 
  
 CENTERLINE 1: 
  
 COMMENCING at the Southwest (SW) corner of the North Half (N 1/2) of the Southeast Quarter (SE 1/4) of the Southwest Quarter
(SW 1/4) of said Section 9; thence North 00°38’36” West, 40.02 feet to a point en the North line of Stardust Road; thence continuing North     °38’36” West, 5.00 feet; thence South
88°42’33” East, 5.00 feet to the POINT OF BEGINNING, said point hereinafter referred to a Point “A”; thence continuing South 88°42’33” East, parallel with and 5.00 feet North of the North line of Stardust Road,
975.20 feet to a point on the West right of way line of Las Vegas Boulevard South, being the point of ending. 
  
 The sideline boundaries of said strip are to be lengthened or shortened so as to end on the West line of Las Vegas Boulevard South. 
  
 CENTERLINE 2: 
  
 BEGINNING at Point “A”; thence North 00°38’36” West, parallel with and 5.00 feet East of the West
line of Grantor’s property, 614.41 feet; thence North 88°35’58” West, parallel with and 5.00 feet North of the South line of Grantor’s property, 917.86 feet to a point on the East right of way line of Industrial Road, being
the point of ending. 
  
 The sideline boundaries of said strip
are to be lengthened or shortened so as to intersect at the angle point and end on the Fast right of way line of Industrial Road. 
  

	32.	An easement for the purpose shown below and rights incidental thereto as set forth in a document granted to STATE OF NEVADA for the purpose of Public highway recorded
September 20, 1991 in Book 910920, Doc/Inst. No. 00617 of Official Records. 

  
 Affects: A portion of said land described as follows: 
  
 COMMENCING at the Southeast corner of the Southwest Quarter (SW 1/4) of said Section 9; thence North 88°49’21” West along the South
line thereof, 739.53 feet to a point on the Westerly right of way line of Las Vegas Boulevard South; thence North 28°00’00” East along said right of way line 812.66 feet to a point, said point being the TRUE POINT OF BEGINNING; thence
North 09°33’54” East, a distance of 37.95 feet; thence North 28°00’00” East, a distance of 80.00 feet; thence North 39°18’36” East, a distance of 61.19 feet to a point on the Westerly right of way line of
Las Vegas Boulevard; thence South 28°00’00” West along said right of way line, a distance of 176.00 feet to a point, said point being the TRUE POINT OF BEGINNING. 
  

	33.	An easement for the purpose shown below and rights incidental thereto as set forth in a document granted to LAS VEGAS WATER DISTRICT for the purpose of pipelines for conducting of
water recorded March 30, 1992 in Book 920330, Doc/Inst. No. 01037 of Official Records. 

  
 Affects: A portion of said land described as follows: 
  
 COMMENCING at the Southwest (SW) corner of the Northwest Quarter (NW 1/4) of the Southwest Quarter (SW 1/4) of said Section 9, thence South
88°36’19” East, along the South line thereof 447.61 feet to a point on the East right of way line of Industrial Road (said right of way width being 90 feet); thence North 28°00’00” East along said East line 919.36 feet;
thence South 62°00’00” East a distance of 10.00 feet to the TRUE POINT OF BEGINNING. 
  

 Page 12 

 SCHEDULE B 
 PART I - Continued 
  

 
Thence South 62°00’00” East, continuing along said line 20 feet; thence North 28°00’00” East, 20 feet; thence North
62°00’00” West, 20 feet; thence South 28°00’00” West, 20 feet to the TRUE POINT OF BEGINNING. 
  

	34.	An easement for the purpose shown below and rights incidental thereto as set forth in a document and as shown on Revised Survey prepared by French Consulting Services, Inc. and
dated May 28,1996 for the purpose of utility recorded July 13, 1962 in Book 373 Doc/Inst. 301171 Official Records. 

  
 Affects: The North 10’ feet of the following portion of said land: 
  
 COMMENCING at the intersection of the South line of the North Half (N 1/2) of the Southeast Quarter (SE 1/4) of the
Southwest Quarter (SW 1/4) of Section 9, Township 21 South Range 61 East, and the West line of U.S. Highway No. 91; thence North 28°00’ East a distance of 450.82 feet to a point, said point being THE TRUE POINT OF BEGINNING;
thence North 28°00’ East a distance of 600 feet; thence North 62°00’ West a distance of 2112.40 feet; thence South 28°12” West a distance of 75 feet; thence North 62°00” West a distance of 125 feet to a point on
the East right of way line of the Union Pacific Railroad; thence South 28°12” West a distance of 525 feet; thence South 62°00’ East a distance of 2239.30 feet to the POINT OF BEGINNING. 
  

	35.	The effect of any failure of the lessee to comply with the terms, covenants, conditions and provisions of the leases described or referred to in Schedule A.

  

	36.	Any rights, interests, or claims which may exist or arise by reason of the following facts shown en a survey plat entitled “Stardust Hotel and Casino”, dated May 28,
1996 prepared by French Consulting Services, Inc.: 

  
 The fact that a blockwall is located along the Northerly boundary and partially on said land and partially on adjoining land. 
  

	37.	Rights of tenants under the following unrecorded written leases, which rights are as tenants only and do not include any options to purchase all or any portion of the insured land:

  
 Annee of Paris, Stardust Barber Salon, Clark
County Fire Department, Country Jewelers, Ethel M, Marshall Rousso Woman’s Shop, Marshall Rousso, Gift/Newsstand, Maui Magnets, Nextel of California, Inc., Sid Stern Liquor Store, Stardust Playball, Sushi King, Suzette Inc Cigarettes, Welcome
to Las Vegas (part of Marshall Rousso), World Enterprises (d.b.a. Able Amusement), Consolidated Realty (Time Share), Pay Ball Sports Memorabilia, Cicero’s Men’s Wear, Pyramid Vending, Impression Photography (Showroom), Enterprise
Rent-A-Car, Candy Cable Car (Candy Vendor), Goodfellows Shoe Shine Stand, Coca Cola Vending, Las Vegas # 1 Sunglasses, Bono’s (Deli), Skytop Vending, Swenson’s (Ice Cream), Allstate 
  

	38.	The effect of a Record of Survey prepared by Randall K. French recorded June 12, 1997 in File 89 of Surveys, page 61, of Official Records. 

  

	39.	An easement in favor of the Las Vegas Valley Water District for water lines and incidental purposes, recorded September 9, 1999, in Book 990901, Doc/Inst. No. 00659 of
Official Records. 

  

	40.	An easement in favor of the Las Vegas Valley Water District for water lines and incidental purposes, recorded September 9, 1999, in Book 990901, Doc/Inst. No. 00661 of
Official Records. 

  

	41.	Easements and dedications as indicated or delineated on the plat of said subdivision in File 100 of Parcel Maps, page 35 of Official Records. 

  

 Page 13 

 SCHEDULE B 
 PART I - Continued 
  

	42.	An unrecorded lease with certain terms, covenants, conditions and provisions set forth therein. 

  

			
	 Lessor:
	  	Down Under Grill and Pub., Inc.
	 Lessee:
	  	Subway Real Estate Corp., a corporation
	 Disclosed by:
	  	Memorandum of Lease
	 Recorded:
	  	March 3, 2003
	 Book 20030303 Doc/Inst. No. 03440 of Official Records

  

	43.	An easement for the purpose shown below and rights incidental thereto as set forth in a document 

  

			
	 Granted to:
	  	Las Vegas Valley Water District
	 Purpose:
	  	water lines
	 Recorded:
	  	June 12, 2003
	 Book 20030612 Doc/Inst. No. 02520 of Official Records

  

	44.	The terms, covenants and provisions of that certain Right of Entry executed by and between Mare-Bear, Inc., a Nevada corporation and Nevada Power Company recorded October 28,
2003 in Book 20031028 Doc/Inst. No. 02824 of Official Records, and the effect of any failure to comply with same. 

  

	45.	ANY FAILURE to comply with the terms, covenants and conditions of the lease, leases, or assignments thereof, referred to in Schedule A. 

  
 END OF SCHEDULE B – PART I 
  

 Page 14 

 Exhibit G 
  

Predevelopment Budget 

 MORGANS HOTELS 
 LAS VEGAS BUDGET 
 PRE-DEVELOPMENT 
  
 Budget Summary 
  

				
	 	  	Budget

	 Land & Improvements
	  	 	 
	 Offsite/Gov’t Improvements
	  	$	—  
	 Land
	  	$	—  
	 	  	
	

	 Total Land & Improvements
	  	$	—  
	 Construction Hard Costs
	  	 	 
	 Low Rise Core & Shell & Fit Out
	  	$	—  
	 High Rise Core & Shell & Fit Out
	  	$	—  
	 Valet Parking Garage
	  	$	—  
	 Employee Parking Garage
	  	$	—  
	 Site Work
	  	$	—  
	 General Conditions
	  	$	—  
	 Construction Managers Fee
	  	$	—  
	 	  	
	

	 Total Construction Hard Costs
	  	$	—  
	 Soft Costs
	  	 	 
	 Professional Fees & Reimbursables
	  	$	29,547,500
	 Property Taxes
	  	$	—  
	 FF&E
	  	$	1,750,000
	 Financing Costs
	  	$	1,000,000
	 Systems
	  	$	—  
	 Working Capital
	  	$	—  
	 Pre-Opening Expenses
	  	$	—  
	 	  	
	

	 Total Soft Costs
	  	$	32,297,500
	 Unallocated Contingency (10%)
	  	$	3,229,750
	 	  	
	

	 Pre-Development Grand Total
 (Jan. 2006 through July 2007)
	  	$	35,527,250
	 	  	
	

  

 MORGANS HOTELS 
 LAS VEGAS BUDGET 
 December 19, 2005 
 1 

 MORGANS HOTELS 
 LAS VEGAS BUDGET 
 PRE-DEVELOPMENT 
  
 Soft Costs-Professional Fees and Reimbursables 
  

						
	 	  	Budget

	  	 Assumptions

	 Audit Fees
	  	$	—  	  	 
	 Design Architect Fee
	  	$	3,000,000	  	$4,000,000 x 75% complete
	 Environmental Consultant
	  	$	—  	  	 
	 Estimating + Pre-Con Fees
	  	$	900,000	  	$50,000 per month
	 Executive Architect Fees
	  	$	8,775,000	  	$13,500,000 x 65% complete
	 Geotechnical
	  	$	—  	  	 
	 Construction Insurance
	  	$	—  	  	 
	 Landscape Design
	  	$	340,000	  	Pre-development estimate
	 Construction Legal
	  	$	500,000	  	Pre-development estimate
	 Misc. Consultants
	  	$	900,000	  	Misc. Development Consultants
	 Retail Design Fees
	  	$	—  	  	 
	 Principal Interior Designer Fees
	  	$	3,000,000	  	$4,000,000 x 75% complete
	 Rooms Interior Designer Fees
	  	$	2,250,000	  	$3,000,000 x 75% complete
	 Spa Interior Designer Fees
	  	$	400,000	  	Pre-Development estimate
	 Restaurant Consultant Fees
	  	$	400,000	  	Pre-Development estimate
	 Entertainment Consultant Fees
	  	$	—  	  	 
	 Engineering - MEPS
	  	$	3,900,000	  	$6,000,000 x 65% complete
	 Employee Parking Garage Design Fees
	  	$	—  	  	 
	 Structural Designer Fees
	  	$	1,300,000	  	$2,000,000 x 65% complete
	 Kitchen Design Fees
	  	$	357,500	  	$550,000 x 65% complete
	 Lighting Designer Fees
	  	$	455,000	  	$700,000 x 65% complete
	 Testing & Inspection
	  	$	—  	  	 
	 Project Management Fees
	  	$	1,440,000	  	$80,000 per month estimate through pre-con
	 Permits & Fees
	  	$	1,630,000	  	$3.26 per $1000 of Hard Costs
	 	  	
	
	  	 
	 Total Fees & Reimbursables
	  	$	29,547,500	  	 

  

 MORGANS HOTELS 
 LAS VEGAS BUDGET 
 December 19, 2005 
 4 

 MORGANS HOTELS 
 LAS VEGAS BUDGET 
 PRE-DEVELOPMENT 
  
 Furniture Fixtures & Equipment 
  

						
	 	  	Budget

	  	 Assumptions

	 Hotel
	  	 	 	  	 
	 Corridors
	  	$	—  	  	 
	 Model Rooms
	  	$	1,750,000	  	5 rooms x $350,000 per room (Includes Hard Costs)
	 Lobby
	  	$	—  	  	 
	 Suites
	  	$	—  	  	 
	 Warehouse & Installation
	  	$	—  	  	 
	 Freight
	  	$	—  	  	 
	 Tax
	  	$	—  	  	 
	 	  	
	
	  	 
	 Subtotal Hotel
	  	$	1,750,000	  	 
	 Owner Operated Food Outlets
	  	 	 	  	 
	 Restaurant #1
	  	$	—  	  	 
	 Restaurant #2
	  	$	—  	  	 
	 Room Service
	  	$	—  	  	 
	 	  	
	
	  	 
	 Subtotal Food Outlets
	  	$	—  	  	 
	 Beverage
	  	 	 	  	 
	 Bar 1
	  	$	—  	  	 
	 Bar 2
	  	$	—  	  	 
	 	  	
	
	  	 
	 Subtotal Beverage
	  	$	—  	  	 
	 Entertainment
	  	 	 	  	 
	 	  	 	 	  	 
	 	  	
	
	  	 
	 Subtotal Entertainment
	  	$	—  	  	 
	 Banquet/Meeting Facilities
	  	 	 	  	 
	 Business Office
	  	$	—  	  	 
	 Event Center
	  	$	—  	  	 
	 	  	
	
	  	 
	 Subtotal Banquets
	  	$	—  	  	 
	 Back of House
	  	 	 	  	 
	 Employee Dining
	  	$	—  	  	 
	 General Facilities
	  	$	—  	  	 
	 	  	
	
	  	 
	 Subtotal Back of House
	  	$	—  	  	 
	 Spa
	  	 	 	  	 
	 Fitness Room
	  	$	—  	  	 
	 Lobby/Reception
	  	$	—  	  	 
	 Locker/Showers
	  	$	—  	  	 
	 Offices
	  	$	—  	  	 
	 Restrooms
	  	$	—  	  	 
	 Salon Treatment
	  	$	—  	  	 
	 Swimming Pool Area
	  	$	—  	  	 
	 	  	
	
	  	 
	 Subtotal Spa
	  	$	—  	  	 
	 Operating FF&E and Supplies
	  	 	 	  	 
	 Banquet/Meeting Facility
	  	$	—  	  	 
	 Food Beverage
	  	$	—  	  	 
	 General Administrative
	  	$	—  	  	 
	 Hotel
	  	$	—  	  	 
	 Marketing
	  	$	—  	  	 
	 Property Operations
	  	$	—  	  	 
	 Spa
	  	$	—  	  	 

  

 MORGANS HOTELS 
 LAS VEGAS BUDGET 
 December 19, 2005 
 6 

 MORGANS HOTELS 
 LAS VEGAS BUDGET 
 PRE-DEVELOPMENT 
  
 Furniture Fixtures & Equipment 
  

						
	 	  	Budget

	  	Assumptions

	 Subtotal OS&E
	  	$	—  	  	 
	 	  	
	
	  	 
	 Procurement Agents
	  	 	 	  	 
	 Tower
	  	$	—  	  	 
	 Lowrise
	  	$	—  	  	 
	 	  	
	
	  	 
	 Subtotal Procurement
	  	$	—  	  	 
	 Other Areas
	  	 	 	  	 
	 Valet Lounge
	  	$	—  	  	 
	 Elevators & Parking Garage
	  	$	—  	  	 
	 Retail Outlets
	  	$	—  	  	 
	 Restrooms
	  	$	—  	  	 
	 	  	
	
	  	 
	 Subtotal Other
	  	$	—  	  	 
	 Tower FF&E installation
	  	$	—  	  	 
	 Lowrise FF&E Installation
	  	$	—  	  	 
	 Misc Installation
	  	$	—  	  	 
	 	  	
	
	  	 
	 Subtotal Installation
	  	$	—  	  	 
	 Total FF&E
	  	$	1,750,000	  	 

  

 MORGANS HOTELS 
 LAS VEGAS BUDGET 
 December 19, 2005 
 7 

 MORGANS HOTELS 
 LAS VEGAS BUDGET 
 PRE-DEVELOPMENT  
  
 Financing 
  

				
	 	  	Budget

	 Presentation Materials
	  	$	—  
	 Legal Expenses
	  	$	1,000,000
	 	  	
	

	 Subtotal
	  	$	1,000,000
	 Excess Liability Insurance
	  	$	—  
	 	  	
	

	 Subtotal Insurance
	  	$	—  
	 Interest Income
	  	$	—  
	 	  	
	

	 Subtotal Interest Income
	  	$	—  
	 Swap Expense
	  	$	—  
	 Interest Expense
	  	$	—  
	 Notes Payable
	  	$	—  
	 	  	
	

	 Subtotal Interest Expense
	  	$	—  
	 Commitment Fees
	  	$	—  
	 One Time Fees
	  	$	—  
	 Collar Purchase
	  	$	—  
	 Administration Fees
	  	$	—  
	 Bank Fees
	  	$	—  
	 Strategic Analysis
	  	$	—  
	 Credit Rating Fees
	  	$	—  
	 	  	
	

	 Subtotal Loan Fees
	  	$	—  
	 Total
	  	$	1,000,000

  

 MORGANS HOTELS 
 LAS VEGAS BUDGET 
 December 19, 2005 
 8 

 Exhibit H 
  

Preliminary Site Plan 

 

 

 Exhibit I 
  

REA Terms and Conditions 

 ECHELON PLACE 
 RECIPROCAL EASEMENT AGREEMENT 
 KEY CONCEPTS 
  
 CONSTRUCTION OF ECHELON PLACE 
  
 The joint venture between MHG and BYD (the “Venture”) shall plan, design, develop and construct the JV Hotels with
the overall goal of opening to the public in the first quarter of 2010 contemporaneously with completion of the other projects outlined in the Master Plan and in accordance with the development schedule agreed to by the parties. 
  
 Boyd Gaming Corporation (the “Developer”) shall construct a casino,
convention center, theater, retail and dining area, parking facilities and such other facilities and improvements as are outlined in the Master Plan and in accordance with the development schedule agreed to by the parties. Notwithstanding the
foregoing, in the event the Developer elects not to proceed with the construction of any portion of Echelon Place, nothing in this Exhibit shall be deemed to bind the Developer to complete such portion of Echelon Place, nor shall such election by
the Developer give rise to any cause of action against the Developer by MHG. 
  
 Prior to the completion of construction of Echelon Place, the Developer shall provide certain services and amenities to Echelon Place, and the costs associated with these services shall be generally as outlined below:

  
 Infrastructure. The development of
Echelon Place shall include certain improvements to Stardust Road (such as a pedestrian sidewalk, landscaping and irrigation, signage, and/or signalization) and the construction of an internal road that connects Industrial Road to Stardust Road.
Each component of Echelon Place (“Project Component”) shall bear a reasonable, proportionate share of the total costs associated with site infrastructure. Subject to local fire and building regulations, the parties will endeavor to provide
emergency access to the Echelon Place development other than through the Echelon Boulevard entrance. Except where limited by code or regulatory restrictions, there will be 24-hour unrestricted access (a) between the JV Hotels and the public
areas of the Echelon Resort element of Echelon Place, specifically including the casino, and (b) to the JV Hotels through the internal Echelon Place road. 
  

Utilities. Echelon Place will include a central plant that will distribute emergency electrical power, hot water for heating
purposes, and chilled water for cooling purposes to the entire Echelon Place. Each Project Component shall bear a portion of the total costs incurred in the construction of the central plant and any other capital costs associated with establishing
utility service (e.g., a new electrical substation providing power to the site not fully funded by the utility company), on the basis of a ratio of projected usage by each such Project Component to projected total usage by the entire Echelon Place.
Emergency electrical power, hot water for heating purposes, and chilled water for cooling purposes will be provided to the Project Components by the Developer at actual cost. 

 Parking. The Developer shall construct an employee parking facility at Echelon
Place, which facility shall be available for use by the employees of each Project Component of Echelon Place. Each Project Component shall contribute a portion of the total costs incurred in the construction of the employee parking facility, which
contribution shall equal the product of the number of spaces allocated to each Project Component under the REA multiplied by the average total cost per space of the total employee parking facility, including all construction and development costs.
Each Project Component will be charged for its pro rata share of maintenance and repair costs of the employee parking facility based on the number of parking spaces allocated to such Project Component divided by the total number of such parking
spaces. The method of allocation of employee parking spaces among the Project Components shall be set forth in the REA. 
  
 The Venture will develop and provide parking facilities for the JV Hotels’ guests at its own cost within the site boundaries of the
JV Hotels’ premises. 
  
 Miscellaneous. The connectivity and proximity between the JV Hotels and the other Project Components of the Echelon Place development may precipitate additional capital costs to Project Components of the Echelon Place development to
accommodate the fire protection, egress, or other requirements of the JV Hotels. These costs will be reasonably determined and approved by MHG and BYD and will be borne directly by the Venture. 
  
 Association. Upon completion of the construction and
development of Echelon Place, the Developer may establish an Echelon Place Master Plan Association comprised of representatives from each Project Component within Echelon Place. If established, said association shall administer the budgeting,
operations, maintenance, marketing, and capital expenditures related to the common areas of the Echelon Place development, as well as any modifications to the Master Plan or new capital improvements. Any changes in the Master Plan or changes to
services to be provided by the Developer, and any design, access, operational or management matters relating to Echelon Place that are reasonably likely to have an adverse impact on the JV Hotels will be subject to the prior approval of the Venture.

  
 In addition to the foregoing matters, the
topics to be addressed in the REA will include (without limitation) the following: 
  
 EASEMENTS 
  
 Easements for Use of Common Areas (Other than Common Utility Facilities and Access Roads) 
 Easements for Access Roads 
 Easements for
Common Utility Facilities 
 Construction Easements 
 No Dedication of Easement and Benefit to Permittees 
 Right to Grant Private Easements and Easements to
Utility Companies 
  
 ON-SITE AND OFF-SITE
IMPROVEMENT WORK PLANS – CONSTRUCTION 
  
 Description of
On-Site and Off-Site Improvement Work 

 General Responsibility of Developer 
 Development, Establishment and Approval of On-Site and Off-Site Improvement Plans 
 Construction of On-Site and Off-Site Improvement Work 
 Schedule of On-Site and Off-Site Improvement Work 
 Utility Connections 
  
 PLANS AND SPECIFICATIONS 
  
 General Design Data 
 Final Design Plans 
 Project to be
Architecturally Harmonious 
  
 GENERAL
CONSTRUCTION REQUIREMENTS 
  
 “Construction” and
“Commencement of Construction” Defined 
 Performance of Construction 
 Safety Measures 
 Construction; Storage and
Time Schedule 
 Building Schedule 
 License for Subsequent Construction and Maintenance 
 Evidence of Compliance with Construction Requirements 
 Liens 
 Location and Height of Buildings

  
 CONSTRUCTION BY DEVELOPER 
  
 Developer’s Construction Duty 
 Proof of Developer’s Financing 
  
 ALTERATIONS AND ADDITIONS TO IMPROVEMENTS 
  
 Alterations 
 Additional Floor Area

  
 MAINTENANCE, REPAIR AND RESTORATION OF
BUILDINGS AND IMPROVEMENTS: GENERAL 
  
 Maintenance of Buildings
and Improvements on Each Parcel 
 Damage or Destruction of Developer Facilities 
 Damage or Destruction to the Building on another Parcel 
 Duty to Complete Rebuilding 
 Clearing Debris from Razed Improvements 
 Damage to or Destruction of Common Area 
  
 MAINTENANCE, REPAIR AND RESTORATION – COMMON AREA 
  
 Maintenance of Common Area (Add any exclusions) 
 Operation and Maintenance of (Add specific areas) 

 Illumination of Common Area 
 Right of Each Party to Maintain Own Parcel 
 Failure of Performance 
  
 PARKING REQUIREMENTS 
  
 Required Parking 
 Charges for Parking; Employee Parking Areas 
 Use of Parking Areas 
 Changes and Additions to Parking Area 
  
 OPERATING COVENANTS OF DEVELOPER 
  
 OPERATING COVENANTS 
  
 Operating Covenant 
 Termination of Operating Covenant by another Party 
 No Regulations of Manner of Operation 
 Exceptions to Operating Covenant 
  
 GENERAL COVENANTS – PROJECT APPEARANCE (INCLUDING SIGNAGE) 
  
 AMENDMENTS TO SITE PLAN AND MASTER PLAN 
  
 TRANSFER OR CONVEYANCE OF PARCELS (INCLUDING RESTRICTIONS ON TRANSFERS OF RESERVE PARCEL TO COMPETITORS OF MHG AS PROVIDED IN JV OPERATING AGREEMENT) 
  
 INSURANCE 
  
 CONDEMNATION 
  
 REAL ESTATE TAXES 
  
 EXCUSES FOR NON-PERFORMANCE 
  
 DEFAULTS AND
REMEDIES 
  
 NOTICES AND APPROVALS 
  
 AMENDMENT 

 TERM OF AGREEMENT 
  
 MISCELLANEOUS 
  
 REA for Exclusive Benefit of Parties 
 Default
Shall Not Permit Termination of REA 
 Merchants’ Association or Promotion Fund 
 Rules and Regulations 
  
 EXHIBITS 
  
 Legal Descriptions 
 Site Plan 
 Survey 
 Rules, Regulations and Maintenance
Standards 
 Sign Criteria 

 Exhibit J 
  

Dilution Formula Illustration 

 EXHIBIT J 
  

Dilution Example 
  
 The following hypothetical example illustrates the application of Section 5.05.  
  
 Assume, for illustration purposes, only the following: 
  
 1. Initial Capital Contribution funded by each Member equals $97.5 million. 
  
 2. Capital Call is issued requesting additional Capital Contributions of $20 million in the aggregate ($10 million by each Member).

  
 3. One Member timely funds its requested Capital Contribution and the other
Member fails to timely fund any portion of the requested Capital Contribution (a “Failed Contribution”). The funding Member (the “Contributing Member”) elects to fund the Failed Contribution on behalf of the non funding Member
(the “Non-Contributing Member”). The amount funded on behalf of the Non-Contributing Member is treated as a Priority Loan (principal amount of $10 million with interest accruing at 15% per annum, compounded monthly) owed by the
Non-Contributing Member to Contributing Member. 
  
 4. The Non-Contributing Member
fails to repay any portion of Priority Loan within 180 days of the making of the loan. 
  
 5. The Contributing Member issues a Conversion Notice on the 181st following the date of the making of the
Priority Loan. 
  
 6. The Non-Contributing Member fails to repay any portion of
the Priority Loan (or any accrued interest thereon) within 10 days after the delivery of the Conversion Notice. 
  
 7. The Company has not made any distributions since the making of the Priority Loan. 
  
 Based on the foregoing hypothetical facts, the Percentage Interests of the Members would be adjusted as follows: 
  
 Percentage Interest of Contributing Member is increased, and the Percentage
Interest of the Non-Contribution Member is decreased, by the percentage equivalent of the following fraction: 
  
 The numerator equals 150% of the sum of (i) unpaid principal of $10 million and (ii) accrued and unpaid interest of $818,274. The foregoing
results in a numerator of $16,227,411. 
  
 The denominator equals
the sum of (i) $195 Million (initial Capital Contributions) and (ii) $20 million (additional Capital Contributions) or a denominator equal to $215 million 
  
 The percentage increase by the Contributing Member is equal to the percentage equivalent of the quotient obtained by dividing $16,227,411 by
$215 million or 7.55%. 

 As a result of the foregoing calculations, the Percentage Interest of the Contributing Member would increase to 57.55
percent and the Percentage Interest of the Non-Contributing Member would decrease to 42.45 percent. 

 Exhibit K 
  

Morgans Cost Overrun Guaranty 

 COST OVERRUN PAYMENT GUARANTY 
  
 THIS COST OVERRUN PAYMENT GUARANTY (“Guaranty”), is made as of
                            , by
                                        
                                        
                             , a
                                        
(“Guarantor”), to and in favor of
                                        
    
                                         ,
a                              (“Boyd”). 
  
 WITNESSETH: 
  
 WHEREAS, as of December          , 2005, Morgans/LV Investment LLC
                                        
                 (“Morgans”) and Boyd, have entered into that certain Limited Liability Company Agreement (the “Agreement”), pursuant to which
Morgans shall pay any Development Costs giving rise to a Cost Overrun; and 
  
 WHEREAS, Guarantor has a financial interest in Morgans, and it will therefore be to the indirect financial interest and benefit of Guarantor to guaranty payment of the obligations of Morgans pursuant to the Agreement.

  
 NOW, THEREFORE, for good and valuable considerations as set
forth above, the sufficiency of which is hereby acknowledged by Guarantor, Guarantor does hereby agree with Boyd as follows: 
  
 Guarantor does hereby irrevocably and unconditionally guarantee to Boyd payment, when due (whether by acceleration or otherwise), of any sums payable by
Morgans to Boyd pursuant to the Agreement for any Development Costs giving rise to a Cost Overrun (the “Guaranteed Obligations”). 
  
 Boyd may, at any time and from time to time, without the consent of, or notice to, Guarantor, without incurring responsibility to Guarantor, and without
impairing or releasing the obligations of Guarantor hereunder: (a) amend or alter, with the written consent of Morgans, any of the terms and conditions of the Agreement, and the guarantee herein made shall apply to the Guaranteed Obligations as
so changed, extended, renewed, amended or altered; (b) exercise or refrain from exercising any rights against Morgans or others (including Guarantor); or (c) settle or compromise any of the Guaranteed Obligations, any security therefor, or
any liability (including any of those hereunder) incurred, directly or indirectly, in respect thereof or hereof. 
  
 This Guaranty is a present, absolute and continuing one, in addition to and independent of all obligations to which it applies or may apply under the
terms hereof, and all such obligations shall be conclusively presumed to have been created in reliance hereon. 
  
 Guarantor hereby absolutely and unconditionally guarantees the prompt satisfaction and discharge of any and all Guaranteed Obligations, without defense,
offset, counterclaim or right of subrogation, each of which is hereby waived. This Guaranty is and shall be construed as a continuing, absolute and unconditional guaranty of payment and not as a guaranty of collection. It is expressly understood and
agreed that this is a continuing guaranty and that the obligations of Guarantor hereunder are and shall be absolute under any and all circumstances, without regard to the validity, regularity or enforceability of the Agreement, a true copy of each
of which documents Guarantor hereby acknowledges having received and reviewed. 
  
 The liability of Guarantor under this Guaranty shall be primary, direct and immediate and not conditional or contingent upon the pursuit of any remedy against Morgans or any other entity. No action or inaction of
Guarantor, Boyd, Morgans, or any other Person, and no change of law shall release or diminish Guarantor’s obligations, liabilities, or duties hereunder. If any payment to Boyd by Guarantor 

 
or Morgans is held to constitute a preference or a voidable transfer under applicable law, or if for any other reason Boyd is required to remit such payment
to Guarantor, Morgans, or any other Person, such payment to Boyd shall not constitute a release of Guarantor from liability hereunder, and Guarantor agrees to pay such amount to Boyd upon demand. 
  
 Guarantor and Boyd agree that payment of any of the Guaranteed Obligations
which toll any statute of limitations applicable to the Guaranteed Obligations or Agreement shall also toll the statute of limitations applicable to Guarantor’s and Boyd’s obligations under this Guaranty. 
  
 Guarantor represents and warrants to Boyd as follows: 
  

	 	(a)	Guarantor has the capacity to perform its obligations hereunder. 

  

	 	(b)	There are no actions, suits or proceedings pending, or, to the knowledge of Guarantor, threatened, against or affecting Guarantor, which, if adversely determined, would either
individually or in the aggregate, have a material adverse affect on (i) the ability of Guarantor to pay and perform the Obligations, or (ii) the validity or enforceability of the Agreement. 

  

	 	(c)	No consent, approval, authorization or order by or with any governmental authority or any other Person is required pursuant to any Legal Requirement in connection with the
execution, delivery and carrying out of the terms of this Guaranty by Guarantor. 

  

	 	(d)	This Guaranty constitutes a valid and binding agreement of Guarantor and is enforceable against Guarantor in accordance with the terms of this Guaranty, except as the enforceability
thereof may be limited by (i) bankruptcy, insolvency, reorganization, or other similar laws affecting the enforcement of creditors’ rights generally, and (ii) general equitable principles (whether considered in a proceeding in law or
in equity). 

  

	 	(e)	As of the date hereof, the execution, delivery, and performance of this Guaranty does not and will not (i) result in a default, breach or violation of the certificate or
articles of incorporation or bylaws of Guarantor or any mortgage, deed of trust, indenture, note, bond, license, lease, covenant or other instrument, agreement or obligation to which Guarantor is a party or by which any of their properties or assets
are bound or affected, or (ii) constitute an event which would permit any person or entity to terminate rights or accelerate the performance or maturity of any indebtedness or obligation of Guarantor, or (iii) constitute an event which
would require any consent of a third party or under any agreement to which Guarantor is bound or (iv) contravene any Legal Requirement. 

  
 In the event of any default by Morgans with respect to any Guaranteed Obligations that is not cured within any applicable cure period as set forth in the
Agreement, Guarantor agrees to pay, upon five (5) business days written notice from Boyd to Guarantor, any and all unpaid Guaranteed Obligations. 
  
 Guarantor hereby waives: (a) notice of acceptance of this Guaranty and of creation of the Guaranteed Obligations, (b) presentment and demand for
payment of the Guaranteed Obligations, (c) protest, notice of protest, and notice of dishonor or default to Guarantor or to any other party with respect 

  

 - 2 - 

 
to any of the Guaranteed Obligations except as expressly required under any document or instrument evidencing or securing the Guaranteed Obligations,
(d) all other notices to which Guarantor might otherwise be entitled except as expressly required under any document or instrument evidencing or securing the Guaranteed Obligations, and (e) diligence in collection and any and all
formalities which might otherwise be legally required to charge Guarantor with liability. 
  
 Notwithstanding anything in the Agreement or this Guaranty to the contrary, Guarantor’s obligations hereunder shall terminate upon the date that all Cost Overruns have been paid in full. 
  
 No amendment of any provision of this Guaranty shall be effective unless it
is in writing and signed by Guarantor and Boyd, and no waiver of any provision of this Guaranty, and no consent to any departure by Guarantor therefrom, shall be effective unless it is in writing and signed by Boyd. 
  
 This Guaranty is a continuing guarantee as provided in this Guaranty and
shall (a) be binding upon Guarantor and Boyd and their successors and permitted assigns under the Agreement; (b) inure to the benefit of and be enforceable by Boyd and its successors and assigns permitted under the Agreement; and
(c) remain in full force and effect until, and shall expire only upon, the termination of the Agreement and the satisfaction of all Guaranteed Obligations with respect to such termination. Guarantor may not assign its rights or delegate under
this Guaranty its duties without the written consent of Boyd. 
  
 No failure to exercise, and no delay in exercising any right, power or remedy hereunder or under the Agreement shall impair any right, power or remedy which Boyd may have, nor shall any such delay be construed to be a waiver of any of such
rights, powers or remedies, or an acquiescence in any breach or default under this Guaranty or the Agreement, nor shall any waiver of any breach or default of Guarantor hereunder or Morgans under the Agreement be deemed a waiver of any default or
breach subsequently occurring. The rights and remedies herein specified are cumulative and not exclusive of any rights or remedies which the Agreement, shall be cumulative and concurrent, and may be pursued singularly, successively or together, at
the sole discretion of Boyd, and may be exercised as often as occasion therefor shall arise. No act of omission or commission of Boyd, including specifically any failure to exercise any right, remedy or recourse, shall be deemed to be a waiver or
release of the same, and any waiver or release with reference to any one event shall not be construed as continuing or as a bar to, or as a waiver or release of, any subsequent right, remedy or recourse as to a subsequent event. 
  

 - 3 - 

 Any notices or other communication to be given hereunder shall be given in writing, sent by
(a) personal delivery, (b) internationally recognized expedited delivery service with proof of delivery, (c) registered or certified United States mail, postage prepaid and return receipt requested, or (d) facsimile, addressed to
the appropriate party as follows: 
  

			
	If to Boyd, to:	 	with a copy to:
		
	 _______________________________________
 c/o Boyd Gaming
Corporation
 2950 Industrial Road
 Las Vegas, Nevada
89109-1150
 Attention: Brian Larson, Esq.
 Facsimile:
______________________________
	 	 Greenberg Traurig, LLP
 800 Connecticut Avenue,
NW
 Suite 500
 Washington, D.C. 20006
 Attention: Nelson F. Migdal, Esq.
 Facsimile: (202)
261-4757

		
	If to Guarantor, to:	 	with a copy to:
		
	_______________________________________	 	_______________________________________
	_______________________________________	 	_______________________________________
	_______________________________________	 	_______________________________________
	Facsimile: _______________________________	 	Facsimile: _______________________________

  
 or to such other address or to the
attention of such other individual as hereafter shall be designated in writing by the applicable party. Any such notice or communication shall be deemed to have been given either at the time of personal delivery or, in the case of delivery service
or mail, as of the date of first attempted delivery at the address and in the manner provided herein, or in the case of facsimile, upon receipt. 
  
 If any of the provisions, or portions or applications thereof, of this Guaranty are held to be unenforceable or invalid by any court of competent
jurisdiction, the validity and enforceability of the remaining provisions, or portions or applications thereof, shall not be affected. 
  
 All capitalized terms used in this Guaranty and not otherwise defined herein shall be as set forth in the Agreement. 
  
 MORGANS AND GUARANTOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS GUARANTY OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS OF
MORGANS OR GUARANTOR. THIS PROVISION IS A MATERIAL INDUCEMENT FOR BOYD’S ACCEPTANCE OF THIS GUARANTY. 
  
 This Guaranty constitutes the entire agreement of Guarantor and Boyd with respect to the subject matter hereof and supersedes all prior negotiations,
agreements, understandings and communications, written or oral, with respect to the subject matter hereof. 
  
 Guarantor hereby irrevocably agrees that any suit, action, proceeding or claim against it arising out of, or relating to, this Guaranty or any judgment
entered by any court in respect thereof may be brought and enforced in any federal court located in Las Vegas, Nevada and Guarantor hereby irrevocably submits to the exclusive jurisdiction of such federal courts for the purpose of any such suit,
action, proceeding or claims. Guarantor hereby irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this
Guaranty brought in any federal court located in Las Vegas, Nevada, and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in any such federal court has been brought in an inconvenient forum. Guarantor
further irrevocably consents to the service of 

  

 - 4 - 

 
process out of any of the aforementioned courts in any such suit, action, proceeding or claim by the mailing of copies thereof by certified mail, return
receipt requested, postage prepaid, to its address set forth on the signature page hereof. Nothing herein shall affect the right of Boyd to commence legal proceedings or otherwise proceed against Guarantor in any jurisdiction or to serve process in
any manner permitted by applicable law. 
  
 This Guaranty
constitutes a guaranty of payment only and nothing herein shall be deemed or construed as to require Guarantor to perform any obligation of Morgans pursuant to the Agreement other than the payment of monetary obligations thereunder. 
  
 This Guaranty shall be governed as to validity, interpretation, effect and in
all other respects by the laws and decisions of the State of Delaware. 
  
 This Guaranty may be executed in counterparts, each of which shall constitute an original and all of which, taken together, shall constitute a single instrument. 
  
 IN WITNESS WHEREOF, Guarantor has executed and delivered this Guaranty and Boyd has accepted this Guaranty as of the day and
year first above written. 
  

									
	 GUARANTOR:
	 	 	 	 BOYD:

	 _________________________
	 	 	 	 
				
	By:	 	 	 	 	 	 ______________________________, a ___________________
 ___________________________________________________

	 Name:
	 	 	 	 	 	 	 	 
	 Its:
	 	 	 	 	 	 By:
	 	 
	 	 	 	 	 	 	 Name:
	 	 
	 	 	 	 	 	 	 Its:
	 	 

  

 - 5 -Letter Agreement, dated December 30, 2005

 Exhibit 10.7 
  
 December 30, 2005 
  

Allen J. Bernstein 
 c/o Morton’s Restaurant Group, Inc. 

3333 New Hyde Park Road, Suite 210 
 New Hyde Park, New York 11042

  
 Dear Allen: 
  
 This letter agreement (the “Agreement”) confirms our understanding and agreement with respect to your retirement
from Morton’s Restaurant Group, Inc. (the “Company”) as follows: 
  
 1.    Termination Of Employment.    Effective as of December 31, 2005 (the
“Termination Date”), your employment with the Company and its affiliates shall be terminated and you shall have no further obligation to the Company or its affiliates. You hereby retire, effective as of the Termination Date, from all
positions that you hold with the Company and any of its affiliates, including, without limitation, any position on the Company’s board of directors or the board of directors of any affiliate of the Company. As of the Termination Date, you shall
have the title of Chairman Emeritus of the Company. 
  
 2.    Severance Payments/Benefits.    In consideration for your entering into this Agreement, specifically including the immediate termination of your employment and the General Release and
covenants contained herein, you shall, subject to the expiration of the Revocation Period without your revocation of the General Release, be entitled to the following: 
  
 a.    A payment of $7 million, payable in twelve equal quarterly installments beginning
January 3, 2006; 
  
 b.    Your annual bonus for calendar year 2005, payable when such bonus is paid to executives of the Company. In no event will you be entitled to any annual bonus with respect to calendar year 2006; and 
  
 c.    You shall have the option, within
thirty days following the Termination Date, to acquire the Company’s interest in any insurance policy the Company acquired for its own benefit on your life, to the extent permitted by such policy or policies, upon the payment to the Company of
such policy’s or policies’ then cash surrender value. If you exercise the option, the Company will take whatever reasonable steps are necessary to assign all the rights in the entire policy or policies to you, to the extent permitted by
such policy or policies, and to deliver physical possession of the policy or policies to you; and 

 3.    Equity.    Reference is made to the
Employee Subscription Agreement, dated as of August 27, 2003, between you and Morton’s Holdings, LLC (the “LLC”), a Delaware limited liability company (the “Subscription Agreement”). Capitalized terms not otherwise defined
in this Section 3 shall have the same meanings as set forth in the Subscription Agreement. Notwithstanding the terms of the Subscription Agreement, (i) as of the Termination Date, all the Time Vesting Employee Securities granted pursuant to the
Subscription Agreement shall be deemed to be Vested Common Units under the Subscription Agreement and (ii) you shall continue to be eligible to vest in the Performance Vesting Employee Securities pursuant to the terms of the Subscription Agreement,
without regard to the requirement that your employment continue through the Final Test Event; provided, however, that, to the extent the terms of the Performance Vesting Employee Securities held by the senior executives of the Company are adjusted
or amended or the Performance Vesting Employee Securities are cancelled and/or replaced with other awards or compensation, the Company and you agree that your Performance Vesting Employee Securities will be treated in the same manner. 
  
 4.    Full
Satisfaction.    You hereby acknowledge and agree that, except for the payments and benefits under Sections 2 and 3 of this Agreement, that will become payable to you hereunder if you do not revoke this Agreement as described
in Section 7(c), you will not be entitled to any other compensation or benefits from the Company or its affiliates, including, without limitation, any other severance or termination benefits; provided that it is agreed that nothing in this
Agreement shall constitute a waiver of your rights to vested benefits, if any, under the Company’s employee benefit plans in respect of your services to the Company prior to the Termination Date. You hereby acknowledge and agree that, as of the
Termination Date, the Third Amended and Restated Employment Agreement between you and the Company, dated as of January 1, 2003 shall be terminated and of no further force or effect, including, without limitation, any provision requiring (x) the
Company to give you notice of termination and (y) you to mitigate any of the severance benefits payable hereunder. You further agree that you will reimburse the Company, within ten (10) days following a request for reimbursement from the Company,
for any payments made or expenses incurred (including with respect to any medical benefits) on behalf of you or your affiliates. 
  
 5.    Confidential Information; Confidentiality of this Agreement. 
  
 a.    You will keep secret and retain
in strictest confidence and will not release or divulge either orally or in writing to any person, firm or entity except as may be required by law or regulation or by order of any court, and will not use for the benefit of yourself or others, any
confidential matters of the Company or its affiliates including, without limitation, (i) “know-how,” trade secrets, details of client or consultant contracts, pricing policies, compensation arrangements, business acquisition plans, new
personnel acquisition plans, and other projects and inventions and research projects of the Company or its affiliates learned by you heretofore, and (ii) each and every term of this Agreement. 
  
 b. You acknowledge and agree that the remedies available to
the Company at law for a breach or threatened breach of any of the provisions of this Section 5 would be inadequate and, in recognition of this fact, you agree that, in the event of a breach or threatened breach, in addition to any remedies at
law, the Company shall be entitled to obtain equitable relief in the form of specific performance, temporary restraining order or permanent injunction or any other equitable remedy that may be available. 
  
 6.    Return of Property to the
Company.    All memoranda, notes, lists, records and other documents or papers (and all copies thereof), including items stored in computer memories, on microfilm or by other means, made or compiled by you, or made available
to you relating to the Company or its affiliates or its business, are and shall remain the property of the Company and shall be delivered to the Company promptly upon the execution of this Agreement. 
  
  

 2 

 7.    General Release. 
  
 a.    For and in consideration of the
payments and benefits hereunder, you hereby agree on behalf of yourself, your agents, assignees, attorneys, successors, assigns, heirs and executors, to, and you do hereby, fully and completely forever release the Company and its affiliates,
predecessors and successors and all of their respective past and/or present officers, directors, partners, members, managing members, managers, employees, agents, representatives, administrators, attorneys, insurers and fiduciaries in their
individual and/or representative capacities (hereinafter collectively referred to as the “Releasees”), from any and all causes of action, suits, agreements, promises, damages, disputes, controversies, contentions, differences, judgments,
claims, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialities, covenants, contracts, variances, trespasses, extents, executions and demands of any kind whatsoever, which you or your heirs, executors, administrators, successors
and assigns ever had, now have or may have against the Releasees or any of them, in law, admiralty or equity, whether known or unknown to you, for, upon, or by reason of, any matter, action, omission, course or thing whatsoever occurring up to the
date this Agreement is signed by you, including, without limitation, in connection with or in relationship to your employment or other service relationship with the Company or its affiliates, the termination of any such employment or service
relationship and any applicable employment, compensatory or equity arrangement with the Company or its respective affiliates; provided that such released claims shall not include any claims to enforce your rights under, or with respect to,
this Agreement or any claim you have to indemnification from the Company (such released claims are collectively referred to herein as the “Released Claims”). 
  
 b.    Notwithstanding the generality of clause (a) above, the Released Claims
include, without limitation, (i) any and all claims under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967, the Civil Rights Act of 1971, the Civil Rights Act of 1991, the Fair Labor Standards Act, the
Employee Retirement Income Security Act of 1974, the Americans with Disabilities Act, the Family and Medical Leave Act of 1993, and any and all other federal, state or local laws, statutes, rules and regulations pertaining to employment or
otherwise, and (ii) any claims for wrongful discharge, breach of contract, fraud, misrepresentation or any compensation claims, or any other claims under any statute, rule or regulation or under the common law, including compensatory damages,
punitive damages, attorney’s fees, costs, expenses and all claims for any other type of damage or relief. 
  
 c.    You represent that you have read carefully and fully understand the terms of this Agreement, and that you have
been advised to consult with an attorney and have had the opportunity to consult with an attorney prior to signing this Agreement. You acknowledge that you are executing this Agreement voluntarily and knowingly and that you have not relied on any
representations, promises or agreements of any kind made to you in connection with your decision to accept the terms of this Agreement, other than those set forth in this Agreement. You acknowledge that you have been given at least twenty-one days
to consider whether you want to sign this Agreement and that the Age Discrimination in Employment Act gives you the right to revoke this Agreement within seven (7) days after it is signed, and you understand that you will not receive any payments or
benefits due you under this Agreement until such seven (7) day revocation period (the “Revocation Period”) has passed and then, only if you have not revoked this Agreement. To the extent you have executed this Agreement within less than
twenty-one (21) days after its delivery to you, you hereby acknowledge that your decision to execute this Agreement prior to the expiration of such twenty-one (21) day period was entirely voluntary. 
  
 8.    Non-Disparagement.    You agree that you will not, for a period of three years following the Termination Date, take any action to disparage or criticize to any third parties any of the
products, services or any of the employees, officers, directors, members or equity holders of the Company, the 

  

 3 

 
LLC or any of their subsidiaries, or to commit any other action that materially injures or hinders the business relationship of the Company, the LLC or their
subsidiaries or any of their respective officers, members, directors, equity holders or employees. 
  
 9.    Withholding Taxes.    The Company may withhold from any amounts payable under this
Agreement such Federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation. You agree that you will indemnify the Company if any liability is imposed on the Company as a result of (i) the Company
honoring your request to reduce the amount withheld for taxes on any payment hereunder or (ii) your failure to pay your income taxes when due. 
  
 10.    Governing Law.    This Agreement will be governed, construed and interpreted under
the laws of the State of New York, without regard to the conflicts of laws provisions thereof. 
  
 11.    Entire Agreement/Counterparts.    This constitutes the entire agreement between the
parties. It may not be modified or changed except by written instrument executed by all parties. This Agreement may be executed in counterparts, each of which shall constitute an original and which together shall constitute a single instrument.

  

 4 

 If this letter correctly sets forth your understanding of our agreement with respect to the foregoing
matters, please so indicate by signing below on the line provided for your signature. 
  

			
	 Very truly yours,

	
	 Morton’s Restaurant Group, Inc.

		
	By:	 	/s/ Thomas J. Baldwin
	Name:	 	Thomas J. Baldwin
	Title:	 	 Executive Vice President
 Chief Financial
Officer

  
 Reviewed, approved and agreed:

  
 /s/ Allen J.
Bernstein                     
 Allen J. Bernstein

  

			
	 For purposes of Section 3 of the Agreement only:

	
	 Morton’s Holdings, LLC

		
	By:	 	/s/ Thomas J. Baldwin
	Name:	 	Thomas J. Baldwin
	Title:	 	 Executive Vice President
 Chief Financial
Officer

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