Exhibit 10.1


 




 





CREDIT AGREEMENT


 


 


Dated as of May 30, 2003


 


 


among


 


 


HARD ROCK HOTEL, INC.


 


as Borrower,


 


 


The Lenders referred to herein


 


and


 


 


BANK OF AMERICA, N.A.,


 


as Administrative Agent




 





 

















 


TABLE OF
CONTENTS


 


	
  ARTICLE 1

  	
  DEFINITIONS AND ACCOUNTING TERMS

  
	
   

  	
   

  
	
  1.1

  	
  Defined
  Terms

  
	
   

  	
   

  
	
  1.2

  	
  Use of Defined Terms

  
	
   

  	
   

  
	
  1.3

  	
  Accounting Terms

  
	
   

  	
   

  
	
  1.4

  	
  Rounding

  
	
   

  	
   

  
	
  1.5

  	
  Exhibits and Schedules

  
	
   

  	
   

  
	
  1.6

  	
  References to “Borrower and its
  Subsidiaries”

  
	
   

  	
   

  
	
  1.7

  	
  References to Times

  
	
   

  	
   

  
	
  1.8

  	
  Miscellaneous Terms

  
	
   

  	
   

  
	
  ARTICLE 2

  	
  LOANS

  
	
   

  	
   

  
	
  2.1

  	
  Loans-General

  
	
   

  	
   

  
	
  2.2

  	
  Base
  Rate Loans

  
	
   

  	
   

  
	
  2.3

  	
  LIBOR
  Loans

  
	
   

  	
   

  
	
  2.4

  	
  Letters of Credit

  
	
   

  	
   

  
	
  2.5

  	
  Voluntary Reduction of Commitments

  
	
   

  	
   

  
	
  2.6

  	
  Scheduled Mandatory Reductions of
  Commitments

  
	
   

  	
   

  
	
  2.7

  	
  Other Mandatory Reductions of Commitment

  
	
   

  	
   

  
	
  2.8

  	
  Administrative Agent’s Right to Assume
  Funds Available for Advances

  
	
   

  	
   

  
	
  2.9

  	
  Swing
  Line

  
	
   

  	
   

  
	
  ARTICLE 3

  	
  PAYMENTS AND FEES

  
	
   

  	
   

  
	
  3.1

  	
  Principal and Interest

  
	
   

  	
   

  
	
  3.2

  	
  Upfront
  Fees

  
	
   

  	
   

  
	
  3.3

  	
  Commitment Fees

  
	
   

  	
   

  
	
  3.4

  	
  Letter of Credit Fees

  
	
   

  	
   

  
	
  3.5

  	
  Agency Management Fees

  
	
   

  	
   

  
	
  3.6

  	
  Fee Determination Detail

  
	
   

  	
   

  
	
  3.7

  	
  Increased Commitment Costs

  
	
   

  	
   

  
	
  3.8

  	
  LIBOR Costs and Related Matters

  
	
   

  	
   

  
	
  3.9

  	
  Late
  Payments

  
	
   

  	
   

  
	
  3.10

  	
  Computation of Interest and Fees

  
	
   

  	
   

  
	
  3.11

  	
  Non-Banking Days

  



 


i

















 


	
  3.12

  	
  Manner and Treatment of Payments

  
	
   

  	
   

  
	
  3.13

  	
  Funding Sources

  
	
   

  	
   

  
	
  3.14

  	
  Failure to Charge Not Subsequent Waiver

  
	
   

  	
   

  
	
  3.15

  	
  Administrative Agent’s Right to Assume
  Payments Will be Made by Borrower

  
	
   

  	
   

  
	
  3.16

  	
  Survival

  
	
   

  	
   

  
	
  ARTICLE 4

  	
  REPRESENTATIONS AND WARRANTIES

  
	
   

  	
   

  
	
  4.1

  	
  Existence and Qualification; Power;
  Compliance With Laws

  
	
   

  	
   

  
	
  4.2

  	
  Authority; Compliance With Other Agreements
  and Instruments and Government Regulations

  
	
   

  	
   

  
	
  4.3

  	
  No Governmental Approvals Required

  
	
   

  	
   

  
	
  4.4

  	
  Subsidiaries

  
	
   

  	
   

  
	
  4.5

  	
  Financial Statements

  
	
   

  	
   

  
	
  4.6

  	
  No Material Adverse Changes

  
	
   

  	
   

  
	
  4.7

  	
  Title to Property

  
	
   

  	
   

  
	
  4.8

  	
  Intangible Assets

  
	
   

  	
   

  
	
  4.9

  	
  Public Utility Holding Company Act

  
	
   

  	
   

  
	
  4.10

  	
  Litigation

  
	
   

  	
   

  
	
  4.11

  	
  Binding Obligations

  
	
   

  	
   

  
	
  4.12

  	
  No
  Default

  
	
   

  	
   

  
	
  4.13

  	
  ERISA

  
	
   

  	
   

  
	
  4.14

  	
  Regulations U and X; Investment
  Company Act

  
	
   

  	
   

  
	
  4.15

  	
  Disclosure

  
	
   

  	
   

  
	
  4.16

  	
  Tax
  Liability

  
	
   

  	
   

  
	
  4.17

  	
  Projections

  
	
   

  	
   

  
	
  4.18

  	
  Hazardous Materials

  
	
   

  	
   

  
	
  4.19

  	
  Gaming
  Laws

  
	
   

  	
   

  
	
  4.20

  	
  Security Interests

  
	
   

  	
   

  
	
  4.21

  	
  Tax Shelter Regulations

  
	
   

  	
   

  
	
  ARTICLE 5

  	
  AFFIRMATIVE COVENANTS

  
	
   

  	
   

  
	
  5.1

  	
  Payment of Taxes and Other Potential Liens

  
	
   

  	
   

  
	
  5.2

  	
  Preservation of Existence

  



 


ii
















 


	
  5.3

  	
  Maintenance of Properties

  
	
   

  	
   

  
	
  5.4

  	
  Maintenance of Insurance

  
	
   

  	
   

  
	
  5.5

  	
  Compliance With Laws

  
	
   

  	
   

  
	
  5.6

  	
  Keeping of Records and Books of Account

  
	
   

  	
   

  
	
  5.7

  	
  Compliance With Agreements

  
	
   

  	
   

  
	
  5.8

  	
  Use
  of Proceeds

  
	
   

  	
   

  
	
  5.9

  	
  Hazardous Materials Laws

  
	
   

  	
   

  
	
  ARTICLE 6

  	
  NEGATIVE COVENANTS

  
	
   

  	
   

  
	
  6.1

  	
  Prepayment of Indebtedness

  
	
   

  	
   

  
	
  6.2

  	
  Payment of Subordinated Obligations

  
	
   

  	
   

  
	
  6.3

  	
  Disposition of Property

  
	
   

  	
   

  
	
  6.4

  	
  Hostile Tender Offers

  
	
   

  	
   

  
	
  6.5

  	
  Mergers

  
	
   

  	
   

  
	
  6.6

  	
  Distributions

  
	
   

  	
   

  
	
  6.7

  	
  ERISA

  
	
   

  	
   

  
	
  6.8

  	
  Change in Nature of Business

  
	
   

  	
   

  
	
  6.9

  	
  Liens, Negative Pledges and Rights of
  Others

  
	
   

  	
   

  
	
  6.10

  	
  Indebtedness and Contingent Obligations

  
	
   

  	
   

  
	
  6.11

  	
  Total Leverage Ratio

  
	
   

  	
   

  
	
  6.12

  	
  Senior Leverage Ratio

  
	
   

  	
   

  
	
  6.13

  	
  Fixed Charge Coverage Ratio

  
	
   

  	
   

  
	
  6.14

  	
  Capital Expenditures

  
	
   

  	
   

  
	
  6.15

  	
  Investments

  
	
   

  	
   

  
	
  6.16

  	
  New Subsidiaries

  
	
   

  	
   

  
	
  6.17

  	
  Transactions with Affiliates

  
	
   

  	
   

  
	
  6.18

  	
  Changes to the Subordinated Obligations or
  Codes, Covenants and Restrictions

  
	
   

  	
   

  
	
  ARTICLE 7

  	
  INFORMATION AND REPORTING REQUIREMENTS

  
	
   

  	
   

  
	
  7.1

  	
  Financial and Business Information

  
	
   

  	
   

  
	
  7.2

  	
  Compliance Certificates

  



 


iii

















 


	
  ARTICLE 8

  	
  CONDITIONS

  
	
   

  	
   

  
	
  8.1

  	
  Initial Advances on the Closing Date

  
	
   

  	
   

  
	
  8.2

  	
  Any
  Advance

  
	
   

  	
   

  
	
  ARTICLE 9

  	
  EVENTS OF DEFAULT AND REMEDIES UPON EVENT
  OF DEFAULT

  
	
   

  	
   

  
	
  9.1

  	
  Events of Default

  
	
   

  	
   

  
	
  9.2

  	
  Remedies Upon Event of Default

  
	
   

  	
   

  
	
  9.3

  	
  Call Right in Favor of the Noteholders
  under the Indenture

  
	
   

  	
   

  
	
  ARTICLE
  10

  	
  THE
  ADMINISTRATIVE AGENT

  
	
   

  	
   

  
	
  10.1

  	
  Appointment and Authorization of
  Administrative Agent

  
	
   

  	
   

  
	
  10.2

  	
  Delegation of Duties

  
	
   

  	
   

  
	
  10.3

  	
  Liability of Administrative Agent

  
	
   

  	
   

  
	
  10.4

  	
  Reliance by Administrative Agent

  
	
   

  	
   

  
	
  10.5

  	
  Notice of Default

  
	
   

  	
   

  
	
  10.6

  	
  Credit Decision; Disclosure of Information
  by Administrative Agent

  
	
   

  	
   

  
	
  10.7

  	
  Indemnification of Administrative Agent

  
	
   

  	
   

  
	
  10.8

  	
  Administrative Agent in its Individual
  Capacity

  
	
   

  	
   

  
	
  10.9

  	
  Successor Administrative Agent

  
	
   

  	
   

  
	
  10.10

  	
  Administrative Agent May File Proofs of
  Claim

  
	
   

  	
   

  
	
  10.11

  	
  Collateral Matters

  
	
   

  	
   

  
	
  ARTICLE
  11

  	
  MISCELLANEOUS

  
	
   

  	
   

  
	
  11.1

  	
  Cumulative Remedies; No Waiver

  
	
   

  	
   

  
	
  11.2

  	
  Amendments; Consents

  
	
   

  	
   

  
	
  11.3

  	
  Attorney Costs, Expenses and Taxes

  
	
   

  	
   

  
	
  11.4

  	
  Nature of Lenders’ Obligations

  
	
   

  	
   

  
	
  11.5

  	
  Survival of Representations and Warranties

  
	
   

  	
   

  
	
  11.6

  	
  Notices

  
	
   

  	
   

  
	
  11.7

  	
  Execution of Loan Documents

  
	
   

  	
   

  
	
  11.8

  	
  Successors and Assigns

  
	
   

  	
   

  
	
  11.9

  	
  Right
  of Setoff

  
	
   

  	
   

  
	
  11.10

  	
  Sharing of Setoffs

  
	
   

  	
   

  
	
  11.11

  	
  Indemnification by Borrower

  



 


iv

















 


	
  11.12

  	
  Nonliability of the Lenders

  
	
   

  	
   

  
	
  11.13

  	
  No Third Parties Benefited

  
	
   

  	
   

  
	
  11.14

  	
  Confidentiality

  
	
   

  	
   

  
	
  11.15

  	
  Further Assurances

  
	
   

  	
   

  
	
  11.16

  	
  Integration

  
	
   

  	
   

  
	
  11.17

  	
  Governing
  Law

  
	
   

  	
   

  
	
  11.18

  	
  Severability of Provisions

  
	
   

  	
   

  
	
  11.19

  	
  Headings

  
	
   

  	
   

  
	
  11.20

  	
  Time of the Essence

  
	
   

  	
   

  
	
  11.21

  	
  Foreign Lenders and Participants

  
	
   

  	
   

  
	
  11.22

  	
  Hazardous Material Indemnity

  
	
   

  	
   

  
	
  11.23

  	
  Gaming
  Boards

  
	
   

  	
   

  
	
  11.24

  	
  Waiver of Right to Trial by Jury

  
	
   

  	
   

  
	
  11.25

  	
  Purported Oral Amendments

  



 


Exhibits


 


A - Assignment Agreement


B - Compliance Certificate


C - Form of Revolving Note


D - Form of Term Note


E - Request for Loan


F - Request for Letter of Credit


 


Schedules


 


	
  1.1

  	
   

  	
  Designated Capital Expenditures

  
	
  1.2

  	
   

  	
  Continuing Letter of Credit

  
	
  4.3

  	
   

  	
  Governmental Approvals

  
	
  4.8

  	
   

  	
  Intellectual Property

  
	
  4.18

  	
   

  	
  Environmental Matters

  
	
  6.8

  	
   

  	
  Permitted Title Exceptions

  
	
  6.9

  	
   

  	
  Existing Liens

  
	
  6.10

  	
   

  	
  Existing Indebtedness

  
	
  8.1(a)(xvii)

  	
   

  	
  Permitted Title Exceptions

  



 


v

















 


 


CREDIT AGREEMENT


 


Dated as of May 30, 2003


 


This Credit
Agreement (“Agreement”) is entered into by and among Hard Rock Hotel, Inc., a
Nevada corporation (“Borrower”), each lender whose name is set forth on the
signature pages of this Agreement and each lender which may hereafter become a
party to this Agreement pursuant to Section 11.8 (collectively, the
“Lenders” and individually, a “Lender”) and Bank of America, N.A., as
Administrative Agent.


 


In
consideration of the mutual covenants and agreements herein contained, the
parties hereto agree as follows:


 


ARTICLE 1

DEFINITIONS AND ACCOUNTING TERMS


 


1.1                                 Defined
Terms.  As used in this
Agreement, the following terms shall have the meanings set forth below:


 


“Acquisition” means any transaction,
or any series of related transactions, by which Borrower directly or indirectly
(i) acquires any going business or all or substantially all of the assets
of any firm, partnership, joint venture, limited liability company, corporation
or division thereof, whether through purchase of assets, merger or otherwise,
or (ii) acquires (in one transaction or as the most recent transaction in
a series of transactions) control of at least a majority in ordinary voting
power of the securities of a corporation which have ordinary voting power for
the election of directors, or (iii) acquires control of at least a
majority in ordinary voting power of the interest in any partnership, limited
liability company or joint venture.


 


“Administrative Agent” means Bank of
America, when acting in its capacity as the Administrative Agent under any of
the Loan Documents, or any successor Administrative Agent.


 


“Administrative Agent’s Office” means
the Administrative Agent’s address as set forth on the signature pages of this
Agreement, or such other address as the Administrative Agent hereafter may
designate by written notice to Borrower and the Lenders.


 


“Advance” means any advance made or to
be made by any Lender to Borrower as provided in Article 2, and includes
each Base Rate Advance and each LIBOR Advance.


 


“Affiliate” means, as to any Person,
any other Person which directly or indirectly controls, or is under common
control with, or is controlled by, such Person.  As used in this definition, “control” (and the correlative terms,
“controlled by” and “under common control with”) shall mean possession,
directly or indirectly, of power to direct or cause the direction of management
or policies (whether through ownership of securities or partnership or other
ownership interests, by contract or otherwise); provided that, in any


 

















 


event, any Person that owns, directly or indirectly, 10% or more of the
securities (on a fully diluted basis) having ordinary voting power for the
election of directors or other governing body of a corporation that has more
than 100 record holders of such securities, or 10% or more of the partnership
or other ownership interests (on a fully diluted basis) of any other Person
that has more than 100 record holders of such interests, will be deemed to
control such corporation, partnership or other Person.


 


“Agent-Related Persons” means the
Administrative Agent, together with its Affiliates (including, in the case of
Bank of America in its capacity as the Administrative Agent and the Arranger),
and the officers, directors, employees, agents and attorneys-in-fact of such
Persons and Affiliates.


 


“Aggregate Commitments” means the
Commitments of all of the Lenders.  As
of the Closing Date, the Aggregate Commitments are $40,000,000.


 


“Aggregate Effective Amount” means, as
of any date of determination and with respect to all Letters of Credit, the sum
of (a) the aggregate effective face amounts of all outstanding Letters of
Credit plus (b) the aggregate amounts paid by the Issuing Lender
under Letters of Credit not then reimbursed to the Issuing Lender by Borrower
pursuant to Section 2.4(d) and not then the subject of Advances made
pursuant to Section 2.4(e).


 


“Aggregate Pro Rata Share” means, with
respect to each Lender, the percentage of the Aggregate Commitments held by
that Lender.  The Aggregate Pro Rata Share
of each Lender is set forth in the records of the Administrative Agent.


 


“Agreement” means this Credit
Agreement, either as originally executed or as it may from time to time be
supplemented, modified, amended, restated or extended.


 


“Approved Fund” has the meaning
specified in Section 11.8(g).


 


“Arranger” means Banc of America
Securities LLC.  The Arranger shall have
no obligations or liabilities under this Agreement or the Loan Documents, but
shall be entitled to the benefits of Sections 11.3 and 11.11.


 


“Assignment Agreement” means an
Assignment Agreement substantially in the form of Exhibit A.


 


“Attorney Costs” means and includes
all fees, expenses and disbursements of any law firm or other external counsel
and, without duplication, the allocated fees and expenses of in-house counsel
to the extent not duplicative of fees and expenses paid to outside counsel for
the same work done.


 


“Bank of America” means Bank of
America, N.A., its successors and assigns.


 


“Banking Day” means any Monday,
Tuesday, Wednesday, Thursday or Friday, other  than a day on which
banks are authorized or required to be closed in California or Nevada.


 


2

















 


“Base Rate” means for any day a
fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate
plus 1/2 of 1% and (b) the rate of interest in effect for such day as publicly
announced from time to time by Bank of America as its “prime rate.”  The “prime rate” is a rate set by Bank of
America based upon various factors including Bank of America’s costs and
desired return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such announced rate.  Any change in such
rate announced by Bank of America shall take effect at the opening of business
on the day specified in the public announcement of such change.


 


“Base Rate Advance” means an Advance
made hereunder and specified to be a Base Rate Advance in accordance with
Article 2.


 


“Base Rate Loan” means a Loan made
hereunder and specified to be a Base Rate Loan in accordance with
Article 2.


 


“Base Rate Margin” means, for each
Pricing Period, the percentage set forth opposite the Total Leverage Ratio as
of the last day of the Fiscal Quarter ending two months prior to the first day
of that Pricing Period:


 


	
  Total Leverage Ratio

  	
   

  	
  Base Rate
  Margin

  	
   

  
	
  Greater than or equal to 5.75:1.00

  	
   

  	
  2.25

  	
  %

  
	
  Less than 5.75:1.00 but greater than or
  equal to 5.25:1.00

  	
   

  	
  2.00

  	
  %

  
	
  Less than 5.25:1.00 but greater than or
  equal to 4.75:1.00

  	
   

  	
  1.75

  	
  %

  
	
  Less than 4.75:1.00 but greater than or
  equal to 4.25:1.00

  	
   

  	
  1.50

  	
  %

  
	
  Less than 4.25:1.00

  	
   

  	
  1.25

  	
  %

  



 


From the Closing Date through August 31, 2003, the Base Rate
Margin shall be 2.00%.


 


“Borrower” means Hard Rock Hotel,
Inc., a Nevada corporation, its successors and permitted assigns.


 


“Capital Expenditure” means any
expenditure that is considered a capital expenditure under Generally Accepted
Accounting Principles, including any amount which is required to be
treated as an asset subject to a Capital Lease Obligation.


 


“Capital Lease Obligations” means all
monetary obligations of a Person under any leasing or similar arrangement
which, in accordance with Generally Accepted Accounting Principles, is
classified as a capital lease.


 


“Cash” means, when used in connection
with any Person, all monetary and non-monetary items owned by that Person that
are treated as cash in accordance with Generally Accepted Accounting
Principles, consistently applied.


 


“Cash Equivalents” means, when used in
connection with any Person, that Person’s Investments in:


 


3

















 


(a)                                  Government Securities
due within one year after the date of the making of the Investment;


 


(b)                                 readily marketable
direct obligations of any State of the United States of America or any
political subdivision of any such State or any public agency or instrumentality
thereof given on the date of such Investment a credit rating of at least Aa by
Moody’s Investors Service, Inc. or AA by Standard & Poor’s Ratings
Group, in each case due within one year from the making of the Investment;


 


(c)                                  certificates of
deposit issued by, bank deposits in, eurodollar deposits through, bankers’
acceptances of, and repurchase agreements covering Government Securities
executed by, any Lender or any bank incorporated under the Laws of the United
States of America, any State thereof or the District of Columbia and having on
the date of such Investment combined capital, surplus and undivided profits of
at least $250,000,000, in each case due within one year after the date of the
making of the Investment;


 


(d)                                 certificates of
deposit issued by, bank deposits in, eurodollar deposits through, bankers’
acceptances of, and repurchase agreements covering Government Securities
executed by, any branch or office located in the United States of America of a
bank incorporated under the Laws of any jurisdiction outside the United States
of America having on the date of such Investment combined capital, surplus and
undivided profits of at least $500,000,000, in each case due within one year
after the date of the making of the Investment; and


 


(e)                                  readily marketable
commercial paper of corporations doing business in and incorporated under the
Laws of the United States of America or any State thereof or of any corporation
that is the holding company for a bank described in clause (c) or (d)
above given on the date of such Investment a credit rating of at least P-1 by
Moody’s Investors Service, Inc. or A-1 by Standard & Poor’s Ratings
Group, in each case due within 90 days after the date of the making of the
Investment.


 


“Certificate of a Responsible Official”
means a certificate signed by a Responsible Official of the Person providing
the certificate.


 


“Change of Control” means (a) following
the public offering of any equity securities of Borrower, during any period of
24 consecutive months, individuals who at the beginning of such period
were members of the board of directors of Borrower (together with any new or
replacement directors whose election by the board of directors, or whose
nomination for election, was approved by a vote of at least a majority of the
directors then still in office who were either directors at the beginning of
such period or whose election or nomination for reelection was previously so
approved) cease for any reason to constitute a majority of the directors then
in office, or (b) the Permitted Investor, the spouse or immediate family
members of Peter A. Morton (or any trusts established for their benefit) or any
trustee, executor or receiver appointed to manage or administer the


 


4

















 


assets of any such Person who is an individual following the death of
such individual, fail to directly or indirectly own and hold the power to vote
collectively, at least 51% of Borrower’s capital stock entitled to ordinary
voting power.


 


“Closing Date” means the time and
Banking Day on which the conditions set forth in Section 8.1 are satisfied
or waived.  The Administrative Agent shall
notify Borrower and the Lenders of the date that is the Closing Date.


 


“Code” means the Internal Revenue Code
of 1986, as amended or replaced and as in effect from time to time.


 


“Collateral” means all of the
collateral covered by the Collateral Documents.


 


“Collateral Documents” means,
collectively, the Security Agreement, the Deed of Trust, the Trademark
Assignment (and accompanying Trademark Consent and Assignment Agreement), the
Deposit Account Control Agreement, the Copyright Assignment and any other
security agreement, pledge agreement, deed of trust, mortgage or other
collateral security agreement hereafter executed and delivered by Borrower or
its Subsidiaries to secure the Obligations.


 


“Commitment” means for each Lender,
such Lender’s Revolving Loan Commitment and/or Term Loan Commitment.


 


“Commitment Fee Rate” means .50% per
annum.


 


“Compliance Certificate” means a
certificate in the form of Exhibit B, properly completed and signed by a Senior
Officer of Borrower.


 


“Contingent Obligation” means, as to
any Person, any (a) guarantee by that Person of Indebtedness of, or other
obligation performable by, any other Person or (b) assurance given by that
Person to an obligee of any other Person with respect to the performance of an
obligation by, or the financial condition of, such other Person, whether
direct, indirect or contingent, including any purchase or repurchase
agreement covering such obligation or any collateral security therefor, any
agreement to provide funds (by means of loans, capital contributions or
otherwise) to such other Person, any agreement to support the solvency or level
of any balance sheet item of such other Person or any “keep-well” or other
arrangement of whatever nature given for the purpose of assuring or holding
harmless such obligee against loss with respect to any obligation of such other
Person; provided, however, that the term Contingent Obligation shall not
include endorsements of instruments for deposit or collection in the ordinary
course of business.  The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the related primary obligation (unless the Contingent
Obligation is limited by its terms to a lesser amount, in which case to the
extent of such amount) or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by the Person
in good faith.


 


“Continuing Letters of Credit” means
those letters of credit issued under the Existing Loan Agreement which are described
on Schedule 1.2.


 


5

















 


“Contractual Obligation” means, as to
any Person, any provision of any outstanding security issued by that Person or
of any material agreement, instrument or undertaking to which that Person is a
party or by which it or any of its Property is bound.


 


“Copyright Assignment” means the
Copyright Security Interest Assignment, executed by Borrower on the Closing
Date, either as originally executed or as it may from time to time be supplemented,
modified, amended, extended or supplanted.


 


“Creditors” means, collectively, the
Administrative Agent, the Issuing Lender, the Swing Line Lender, the Lenders
and the Arranger.


 


“Debtor Relief Laws” means the
Bankruptcy Code of the United States of America, as amended from time to time,
and all other applicable liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership, insolvency, reorganization, or similar debtor
relief Laws from time to time in effect affecting the rights of creditors
generally.


 


“Deed of Trust” means the Construction
Deed of Trust, Assignment of Rents and Fixture Filing executed and delivered by
Borrower on the Closing Date, either as originally executed or as it may from
time to time be supplemented, modified, amended, extended or supplanted.


 


“Default” means any event that, with
the giving of any applicable notice or passage of time specified in
Section 9.1, or both, would be an Event of Default.


 


“Default Rate” means the interest rate
prescribed in Section 3.9.


 


“Deposit Account Control Agreement”
means the deposit account control agreement executed and delivered by Borrower
on the Closing Date, either as originally executed or as it may from time to
time be supplemented, modified, amended, extended or supplanted.


 


“Disbursement Account” means a deposit
account to be maintained by Borrower with Bank of America, as from time to time
designated by Borrower by written notification to the Administrative Agent.


 


“Disposition” means the voluntary
sale, transfer or other disposition of any asset of Borrower or any of its
Subsidiaries other  than (a) Cash, Cash Equivalents,
inventory or other assets sold, leased or otherwise disposed of in the ordinary
course of business of Borrower or its Subsidiaries, (b) equipment sold or
otherwise disposed of where substantially similar equipment in replacement
thereof has theretofore been acquired or thereafter within 90 days is acquired
or is the subject of a written agreement to acquire, by Borrower or its
Subsidiaries, (c) leases of retail space on the Project Site in the ordinary
course of the business of Borrower and in a manner consistent with other
similar hotel-casinos, (d) a disposition to Borrower or any of its
Subsidiaries and (e) the license or sublicense of trademarks, copyrights and
know-how from Borrower or any of its Subsidiaries in the ordinary course of
business of Borrower or such Subsidiary.


 


6

















 


“Distribution” means, with respect to
shares of capital stock or any warrant or option to purchase an equity security
or other equity security issued by a Person, (i) the retirement,
redemption, purchase, or other acquisition for Cash or for Property by such
Person of any such security, (ii) the declaration or (without duplication)
payment by such Person of any dividend in Cash or in Property on or with
respect to any such security, (iii) any Investment by such Person in the
holder of 5% or more of any such security if a purpose of such Investment is to
avoid characterization of the transaction as a Distribution, and (iv) any
other payment in Cash or Property by such Person constituting a distribution
under applicable Laws with respect to such security.


 


“Dollars” or “$” means United
States dollars.


 


“EBITDA” means, for any fiscal period,
the sum of (a) Net Income for that period, plus (b) any
extraordinary loss reflected in such Net Income, minus (c) any
extraordinary gain reflected in such Net Income, plus  (d) Interest Expense for that period, plus
(e) the aggregate amount of federal, state and local taxes on or measured
by income of Borrower and its Subsidiaries for that period (whether or not
payable during that period), plus (f) depreciation, amortization
and all other non-cash expenses for that period, plus (g) non-cash
items for that period, plus (h) non-recurring expenses for that
period, plus (i) during each period which includes the Fiscal
Quarter ending June 30, 2003, up to $4,500,000 of losses or expenses from
the early extinguishment of debt, plus (j) during each period which
includes the Fiscal Quarter ending June 30, 2003, up to $4,000,000 of
costs relating to the consummation of the Second Lien Note issuance, this
Agreement and the transactions related thereto, plus (k) any Supervisory
Fees or management fees, if any, for that period, minus (l) any
Supervisory Fees and any other management fees, if any, paid in Cash to the
Permitted Investor by Borrower for that period, in each case determined in
accordance with Generally Accepted Accounting Principles and, in the case of
any of the above-described items that are added to Net Income for any period,
only to the extent deducted in the determination of Net Income for that period.


 


“Eligible Assignee” means (a) a
Lender; (b) an Affiliate of a Lender; (c) an Approved Fund; and (d) any other
Person (other than a natural person) approved by (i) the Administrative Agent,
each Issuing Lender and the Swing Line Lender, and (ii) unless an Event of
Default has occurred and is continuing, Borrower (each such approval not to be
unreasonably withheld or delayed); provided that notwithstanding the
foregoing, “Eligible Assignee” shall not include Borrower or any of its
respective Affiliates or Subsidiaries.


 


“ERISA” means the Employee Retirement
Income Security Act of 1974, and any regulations issued pursuant thereto, as
amended or replaced and as in effect from time to time.


 


“Eurodollar Market” means a regular
established market located outside the United States of America by and among
banks for the solicitation, offer and acceptance of Dollar deposits in such
banks.


 


“Eurodollar Obligations” means
eurocurrency liabilities, as defined in Regulation D.


 


7

















 


“Event of Default” shall have the
meaning provided in Section 9.1.


 


“Excess Cash Flow” means, as of the
last day of any Fiscal Quarter, for the four most recently ended Fiscal
Quarters as of such date, (a) EBITDA for that period minus (b) principal
and interest payments made by Borrower and its Subsidiaries in Cash during that
period with respect to Indebtedness for borrowed money, minus (c)
Capital Expenditures made by Borrower and its Subsidiaries during that period
in Cash, minus (d) Cash payments made by Borrower and its Subsidiaries
during that period with respect to federal and state taxes on or measured by
income of Borrower and its Subsidiaries.


 


“Existing Loan Agreement” means the
Loan Agreement dated as of March 23, 1998 (as amended, extended, renewed,
supplemented or otherwise modified), by and among Borrower, the lenders party
thereto and Bank of America, N.A., as administrative agent.


 


“Federal Funds Rate” means, for any
day, the rate per annum equal to the weighted average of the rate on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers on such day, as published by the Federal Reserve Bank
on the Banking Day next succeeding such day; provided that (a) if such
day is not a Banking Day, the Federal Funds Rate for such day shall be such
rate on such transactions on the next preceding Banking Day as so published on
the next succeeding Banking Day, and (b) if no such rate is so published on
such next succeeding Banking Day, the Federal Funds Rate for such day shall be
the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of
1%) charged to Bank of America on such day on such transactions as determined
by the Administrative Agent.


 


“FIRREA” means the Financial
Institutions Reform, Recovery and Enforcement Act of 1989, as it may be amended
from time to time.


 


“Fiscal Quarter” means the fiscal
quarter of Borrower consisting of a three-month fiscal period ending on each
March 31, June 30, September 30 and December 31.


 


“Fiscal Year” means the fiscal year of
Borrower consisting of a twelve-month period ending on each December 31.


 


“Fixed Charge Coverage Ratio” means,
as of each date of determination, the ratio of (a) EBITDA for the four
most recently ended Fiscal Quarters as of that date minus
(i) Maintenance Capital Expenditures (other than expansion/renovation/improvement
Capital Expenditures as set forth on Schedule 1.1 annexed hereto) during
that same period, minus (ii) taxes actually paid in Cash with
respect to income of Borrower during the same period, minus
(iii) Cash Distributions (including tax distributions) during the same
period plus (iv) tax refunds received in Cash, to
(b) scheduled required payments of principal and Interest Expense made in
Cash by Borrower and its Subsidiaries with respect to Indebtedness made during
such twelve month period (exclusive of any repayments of purchase money
Indebtedness that was used for Maintenance Capital Expenditures).


 


8

















 


“Foreign Subsidiary” means any direct
or indirect Subsidiary of Borrower that is organized under the laws of a
jurisdiction other than the United States or any state thereof or the District
of Columbia.


 


“Fund” has the meaning specified in
Section 11.8(g).


 


“Gaming Board” means, collectively,
(a) the Nevada Gaming Commission, (b) the Nevada State Gaming Control
Board, and (c) any other Governmental Agency that holds regulatory,
licensing or permit authority over gambling, gaming or casino activities
conducted by Borrower and its Subsidiaries within its jurisdiction.


 


“Gaming Laws” means all Laws pursuant
to which any Gaming Board possesses regulatory, licensing or permit authority
over gambling, gaming or casino activities conducted by Borrower and its
Subsidiaries within its jurisdiction.


 


“Generally Accepted Accounting Principles”
means, as of any date of determination, accounting principles (a) set
forth as generally accepted in then currently effective Opinions of the
Accounting Principles Board of the American Institute of Certified Public
Accountants, (b) set forth as generally accepted in then currently
effective Statements of the Financial Accounting Standards Board or
(c) that are then approved by such other entity as may be approved by a
significant segment of the accounting profession in the United States of
America.  The term “consistently
applied,” as used in connection therewith, means that the accounting
principles applied are consistent in all material respects with those applied
at prior dates or for prior periods.


 


“Government Securities” means readily
marketable (a) direct full faith and credit obligations of the
United States of America or obligations guaranteed by the full faith and
credit of the United States of America, or (b) obligations of an
agency or instrumentality of, or corporation owned, controlled or sponsored by,
the United States of America that are generally considered in the securities
industry to be implicit obligations of the United States of America.


 


“Governmental Agency” means
(a) any international, foreign, federal, state, county or municipal
government, or political subdivision thereof, (b) any governmental or
quasi-governmental agency, authority, board, bureau, commission, department,
instrumentality or public body, or (c) any court or administrative
tribunal of competent jurisdiction.


 


“Hazardous Materials” means substances
regulated as hazardous substances pursuant to (a) the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.
§ 9601 et seq., or as hazardous or toxic wastes or pollutants
pursuant to the Hazardous Materials Transportation Act, 49 U.S.C.
§ 1801, et seq., the Resource Conservation and Recovery Act,
42 U.S.C. § 6901, et seq., or (b) any other Law regulating
hazardous substances or hazardous or toxic wastes or pollutants or regulating
the generation, use, storage, treatment, handling or transportation of any such
substances, in each case as such Laws are amended from time to time.


 


9

















 


“Hazardous Materials Laws” means all
federal, state or local laws, ordinances, rules or regulations governing the
disposal, transfer, generation, storage or treatment of Hazardous Materials
applicable to any of the Real Property.


 


“Indebtedness” means, as to any Person
(without duplication), (a) indebtedness of such Person for borrowed money
or for the deferred purchase price of Property (excluding trade and other
accounts payable in the ordinary course of business in accordance with
customary trade terms), including any Contingent Obligation for any such
indebtedness, (b) indebtedness of such Person of the nature described in
clause (a) that is non-recourse to the credit of such Person but is
secured by assets of such Person, to the extent of the lesser of the
outstanding principal amount of such indebtedness and the value of such assets,
(c) Capital Lease Obligations of such Person, (d) indebtedness of
such Person arising under bankers’ acceptance facilities or under facilities
for the discount of accounts receivable of such Person, (e) any direct or
Contingent Obligations of such Person under letters of credit issued for the
account of such Person and (f) any net obligations of such Person under a Swap
Agreement.


 


“Indemnified Liabilities” has the
meaning specified in Section 11.11.


 


“Indemnitees” has the meaning
specified in Section 11.11.


 


“Indenture” means the Indenture dated
May 30, 2003 between Borrower and U.S. Bank National Association, as
Trustee, governing Borrower’s $140,000,000 Second Lien Notes due 2013.


 


“Intangible Assets” means assets that
are considered intangible assets under Generally Accepted Accounting
Principles, including customer lists, goodwill, computer software,
copyrights, trade names, trademarks and patents.


 


“Intercreditor Agreement” means that
certain Intercreditor Agreement dated as of the Closing Date between the
Administrative Agent and the trustee under the Indenture.


 


“Interest Differential”
means, with respect to any prepayment of a LIBOR Loan on a day other than
the last day of the applicable Interest Period and with respect to any failure
to borrow a LIBOR Loan on the date or in the amount specified in any Request
for Loan, (a) the per annum interest rate payable (or, with respect to a
failure to borrow, the interest rate which would have been payable) pursuant to
Section 3.1(c) with respect to the LIBOR Loan minus (b) the
LIBOR on, or as near as practicable to, the date of the prepayment or failure
to borrow for a LIBOR Loan with an Interest Period commencing on such date and
ending on the last day of the Interest Period of the LIBOR Loan so prepaid or
which would have been borrowed on such date.


 


“Interest Expense” means, as of the
last day of any fiscal period, the sum of (a) all interest, fees,
charges and related expenses paid or payable (without duplication) for that
fiscal period to a lender in connection with borrowed money or the deferred
purchase price of assets that are considered “interest expense” under Generally
Accepted Accounting Principles, plus (b) the portion of rent paid
or payable (without duplication) for that fiscal


 


10

















 


period under Capital Lease Obligations that should be treated as
interest in accordance with Financial Accounting Standards Board Statement
No. 13.


 


“Interest Period” means, as to each
LIBOR Loan, the period commencing on the date specified by Borrower pursuant to
Section 2.1(b) and ending 1, 2, 3, 6 or 9 months thereafter, as specified
by Borrower in the applicable Request for Loan; provided that:


 


(a)                                  The first day of any
Interest Period shall be a Market Day;


 


(b)                                 Any Interest Period
that would otherwise end on a day that is not a Market Day shall be extended to
the next succeeding Market Day unless such Market Day falls in another calendar
month, in which case such Interest Period shall end on the next preceding Market
Day;


 


(c)                                  Borrower may not
specify a Interest Period that extends beyond any Reduction Date unless the sum
of (i) the aggregate principal amount of the LIBOR Loans having a Interest
Period ending after such Reduction Date plus (ii) the aggregate maximum
amount available for drawing under Letters of Credit for which the expiry date
is after such Reduction Date, does not exceed the applicable Commitment (after
giving effect to any reduction thereto scheduled to be made on such Reduction
Date pursuant to Section 2.6); and


 


(d)                                 No Interest Period
shall extend beyond the Maturity Date.


 


“Investment” means, when used in
connection with any Person, any investment by or of that Person, whether by
means of purchase or other acquisition of stock or other securities of any
other Person or by means of a loan, advance creating a debt, capital
contribution, guaranty or other debt or equity participation or interest in any
other Person, including any partnership and joint venture interests of
such Person.  The amount of any
Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment.


 


“Issuing Lender” means Bank of
America, N.A., or any successor thereto.


 


“Laws” means, collectively, all federal,
state and local statutes, rules, regulations, ordinances, codes and
administrative or judicial precedents, or other matters having the force of law
and binding upon the parties hereto.


 


“L/C Obligations” means, as at any
date of determination, the aggregate undrawn amount of all outstanding Letters
of Credit plus the aggregate of all amounts that have been drawn under
Letters of Credit and not reimbursed by the Borrower.


 


“Lenders” has the meaning set forth in
the preamble hereto.


 


“Letters of Credit” means any of the
Letters of Credit issued by the Issuing Lender under the Revolving Loan
Commitment pursuant to Section 2.4, either as originally issued or as the
same may be supplemented, modified, amended, renewed, extended or supplanted.


 


11

















 


“LIBOR”
means for any Interest Period with respect to any LIBOR Loan:


 


(a)                                  the rate per annum
equal to the rate determined by the Administrative Agent to be the offered rate
that appears on the page of the Telerate screen (or any successor thereto) that
displays an average British Bankers Association Interest Settlement Rate for
deposits in Dollars (for delivery on the first day of such Interest Period)
with a term equivalent to such Interest Period, determined as of approximately
11:00 a.m. (London time) two Market Days prior to the first day of such
Interest Period, or


 


(b)                                 if the rate referenced
in the preceding clause (a) does not appear on such page or service or such
page or service shall not be available, the rate per annum equal to the rate
determined by the Administrative Agent to be the offered rate on such other
page or other service that displays an average British Bankers Association
Interest Settlement Rate for deposits in Dollars (for delivery on the first day
of such Interest Period) with a term equivalent to such Interest Period,
determined as of approximately 11:00 a.m. (London time) two Market Days prior
to the first day of such Interest Period, or


 


(c)                                  if the rates
referenced in the preceding clauses (a) and (b) are not available, the rate per
annum determined by the Administrative Agent as the rate of interest at which
deposits in Dollars for delivery on the first day of such Interest Period in
same day funds in the approximate amount of the LIBOR Loan being made,
continued or converted by Bank of America and with a term equivalent to such
Interest Period would be offered by Bank of America’s London Branch to major
banks in the London interbank eurodollar market at their request at
approximately 4:00 p.m. (London time) two Market Days prior to the first day of
such Interest Period.


 


“LIBOR Advance” means an Advance made
hereunder and specified to be a LIBOR Advance in accordance with
Article 2.


 


“LIBOR Loan” means a Loan made
hereunder and specified to be a LIBOR Loan in accordance with Article 2.


 


“LIBOR Margin” means, for each Pricing
Period, the percentage set forth opposite the Total Leverage Ratio as of the
last day of the Fiscal Quarter ending two months prior to the first day of that
Pricing Period:


 


	
  Total Leverage Ratio

  	
   

  	
  LIBOR Margin

  	
   

  
	
  Greater than or equal to 5.75:1.00

  	
   

  	
  3.50

  	
  %

  
	
  Less than 5.75:1.00 but greater than or
  equal to 5.25:1.00

  	
   

  	
  3.25

  	
  %

  
	
  Less than 5.25:1.00 but greater than or
  equal to 4.75:1.00

  	
   

  	
  3.00

  	
  %

  
	
  Less than 4.75:1.00 but greater than or
  equal to 4.25:1.00

  	
   

  	
  2.75

  	
  %

  
	
  Less than 4.25:1.00

  	
   

  	
  2.50

  	
  %

  



 


From the Closing Date through August 31, 2003, the LIBOR Rate
Margin shall be 3.25%.


 


12

















 


“LIBOR Office” means, as to each
Lender, its office or branch so designated by written notice the Administrative
Agent as its LIBOR Office.  If no LIBOR
Office is designated by a Lender, its LIBOR Office shall be its office at its
address for purposes of notices hereunder.


 


“License Revocation” means the revocation,
failure to renew or suspension of, or the appointment of a receiver, supervisor
or similar official with respect to, any casino, gambling or gaming license
issued by any Gaming Board covering any casino or gaming facility of Borrower
and its Subsidiaries.


 


“Lien” means any mortgage, deed of
trust, pledge, hypothecation, assignment for security, security interest,
encumbrance, lien or charge of any kind, whether voluntarily incurred or
arising by operation of Law or otherwise, affecting any Property, including
any agreement to grant any of the foregoing, any conditional sale or other
title retention agreement, any lease in the nature of a security interest,
and/or the filing of or agreement to give any financing statement (other
than a precautionary financing statement with respect to a lease that is
not in the nature of a security interest) under the Uniform Commercial Code or
comparable Law of any jurisdiction with respect to any Property.


 


“Loan” means the aggregate of the
Advances made at any one time by the Lenders pursuant to Article 2.


 


“Loan Documents” means, collectively,
this Agreement, the Notes, the Swing Line Documents, the Collateral Documents,
any Secured Swap Agreement, the Subordination Agreement, each Request for
Letter of Credit, each Request for Loan, the letter described in
Sections 3.2, 3.4 and 3.5, each Compliance Certificate and any other
agreements of any type or nature hereafter executed and delivered by Borrower
or any of its Subsidiaries or Affiliates, to the Administrative Agent or to any
Lender in any way relating to or in furtherance of this Agreement, in each case
either as originally executed or as the same may from time to time be
supplemented, modified, amended, restated, extended or supplanted.


 


“Maintenance Capital Expenditures”
means any Capital Expenditure for the maintenance, repair, restoration or
refurbishment of any portion of the Hard Rock Hotel existing as of the Closing
Date (and after completion of the Proposed Expansion, of the Proposed
Expansion), but not any Capital Expenditure which adds to or further improves
such property or otherwise constitutes part of the Proposed Expansion.


 


“Margin Stock” means “margin stock” as
such term is defined in Regulation G, T, U or X.


 


“Market Day” means any Banking Day on which
dealings in Dollar deposits are conducted by and among banks in the London
interbank eurodollar market.


 


“Material Adverse Effect” means any
set of circumstances or events which (a) has or could reasonably be
expected to have any material adverse effect whatsoever upon the validity or
enforceability of any Loan Document, (b) is or could reasonably be
expected to be material and adverse to the condition (financial or otherwise),
business operations


 


13

















 


or prospects of Borrower and its Subsidiaries, taken as a whole, or
(c) materially impairs or could reasonably be expected to materially
impair the ability of Borrower and its Subsidiaries, taken as a whole, to
perform the Obligations.


 


“Maturity Date” means May 30,
2008.


 


“Multiemployer Plan” means any
employee benefit plan of the type described in Section 4001(a)(3) of
ERISA.


 


“Negative Pledge” means a Contractual
Obligation that contains a covenant binding on Borrower or any of its
Subsidiaries that prohibits Liens on any of its or their Property, other
than (a) any such covenant contained in a Contractual Obligation
granting a Lien permitted under Section 6.9 which affects only the Property
that is the subject of such permitted Lien and (b) any such covenant that
does not apply to Liens securing the Obligations.


 


“Net Income” means, with respect to
any fiscal period, the consolidated net income of Borrower and its Subsidiaries
for that period, determined in accordance with Generally Accepted Accounting Principles,
consistently applied.


 


“Net Cash Proceeds” means with respect
to any Disposition or any offerings of equity securities (other than equity
securities offered to management of Borrower or of any of its Subsidiaries or
to the Permitted Investor) of Borrower or its Subsidiaries, the gross sales
proceeds received by Borrower and its Subsidiaries from such Disposition or
offering in Cash, net of brokerage commissions, legal expenses and other
transactional costs payable by Borrower and its Subsidiaries with respect to
such Disposition or offering, and net of an amount determined in good
faith by Borrower to be the estimated amount of income taxes payable by
Borrower attributable to such Disposition or offering, and net of, in
the case of an asset sale, amounts required to be applied to the repayment of
Indebtedness secured by a Lien on such asset and payments of unassumed
liabilities relating to the assets sold at the time or within 30 days after
such sale.  Upon the conversion of any
non-Cash proceeds from a Disposition to Cash, such Cash shall thereupon be
deemed to be Net Cash Proceeds and applied by the Administrative Agent as
provided in Section 2.7.  The
parties hereto acknowledge and agree that Net Cash Proceeds shall not include
any trade-in-credits or purchase price reductions received by Borrower or any
of its Subsidiaries in connection with an exchange of equipment for replacement
equipment that is the functional equivalent of such exchanged equipment.


 


“Note” means either a Revolving Note
or a Term Note.


 


“Obligations” means all present and
future obligations of every kind or nature of Borrower or any other Obligor at
any time and from time to time owed to the Administrative Agent or the Lenders
or any one or more of them, under any one or more of the Loan Documents,
whether due or to become due, matured or unmatured, liquidated or unliquidated,
or contingent or noncontingent, including obligations of performance as
well as obligations of payment, and including interest that accrues
after the


 


14

















 


commencement of any proceeding under any Debtor Relief Law by or
against Borrower or any Subsidiary or Affiliate of Borrower.


 


“Obligor” means Borrower and any of
its Subsidiaries.


 


“Opinions of Counsel” means the
favorable written legal opinions of Skadden, Arps, Slate, Meagher & Flom
LLP, special counsel to Borrower and its Subsidiaries, and Gordon & Silver,
Ltd., special Nevada counsel to Borrower and its Subsidiaries, in each case
issued on the Closing Date, together with copies of all factual certificates
and legal opinions upon which such counsel have relied.


 


“Outstanding Obligations” means, as of
each date of determination, and giving effect to the making of any such credit
accommodations requested on that date, the sum of (i) the aggregate principal
amount of the Outstanding Revolving Obligations, plus (ii) the aggregate
principal amount of the outstanding Term Loans.


 


“Outstanding Preferred Stock” means
the shares of Borrower’s 91⁄4% Series A Cumulative Preferred Stock and 91⁄4% Series
B Cumulative Preferred Stock issued and outstanding on the Closing Date with an
aggregate liquidation preference of approximately $50,050,000.


 


“Outstanding Revolving Obligations”
means, as of each date of determination, and giving effect to the making of any
such credit accommodations requested on that date, the sum of (i) the
aggregate principal amount of the outstanding Revolving Loans, plus (ii)
the Swing Line Outstandings, plus (iii) the Aggregate Effective
Amount of all Letters of Credit.


 


“Participant” has the meaning
specified in Section 11.8(d).


 


“PBGC” means the Pension Benefit
Guaranty Corporation or any successor thereof established under ERISA.


 


“Pension Plan” means any “employee
pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other
than a Multiemployer Plan, which is subject to Title IV of ERISA and
is maintained by Borrower or any of its Subsidiaries or to which Borrower or
any of its Subsidiaries contributes or has an obligation to contribute.


 


“Permitted Encumbrances” means:


 


(a)                                  inchoate Liens
incident to construction on or maintenance of Real Property; or Liens incident
to construction on or maintenance of Real Property now or hereafter filed of
record for which adequate reserves have been set aside (or deposits made
pursuant to applicable Law) and which are being contested in good faith by
appropriate proceedings and have not proceeded to judgment, provided
that, by reason of nonpayment of the obligations secured by such Liens, no such
Real Property is subject to a material risk of loss or forfeiture;


 


15

















 


(b)                                 Liens for taxes and
assessments on Real Property which are not yet past due; or Liens for taxes and
assessments on Real Property for which adequate reserves have been set aside
and are being contested in good faith by appropriate proceedings and have not
proceeded to judgment, provided that, by reason of nonpayment of the
obligations secured by such Liens, no such Real Property is subject to a
material risk of loss or forfeiture;


 


(c)                                  minor defects and
irregularities in title to any Real Property which in the aggregate do not
materially impair the fair market value or use of the Real Property for the
purposes for which it is or may reasonably be expected to be held;


 


(d)                                 easements, exceptions,
licenses, reservations, or other agreements for the purpose of pipelines,
conduits, cables, telecommunications, wire communication lines, power lines and
substations, streets, trails, walkways, drainage, irrigation, water, and
sewerage purposes, dikes, canals, ditches, the removal of oil, gas, coal, or
other minerals, and other like purposes affecting Real Property, facilities, or
equipment which in the aggregate do not materially burden or impair the fair
market value or use of such Real Property for the purposes for which it is or
may reasonably be expected to be held;


 


(e)                                  rights reserved to or
vested in any Governmental Agency to control or regulate, or obligations or
duties to any Governmental Agency with respect to, the use of any Real
Property;


 


(f)                                    rights reserved to
or vested in any Governmental  Agency to
control or regulate, or obligations or duties to any Governmental Agency with
respect to, any right, power, franchise, grant, approval, license, or permit;


 


(g)                                 present or future
zoning laws and ordinances or other Laws and ordinances restricting the
occupancy, use, or enjoyment of Real Property;


 


(h)                                 statutory Liens, other
than those described in clauses (a) or (b) above, arising in the
ordinary course of business with respect to obligations which are not
delinquent or are being contested in good faith by appropriate proceedings, provided
that, if delinquent, adequate reserves have been set aside with respect thereto
and, by reason of nonpayment, no Property is subject to a material risk of loss
or forfeiture;


 


(i)                                     rights of tenants
under leases and rental agreements covering Real Property entered into in the
ordinary course of business of the Person owning such Real Property;


 


(j)                                     Liens consisting
of pledges or deposits to secure obligations under workers’ compensation laws
or similar legislation, including Liens of judgments thereunder which are not
currently dischargeable;


 


16

















 


(k)                                  other non-consensual
Liens incurred in the ordinary course of business but not in connection with an
extension of credit, which do not in the aggregate, when taken together with
all other Liens, materially impair the value or use of the Property of Borrower
and the Subsidiaries of Borrower, taken as a whole; and


 


(l)                                     the matters
disclosed on Schedule B to the ALTA lenders policy of title insurance delivered
to the Administrative Agent pursuant to Section 8.1(a).


 


“Permitted Investor” means Peter A.
Morton or any corporation, partnership or other Person in which Peter A. Morton
owns and holds the power to vote, at least 51% of such Person’s capital stock
or other comparable ownership interest entitled to ordinary voting power or any
trustee, executor or receiver appointed to manage or administer the assets of
Peter A. Morton following his death.


 


“Permitted Right of Others” means a
Right of Others consisting of (a) an interest (other than a legal or
equitable co-ownership interest, an option or right to acquire a legal or
equitable co-ownership interest and any interest of a ground lessor under a
ground lease), that does not materially impair the value or use of Property for
the purposes for which it is or may reasonably be expected to be held, and
(b) an option or right to acquire a Lien that would be a Permitted
Encumbrance.


 


“Person” means any individual or
entity, including a trustee, corporation, limited liability company,
general partnership, limited partnership, joint stock company, trust, estate,
unincorporated organization, business association, firm, joint venture,
Governmental Agency, or other entity.


 


“Pricing Period” means each period of
three calendar months beginning on the first 
day of each March, June, September and December.


 


“Project Site” means the 16.7 acre
site which is the location of the Hard Rock Hotel, which real property is
further described on the ALTA/ASCM Land Title Survey prepared by HMH, Inc.
dated May 15, 2003.


 


“Projections” means the financial
projections included in the Confidential Offering Memorandum for the
$40,000,000 Senior Secured Facility dated May 2003, prepared based on
information provided by Borrower and previously delivered to the Administrative
Agent.


 


“Property” means any interest in any
kind of property or asset, whether real, personal or mixed, or tangible or
intangible.


 


“Proposed Expansion” means the
proposed expansion/renovation of the Hard Rock Hotel facility consisting of the
expansion of its banquet facilities, the expansion of its parking facilities,
the expansion of a nightclub on the Property, the development of a mega high
roller suite and other capital improvements.


 


17

















 


“Pro Rata Share” means, with respect
to each Commitment of each Lender at any time, a fraction (expressed as a
percentage, carried out to the ninth decimal place), the numerator of which is
the amount of such Commitment of such Lender at such time and the denominator
of which is the aggregate amount of such Commitments at such time (or, if the Aggregate
Commitments have been terminated, the percentage of the Outstanding Obligations
owned by that Lender).  The Pro Rata
Share(s) of each Lender is set forth in the records of the Administrative
Agent.


 


“Qualified Subordinated Notes” means
the notes substantially in the form reasonably acceptable to the Administrative
Agent and delivered to the Permitted Investor as of the Closing Date.


 


“Quarterly Payment Date” means each
May 31, August 31, November 30 and February 28 (or, in a leap year,
February 29) to occur following the date of this Agreement.


 


“Real Property” means, as of any date
of determination, all real Property then or theretofore owned, leased or
occupied by Borrower or any of its Subsidiaries, including the Project
Site.


 


“Reduction Date” means the last day of
each Fiscal Quarter, commencing with the Fiscal Quarter ending
September 30, 2004 through March 31, 2008 and the Maturity Date.


 


“Register” has the meaning specified
in Section 11.8(c).


 


“Regulation D” means Regulation D, as
at any time amended, of the Board of Governors of the Federal Reserve System,
or any other regulation in substance substituted therefor.


 


“Regulations U and X” means
Regulations U and X, as at any time amended, of the Board of Governors of the
Federal Reserve System, or any other regulations in substance substituted
therefor.


 


“Request for Letter of Credit” means a
written request for a Letter of Credit substantially in the form of
Exhibit F, signed by a Responsible Official of Borrower, on its behalf,
and properly completed to provide all information required to be included
therein.


 


“Request for Loan” means a written
request for a Loan substantially in the form of Exhibit E, signed by a
Responsible Official of Borrower and properly completed to provide all
information required to be included therein.


 


“Requirement of Law” means, as to any
Person, the articles or certificate of incorporation and by-laws or other
organizational or governing documents of such Person, and any Law, or judgment,
award, decree, writ or determination of a Governmental Agency, in each case
applicable to or binding upon such Person or any of its Property or to which
such Person or any of its Property is subject.


 


18

















 


“Requisite Lenders” means (a) as of
any date of determination prior to the termination of the Commitments, Lenders
having in the aggregate 51% or more of the Aggregate Commitments and (b) as of
any date of determination if the Commitments have then been terminated, Lenders
holding 51% or more of the Outstanding Obligations.


 


“Requisite Revolving Lenders” means
(a) as of any date of determination if the Revolving Loan Commitment is then in
effect, Revolving Lenders having in the aggregate 51% or more of the Revolving
Loan Commitment then in effect and (b) as of any date of determination if
the Revolving Loan Commitment has then been terminated, Revolving Lenders
holding 51% or more of the Outstanding Revolving Obligations.


 


“Responsible Official” means
(a) when used with reference to a Person other than an individual, any
officer of such Person, general partner of such Person, officer of a corporate
general partner of such Person, or corporate officer of a corporate general
partner of a partnership that is a general partner of such Person, or any other
responsible official thereof duly acting on behalf thereof, and (b) when
used with reference to a Person who is an individual, such Person.  Any document or certificate hereunder that
is signed or executed by a Responsible Official of another Person shall be
conclusively presumed to have been authorized by all necessary corporate,
partnership and/or other action on the part of such other Person.


 


“Revolving Lender” means each Lender
that holds a Revolving Loan Commitment.


 


“Revolving Loan” means each Loan made
by a Revolving Lender under the Revolving Loan Commitment.


 


“Revolving Loan Commitment” means,
subject to Sections 2.5, 2.6 and 2.7, $20,000,000.  As of the Closing Date, the respective Pro
Rata Shares of the Revolving Lenders with respect to the Revolving Loan
Commitment are set forth in the records of the Administrative Agent.


 


“Revolving Note” means the promissory
note made by Borrower to a Revolving Lender evidencing the Advances under that
Lender’s Pro Rata Share of the Revolving Loan Commitment, substantially in the
form of Exhibit C, either as originally executed or as the same may from
time to time be supplemented, modified, amended, renewed, extended or
supplanted.


 


“Revolving Pro Rata Share” means, with
respect to each Revolving Lender, the percentage of the Revolving Loan
Commitment held by that Lender (or, if the aggregate Revolving Loan Commitment
has been terminated, the percentage of the outstanding Revolving Loans owned by
that Lender).  The Revolving Pro Rata
Share of each Revolving Lender is set forth in the records of the
Administrative Agent.


 


“Right of Others” means, as to any
Property in which a Person has an interest, any legal or equitable right, title
or other interest (other than a Lien) held by any other Person in that
Property, and any option or right held by any other Person to acquire any such
right, title or other interest in that Property, including any option or
right to acquire a Lien.


 


19

















 


“Second Lien Notes” means the second
lien notes due 2013 issued by the Borrower pursuant to the Indenture.


 


“Secured Swap Agreement” means a Swap
Agreement between Borrower and a Lender.


 


“Security Agreement” means the
security agreement executed and delivered by Borrower on the Closing Date,
either as originally executed or as it may from time to time be supplemented,
modified, amended, extended or supplanted.


 


“Senior Debt” means, as of each date
of determination, Total Debt minus Subordinated Obligations.


 


“Senior Leverage Ratio” means, as of
the last day of each Fiscal Quarter, the ratio of (a) the average principal
amount of the outstanding Senior Debt as of the last day of each of the three
constituent calendar months in that Fiscal Quarter, to (b) EBITDA for the four
most recently ended Fiscal Quarters as of such date.


 


“Senior Officer” means the
(a) chief executive officer, (b) president, (c) any vice
president, (d) chief financial officer, (e) treasurer or
(f) assistant treasurer of the Person designated.


 


“SPC” has the meaning specified in
Section 11.8(h).


 


“Special LIBOR Circumstance” means the
application or adoption after the Closing Date of any Law or interpretation, or
any change therein or thereof, or any change in the interpretation or
administration thereof by any Governmental Agency, central bank or comparable
authority charged with the interpretation or administration thereof, or
compliance by any Lender or its LIBOR Office with any request or directive
(whether or not having the force of Law) of any such Governmental Agency,
central bank or comparable authority, or the existence or occurrence of
circumstances affecting the London interbank eurodollar market generally that
are beyond the reasonable control of the Lenders.


 


“Subordinated Obligations” means
(a) the Indebtedness of Borrower pursuant to the Indenture, (b) the
Indebtedness of Borrower pursuant to the Qualified Subordinated Notes,
(c) the Supervisory Fees payable by Borrower and (d) any other
Indebtedness of Borrower which is contractually subordinated in right of
payment to the Obligations, the terms of which are approved by the
Administrative Agent, acting with the consent of the Requisite Lenders, in
writing.


 


“Subordination Agreement” means the
Subordination Agreement, executed by Peter A. Morton regarding Supervisory Fees
on the Closing Date, either as originally executed or as it may from time to
time be supplemented, modified, amended, extended or supplanted.


 


“Subsidiary” means, as of any date of
determination and with respect to any Person, any corporation, limited
liability company or partnership (whether or not, in either case,


 


20

















 


characterized as such or as a “joint venture”), whether now existing or
hereafter organized or acquired: (a) in the case of a corporation or
limited liability company, of which a majority of the securities having
ordinary voting power for the election of directors or other governing body
(other than securities having such power only by reason of the happening of a
contingency) are at the time beneficially owned by such Person and/or one or
more Subsidiaries of such Person, or (b) in the case of a partnership, of
which a majority of the partnership or other ownership interests are at the
time beneficially owned by such Person and/or one or more of its Subsidiaries.


 


“Supervisory Fees” means fees paid to
the Permitted Investor on a monthly basis pursuant to the Amended and Restated
Supervisory Agreement dated as of October 21, 1997, between Peter A.
Morton and Borrower, as in effect on the Closing Date.


 


“Swap Agreement” means a written
agreement between Borrower and one or more financial institutions providing for
“swap”, “cap”, “collar” or other interest rate protection with respect to any
Indebtedness.


 


“Swing Line” means the revolving line
of credit established by the Swing Line Lender in favor of Borrower
pursuant to Section 2.9.


 


“Swing Line Advances” means loans made
by the Swing Line Lender to Borrower pursuant to Section 2.9.


 


“Swing Line Lender” means Bank of
America or any successor thereto.


 


“Swing Line Documents” means the
$2,000,000 promissory note of even date herewith (as at any time amended) and
any other documents executed by Borrower in favor of the Swing Line Lender
in connection with the Swing Line.


 


“Swing Line Outstandings” means, as of
any date of determination, the aggregate principal Indebtedness of Borrower on
all Swing Line Loans then outstanding.


 


“Term Loan” has the meaning specified
in Section 2.1(a).


 


“Term Loan Commitment” means, subject
to Sections 2.5, 2.6 and 2.7, $20,000,000.  As of the Closing Date, the respective Pro Rata Shares of the
Lenders with respect to the Term Loan Commitment are set forth in the records
of the Administrative Agent.


 


“Term Loan Lender” means each Lender
that holds a Term Loan Commitment.


 


“Term Note” means the promissory note
made by Borrower to a Term Loan Lender evidencing the Advances under that
Lender’s Pro Rata Share of the Term Loan Commitment, substantially in the form
of Exhibit D, either as originally executed or as the same may from time
to time be supplemented, modified, amended, renewed, extended or supplanted.


 


“Title Company” means Nevada Title
Company or such other title insurance company as is reasonably acceptable to
the Administrative Agent.


 


21

















 


“Total Debt” means, as of each date of
determination, the aggregate principal Indebtedness of Borrower and its
Subsidiaries for borrowed money and Capital Lease Obligations on that date
(including any Contingent Obligations in support of such Indebtedness or
Capital Lease Obligations to the extent then required by Borrower’s independent
auditors to be shown on Borrower’s consolidated balance sheet as of that date
in accordance with Generally Accepted Accounting Principles); provided that
Total Debt will not include accrued but unpaid Supervisory Fees, indebtedness
to the Permitted Investor that is subordinated on terms satisfactory to the
Administrative Agent or indebtedness evidenced by the Qualified Subordinated
Notes.


 


“Total Leverage Ratio” means, as of
the last day of each Fiscal Quarter, the ratio of (a) the average
principal amount of the outstanding Total Debt as of the last day of each of
the three constituent calendar months in that Fiscal Quarter, to (b) EBITDA
for the four most recently ended Fiscal Quarter as of such date.


 


“to the best knowledge of” means, when
modifying a representation, warranty or other statement of any Person, that the
fact or situation described therein is known by the Person (or, in the case of
a Person other than a natural Person, known by a Responsible Official of that
Person) making the representation, warranty or other statement, or with the
exercise of reasonable due diligence under the circumstances (in accordance
with the standard of what a reasonable Person in similar circumstances would
have done) would have been known by the Person (or, in the case of a Person
other than a natural Person, would have been known by a Responsible Official of
that Person).


 


“Trademark Assignment” means the
Trademark Security Interest Assignment, executed by Borrower on the Closing
Date, either as originally executed or as it may from time to time be
supplemented, modified, amended, extended or supplanted.


 


“type”, when used with respect to any
Loan or Advance, means the designation of whether such Loan or Advance is a
Base Rate Loan or Advance, or a LIBOR Loan or Advance.


 


“Unrelated Person” means any Person other
than (i) an employee stock ownership plan or other employee benefit
plan covering the employees of Borrower and its Subsidiaries or (ii) an
Affiliate of any Person or group of related Persons which as of the date of
this Agreement is the beneficial owner of 25% or more (in the aggregate) of the
outstanding common stock of Borrower.


 


1.2                                 Use of Defined Terms.  Any defined term used in the plural shall
refer to all members of the relevant class, and any defined term used in the
singular shall refer to any one or more of the members of the relevant class.


 


1.3                                 Accounting Terms.  All accounting terms not specifically defined in this Agreement
shall be construed in conformity with, and all financial data required to be
submitted by this Agreement shall be prepared in conformity with, Generally
Accepted Accounting Principles applied on a consistent basis, except as
otherwise specifically prescribed herein. 
In the event that Generally Accepted Accounting Principles change during
the term of this


 


22

















 


Agreement such that the
covenants contained in Sections 6.11 through 6.14 would then be calculated
in a different manner or with different components, (a) Borrower and the
Lenders agree to amend this Agreement in such respects as are necessary to
conform those covenants as criteria for evaluating Borrower’s financial
condition to substantially the same criteria as were effective prior to such
change in Generally Accepted Accounting Principles, (b) Borrower shall be
deemed to be in compliance with the covenants contained in the aforesaid
Sections following any such change in Generally Accepted Accounting Principles
until the effectiveness of any amendment contemplated by clause (a) above if
and to the extent that Borrower would have been in compliance therewith under
Generally Accepted Accounting Principles as in effect immediately prior to such
change and (c) Borrower shall provide to the Administrative Agent and the
Lenders financial statements and other documents required under this Agreement
or as reasonably requested hereunder setting forth a reconciliation between
calculations of such ratio or requirement made before and after giving effect
to such change in Generally Accepted Accounting Principles.


 


1.4                                 Rounding.  Any financial ratios required to be
maintained by Borrower pursuant to this Agreement shall be calculated by
dividing the appropriate component by the other component, carrying the result
to one place more than the number of places by which such ratio is expressed in
this Agreement and rounding the result up or down to the nearest number (with a
round-up if there is no nearest number) to the number of places by which such
ratio is expressed in this Agreement.


 


1.5                                 Exhibits and Schedules.  All Exhibits and Schedules to this
Agreement, either as originally existing or as the same may from time to time
be supplemented, modified or amended, are incorporated herein by this
reference.


 


1.6                                 References to “Borrower and its
Subsidiaries”.  Any
reference herein to “Borrower and its Subsidiaries” or the like shall refer
solely to Borrower during such times as Borrower shall have no
Subsidiaries.  No use of the term
“Subsidiary” or any derivative thereof in the Loan Documents shall imply a
right in Borrower to make any Investments in or Acquisitions of any Person.


 


1.7                                 References to Times.  Each reference to a time of day set forth in
the Loan Documents shall, unless expressly stated to the contrary, be a
reference to the then prevailing time in the city in which the Administrative
Agent’s Office is located.


 


1.8                                 Miscellaneous Terms.  The term “or” is disjunctive; the term “and”
is conjunctive.  The term “shall” is
mandatory; the term “may” is permissive. 
Masculine terms also apply to females; feminine terms also apply to males.  The term “including” is by way of example
and not limitation.


 


ARTICLE 2

LOANS


 


2.1                                 Loans-General.


 


(a)                                  Subject
to the terms and conditions set forth in this Agreement, each of the Term Loan
Lenders agrees to make Advances to the Borrower in such amount (not to exceed
the Term Loan Commitment) as the Borrower may request in up to two Advances
(each


 


23

















 


individually, a “Term Loan”
and, collectively, the “Term Loans”). 
The Term Loans shall be made by the Term Loan Lenders in up to two
Advances on or before the thirtieth day following the Closing Date, and any
portion of the Term Loan Commitment not borrowed on or before the thirtieth day
following the Closing Date shall expire on such date.  All Term Loans shall be made by the Term Loan Lenders
simultaneously and proportionately to their respective Pro Rata Shares, it
being understood that no Lender shall be responsible for any failure by any
other Lender to perform its obligation to make any Term Loan hereunder nor
shall the Term Loan Commitment of any Lender be increased or decreased as a
result of any such failure.  Once
repaid, Term Loans may not be reborrowed.


 


(b)                                 Subject
to the terms and conditions set forth in this Agreement, from time to time from
the Closing Date through the Maturity Date each Revolving Lender shall, pro
rata according to that Lender’s Pro Rata Share of the then applicable Revolving
Loan Commitment, make revolving Advances to Borrower under the Revolving Loan
Commitment in such amounts as Borrower may request that do not result in the
Outstanding Revolving Obligations being in excess of the Revolving Loan
Commitment.  Subject to the limitations
set forth herein, Borrower may borrow, repay and reborrow under the Revolving
Loan Commitment without premium or penalty.


 


(c)                                  Subject
to the next sentence, each Loan shall be made pursuant to a Request for Loan
which shall specify the requested (i) date of such Loan, (ii) type of
Loan, (iii) amount of such Loan, (iv) term or revolving nature of
such Loan and (v) in the case of a LIBOR Loan, the Interest Period for
such Loan.  Unless the Administrative
Agent has previously notified Borrower to the contrary (which notice may be
given in the sole and absolute discretion of the Administrative Agent), Loans
may be requested by telephone by a Responsible Official of Borrower, in which
case Borrower shall confirm such request by promptly delivering a Request for
Loan in person or by telecopier conforming to the preceding sentence to the
Administrative Agent.  Neither the
Administrative Agent nor any Lender shall incur any liability whatsoever
hereunder in acting upon any telephonic request for a Loan purportedly made by
a Responsible Official of Borrower, which hereby agrees to indemnify the
Administrative Agent and the Lenders from any loss, cost, expense or liability
as a result of so acting.


 


(d)                                 Promptly
following receipt of a Request for Loan, the Administrative Agent shall notify
each Lender that holds a Commitment for the type of Loan requested by telephone
or telecopier (and if by telephone, promptly confirmed by telecopier) of the
date and type of the Loan, the applicable Interest Period, and that Lender’s
Pro Rata Share of the requested Loan. 
Not later than 11:00 a.m. on the date specified for any Loan (which
must be a Banking Day), each Lender shall make its Pro Rata Share of the Loan
in immediately available funds available to the Administrative Agent at the
Administrative Agent’s Office.  Upon
satisfaction or waiver of the applicable conditions set forth in
Article 8, all Advances shall be credited on that date in immediately
available funds to the Disbursement Account.


 


(e)                                  Unless
the Requisite Revolving Lenders otherwise consent, each Revolving Loan shall be
in an amount which is an integral multiple of $100,000 and shall not be less
than $500,000.


 


24

















 


(f)                                    The
Advances made by each Revolving Lender shall be evidenced by that Lender’s
Revolving Note.  The Advances made by
each Term Lender shall be evidenced by that Lender’s Term Note.


 


(g)                                 A
Request for Loan shall be irrevocable upon the Administrative Agent’s receipt
thereof (or, in the case of a telephonic request for Loan referred to in the
second sentence of Section 2.1(c), upon the Administrative Agent’s receipt
of that telephone call).


 


(h)                                 If
no Request for Loan (or telephonic request for Loan referred to in the second
sentence of Section 2.1(c), if applicable) has been made within the
requisite notice periods set forth in Section 2.2 or 2.3 in connection
with a Loan which, if made and giving effect to the application of the proceeds
thereof, would not increase the outstanding principal Indebtedness evidenced by
the Notes, then Borrower shall be deemed to have requested, as of the date upon
which the related then outstanding Loan is due pursuant to Section 3.1(e),
a Base Rate Loan in an amount equal to the amount necessary to cause the
outstanding principal Indebtedness evidenced by such Notes to remain the same
and the Lenders shall make the Advances necessary to make such Loan
notwithstanding Sections 2.1(c), 2.2 and 2.3.


 


(i)                                     If
a Loan is to be made on the same date that another Loan is due and payable,
Borrower or the Lenders, as the case may be, shall at the request of the
Administrative Agent make available to the Administrative Agent the net amount
of funds giving effect to both such Loans and the effect for purposes of this
Agreement shall be the same as if separate transfers of funds had been made
with respect to each such Loan.


 


2.2                                 Base
Rate Loans.  Each request by
Borrower for a Base Rate Loan shall be made pursuant to a Request for Loan (or
telephonic or other request for loan referred to in the second sentence of
Section 2.1(c), if applicable) received by the Administrative Agent, at
the Administrative Agent’s Office, not later than 10:00 a.m. on the date
(which must be a Banking Day) of the requested Base Rate Loan.  All Loans shall constitute Base Rate Loans
unless properly designated as LIBOR Loans pursuant to Section 2.3.


 


2.3                                 LIBOR
Loans.


 


(a)                                  Each
request by Borrower for a LIBOR Loan shall be made pursuant to a Request for
Loan (or telephonic or other request for Loan referred to in the second
sentence of Section 2.1(c), if applicable) received by the Administrative
Agent, at the Administrative Agent’s Office, not later than 10:00 a.m. at
least three Market Days before the first day of the applicable Interest Period.


 


(b)                                 On
the date which is two Market Days before the first day of the applicable
Interest Period, the Administrative Agent shall confirm its determination of
the applicable LIBOR (which determination shall be conclusive in the absence of
manifest error) and promptly shall give notice of the same to Borrower and the
applicable Lenders by telephone or telecopier (and if by telephone, promptly
confirmed by telecopier).


 


(c)                                  Unless
the Administrative Agent and the Requisite Lenders otherwise consent, no more
than twelve LIBOR Loans shall be outstanding at any one time.


 


25

















 


(d)                                 No
LIBOR Loan may be requested where a Default or Event of Default has occurred
and remains continuing.


 


(e)                                  Nothing
herein shall be deemed to obligate any Lender to obtain the funds for any Loan
in any particular place or manner or to constitute a representation by any
Lender that it has obtained or will obtain the funds for any Loan in any
particular place or manner.


 


2.4                                 Letters of Credit.


 


(a)                                  On
the Closing Date, each of the Continuing Letters of Credit shall be deemed to
have been issued and to be outstanding under this Agreement, and each issuer of
a Continuing Letter of Credit hereby consents to the termination, concurrently
with the Closing Date, of the participation therein of the lenders under the
Existing Loan Agreement.


 


(b)                                 Subject
to the terms and conditions hereof, at any time and from time to time from the
Closing Date through the Banking Day immediately prior to the Maturity Date,
the Issuing Lender shall issue such Letters of Credit under the Revolving Loan
Commitment as Borrower may request by a Request for Letter of Credit; provided
that (i) giving effect to all such Letters of Credit, the Outstanding
Revolving Obligations do not exceed the then applicable Revolving Loan
Commitment and (ii) the Aggregate Effective Amount under all outstanding
Letters of Credit shall not exceed $5,000,000. 
Each Letter of Credit shall be in a form reasonably acceptable to the
Issuing Lender.  Unless all the
Revolving Lenders otherwise consent in a writing delivered to the
Administrative Agent, no Letter of Credit shall have a term which exceeds one
year or extends beyond the Maturity Date.


 


(c)                                  Each
Request for Letter of Credit shall be submitted to the Issuing Lender, with a
copy to the Administrative Agent, at least two Banking Days prior to the date
upon which the related Letter of Credit is proposed to be issued.  The Administrative Agent shall promptly
notify the Issuing Lender whether such Request for Letter of Credit, and the
issuance of a Letter of Credit pursuant thereto, conforms to the requirements
of this Agreement.  Upon issuance of a
Letter of Credit, the Issuing Lender shall promptly notify the Administrative
Agent, who shall promptly notify the Revolving Lenders, of the amount and terms
thereof.


 


(d)                                 Upon
the issuance of a Letter of Credit, each Revolving Lender shall be deemed to
have purchased a pro rata participation in such Letter of Credit from the
Issuing Lender in an amount equal to that Lender’s Revolving Pro Rata
Share.  Without limiting the scope and
nature of each Revolving Lender’s participation in any Letter of Credit, to the
extent that the Issuing Lender has not been reimbursed by Borrower for any
payment required to be made by the Issuing Lender under any Letter of Credit,
each Revolving Lender shall, pro rata according to its Revolving Pro Rata
Share, pay the purchase price for such participation to the Issuing Lender
through the Administrative Agent promptly upon demand therefor.  The obligation of each Revolving Lender to
so pay the participation purchase price to the Issuing Lender shall be absolute
and unconditional and shall not be affected by the occurrence of an Event of
Default or any other occurrence or event. 
Any such payment of the purchase price shall not relieve or otherwise
impair the obligation of Borrower to reimburse the Issuing Lender for the amount
of any payment made by the Issuing Lender under any Letter of Credit together
with interest as hereinafter provided.


 


26

















 


(e)                                  Borrower
agrees to pay to the Issuing Lender through the Administrative Agent an amount
equal to any payment made by the Issuing Lender with respect to each Letter of
Credit upon demand by the Issuing Lender therefor, together with interest on
such amount from the date of any payment made by the Issuing Lender at the
Default Rate.  The principal amount of
any such payment shall be used to reimburse the Issuing Lender for the payment
made by it under the Letter of Credit and, to the extent that the Revolving
Lenders have not reimbursed the Issuing Lender pursuant to Section 2.4(d),
the interest amount of any such payment shall be for the account of the Issuing
Lender.  Each Revolving Lender that has
paid the participation purchase price to the Issuing Lender pursuant to
Section 2.4(d) shall thereupon acquire a pro rata participation, to the
extent of such payment, in the claim of the Issuing Lender against Borrower for
reimbursement of principal and interest under this Section 2.4(e) and
shall share, in accordance with that pro rata participation, in any
principal payment made by Borrower with respect to such claim and in any
interest payment made by Borrower (but only with respect to periods subsequent
to the date such Revolving Lender paid the participation purchase price to the
Issuing Lender) with respect to such claim.


 


(f)                                    Borrower
may, pursuant to a Request for Loan, request that Advances be made pursuant to
Section 2.1(b) to provide funds for the payment required by
Section 2.4(e) and, for this purpose, the conditions precedent set forth
in Article 8 shall not apply.  The
proceeds of such Advances shall be paid directly to the Issuing Lender to
reimburse it for the payment made by it under the Letter of Credit.


 


(g)                                 If
Borrower fails to make the payment required by Section 2.4(e) on a timely
basis then, in lieu of the payment of the participation purchase price to the
Issuing Lender under Section 2.4(d), the Issuing Lender may (but is not
required to), without notice to or the consent of Borrower, instruct the
Administrative Agent to cause Base Rate Advances to be made by the Revolving
Lenders under their Pro Rata Shares of the Revolving Loan Commitment in an
aggregate amount equal to the amount paid by the Issuing Lender with respect to
that Letter of Credit and, for this purpose, the conditions precedent to
Advances set forth in Article 8 shall not apply.  The proceeds of such Advances shall be paid directly to the
Issuing Lender to reimburse it for the payment made by it under the Letter of
Credit.


 


(h)                                 The
issuance of any supplement, modification, amendment, renewal, or extension to
or of any Letter of Credit shall be treated in all respects the same as the
issuance of a new Letter of Credit, provided that this clause (h)
shall not require the payment of any letter of credit fees except to the extent
set forth in Section 3.4(c) or to the extent that such supplementation,
modification, amendment, renewal or extension results in an increase to the
amount of the related Letter of Credit or any extension of its tenor.


 


(i)                                     The
obligation of Borrower to pay to the Issuing Lender the amount of any payment
made by the Issuing Lender under any Letter of Credit shall be absolute,
unconditional, and irrevocable, subject only to performance by the Issuing
Lender of its obligations to Borrower under Uniform Commercial Code
Section 5109, as in effect in the State of Nevada.  Without limiting the foregoing, the
obligations of Borrower to the Issuing Lender shall not be affected by any of
the following circumstances:


 


27

















 


(i)                                     any lack of
validity or enforceability of the Letter of Credit, this Agreement, or any
other Agreement or instrument relating thereto;


 


(ii)                                  any amendment or
waiver of the terms of the Letter of Credit, or any consent to departure from
the Letter of Credit, this Agreement, or any other Agreement or instrument
relating thereto;


 


(iii)                               the existence of any
claim, setoff, defense, or other rights which Borrower may have at any time
against any Creditor, any beneficiary of the Letter of Credit (or any persons
or entities for whom any such beneficiary may be acting) or any other Person,
whether in connection with the Letter of Credit, this Agreement, or any other
Agreement or instrument relating thereto, or any unrelated transactions;


 


(iv)                              any demand, statement, or
any other document presented under the Letter of Credit proving to be forged,
fraudulent, invalid, or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect whatsoever so long as any such
document appeared to comply with the terms of the Letter of Credit;


 


(v)                                 payment by the Issuing
Lender in good faith under the Letter of Credit against presentation of a draft
or any accompanying document which does not strictly comply with the terms of
the Letter of Credit;


 


(vi)                              the existence, character,
quality, quantity, condition, packing, value or delivery of any Property
purported to be represented by documents presented in connection with any
Letter of Credit or any difference between any such Property and the character,
quality, quantity, condition, or value of such Property as described in such
documents;


 


(vii)                           the time, place, manner,
order or contents of shipments or deliveries of Property as described in
documents presented in connection with any Letter of Credit or the existence,
nature and extent of any insurance relative thereto;


 


(viii)                        the solvency or financial
responsibility of any party issuing any documents in connection with a Letter
of Credit;


 


(ix)                                any failure or delay in
notice of shipments or arrival of any Property;


 


(x)                                   any error in the
transmission of any message relating to a Letter of Credit, or any delay or
interruption in any such message, not caused by the Issuing Lender;


 


(xi)                                any error, neglect or
default of any correspondent of the Issuing Lender in connection with a Letter
of Credit (but without prejudice to any claim by Borrower against such
correspondent);


 


28

















 


(xii)                             any consequence arising
from acts of God, war, insurrection, civil unrest, disturbances, labor
disputes, emergency conditions or other causes beyond the control of the
Issuing Lender;


 


(xiii)                          so long as the Issuing Lender
in good faith determines that the contract or document appears to comply with
the terms of the Letter of Credit, the form, accuracy, genuineness or legal
effect of any contract or document referred to in any document submitted to the
Issuing Lender in connection with a Letter of Credit; and


 


(xiv)                         where the Issuing Lender has
acted in good faith and observed general banking usage, any other circumstances
whatsoever.


 


(j)                                     The
Issuing Lender shall be entitled to the protection accorded to the
Administrative Agent pursuant to Article 10, mutatis  mutandis.


 


(k)                                  The
Uniform Customs and Practice for Documentary Credits, as published in its most
current version by the International Chamber of Commerce, shall be deemed a
part of this Section and shall apply to all Letters of Credit to the extent not
inconsistent with applicable Law.


 


2.5                                 Voluntary Reduction of Commitments.


 


(a)                                  Borrower
shall have the right, at any time and from time to time, without penalty or
charge, upon at least three Banking Days’ prior written notice by Borrower to
the Administrative Agent, to voluntarily reduce, permanently and irrevocably,
in amounts which are integral multiples of $500,000, or to terminate, all or a portion
of the then undisbursed portion of the Revolving Loan Commitment, provided
that any such reduction or termination shall be accompanied by payment of all
accrued and unpaid commitment fees with respect to the portion of the Revolving
Loan Commitment being reduced or terminated. 
Concurrently with the making of any such reduction in the Revolving Loan
Commitment, Borrower may specify that the installments due for one or more
Reduction Dates will be reduced in an aggregate amount which is the same as the
amount of the reduction of the Revolving Loan Commitment, provided that
in the absence of a timely specification to this effect by Borrower, each such
reduction shall be applied to installments due in the chronological order of
their occurrence.  The Administrative
Agent shall promptly notify the Revolving Lenders of any reduction or
termination of the Revolving Loan Commitment under this Section, and of any
changes to the principal installments thereafter due.


 


(b)                                 Borrower
shall have the right, at any time and from time to time, without penalty or
charge, upon at least three Banking Days’ prior written notice by Borrower to
the Administrative Agent, to voluntarily reduce, permanently and irrevocably,
in amounts which are integral multiples of $500,000, or to terminate, all or a
portion of the Term Loan Commitment, provided that any such reduction or
termination shall be accompanied by a principal payment in an amount equal to
the portion of the Term Loan Commitment being reduced or terminated.  Concurrently with the making of any such
reduction in the Term Loan Commitment, Borrower may specify that the
installments due for one or more Reduction Dates will be reduced in an


 


29

















 


aggregate amount which is the same
as the amount of the reduction of the Term Loan Commitment, provided
that in the absence of a timely specification to this effect by Borrower, each
such reduction shall be applied to installments due in the chronological order
of their occurrence.  The Administrative
Agent shall promptly notify the Term Loan Lenders of any reduction or
termination of the Term Loan Commitment under this Section, and of any changes
to the principal installments thereafter due.


 


2.6                                 Scheduled Mandatory Reductions of
Commitments.


 


(a)                                  The
Revolving Loan Commitment shall automatically and permanently reduce on
March 31, 2007 to $15,000,000.


 


(b)                                 The
Term Loan Commitment shall automatically and permanently reduce on each
Reduction Date by $1,250,000, and on the Maturity Date the Term Loan Commitment
shall be reduced to zero.


 


2.7                                 Other Mandatory Reductions of
Commitment.  The Commitments
shall automatically and permanently reduce upon receipt by Borrower or any of
its Subsidiaries by an amount equal to 100% of the Net Cash Proceeds from any
Disposition or offerings of equity securities (other than equity securities
offered to an Obligor, management of an Obligor or to the Permitted Investor)
of Borrower or its Subsidiaries; provided, however, that the
requirements of this Section shall terminate on the date upon which the
Revolving Loan Commitment is reduced to $15,000,000.  Each reduction of the Commitments pursuant to this
Section 2.7 shall be applied first to installments due under the Term Loan
Commitment in the inverse order of their occurrence and thereafter to
installments due under the Revolving Loan Commitment in the inverse order of
their occurrence.  Notwithstanding the
foregoing provisions of this Section 2.7, so long as no Default or Event
of Default shall have occurred and be continuing, no mandatory repayment shall
be required pursuant to this Section 2.7 to the extent the aggregate Net
Cash Proceeds from and after the date hereof required to be applied as
mandatory repayments in the absence of this sentence does not exceed
$1,000,000.


 


2.8                                 Administrative Agent’s Right to
Assume Funds Available for Advances. 
Unless the Administrative Agent shall have been notified by a Lender no
later than the Banking Day prior to the funding by the Administrative Agent of
any Loan that such Lender does not intend to make available to the
Administrative Agent such Lender’s Pro Rata Share of that Loan, the
Administrative Agent may assume that such Lender has made such amount available
to the Administrative Agent on the date of the Loan and the Administrative
Agent may, in reliance upon such assumption, make available to Borrower a
corresponding amount.  If the
Administrative Agent has made funds available to Borrower based on such
assumption and such corresponding amount is not in fact made available to the
Administrative Agent by such Lender, the Administrative Agent shall be entitled
to recover such corresponding amount on demand from such Lender.  If such Lender does not pay such
corresponding amount forthwith upon the Administrative Agent’s demand therefor,
the Administrative Agent promptly shall notify Borrower and Borrower shall pay
such corresponding amount to the Administrative Agent.  The Administrative Agent also shall be
entitled to recover from such Lender interest on such corresponding amount in
respect of each day from the date such corresponding amount was made available
by the Administrative Agent to Borrower to the date such corresponding amount


 


30

















 


is recovered by the Administrative
Agent, at a rate per annum equal to (a) the Federal Funds Rate for the
first two days following a demand by the Administrative Agent and (b)
thereafter, the rate of interest then payable by Borrower with respect to Base
Rate Advances.  Nothing herein shall be
deemed to relieve any Lender from its obligation to fulfill its Commitment or
to prejudice any rights which the Administrative Agent or Borrower may have
against any Lender as a result of any default by such Lender hereunder.


 


2.9                                 Swing
Line.  Subject to the terms and
conditions set forth herein, from time to time through the day prior to the
Maturity Date the Swing Line Lender shall make Swing Line Advances to
Borrower in such amounts as Borrower may request that do not result in the
Outstanding Obligations being in excess of the then applicable Commitment, provided
that (i) giving effect to such Swing Line Advance, the Swing Line
Outstandings shall not exceed $2,000,000 and (ii) without the consent of
all of the Revolving Lenders, no Swing Line Advance may be made during the
continuation of a Default or an Event of Default.  Borrower may borrow, repay and reborrow under this Section.  Unless the Swing Line Lender otherwise
agrees, each Swing Line Advance shall be in an amount which is an  integral multiple of $100,000 and shall be
made pursuant to a telephonic request by a Responsible Official of Borrower
made to the Swing Line Lender not later than 3:00 p.m., California
time, on the Banking Day of the requested borrowing (which telephonic request
shall be promptly confirmed in writing by telecopier with a copy submitted by
telecopier to the Administrative Agent). 
Promptly after receipt of such a request for borrowing, the Swing Line
Lender shall obtain telephonic verification from the Administrative Agent that,
giving effect to such request, availability for Revolving Loans will exist
under Section 2.1 (and such verification shall be promptly confirmed in
writing by telecopier).  Unless the
Swing Line Lender otherwise agrees, each repayment of a Swing Line Advance
shall be in an amount which is an integral multiple of $100,000.  If Borrower instructs the Swing Line Lender
to debit its demand deposit account at the Swing Line Lender in the amount of
any payment with respect to a Swing Line Advance, or the Swing Line Lender
otherwise receives repayment, after 3:00 p.m., California time, on a
Banking Day, such payment shall be deemed received on the next Banking
Day.  The Swing Line Lender shall promptly
notify the Administrative Agent of the Swing Line Outstandings each time there
is a change therein.


 


Swing Line
Advances shall bear interest at a fluctuating rate per annum equal to the Base
Rate plus the Base Rate Margin, payable at such intervals as may be
specified by the Swing Line Lender in its invoices to Borrower and in any event
on the Maturity Date.  The Swing Line
Lender shall be responsible for invoicing Borrower for such interest.  The interest payable on Swing Line Advances
shall be solely for the account of the Swing Line Lender, except to the extent
that any Revolving Lender has funded the participation purchased by that Lender
in accordance with this Section.


 


Upon the
making of a Swing Line Advance, each Revolving Lender shall be deemed to have
purchased from the Swing Line Lender a participation therein in an amount equal
to that Lender’s Pro Rata Share times the amount of the Swing Line
Advance.  Upon demand made by the Swing
Line Lender through the Administrative Agent, each Revolving Lender shall,
according to its Pro Rata Share, promptly provide to the Administrative Agent
for the account of the Swing Line Lender its purchase price therefor in an
amount equal to its participation therein. 
The obligation of each Revolving Lender to so provide its purchase price
to the Swing Line


 


31

















 


Lender with respect to any
Swing Line Advance made in accordance with the terms hereof shall be absolute
and unconditional and shall not be affected by the occurrence of a Default or
Event of Default or any other occurrence or event.


 


In the event
that there are Swing Line Outstandings on three consecutive Banking Days, then
on the next Banking Day (unless Borrower has made other arrangements acceptable
to the Swing Line Lender to repay the Swing Line Outstandings in full),
Borrower shall request a Revolving Loan pursuant to Section 2.1(b) in an
amount complying with Section 2.1(e) and sufficient to repay the Swing
Line Outstandings in full.  The
Administrative Agent shall automatically provide such amount to the Swing Line
Lender (which the Swing Line Lender shall then apply to the Swing Line
Outstandings) and credit any balance of the Revolving Loan in immediately
available funds to the Disbursement Account. 
In the event that Borrower fails to request a Revolving Loan within the
time specified by Section 2.2 on any such date, the Administrative Agent
may, but is not required to, without notice to or the consent of Borrower,
cause Advances to be made by the Revolving Lenders under the Revolving Loan
Commitment in the amount necessary to comply with Section 2.1(e) and
sufficient to repay all Swing Line Outstandings and, for this purpose, the
conditions precedent set forth in Article 8 shall not apply.  The proceeds of such Advances shall be paid
to the Swing Line Lender for application to the Swing Line Outstandings.  If for any reason any Swing Line
Outstandings cannot be refinanced by a Revolving Loan in accordance with this
Section, the request for Revolving Loans submitted by the Swing Line Lender as
set forth herein shall be deemed to be a request by the Swing Line Lender that
each of the Revolving Lenders fund its risk participation in the relevant Swing
Line Outstandings and each Revolving Lender’s payment to the Administrative
Agent for the account of the Swing Line Lender shall be deemed payment in
respect of such participation.


 


ARTICLE 3

PAYMENTS AND FEES


 


3.1                                 Principal and Interest.


 


(a)                                  Interest
shall be payable on the outstanding daily unpaid principal amount of each
Advance from the date thereof until payment in full is made and shall accrue
and be payable at the rates set forth or provided for herein before and after
default, before and after maturity, before and after judgment, and before and
after the commencement of any proceeding under any Debtor Relief Law, with
interest on overdue interest at the Default Rate to the fullest extent
permitted by applicable Laws.


 


(b)                                 Interest
accrued on each Base Rate Loan on the last Banking Day of each calendar month,
and on the date of any prepayment of the Notes pursuant to Section 3.1(f),
shall be due and payable on that day.  Except
as otherwise provided in Section 3.9, the unpaid principal amount of each
Base Rate Loan shall bear interest at a fluctuating rate per annum equal to the
Base Rate plus the Base Rate Margin. 
Each change in the interest rate under this Section 3.1(b) due to a
change in the Base Rate shall take effect simultaneously with the corresponding
change in the Base Rate.


 


(c)                                  Interest
accrued on each LIBOR Loan which is for a term of three months or less shall be
due and payable on the last day of the related Interest Period.  Interest accrued on


 


32

















 


each other LIBOR Loan shall be
due and payable on the date which is three months after the date such LIBOR
Loan was made and on the last day of the related Interest Period.  Except as otherwise provided in
Sections 3.1(d) and 3.9, the unpaid principal amount of any LIBOR Loan
shall bear interest at a rate per annum equal to the LIBOR for that LIBOR Loan plus
the LIBOR Margin.


 


(d)                                 During
the existence of a Default or Event of Default, the Requisite Lenders may
determine that any or all then outstanding LIBOR Loans shall be converted to
Base Rate Loans.  Such conversion shall
be effective upon notice to Borrower from the Requisite Lenders (or from the
Administrative Agent on behalf of the Requisite Lenders) and shall continue so
long as such Default or Event of Default continues to exist.


 


(e)                                  If
not sooner paid, the principal Indebtedness evidenced by the Notes shall be
payable as follows:


 


(i)                                     the principal
amount of each LIBOR Loan shall be payable on the last day of the Interest
Period for such Loan (provided that such principal amount may be paid
using the proceeds of a Base Rate Loan made pursuant to Section 2.1(h));


 


(ii)                                  the amount, if any,
by which the Outstanding Revolving Obligations at any time exceed the Revolving
Loan Commitment shall be payable immediately, and shall be applied to the
ratable payment of the Revolving Notes;


 


(iii)                               the amount, if any, by
which the aggregate principal amount of the outstanding Term Loans at any time
exceeds the Term Loan Commitment shall be payable immediately, and shall be
applied to the ratable payment of the Term Loans;


 


(iv)                              the principal Indebtedness
evidenced by the Revolving Notes shall be reduced to an amount not to exceed
$15,000,000 on March 31, 2007.


 


(v)                                 the principal
Indebtedness evidenced by the Term Notes shall be payable in sixteen equal
quarterly installments of $1,250,000, commencing on September 30, 2004 and
continuing on each Reduction Date thereafter through and including
March 31, 2008 with a final installment due on the Maturity Date; and


 


(vi)                              the principal
Indebtedness evidenced by the Notes and the Swing Line Documents shall in any
event be payable on the Maturity Date.


 


(f)                                    The
Notes may, at any time and from time to time, voluntarily be paid or prepaid in
whole or in part without premium or penalty, except that with respect to
any voluntary prepayment under this Section (i) any partial
prepayment shall be not less than $500,000, (ii) the Administrative Agent
shall have received written notice of any prepayment by 10:00 a.m. on the
Banking Day prior to such prepayment (which must be a Banking Day) in the case
of a Base Rate Loan, and, in the case of a LIBOR Loan, three Market Days
before the date of prepayment, which notice shall identify the date and amount
of the prepayment and the Loans being prepaid,


 


33

















 


(iii) each prepayment of
principal shall be accompanied by payment of interest accrued to the date of
payment on the amount of principal paid and (iv) any payment or prepayment
of all or any part of any LIBOR Loan on a day other than the last day of the
applicable Interest Period shall be subject to Section 3.8(d).  Each voluntary prepayment of the principal
amount of Loans shall be applied as Borrower may specify in its notice of
prepayment to the Administrative Agent, provided that in the absence of
a timely specification by Borrower, each such reduction shall be applied to the
applicable installment in the chronological order of their occurrence.


 


3.2                                 Upfront
Fees.  On the Closing Date,
Borrower shall pay to the Arranger upfront fees in the respective amounts
heretofore agreed upon by a letter agreement among Borrower, the Arranger and
the Administrative Agent.  The fees are
for the account of the Lenders in accordance with their separate agreements
with the Arranger.  The upfront fees are
for the credit facilities provided to Borrower under this Agreement, are fully
earned as of the Closing Date and are nonrefundable.


 


3.3                                 Commitment Fees.  From the Closing Date, Borrower shall pay to the Administrative
Agent, for the ratable accounts of the Lenders according to their Pro Rata Shares,
a commitment fee equal to the then applicable Commitment Fee Rate times
the average daily amount by which in the case of each Revolving Lender, such
Lender’s Revolving Loan Commitment exceeds the sum of (i) the aggregate
principal Indebtedness outstanding under the Notes (exclusive of the Swing Line
Outstandings) plus (ii) the Aggregate Effective Amount and in the case
of each Term Lender, such Lender’s Term Loan Commitment exceeds the aggregate
principal amount of Term Loans outstanding. 
Commitment fees shall be payable quarterly in arrears on each Quarterly
Payment Date, on the date of any reduction or termination of the Commitments
pursuant to Sections 2.5, 2.6, 2.7 or 2.8, and on the Maturity Date.


 


3.4                                 Letter of Credit Fees.  With respect to each Letter of Credit,
Borrower shall pay the following fees:


 


(a)                                  to
the Issuing Lender for its sole account, a fronting fee payable in an amount
and at such times as set forth in a letter agreement between Borrower and the
Issuing Lender;


 


(b)                                 a
Letter of Credit fee for each Letter of Credit equal to the applicable LIBOR
Margin times the daily maximum amount available to be drawn under such
Letter of Credit (whether or not such maximum amount is then in effect under
such Letter of Credit), computed on a quarterly basis in arrears and payable on
the first Business Day after the end of each March, June, September and
December, which the Administrative Agent shall promptly pay to the Revolving
Lenders.  If there is any change in the
applicable LIBOR Margin during any quarter, the daily maximum amount of each
Letter of Credit shall be computed and multiplied by the applicable LIBOR
Margin separately for each period during such quarter that such applicable
LIBOR Margin was in effect; and


 


(c)                                  concurrently
with each issuance, negotiation, drawing or amendment of each Letter of Credit,
to the Issuing Lender for the sole account of the Issuing Lender, issuance,
negotiation, drawing and amendment fees in the amounts set forth from time to
time as the Issuing Lender’s published scheduled fees for such services.


 


34

















 


Each of the fees payable with respect to Letters of Credit under this
Section is earned when due and is nonrefundable.


 


3.5                                 Agency Management Fees.  Borrower shall pay to the Administrative
Agent an agency management fee in such amounts and at such times as heretofore
agreed upon by letter agreement between Borrower and the Administrative
Agent.  This fee is for the services to
be performed by the Administrative Agent in acting as Administrative Agent and
is fully earned on the date paid.  The
agency fee paid to the Administrative Agent is solely for its own account and
is nonrefundable.


 


3.6                                 Fee Determination Detail.  The Administrative Agent, and any Lender,
shall provide reasonable detail to Borrower regarding the manner in which the
amount of any payment to the Administrative Agent and the Lenders, or that
Lender, under Article 3 has been determined, concurrently with demand for
such payment.


 


3.7                                 Increased Commitment Costs.  If any Lender shall determine in good faith
that the introduction after the Closing Date of any applicable law, rule,
regulation or guideline regarding capital adequacy, or any change therein or
any change in the interpretation or administration thereof by any central bank
or other Governmental Agency charged with the interpretation or administration
thereof, or compliance by such Lender (or its LIBOR Office) or any corporation
controlling the Lender, with any request, guideline or directive regarding
capital adequacy (whether or not having the force of law) of any such central
bank or other authority, affects or would affect the amount of capital required
or expected to be maintained by such Lender or any corporation controlling such
Lender and (taking into consideration such Lender’s or such corporation’s
policies with respect to capital adequacy and such Lender’s desired return on
capital) determines in good faith that the amount of such capital is increased,
or the rate of return on capital is reduced, as a consequence of its
obligations under this Agreement, then, within ten Banking Days after demand of
such Lender, Borrower shall pay to such Lender, from time to time as specified
in good faith by such Lender, additional amounts sufficient to compensate such
Lender in light of such circumstances, to the extent reasonably allocable to
such obligations under this Agreement. 
Each Lender’s determination of such amounts shall be conclusive in the
absence of manifest error.


 


3.8                                 LIBOR Costs and Related Matters.


 


(a)                                  If,
after the date hereof, the existence or occurrence of any Special LIBOR
Circumstance:


 


(i)                                     shall subject any
Lender or its LIBOR Office to any tax, duty or other charge or cost with
respect to any LIBOR Advance, any of its Notes evidencing LIBOR Loans or its
obligation to make LIBOR Advances, or shall change the basis of taxation of
payments to any Lender attributable to the principal of or interest on any
LIBOR Advance or any other amounts due under this Agreement in respect of any
LIBOR Advance, any of its Notes evidencing LIBOR Loans or its obligation to
make LIBOR Advances, excluding, in the case of each Lender, the
Administrative Agent and each Eligible Assignee, and any Affiliate or LIBOR
Office thereof, (i) taxes imposed on or measured in whole or


 


35

















 


in part by its overall net income, gross income or gross receipts or
capital and franchise taxes imposed on it, by (A) any jurisdiction (or
political subdivision thereof) in which it is organized or maintains its
principal office or LIBOR Office or (B) any jurisdiction (or political
subdivision thereof) in which it is “doing business” (unless it would not be
doing business in such jurisdiction (or political subdivision thereof) absent
the transactions contemplated hereby), (ii) any withholding taxes or other
taxes based on gross income imposed by the United States of America (other than
withholding taxes and taxes based on gross income resulting from or
attributable to any change in any law, rule or regulation or any change in the
interpretation or administration of any law, rule or regulation by any
Governmental Agency) or (iii) any withholding taxes or other taxes based
on gross income imposed by the United States of America for any period with
respect to which it has failed to provide Borrower with the appropriate form or
forms required by Section 11.21, to the extent such forms are then
required by applicable Laws;


 


(ii)                                  shall impose, modify
or deem applicable any reserve not applicable or deemed applicable on the date
hereof (including, without limitation, any reserve imposed by the Board
of Governors of the Federal Reserve System and any reserves under respect to
liabilities or assets consisting of or including eurocurrency funds or
deposits), special deposit, capital or similar requirements against assets of,
deposits with or for the account of, or credit extended by, any Lender or its
LIBOR Office; or


 


(iii)                               shall impose on any
Lender or its LIBOR Office or the London interbank eurodollar market any other
condition affecting any LIBOR Advance, any of its Notes evidencing LIBOR Loans,
its obligation to make LIBOR Advances or this Agreement, or shall otherwise
affect any of the same;


 


and the result of any of the foregoing, as determined in good faith by
such Lender, increases the cost to such Lender or its LIBOR Office of making or
maintaining any LIBOR Advance or in respect of any LIBOR Advance, any of its
Notes evidencing LIBOR Loans or its obligation to make LIBOR Advances or reduces
the amount of any sum received or receivable by such Lender or its LIBOR Office
with respect to any LIBOR Advance, any of its Notes evidencing LIBOR Loans or
its obligation to make LIBOR Advances (assuming such Lender’s LIBOR Office had
funded 100% of its LIBOR Advance in the London interbank eurodollar market),
then, within five (5) Banking Days after demand by such Lender (with a copy to
the Administrative Agent), Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender for such increased cost or
reduction (determined as though such Lender’s LIBOR Office had funded 100% of
its LIBOR Advance in the London interbank eurodollar market).  Borrower hereby indemnifies each Lender
against, and agrees to hold each Lender harmless from and reimburse such Lender
within ten Banking Days after demand for (without duplication) all costs,
expenses, claims, penalties, liabilities, losses, reasonable legal fees and
damages incurred or sustained by each Lender in connection with this Agreement,
or any of the rights, obligations or transactions provided for or contemplated
herein, as a direct result of the existence or occurrence of any Special LIBOR


 


36

















 


Circumstance.  A statement of
any Lender claiming compensation under this subsection and setting forth in
reasonable detail the additional amount or amounts to be paid to it hereunder
shall be conclusive in the absence of manifest error.  Each Lender agrees to endeavor promptly to notify Borrower of any
event of which it has actual knowledge, occurring after the Closing Date, which
will entitle such Lender to compensation pursuant to this Section, and agrees
to designate a different LIBOR Office if such designation will avoid the need
for or reduce the amount of such compensation and will not, in the good faith
judgment of such Lender, otherwise be materially disadvantageous to such
Lender.  If any Lender claims
compensation under this Section, Borrower may at any time, upon at least four
Market Days’ prior notice to the Administrative Agent and such Lender and upon
payment in full of the amounts provided for in this Section through the date of
such payment plus any prepayment fee required by Section 3.8(d),
pay in full the affected LIBOR Advances of such Lender or request that such
LIBOR Advances be converted to Base Rate Advances.


 


(b)                                 If,
after the date hereof, the existence or occurrence of any Special LIBOR
Circumstance shall, in the good faith opinion of any Lender, make it unlawful
or impossible for such Lender or its LIBOR Office to make, maintain or fund its
portion of any LIBOR Loan, or materially restrict the authority of such Lender
to purchase or sell, or to take deposits of, Dollars in the London interbank
eurodollar market, or to determine or charge interest rates based upon the
LIBOR, and such Lender shall so notify the Administrative Agent, then such
Lender’s obligation to make LIBOR Advances shall be suspended for the duration
of such illegality or impossibility and the Administrative Agent forthwith
shall give notice thereof to the other Lenders and Borrower.  Upon receipt of such notice, the outstanding
principal amount of such Lender’s LIBOR Advances, together with accrued interest
thereon, automatically shall be converted to Base Rate Advances with Interest
Periods corresponding to the LIBOR Loans of which such LIBOR Advances were a
part on either (1) the last day of the Interest Period(s) applicable to
such LIBOR Advances if such Lender may lawfully continue to maintain and fund
such LIBOR Advances to such day(s) or (2) immediately if such Lender may
not lawfully continue to fund and maintain such LIBOR Advances to such day(s), provided
that in such event the conversion shall not be subject to payment of a
prepayment fee under Section 3.8(d). 
Each Lender agrees to endeavor promptly to notify Borrower of any event
of which it has actual knowledge, occurring after the Closing Date, which will
cause that Lender to notify the Administrative Agent under this
Section 3.8(b), and agrees to designate a different LIBOR Office if such
designation will avoid the need for such notice and will not, in the good faith
judgment of such Lender, otherwise be materially disadvantageous to such
Lender.  In the event that any Lender is
unable, for the reasons set forth above, to make, maintain or fund its portion
of any LIBOR Loan, such Lender shall fund such amount as a Base Rate Advance
for the same period of time, and such amount shall be treated in all respects
as a Base Rate Advance.  Any Lender
whose obligation to make LIBOR Advances has been suspended under this
Section 3.8(b) shall promptly notify the Administrative Agent and Borrower
of the cessation of the Special LIBOR Circumstance which gave rise to such
suspension.


 


(c)                                  If,
with respect to any proposed LIBOR Loan:


 


(i)                                     the Administrative
Agent reasonably determines that, by reason of circumstances affecting the
London interbank eurodollar market generally that are


 


37

















 


beyond the reasonable control of the Lenders, deposits in Dollars (in
the applicable amounts) are not being offered to any Lender in the London
interbank eurodollar market for the applicable Interest Period; or


 


(ii)                                  the Requisite Lenders
advise the Administrative Agent that the LIBOR as determined by the
Administrative Agent (i) does not represent the effective pricing to such
Lenders for deposits in Dollars in the London interbank eurodollar market in
the relevant amount for the applicable Interest Period, or (ii) will not
adequately and fairly reflect the cost to such Lenders of making the applicable
LIBOR Advances;


 


then the Administrative Agent forthwith shall give notice thereof to
Borrower and the Lenders, whereupon until the Administrative Agent notifies
Borrower that the circumstances giving rise to such suspension no longer exist,
the obligation of the Lenders to make any future LIBOR Advances shall be
suspended.  If at the time of such
notice there is then pending a Request for Loan that specifies a LIBOR Loan,
such Request for Loan shall be deemed to specify a Base Rate Loan.


 


(d)                                 Upon
payment or prepayment of any LIBOR Advance (other  than as the
result of a conversion required under Section 3.1(d) or 3.8(b)), on a day
other than the last day in the applicable Interest Period (whether voluntarily,
involuntarily, by reason of acceleration, or otherwise), or upon the failure of
Borrower (for a reason other than the failure of a Lender to make an Advance)
to borrow on the date or in the amount specified for a LIBOR Loan in any
Request for Loan, Borrower shall pay to the appropriate Lender within
ten Banking Days after demand a prepayment fee or failure to borrow fee,
as the case may be (determined as though 100% of the LIBOR Advance had been
funded in the London interbank eurodollar Market) equal to the sum of:


 


(i)                                     the principal
amount of the LIBOR Advance prepaid or not borrowed, as the case may be, times
the number of days between the date of prepayment or failure to borrow, as
applicable, and the last day in the applicable Interest Period, divided by
360, times the applicable Interest Differential (provided that
the product of the foregoing formula must be a positive number); plus


 


(ii)                                  all out-of-pocket
expenses incurred by the Lender reasonably attributable to such payment,
prepayment or failure to borrow.


 


Each Lender’s determination of the amount of any prepayment fee payable
under this Section 3.8(d) shall be conclusive in the absence of manifest
error.


 


3.9                                 Late
Payments.  If any installment of
principal or interest or any fee or cost or other amount payable under any Loan
Document to the Administrative Agent or any Lender is not paid when due, it
shall thereafter bear interest at a fluctuating interest rate per annum at all
times equal to the sum of the Base Rate plus the Base Rate Margin
plus 2%, to the fullest extent permitted by applicable Laws.  Accrued and unpaid interest on past due
amounts (including,


 


38

















 


without limitation, interest on
past due interest) shall be compounded monthly, on the last day of each
calendar month, to the fullest extent permitted by applicable Laws.


 


3.10                           Computation of Interest and Fees.  Computation of interest on Base Rate Loans
shall be calculated on the basis of a year of 365 or 366 days, as the case may
be, and the actual number of days elapsed; computation of interest on LIBOR
Loans and all fees under this Agreement shall be calculated on the basis of a
year of 360 days and the actual number of days elapsed.  Borrower acknowledges that such latter
calculation method will result in a higher yield to the Lenders than a method
based on a year of 365 or 366 days. 
Interest shall accrue on each Loan for the day on which the Loan is
made; interest shall not accrue on a Loan, or any portion thereof, for the day
on which the Loan or such portion is paid. 
Any Loan that is repaid on the same day on which it is made shall bear
interest for one day.


 


3.11                           Non-Banking
Days.  If any payment to be made
by Borrower or any other Obligor under any Loan Document shall come due on a
day other than a Banking Day, payment shall instead be considered due on the
next succeeding Banking Day and the extension of time shall be reflected in
computing interest and fees.


 


3.12                           Manner and Treatment of Payments.


 


(a)                                  Each
payment hereunder (except payments pursuant to Sections 2.9, 3.7,
3.8, 11.3, 11.11 and 11.22) or on the Notes, on the Swing Line Documents or
under any other Loan Document shall be made to the Administrative Agent, at the
Administrative Agent’s Office, for the account of each of the Lenders or the
Administrative Agent, as the case may be, in immediately available funds not
later than 11:00 a.m. on the day of payment (which must be a Banking
Day).  All payments received after
11:00 a.m. on any Banking Day, shall be deemed received on the next
succeeding Banking Day.  The amount of
all payments received by the Administrative Agent for the account of each
Lender shall be immediately paid by the Administrative Agent to the applicable
Lender in immediately available funds and, if such payment was received by the
Administrative Agent by 11:00 a.m. on a Banking Day and not so made
available to the account of a Lender on that Banking Day, the Administrative
Agent shall reimburse that Lender for the cost to such Lender of funding the
amount of such payment at the Federal Funds Rate.  All payments shall be made in lawful money of the United States
of America.


 


(b)                                 Each
payment or prepayment on account of any Loan (other than Swing Line Advances)
shall be applied pro rata according to the outstanding Advances made by each
Lender comprising such Loan.


 


(c)                                  Each
Lender shall use its best efforts to keep a record of Advances made by it and
payments received by it with respect to each of its Notes and, subject to
Section 10.6(g), such record shall, as against Borrower, be presumptive
evidence of the amounts owing. 
Notwithstanding the foregoing sentence, no Lender shall be liable to any
Obligor for any failure to keep such a record.


 


(d)                                 Each
payment of any amount payable by Borrower or any other Obligor under this
Agreement or any other Loan Document shall be made free and clear of, and
without


 


39

















 


reduction by reason of, any
taxes, assessments or other charges imposed by any Governmental Agency, central
bank or comparable authority, excluding, in the case of each Lender, the
Administrative Agent and each Eligible Assignee, and any Affiliate or LIBOR
Office thereof, (i) taxes imposed on or measured in whole or in part by
its overall net income, gross income or gross receipts or capital and franchise
taxes imposed on it, (ii) any withholding taxes or other taxes based on
gross income imposed by the United States of America (other than withholding
taxes and taxes based on gross income resulting from or attributable to any
change in any law, rule or regulation or any change in the interpretation or
administration of any law, rule or regulation by any Governmental Agency) or
(iii) any withholding taxes or other taxes based on gross income imposed
by the United States of America for any period with respect to which it has
failed to provide Borrower with the appropriate form or forms required by
Section 11.21, to the extent such forms are then required by applicable
Laws (all such non-excluded taxes, assessments or other charges being
hereinafter referred to as “Taxes”).  To
the extent that Borrower is obligated by applicable Laws to make any deduction
or withholding on account of Taxes from any amount payable to any Lender under
this Agreement, Borrower shall (i) make such deduction or withholding and
pay the same to the relevant Governmental Agency and (ii) pay such
additional amount to that Lender as is necessary to result in that Lender’s
receiving a net after-Tax amount equal to the amount to which that Lender would
have been entitled under this Agreement absent such deduction or
withholding.  If and when receipt of
such payment results in an excess payment or credit to that Lender on account
of such Taxes, that Lender shall promptly refund such excess to Borrower.


 


3.13                           Funding
Sources.  Nothing in this
Agreement shall be deemed to obligate any Lender to obtain the funds for any
Loan or Advance in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds for
any Loan or Advance in any particular place or manner.


 


3.14                           Failure to Charge Not Subsequent
Waiver.  Any decision by the
Administrative Agent or any Lender not to require payment of any interest (including
interest arising under Section 3.8), fee, cost or other amount payable
under any Loan Document, or to calculate any amount payable by a particular
method, on any occasion shall in no way limit or be deemed a waiver of the
Administrative Agent’s or such Lender’s right to require full payment of any
interest (including interest arising under Section 3.8), fee, cost
or other amount payable under any Loan Document, or to calculate an amount
payable by another method that is not inconsistent with this Agreement, on any
other or subsequent occasion.


 


3.15                           Administrative Agent’s Right to
Assume Payments Will be Made by Borrower.  Unless the Administrative Agent shall have been notified by
Borrower prior to the date on which any payment to be made by Borrower
hereunder is due that Borrower does not intend to remit such payment, the
Administrative Agent may, in its discretion, assume that Borrower has remitted
such payment when so due and the Administrative Agent may, in its discretion
and in reliance upon such assumption, make available to each Lender on such
payment date an amount equal to such Lender’s share of such assumed
payment.  If Borrower has not in fact
remitted such payment to the Administrative Agent, each Lender shall forthwith
on demand repay to the Administrative Agent the amount of such assumed payment
made available to such Lender, together with interest thereon in respect of
each day from and including the date such amount


 


40

















 


was made available by the
Administrative Agent to such Lender to the date such amount is repaid to the
Administrative Agent at the Federal Funds Rate.


 


3.16                           Survival.  All of Borrower’s obligations under
Sections 3.7, 3.8 and 11.22 shall survive for ninety days following the
date on which the Commitments are terminated, and all Loans hereunder are fully
paid.


 


ARTICLE 4

REPRESENTATIONS AND WARRANTIES


 


Borrower
represents and warrants to the Creditors that:


 


4.1                                 Existence and Qualification; Power;
Compliance With Laws.  Borrower
is a corporation duly formed, validly existing and in good standing under the
Laws of Nevada.  Borrower is duly
qualified or registered to transact business and is in good standing in each
other jurisdiction in which the conduct of its business or the ownership or
leasing of its Properties makes such qualification or registration necessary, except
where the failure so to qualify or register and to be in good standing would
not constitute a Material Adverse Effect. 
Borrower has all requisite corporate or other organizational power and
authority to conduct its business, to own and lease its Properties and to
execute and deliver each Loan Document to which it is a party and to perform
its Obligations.  All outstanding shares
of the capital stock of Borrower are duly authorized and validly issued, fully
paid and non-assessable, and no holder thereof has any enforceable right of
rescission under any applicable state or federal securities Laws.  Borrower is in compliance with all Laws and
other legal requirements applicable to its business, has obtained all
authorizations, consents, approvals, orders, licenses and permits from, and has
accomplished all filings, registrations and qualifications with, or obtained
exemptions from any of the foregoing from, any Governmental Agency that are
necessary for the transaction of its business, except where the failure
so to comply, file, register, qualify or obtain exemptions does not constitute
a Material Adverse Effect.


 


4.2                                 Authority; Compliance With Other
Agreements and Instruments and Government Regulations.  The execution, delivery and performance by
Borrower and each other Obligor of the Loan Documents to which they are a party
have been duly authorized by all necessary corporate action, and do not and
will not:


 


(a)                                  Require
any consent or approval not heretofore obtained of any director, stockholder,
security holder or creditor of such Obligor;


 


(b)                                 Violate
or conflict with any provision of such Obligor’s articles of incorporation or
bylaws;


 


(c)                                  Except
to the extent contemplated by the Loan Documents, result in or require the
creation or imposition of any Lien or Right of Others upon or with respect to
any Property now owned or leased or hereafter acquired by such Obligor;


 


(d)                                 Violate
any Requirement of Law applicable to such Obligor;


 


41

















 


(e)                                  Result
in a breach of or constitute a default under, or cause or permit the
acceleration of any obligation owed under, any indenture or loan or credit
agreement or any other Contractual Obligation to which such Obligor is a party
or by which such Obligor or any of its Property is bound or affected;


 


and neither Borrower nor any other Obligor is in violation of, or
default under, any Requirement of Law or Contractual Obligation, or any
indenture, loan or credit agreement described in Section 4.2(e), in any
respect that constitutes a Material Adverse Effect.


 


4.3                                 No Governmental Approvals Required.  Except as set forth in Schedule 4.3
or previously obtained or made, no authorization, consent, approval, order,
license or permit from, or filing, registration or qualification with, any
Governmental Agency is or will be required to authorize or permit under
applicable Laws the execution, delivery and performance by Borrower of the Loan
Documents to which it is an Obligor. 
All authorizations from, or filings with, any Governmental Agency
described in Schedule 4.3 will be accomplished as of the Closing Date or
such other date as is specified in Schedule 4.3.


 


4.4                                 Subsidiaries.  Borrower does not have any Subsidiaries and
Borrower does not own any capital stock, equity interest or debt security which
is convertible, or exchangeable, for capital stock or equity interests in any
Person.


 


4.5                                 Financial Statements.  Borrower has furnished (a) the audited
financial statements of Borrower for the Fiscal Year ended December 31,
2002, and (b) the unaudited financial statement of Borrower for the Fiscal
Quarter ended March 31, 2003, to the Administrative Agent and the Lenders,
which financial statements fairly present the financial condition, results of
operations and changes in financial position of Borrower as of such dates and
for such periods in conformity with Generally Accepted Accounting Principles
(subject to normal year-end adjustments and the absence of footnotes),
consistently applied.


 


4.6                                 No Material Adverse Changes.  As of the Closing Date, no circumstance or
event has occurred that constitutes a Material Adverse Effect since
December 31, 2002, or, as of any date subsequent to the Closing Date,
since the Closing Date.


 


4.7                                 Title to Property.  On the Closing Date and on each subsequent date, Borrower has
valid title in fee simple to the Project Site and all improvements (if any)
located thereon, free and clear of all Liens and Rights of Others, other
than Liens or Rights of Others permitted by Section 6.9.


 


4.8                                 Intangible Assets.  Borrower and its Subsidiaries own, or possess the right to use to
the extent necessary in their respective businesses, all material trademarks,
trade names, copyrights, patents, patent rights, computer software, licenses
and other Intangible Assets that are necessary to complete and operate the
Proposed Expansion or which are used or contemplated to be used in the conduct
of their businesses as now operated and as contemplated to be operated, and no
such Intangible Asset, to the best knowledge of Borrower, conflicts with the
valid trademark, trade name, copyright, patent, patent right or Intangible
Asset of any other Person to the extent that such conflict constitutes a
Material Adverse Effect.  Without
limitation on the foregoing, Borrower holds a valid license to use the name and
mark “Hard Rock Hotel” in


 


42

















 


Las Vegas Nevada in connection
with its operation of the existing Hard Rock Hotel.  Each registered patent, trademark or copyright owned by Borrower,
or as to which Borrower is a licensee, is described on Schedule 4.8 or,
after the Closing Date, on a supplement to the Trademark Assignment.


 


4.9                                 Public Utility Holding Company Act.  Neither Borrower nor any of its Subsidiaries
is a “holding company”, or a “subsidiary company” of a “holding company”, or an
“affiliate” of a “holding company” or of a “subsidiary company” of a “holding
company”, within the meaning of the Public Utility Holding Company Act of 1935,
as amended.


 


4.10                           Litigation.  There are no actions, suits, proceedings or
investigations pending as to which Borrower or any of its Subsidiaries have
been served or have received notice or, to the best knowledge of Borrower,
threatened against or affecting Borrower or any of its Subsidiaries or any
Property of any of them (including the Real Property) before any Governmental
Agency, which may reasonably be expected to have a monetary impact which is in
excess of $1,000,000, and no such action, suit proceeding or investigation
described in this Section may reasonably be expected to have a Material Adverse
Effect.


 


4.11                           Binding
Obligations.  Each of the Loan
Documents to which Borrower or any of its Subsidiaries is a party will, when
executed and delivered by such Obligor, constitute the legal, valid and binding
obligation of such Obligor, enforceable against such Obligor in accordance with
its terms, except as enforcement may be limited by Debtor Relief Laws,
Gaming Laws or equitable principles relating to the granting of specific
performance and other equitable remedies as a matter of judicial discretion.


 


4.12                           No
Default.  No event has occurred
and is continuing that is a Default or Event of Default.


 


4.13                           ERISA.


 


(a)                                  With
respect to each Pension Plan:


 


(i)                                     such Pension Plan
complies in all material respects with ERISA and any other applicable Laws to
the extent that noncompliance could reasonably be expected to have a Material
Adverse Effect;


 


(ii)                                  such Pension Plan has
not incurred any “accumulated funding deficiency” (as defined in
Section 302 of ERISA) that could reasonably be expected to have a Material
Adverse Effect;


 


(iii)                               no “reportable event”
(as defined in Section 4043 of ERISA) has occurred that could reasonably
be expected to have a Material Adverse Effect; and


 


(iv)                              neither Borrower nor any
of its Subsidiaries has engaged in any non-exempt “prohibited transaction” (as
defined in Section 4975 of the Code) that could reasonably be expected to
have a Material Adverse Effect.


 


43

















 


(b)                                 Neither
Borrower nor any of its Subsidiaries has incurred or expects to incur any
withdrawal liability to any Multiemployer Plan that could reasonably be
expected to have a Material Adverse Effect.


 


4.14                           Regulations U and X; Investment
Company Act.  No part of the
proceeds of any Loan hereunder will be used to purchase or carry, or to extend
credit to others for the purpose of purchasing or carrying, any Margin Stock in
violation of Regulations U and X. 
Neither Borrower nor any of its Subsidiaries is or is required to be
registered as an “investment company” under the Investment Company Act of 1940.


 


4.15                           Disclosure.  No statement made by Borrower or any of its
Affiliates to the Administrative Agent or any Lender in connection with this
Agreement, or in connection with any Loan, as of the date thereof contained any
untrue statement of a material fact or omitted a material fact necessary to
make the statement made not misleading in light of all the circumstances
existing at the date the statement was made.


 


4.16                           Tax
Liability.  Borrower and its
Subsidiaries have filed all tax returns which are required to be filed, and
have paid, or made provision for the payment of, all taxes with respect to the
periods, Property or transactions covered by said returns, or pursuant to any
assessment received by Borrower or any of its Subsidiaries, except
(a) such taxes, if any, as are being contested in good faith by
appropriate proceedings and as to which adequate reserves have been established
and maintained and (b) immaterial taxes so long as no material item or
portion of Property of Borrower or any of its Subsidiaries is in jeopardy of
being seized, levied upon or forfeited.


 


4.17                           Projections.  As of the Closing Date, to the best
knowledge of Borrower, the assumptions set forth in the Projections are
reasonable and consistent with each other and with all facts known to Borrower,
and the Projections are reasonably based on such assumptions.  Nothing in this Section shall be
construed as a representation or covenant that the Projections in fact will be
achieved.


 


4.18                           Hazardous
Materials.  Except as described
in Schedule 4.18 or except as would not individually or in the aggregate
have a Material Adverse Effect, (a) none of Borrower nor any of its
Subsidiaries at any time has disposed of, discharged, released or threatened
the release of any Hazardous Materials on, from or under the Project Site (or,
to the best of Borrower or any of its Subsidiaries knowledge, any other Real
Property) in violation of any Hazardous Materials Law, (b) to the best
knowledge of Borrower, no condition exists that violates any Hazardous Material
Law affecting any Real Property, (c) neither the Project Site nor any
portion thereof (nor, to the best knowledge of Borrower and its Subsidiaries,
any other Real Property) is or has been utilized by Borrower or any of its
Subsidiaries as a site for the manufacture of any Hazardous Materials and
(d) to the extent that any Hazardous Materials are used, generated or
stored by Borrower or any of its Subsidiaries on the Project Site, or
transported to or from the Project Site, such use, generation, storage and
transportation are in compliance in all material respects with all Hazardous Materials
Laws.


 


4.19                           Gaming
Laws.  Borrower and its
Subsidiaries are in compliance in all material respects with all Gaming Laws
that are applicable to them.


 


44

















 


4.20                           Security
Interests.  Upon the execution and
delivery of the Security Agreement and the Trademark Assignment, the Security
Agreement and the Trademark Assignment will create a valid first priority
security interests in the Collateral described therein securing the
Obligations, and all action necessary to perfect the security interests so
created (including without limitation Borrower’s license to use the name and
mark “Hard Rock Hotel”), other than filing of the UCC-1 financing statements
delivered to the Administrative Agent pursuant to Section 8.1 with the
appropriate Governmental Agency and the filing of the Trademark Assignment with
the United States Patent and Trademark Office, shall have been taken and
completed.  Upon the execution and
delivery of the Deed of Trust, the Deed of Trust will create a valid Lien in
the Collateral described therein securing the Obligations, other  than
those arising under Sections 4.18, 5.9 and 11.22 (subject only to
Permitted Encumbrances and Permitted Rights of Others), and all action
necessary to perfect the Lien so created, other than recordation or filing
thereof with the appropriate Governmental Agencies, will have been taken and
completed.


 


4.21                           Tax Shelter Regulations.  Borrower does not intend to treat the Loans
and/or Letters of Credit as being a “reportable transaction” (within the
meaning of Treasury Regulation Section 1.6011-4).  In the event Borrower determines to take any
action inconsistent with such intention, it will promptly notify the
Administrative Agent thereof.  If
Borrower notifies the Administrative Agent, Borrower acknowledges that one or
more of the Lenders may treat its Loans and/or its interest in Swing Line
Advances and/or Letters of Credit as part of a transaction that is subject to
Treasury Regulation Section 301.6112-1, and such Lender or Lenders, as
applicable, will maintain the lists and other records required by such Treasury
Regulation.


 


ARTICLE 5

AFFIRMATIVE COVENANTS


 


(OTHER THAN INFORMATION AND

REPORTING REQUIREMENTS)


 


So long as any
Advance remains unpaid, or any Letter of Credit remains outstanding, or any
other Obligation remains unpaid or unperformed, or any portion of the
Commitments remain in force, Borrower shall, and shall cause each of its
Subsidiaries to, unless the Administrative Agent (with the written approval of
the Requisite Lenders) otherwise consents:


 


5.1                                 Payment of Taxes and Other Potential
Liens.  Pay and discharge
promptly all taxes, assessments and governmental charges or levies imposed upon
any of them, upon their respective Property or any part thereof and upon their
respective income or profits or any part thereof, except that Borrower
and its Subsidiaries shall not be required to pay or cause to be paid
(a) any tax, assessment, charge or levy that is not yet past due, or is
being contested in good faith by appropriate proceedings so long as the
relevant entity has established and maintains adequate reserves for the payment
of the same or (b) any immaterial tax so long as no material item or
portion of Property of Borrower or any of its Subsidiaries is in jeopardy of
being seized, levied upon or forfeited.


 


5.2                                 Preservation of Existence.  Preserve and maintain their respective
existences in the jurisdiction of their formation and all material
authorizations, rights, franchises, privileges,


 


45

















 


consents, approvals, orders,
licenses, permits, or registrations from any Governmental Agency that are
necessary for the transaction of their respective business, except where
the failure to so preserve and maintain the existence of any Subsidiary or such
authorizations would not constitute a Material Adverse Effect; and qualify and
remain qualified to transact business in each jurisdiction in which such
qualification is necessary in view of their respective business or the ownership
or leasing of their respective Properties except where the failure to so
qualify or remain qualified would not constitute a Material Adverse Effect.


 


5.3                                 Maintenance of Properties.  Maintain, preserve and protect all of their
respective depreciable Properties in good order and condition, subject to wear
and tear in the ordinary course of business, and not permit any waste of their
respective Properties, except that the failure to maintain, preserve and
protect a particular item of depreciable Property that is not of significant
value, either intrinsically or to the operations of Borrower and its
Subsidiaries, taken as a whole, shall not constitute a violation of this
covenant.


 


5.4                                 Maintenance of Insurance.  Maintain, with responsible insurance companies,
insurance covering the Collateral against such insurable losses as is
consistent with sound business practice, and will cause Administrative Agent
for its benefit and the benefit of the Lenders, the Trustee and the holders of
the Second Lien Notes (collectively, the “Secured Parties”) to be designated as
an additional insured and loss payee with respect to all insurance, obtain the
written agreement of the insurers that such insurance shall not be cancelled,
terminated or materially modified to the detriment of Secured Parties without
at least 30 days prior written notice to Secured Parties, and furnish copies of
such insurance policies or certificates to Secured Parties promptly upon
request therefore.


 


5.5                                 Compliance With Laws.  Comply, within the time period, if any,
given for such compliance by the relevant Governmental Agency or Agencies with
enforcement authority, with all Requirements of Law noncompliance with which
constitutes a Material Adverse Effect, except that Borrower and its
Subsidiaries need not comply with a Requirement of Law then being contested by
any of them in good faith by appropriate proceedings.


 


5.6                                 Keeping of Records and Books of
Account.  Keep adequate records
and books of account reflecting all financial transactions in conformity with
Generally Accepted Accounting Principles, consistently applied, and in material
conformity with all applicable requirements of any Governmental Agency having
regulatory jurisdiction over Borrower or any of its Subsidiaries.


 


5.7                                 Compliance With Agreements.  Promptly and fully comply with all
Contractual Obligations under all material agreements, indentures, leases
and/or instruments to which any one or more of them is a party, whether such
material agreements, indentures, leases or instruments are with a Lender or
another Person, except for any such Contractual Obligations (a) the
performance of which would cause a Default or (b) then being contested by
any of them in good faith by appropriate proceedings or if the failure to
comply with such agreements, indentures, leases or instruments does not
constitute a Material Adverse Effect.


 


5.8                                 Use
of Proceeds.  Use the proceeds
of the Loans to refinance existing Indebtedness, to fund an initial preferred
dividend payment in an amount not to exceed


 


46

















 


$15,000,000, to pay costs and
expenses related to the foregoing and, subsequent thereto, for other general
corporate purposes of Borrower, including construction of the Proposed
Expansion.


 


5.9                                 Hazardous Materials Laws.  Keep and maintain all Real Property and each
portion thereof in compliance in all material respects with all applicable
Hazardous Materials Laws and promptly notify the Administrative Agent in
writing (attaching a copy of any pertinent written material) of (a) any
and all material enforcement, cleanup, removal or other governmental or
regulatory actions instituted, completed or threatened in writing by a
Governmental Agency pursuant to any applicable Hazardous Materials Laws with
regard to the Real Property, (b) any and all material claims made or
threatened in writing by any Person against Borrower relating to damage,
contribution, cost recovery, compensation, loss or injury resulting from any
Hazardous Materials with regard to the Real Property, and (c) discovery by
any Senior Officer of Borrower of any material occurrence or condition on any
real Property adjoining or in the vicinity of such Real Property and affecting
the Real Property that could reasonably be expected to cause such Real Property
or any part thereof to be subject to any restrictions on the ownership,
occupancy, transferability or use of such Real Property under any applicable
Hazardous Materials Laws.


 


ARTICLE 6

NEGATIVE COVENANTS


 


So long as any
Advance remains unpaid, or any Letter of Credit remains outstanding or any
other Obligation remains unpaid or unperformed, or any portion of the
Commitments remain in force, Borrower shall not, and shall not permit any of
its Subsidiaries to, unless the Administrative Agent (with the written approval
of the Requisite Lenders or, if required by Section 11.2, of all of the
Lenders) otherwise consents:


 


6.1                                 Prepayment of Indebtedness.  Pay any principal or interest on any
Indebtedness of Borrower or any of its Subsidiaries prior to the date when due,
or make any payment or deposit with any Person that has the effect of providing
for the satisfaction of any Indebtedness of Borrower or any of its Subsidiaries
prior to the date when due, in each case if a Default or Event of
Default then exists or would result therefrom.


 


6.2                                 Payment of Subordinated Obligations.  Pay any principal (including sinking
fund payments) or any other amount with respect to any Subordinated Obligation,
or purchase or redeem any Subordinated Obligation, except for (a) regularly
scheduled Cash payments of interest with respect to the Qualified Subordinated
Notes and (b) the purchase and redemption of Second Lien Notes in an
aggregate principal amount not to exceed $15,000,000, provided, in each case
that (i) no Default or Event of Default exists or would result from the
making of such payments, purchases or redemptions, (ii) the Total Leverage
Ratio as of the last day of the most recent Fiscal Quarter, and after giving
effect to such payment, purchase or redemption, was less than 5.00 to 1.00 and
(iii) such purchases or redemptions shall be funded solely from Excess
Cash Flow from the previous four Fiscal Quarters, (c) regularly scheduled
payments of interest with respect to the Second Lien Notes and regularly scheduled
payments of any Supervisory Fees so long as no Default or Event of Default
exists or would result from the making of such payment, (d) Cash payments
of interest with respect to the Qualified Subordinated Notes in an amount not
to exceed the estimated taxes payable by the holders of such Qualified
Subordinated Notes on the interest accrued on such Qualified Subordinated Notes
since the most recent semi-annual


 


47

















 


interest payment date as
provided therein so long as no Default or Event of Default exists or would
result from the making of such payments and (e) payments of interest in
kind with respect to the Qualified Subordinated Notes as provided therein.


 


6.3                                 Disposition of Property.  Make any Disposition of its Property,
whether now owned or hereafter acquired, except for:


 


(a)                                  Dispositions
of obsolete equipment or other personal property no longer necessary to the
business of Borrower and its Subsidiaries having a fair market value (in each
transaction or series of related transactions) of less than $1,000,000);


 


(b)                                 Dispositions
of easements or minor strips and gores of property in connection with the
construction of the Proposed Expansion or other improvements to the Project
Site and which are approved in advance by the Administrative Agent as
reasonably necessary to the construction or maintenance thereof, provided
that the Administrative Agent shall concurrently receive any endorsements to
its policy of title insurance as it may reasonably request in connection
therewith; and


 


(c)                                  Dispositions
to the extent permitted by Section 6.5 of this Agreement;


 


provided, however, that this Section
shall not apply to prohibit a Disposition to the extent necessary to prevent a
License Revocation if (i) no Default or Event of Default then exists which
is not curable by such Disposition, (ii) Borrower has notified the
Administrative Agent in writing of the necessity to invoke this proviso at
least ten Banking Days (or such shorter period as may be necessary in order to
comply with a regulation or order of the relevant Gaming Board) in advance,
(iii) the Net Cash Proceeds from such Disposition are paid to the
Administrative Agent promptly after receipt and applied to reduce the principal
outstanding under the Term Notes and, after the Term Notes shall have been
repaid in full, the Revolving Notes (in each such case first, to Base Rate
Loans and thereafter to LIBOR Loans, shortest Interest Periods first and to the
installments due under such Notes in the inverse order of maturity), and (iv)
any non-Cash proceeds from such Disposition shall be delivered and pledged to
the Administrative Agent as additional collateral for the Obligations, and provided
further that nothing in this Section shall apply to restrict the
Disposition of any of the equity securities of any Person that holds, directly
or indirectly through a holding company or otherwise, a license under any
Gaming Law to the extent such restriction is unlawful under that Gaming
Law.  Notwithstanding any provision to
the contrary contained elsewhere herein or in any other Loan Document, to the
extent the Requisite Lenders waive the provisions of this Section 6.3 with
respect to the Disposition of any Collateral, or any Collateral is sold or
otherwise disposed of as permitted by this Agreement (unless transferred to the
Borrower or another Obligor) the Administrative Agent shall take such actions
as are appropriate to release such Collateral from the Liens created by the
Loan Documents.


 


6.4                                 Hostile Tender Offers.  Make any offer to purchase or acquire, or
consummate a purchase or acquisition of, 5% or more of the capital stock of any
corporation or other business entity if the board of directors or management of
such corporation or business entity has notified Borrower that it opposes such
offer or purchase and such notice has not been withdrawn or superseded.


 


48

















 


6.5                                 Mergers.  Merge or consolidate with or into any
Person, except:


 


(a)                                  mergers
and consolidations of a Subsidiary of Borrower into Borrower or another
Subsidiary of Borrower (in the case of any such merger or consolidation to
which Borrower is a party, with Borrower as the surviving entity), provided
that Borrower and each of such Subsidiaries have executed such amendments to
the Loan Documents as the Administrative Agent may reasonably determine are
appropriate as a result of such merger; and


 


(b)                                 mergers
or consolidations of Borrower or any of its Subsidiaries with any other Person,
provided that (i) either (A) Borrower or such Subsidiary is
the surviving entity, or (B) the surviving entity is a Person (other than
an individual) organized under the Laws of a State of the United States of
America or the District of Columbia and, as of the date of such merger or
consolidation, expressly assumes, by an appropriate instrument, the Obligations
of Borrower or such Subsidiary, as the case may be, (ii) giving effect
thereto on a pro-forma basis, no Default or Event of Default exists or would
result therefrom, and (iii) as a result thereof, no Change of Control has
occurred.


 


6.6                                 Distributions.  Make any Distribution, whether from capital,
income or otherwise, and whether in Cash or other Property, other  than:


 


(a)                                  Distributions
from any Subsidiary of Borrower to Borrower or from one Subsidiary to another
Subsidiary;


 


(b)                                 the
conversion of the Outstanding Preferred Stock into Qualified Subordinated
Notes;


 


(c)                                  provided
that no Default or Event of Default shall have occurred or be continuing or
would result therefrom, on the Closing Date Borrower may make a one-time
Distribution of accrued and unpaid dividends in an aggregate amount not to
exceed $15,000,000 to the holders of Borrower’s Outstanding Preferred Stock;


 


(d)                                 provided
that no Default or Event of Default shall have occurred and be continuing or
would result therefrom, Borrower may purchase its common stock or options in
such common stock from present or former officers or employees of any of
Borrower or its Subsidiaries upon the death, disability or termination of employment
of such officer or employee or pursuant to the terms of any stock option plan
or like agreements, provided, that the aggregate amount of payments under the
clause after the date hereof (net of any proceeds received by Borrower and
contributed to Borrower after the date hereof in connection with resales of any
common stock or common stock options so purchased) shall not exceed $1,000,000;
and


 


(e)                                  any
non-wholly owned Subsidiary of Borrower may pay cash Distributions to its
shareholders, members or partners generally, so long as Borrower or its
respective Subsidiary that owns the capital stock in the Subsidiary paying such
dividends receives at least its proportionate share thereof.


 


6.7                                 ERISA.  At any time, permit any Pension Plan
to:  (i) engage in any non-exempt
“prohibited transaction” (as defined in Section 4975 of the Code);
(ii) fail to comply with ERISA or any other applicable Laws;
(iii) incur any material “accumulated funding deficiency” (as defined


 


49

















 


in Section 302 of ERISA);
or (iv) terminate in any manner, which, with respect to each event listed
above, could reasonably be expected to result in a Material Adverse Effect, or
(b) withdraw, completely or partially, from any Multiemployer Plan if to
do so could reasonably be expected to result in a Material Adverse Effect.


 


6.8                                 Change in Nature of Business.  Make any material change in the nature of
the business of Borrower and its Subsidiaries, taken as a whole.


 


6.9                                 Liens,
Negative Pledges and Rights of Others. 
Create, incur, assume or suffer to exist any Lien, Negative Pledge
prohibiting the granting of Liens to the Banks or any Right of Others of any
nature upon or with respect to any of their respective Properties, or engage in
any sale and leaseback transaction with respect to any of their respective
Properties, whether now owned or hereafter acquired, except:


 


(a)                                  Liens
and Negative Pledges described on Schedule 6.9 and renewals and extensions
thereof, provided that no such Lien is spread to cover any additional property
after the Closing Date and that the amount of indebtedness secured thereby is
not increased;


 


(b)                                 Permitted
Encumbrances and Permitted Rights of Others;


 


(c)                                  Liens
and Negative Pledges under the Loan Documents;


 


(d)                                 to
the extent that the same constitute Liens, the exceptions reflected on Schedule
B to the ALTA Lender’s policy of title insurance described in Section 8.1;


 


(e)                                  purchase
money Liens securing Indebtedness permitted by Section 6.10(c) on and
limited to the Property acquired, constructed or financed with the proceeds of
such Indebtedness and Negative Pledges in favor of the holders of such
Indebtedness with respect to such Property;


 


(f)                                    Liens
securing the Second Lien Notes;


 


(g)                                 Liens
on Property acquired by Borrower and its Subsidiaries following the Closing
Date securing Indebtedness permitted by Section 6.10, which are in existence at
the time of such acquisition and not created in contemplation thereof;


 


(h)                                 any
interest or title of a lessor, licensor or sublessor under any lease, license
or sublease entered into by Borrower or any of its Subsidiaries in the ordinary
course of business and covering only the assets so leased, licensed or
subleased;


 


(i)                                     Liens
arising from judgments, decrees, awards or attachments in circumstances not
constituting an Event of Default;


 


(j)                                     Liens
arising out of any conditional sale, title retention, consignment or other
similar arrangements for the sale of goods entered into by the Borrower or any
of its Subsidiaries in the ordinary course of business to the extent such Liens
do not attach to any assets other than the goods subject to such arrangements
and the amount secured does not exceed $250,000;


 


50

















 


(k)                                  Liens
securing insurance premium financing arrangements so long as the amount secured
does not exceed $750,000;


 


(l)                                     Liens
(i) incurred in the ordinary course of business in connection with the purchase
of shipping of goods or assets (or the related assets and proceeds thereof),
which Liens are in favor of the seller or shipper of such goods or assets and
only attach to such goods or assets, and (ii) in favor of customs and
revenue authorities arising as a matter of law to secure payment of customs
duties in connection with the importation of goods; and


 


(m)                               Liens
in favor of collecting banks having a right of setoff, revocation, refund or
chargeback with respect to money or instruments of the Borrower or any of its
Subsidiaries on deposits with or in possession of such banks, other than
relating to Indebtedness.


 


6.10                           Indebtedness and Contingent
Obligations.  Create, incur or
assume any Indebtedness or Contingent Obligation except:


 


(a)                                  Indebtedness
and Contingent Obligations existing on the Closing Date and disclosed in
Schedule 6.10, and renewals, extensions or amendments that do not increase
the amount thereof;


 


(b)                                 Indebtedness
and Contingent Obligations under the Loan Documents;


 


(c)                                  purchase
money Indebtedness and Capital Lease Obligations, and Contingent Obligations
with respect thereto, incurred when no Default or Event of Default has occurred
and remains continuing, provided that the aggregate principal amount of
such Indebtedness and Capital Lease Obligations outstanding at any time does
not exceed $5,000,000;


 


(d)                                 Indebtedness,
and Contingent Obligations with respect thereto, consisting of one or more Swap
Agreements entered into with respect to the Obligations;


 


(e)                                  refinancings
of any of the Indebtedness and Capital Lease Obligations, and Contingent
Obligations with respect thereto, described in the foregoing clauses of this
Section, provided that the amount thereof is not increased;


 


(f)                                    Indebtedness,
and Contingent Obligations with respect thereto, incurred pursuant to the
Indenture in an aggregate principal amount not to exceed $140,000,000 and
refinancings thereof which are subordinated in the same manner, which do not
increase the amount thereof and which have a maturity date no earlier than that
in the Indenture;


 


(g)                                 the
Qualified Subordinated Notes of Borrower;


 


(h)                                 Indebtedness
of the Borrower to any Subsidiary and Indebtedness of any Subsidiary to the
Borrower to the extend permitted under Section 6.16; and;


 


(i)                                     Contingent
Obligations under mechanics lien indemnity agreements executed in favor of the
Title Company as of the Closing Date.


 


51

















 


6.11                           Total
Leverage Ratio.  Permit the
Total Leverage Ratio as of the last day of any Fiscal Quarter set forth below
to exceed the ratio set forth opposite that Fiscal Quarter:


 


	
  Fiscal Quarters Ending

  	
   

  	
  Maximum
  Ratio

  	
   

  
	
  After Closing through September 30, 2003

  	
   

  	
  6.25:1.00

  	
   

  
	
  December 31, 2003 through June 30, 2004

  	
   

  	
  5.75:1.00

  	
   

  
	
  September 30, 2004

  	
   

  	
  5.50:1.00

  	
   

  
	
  December 31, 2004 through March 31, 2005

  	
   

  	
  5.25:1.00

  	
   

  
	
  June 30, 2005 through September 30, 2005

  	
   

  	
  5.00:1.00

  	
   

  
	
  December 31, 2005 through March 31, 2006

  	
   

  	
  4.75:1.00

  	
   

  
	
  June 30, 2006 through September 30, 2006

  	
   

  	
  4.50:1.00

  	
   

  
	
  December 31, 2006 through March 31, 2007

  	
   

  	
  4.25:1.00

  	
   

  
	
  June 30, 2007 and thereafter

  	
   

  	
  4.00:1.00

  	
   

  



 


6.12                           Senior
Leverage Ratio.  Permit the
Senior Leverage Ratio as of the last day of any Fiscal Quarter after the
Closing Date to exceed 1.25:1.00.


 


6.13                           Fixed Charge Coverage Ratio.  Permit the Fixed Charge Coverage Ratio as of
the last day of any Fiscal Quarter after the Closing Date to be less than
1.25:1.00.


 


6.14                           Capital
Expenditures.  Make or commit to
make any Capital Expenditure other than:


 


(a)                                  Capital
Expenditures made in connection with the construction of the Proposed Expansion
in an aggregate amount which does not exceed $30,000,000; and


 


(b)                                 Maintenance
Capital Expenditures in an aggregate amount not to exceed $7,500,000 during any
Fiscal Year, provided that up to 50% of any such amount not expended in any
Fiscal Year may be carried over to the following Fiscal Year.


 


6.15                           Investments.  Make or suffer to exist any Investment, other
than:


 


(a)                                  Investments
consisting of Cash and Cash Equivalents;


 


(b)                                 Investments
consisting of advances to officers, directors, partners and employees of
Borrower and its Subsidiaries for travel, entertainment, relocation and
analogous ordinary business purposes;


 


(c)                                  Investments
consisting of credit extended to gaming patrons in the ordinary course of
business and in accordance with past practices;


 


(d)                                 Investments
to the extent permitted under Section 6.16;


 


(e)                                  Contingent
Obligations to the extent permitted under Section 6.10; and


 


(f)                                    Investments
made by Borrower or any of its Subsidiaries, solely with proceeds that have
been contributed from the Permitted Investor for the purpose of making an


 


52

















 


Investment identified in a
notice to the Administrative Agent on or prior to the date that such capital
contribution is made.


 


6.16                           New
Subsidiaries.  Make or suffer to
exist any Investment in any Subsidiary, or form or acquire any Subsidiary,
unless:


 


(a)                                  such
Subsidiary is not a Foreign Subsidiary;


 


(b)                                 concurrently
with such Investment, Acquisition or formation, (i) Borrower has pledged its
interest in the capital stock and debt securities of such Subsidiary to the
Administrative Agent and the Lenders, (ii) such Subsidiary has issued a
guaranty of the Obligations and has granted perfected first priority Liens in
substantially all of its Property, in each case pursuant to agreements which are
in form and substance substantially similar to the Collateral Documents as of
the date hereof, (iii) Borrower and such Subsidiary have provided to the
Administrative Agent such other opinions, assurances and the like as the
Administrative Agent or the Requisite Lenders have reasonably requested, (iv)
no Default or Event of Default shall have occurred and be continuing, before or
after giving effect thereto, (v) the Subsidiary so invested in, acquired or
formed is principally engaged in the same line of business (or a business
reasonably incidental or complementary thereto) as Borrower; and


 


(c)                                  such
Investments or Acquisitions are made in Subsidiaries in which Borrower holds at
least 80% of the capital stock thereof entitled to ordinary voting power and the
aggregate amount of all such Investments or Acquisition consideration does not
exceed $6,000,000 from and after the date hereof.


 


6.17                           Transactions with Affiliates.  Enter into any transaction of any kind with
any Affiliate of Borrower other than (a) salary, bonus and other
compensation arrangements with directors, officers, partners or employees in
the ordinary course of business and determined in a manner consistent with past
practices, (b) transactions between or among Borrower and its Subsidiaries,
(c) transactions on overall terms at least as favorable to Borrower or its
Subsidiaries as would be the case in an arm’s-length transaction between
unrelated parties of equal bargaining power, (d) reimbursement of expenses
incurred by Persons controlled by the Permitted Investor in providing support
and travel services to Borrower and its Subsidiaries in the ordinary course of
their business and consistent with past practices, (e) loans to employees of
Borrower and its Subsidiaries in the ordinary course of their business, provided
that any loan in excess of $200,000 shall have been approved by the
disinterested members of the Board of Directors of Borrower (f) payments of
Supervisory Fees to the extent permitted under this Agreement, (g) the
conversion of the Outstanding Preferred Stock into Qualified Subordinated
Notes, (h) the payments of the one-time Distribution described in
Section 6.6(c) and (i) payments of principal and interest on the Qualified
Subordinated Notes to the extent permitted under this Agreement.


 


6.18                           Changes to the Subordinated
Obligations or Codes, Covenants and Restrictions.  Make any changes, amendments or
modifications to the terms of the Supervisory Agreement, the Indenture, the
Qualified Subordinated Notes or any other Subordinated Obligations which are
materially adverse to the interests of the Creditors, under the Loan Documents,
or amend, modify or fail to enforce (in any manner which is materially adverse
to the interests of the Lenders under the Loan Documents or which is directed
by the Administrative Agent pursuant to the Loan


 


53

















 


Documents) the Declaration of
Codes, Covenants and Restrictions dated made by Hotel Nicole Limited
Partnership dated July 27, 1989 and of record as of the Closing Date.


 


ARTICLE 7

INFORMATION AND REPORTING REQUIREMENTS


 


7.1                                 Financial and Business Information.  So long as any Advance remains unpaid, or
any Letter of Credit remains outstanding, or any other Obligation remains
unpaid or unperformed, or any portion of the Commitments remains in force,
Borrower shall, unless the Administrative Agent (with the written approval of
the Requisite Lenders) otherwise consents, at Borrower’s sole expense, deliver
to the Administrative Agent, a sufficient number of copies for all of the
Lenders, of the following:


 


(a)                                  As
soon as practicable, and in any event within 45 days after the end of each
Fiscal Quarter, (i) the consolidated and consolidating balance sheet, statement
of income and cash flows for the portion of the Fiscal Year ended with such
Fiscal Quarter, all in reasonable detail, and (ii) a quarterly operating report
with a narrative description in a format which is mutually acceptable to
Borrower and the Administrative Agent. 
Such financial statements shall be certified by the Chief Financial
Officer or Treasurer of Borrower as fairly presenting the financial condition,
results of operations and cash flows of Borrower and its Subsidiaries in
accordance with Generally Accepted Accounting Principles (other than footnote
disclosures and subject to year-end adjustments), consistently applied, as at
such date and for such periods, subject only to normal year-end accruals and
audit adjustments;


 


(b)                                 As
soon as practicable, and in any event within 90 days after the end of each
Fiscal Year, the consolidated and consolidating balance sheet, statements of
operations and cash flows, in each case of Borrower and its Subsidiaries for
such Fiscal Year, in each case as at the end of and for the Fiscal Year, all in
reasonable detail.  Such financial
statements shall be prepared in accordance with Generally Accepted Accounting
Principles, consistently applied, and such consolidated balance sheet and
consolidated statements shall be accompanied by a report and opinion of
independent public accountants of recognized standing selected by Borrower and
reasonably satisfactory to the Requisite Lenders, which report and opinion
shall be prepared in accordance with generally accepted auditing standards as
at such date, and shall not be subject to any qualifications or exceptions
which are not reasonably acceptable to the Requisite Lenders.  Such accountants’ report shall be
accompanied by a certificate stating that, in making the examination pursuant
to generally accepted auditing standards necessary for the certification of
such financial statements and such report, such accountants have obtained no
knowledge of any Default or, if, in the opinion of such accountants, any such
Default shall exist, stating the nature and status of such Default;


 


(c)                                  As
soon as practicable, and in any event within 90 days after the
commencement of each Fiscal Year, a budget and projection by Fiscal Quarter for
that Fiscal Year and by Fiscal Year for the four succeeding Fiscal Years, including
projected consolidated balance sheets, statements of operations and statements
of cash flow of Borrower and its Subsidiaries, all in reasonable detail (it
being understood that such projections will be prepared in good faith based on
reasonable assumptions at the time made but that no assurances are offered that
such projections will be realized);


 


54

















 


(d)                                 Promptly
after request by the Administrative Agent or any Lender, copies of any detailed
audit reports, management letters or recommendations submitted to Borrower by
independent accountants in connection with the accounts or books of Borrower or
any of its Subsidiaries, or any audit of any of them;


 


(e)                                  Promptly
after the same are available, copies of each annual report, proxy or financial
statement or other report or communication sent to the stockholders of
Borrower, and copies of all annual, regular, periodic and special reports and
registration statements which Borrower may file or be required to file with the
Securities and Exchange Commission under Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended, and not otherwise required to be
delivered to the Lenders pursuant to other provisions of this Section 7.1;


 


(f)                                    Promptly
after the same are available, copies of the Nevada “Regulation 6.090
Report” and “6-A Report” and copies of any written communication to
Borrower or any of its Subsidiaries from any Gaming Board advising it of a
violation of or non-compliance with any Gaming Law by Borrower or any of its
Subsidiaries;


 


(g)                                 Promptly
after request by the Administrative Agent or any Lender, copies of any other
material report or other document that was filed by Borrower or any of its
Subsidiaries with any Governmental Agency;


 


(h)                                 Promptly,
and in any event within ten Banking Days upon a Senior Officer becoming aware,
of the occurrence of any (i) “reportable event” (as such term is defined
in Section 4043 of ERISA) or (ii) “prohibited transaction” (as such
term is defined in Section 406 of ERISA or Section 4975 of the Code)
in connection with any Pension Plan or any trust created thereunder, telephonic
notice specifying the nature thereof, and, no more than five Banking Days after
such telephonic notice, written notice again specifying the nature thereof and
specifying what action Borrower or any of its Subsidiaries is taking or
proposes to take with respect thereto, and, when known, any action taken by the
Internal Revenue Service with respect thereto;


 


(i)                                     As
soon as practicable, and in any event within three Banking Days after a
Senior Officer becomes aware of the existence of any condition or event which
constitutes a Default, telephonic notice specifying the nature and period of
existence thereof, and, no more than two Banking Days after such telephonic
notice, written notice again specifying the nature and period of existence
thereof and specifying what action Borrower is taking or proposes to take with
respect thereto;


 


(j)                                     Promptly
upon a Senior Officer becoming aware that (i) any Person has commenced a
legal proceeding with respect to a claim against Borrower or any of its
Subsidiaries that is $1,000,000 or more in excess of the amount thereof that is
fully covered by insurance, (ii) any creditor or lessor under a written
credit agreement or material lease has asserted a default thereunder on the
part of Borrower or any of its Subsidiaries, (iii) any Person has
commenced a legal proceeding with respect to a claim against Borrower or any of
its Subsidiaries under a contract that is not a credit agreement or material
lease in excess of $1,000,000 or which otherwise may reasonably be
expected to result in a Material Adverse Effect, (iv) any labor union has
notified Borrower of its intent to strike Borrower or any of its Subsidiaries
on a date certain and such strike would involve more than 100 employees of


 


55

















 


Borrower and its Subsidiaries,
or (v) any Gaming Board has indicated its intent to consider or act upon a
License Revocation or a fine or penalty of $1,000,000 or more with respect to
Borrower or any of its Subsidiaries, a written notice describing the pertinent
facts relating thereto and what action Borrower or its Subsidiaries are taking
or propose to take with respect thereto;


 


(k)                                  Promptly
after the Borrower has notified the Administrative Agent of any intention by
the Borrower to treat the Loans and/or Letters of Credit as being a “reportable
transaction” (within the meaning of Treasury Regulation Section 1.6011-4)
a duly completed copy of IRS Form 8886 or any successor form; and


 


(l)                                     Such
other data and information as from time to time may be reasonably requested by
the Administrative Agent, any Lender (through the Administrative Agent) or the
Requisite Lenders.


 


7.2                                 Compliance Certificates.  For so long as any Advance remains unpaid,
any Letter of Credit remains outstanding, any other Obligation remains unpaid
or unperformed, or any portion of the Commitments remain outstanding, Borrower
shall deliver to the Administrative Agent for distribution by it to the Lenders
concurrently with the financial statements required pursuant to
Sections 7.1(a) a properly completed Compliance Certificate signed by a
Senior Officer.


 


ARTICLE 8

CONDITIONS


 


8.1                                 Initial Advances on the Closing Date.  The obligation of each Lender to make the
initial Advance to be made by it on the Closing Date, is subject to the
following conditions precedent, each of which shall be satisfied prior to the
making of the initial advances (unless all of the Lenders, in their sole and
absolute discretion, shall agree otherwise):


 


(a)                                  The
Administrative Agent shall have received all of the following, each of which
shall be originals unless otherwise specified, each properly executed by a
Responsible Official of each party thereto, each dated as of the Closing Date
and each in form and substance satisfactory to the Administrative Agent and its
legal counsel (unless otherwise specified or, in the case of the date of any of
the following, unless the Administrative Agent otherwise agrees or directs):


 


(i)                                     executed
counterparts of this Agreement, sufficient in number for distribution to the
Lenders and Borrower;


 


(ii)                                  Notes executed by
Borrower in favor of each Lender, each in a principal amount equal to that
Lender’s applicable Pro Rata Share;


 


(iii)                               the Swing Line Documents
executed by Borrower in favor of the Swing Line Lender;


 


(iv)                              the Deed of Trust,
executed and acknowledged by Borrower;


 


(v)                                 the Security Agreement
executed by Borrower;


 


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(vi)                              such financing statements
on Form UCC-1 with respect to the Security Agreement as the Administrative
Agent may request;


 


(vii)                           the Trademark Assignment,
executed by Borrower and the consent and agreement from Peter A. Morton
attached thereto;


 


(viii)                        a Certificate, signed by a
Senior Officer of Borrower certifying that attached thereto are true, correct
and complete copies of the Trademark Sublicense Agreement, dated May 30,
2003 between Peter A. Morton and Borrower, as amended (which shall be in form and
substance acceptable to the Lenders);


 


(ix)                                the Subordination
Agreement (regarding Supervisory Fees) executed by Peter A. Morton;


 


(x)                                   the Intercreditor
Agreement;


 


(xi)                                the Deposit Account
Control Agreement executed by the Borrower;


 


(xii)                             the Copyright Assignment,
executed by Borrower;


 


(xiii)                          a certified execution copy of
the Indenture;


 


(xiv)                         such documentation with
respect to Borrower as the Administrative Agent may require to establish its
due organization, valid existence and good standing, its qualification to
engage in business in each material jurisdiction in which it is engaged in
business or required to be so qualified, its authority to execute, deliver and
perform the Loan Documents, the identity, authority and capacity of each
Responsible Official thereof authorized to act on its behalf, including
certified copies of  articles of
incorporation and amendments thereto, bylaws and amendments thereto,
certificates of good standing and/or qualification to engage in business, tax
clearance certificates, certificates of corporate resolutions, and incumbency
certificates;


 


(xv)                            an environmental site
assessment of the Project Site, as more specifically described in the Proposal
to Conduct Phase I Environmental Site Assessment prepared by MFG, Inc., dated
May 14, 2003;


 


(xvi)                         a written appraisal by a
qualified independent appraiser acceptable to the Administrative Agent and
complying in all respects with FIRREA of the Project Site that reflects
the fair market value of the Project Site and the existing Hard Rock Hotel
improvements as of the Closing Date of not less than $100,000,000;


 


(xvii)                      a certificate of insurance issued
by Borrower’s insurance carrier or agent with respect to the insurance required
to be maintained pursuant to the Deed of Trust, including without limitation
flood insurance and a policy or policies of


 


57

















 


bailer’s “all risk” insurance in non-reporting form and in an amount
not less than the then current value of the improvements located on the Real
Property, to be increased on the Completion Date to the full insurable
completed value of Hard Rock Hotel and the Proposed Expansion on a replacement
cost basis, together with lenders’ loss payable endorsements thereof on
Form 438BFU or other form acceptable to the Administrative Agent;


 


(xviii)                   assurances acceptable to the
Administrative Agent that the Title Company is prepared to issue its ALTA
lenders policy, insuring that Borrower is the owner of the Project Site in fee
simple absolute and insuring the Lien of the Deed of Trust in an amount not
less than the amount of the Commitment, subject only to the exceptions to title
described on Schedule 8.1(a)(xvii) and with endorsements to coverage as
are reasonably acceptable to the Administrative Agent or as are reasonably
requested by the Requisite Lenders (including any endorsements providing
coverage as to exceptions to title described on Schedule 8.1(a)(xvii) as
may be reasonably requested by the Administrative Agent with respect thereto),
with such assurances as the Administrative Agent may reasonably require from
title re-insurers acceptable to the Administrative Agent;


 


(xix)                           the Opinions of Counsel;


 


(xx)                              evidence satisfactory to
the Requisite Lenders of such zoning (including variances and use permits) and
other land use entitlements as may be necessary to permit the use of the
Project Site and the Proposed Expansion as a hotel, casino and resort property;


 


(xxi)                           a legal opinion satisfactory
to the Administrative Agent confirming that the relevant Gaming Boards have
approved the transactions contemplated by the Loan Documents to the extent that
such approval is required by applicable Gaming Laws;


 


(xxii)                        a Certificate of a Responsible
Official signed by a Senior Officer of Borrower certifying that the conditions
specified in Sections 8.1(e) and 8.1(f) have been satisfied;


 


(xxiii)                     such other assurances,
certificates, documents, consents or opinions as the Administrative Agent
reasonably may require.


 


(b)                                 Borrower
shall have concurrently terminated the Existing Loan Agreement pursuant to
agreements acceptable to the Administrative Agent, and shall have made
arrangements satisfactory to the Administrative Agent for the termination of
the deed of trust, financing statements and other security held by the lenders
under the Existing Loan Agreement.


 


(c)                                  Evidence
that the security interests of the Administrative Agent in the personal
property of Borrower are of first priority, except as otherwise contemplated by
the Loan Documents.


 


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(d)                                 The
reasonable costs and expenses of the Administrative Agent in connection with
the preparation of the Loan Documents payable pursuant to Section 11.3, and
invoiced to Borrower prior to the Closing Date, shall have been paid.


 


(e)                                  The
representations and warranties of Borrower contained in Article 4 shall be
true and correct in all material respects.


 


(f)                                    Borrower,
Peter A. Morton and any other Obligors shall be in compliance with all the
terms and provisions of the Loan Documents, and after giving effect to the
initial Advance, no Default or Event of Default shall have occurred and be
continuing.


 


(g)                                 The
fees due and payable on the Closing Date pursuant to Article 3 shall have been
paid.


 


(h)                                 Borrower
shall have received, or shall concurrently receive, the net proceeds of the
issuance of its $140,000,000 Second Lien Notes due 2013 issued pursuant to the
Indenture, and the terms of the Indenture shall be acceptable to the
Administrative Agent.


 


(i)                                     The
Outstanding Preferred Stock shall have been or shall concurrently be converted
to Qualified Subordinated Notes on terms acceptable to the Administrative
Agent.


 


(j)                                     All
legal matters relating to the Loan Documents shall be satisfactory to special
counsel to the Administrative Agent.


 


8.2                                 Any
Advance.  The obligation of each
Lender to make any Advance, the obligation of the Issuing Lender to issue any
Letter of Credit, and the obligation of the Swing Line Lender to make any Swing
Line Advance, are each subject to the conditions precedent that:


 


(a)                                  except
as disclosed by Borrower and approved in writing by the Requisite Lenders, the
representations and warranties contained in Article 4 (other  than
the representations set forth in Sections 4.4, 4.10 and 4.17) shall be true and
correct on the date of such Advance as though made on that date;


 


(b)                                 There
shall not be any pending or threatened action, suit, proceeding or
investigation affecting Borrower or any of its Subsidiaries before any
Governmental Agency that constitutes a Material Adverse Effect;


 


(c)                                  except
as provided for in Section 2.1(h), the Administrative Agent shall have
timely received a Request for Loan in compliance with Article 2 (or
telephonic or other request for Loan referred to in the second sentence of
Section 2.1(c), if applicable) or the Issuing Lender shall have received a
Request for Letter of Credit, as the case may be, in compliance with Article 2;


 


(d)                                 no
Default or Event of Default shall have occurred and remain continuing or will
result from such Advance or Swing Line Advance or the issuance of such Letter
of Credit;


 


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(e)                                  the
Administrative Agent shall have received, in form and substance reasonably
satisfactory to the Administrative Agent, such other assurances, certificates,
documents or consents related to the foregoing as the Administrative Agent or
the Requisite Lenders reasonably may require.


 


ARTICLE 9

EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT


 


9.1                                 Events of Default.  The existence or occurrence of any one or more of the following
events, whatever the reason therefor and under any circumstances whatsoever,
shall constitute an Event of Default:


 


(a)                                  Borrower
(i) fails to pay any principal on any of the Notes, or any portion thereof, on
the date when due, (ii) fails to make any payment with respect to any Letter of
Credit when due, or (iii) fails to make any payment of principal with respect
to any Swing Line Advance when due; or


 


(b)                                 Borrower
fails to pay any interest on any of the Notes, or any fees under
Sections 3.4 or 3.5 or any portion thereof, within three Banking Days
after the date when due; or fails to pay any other fee or amount payable to the
Lenders under any Loan Document, or any portion thereof, within two Banking
Days after demand therefor; or


 


(c)                                  Borrower
fails to comply with any of the covenants contained in Article 6;


 


(d)                                 Borrower
fails to comply with Sections 5.6 or 7.1(i) in any respect that is
materially adverse to the interests of the Lenders; or


 


(e)                                  Borrower,
the Permitted Investor or any other Obligor fails to perform or observe any
other covenant or Agreement (not specified in clauses (a), (b), (c) or (d)
above) contained in any Loan Document on its part to be performed or observed
within fifteen Banking Days after the giving of notice by the
Administrative Agent on behalf of the Requisite Lenders of such Default; or


 


(f)                                    Any
representation or warranty of Borrower, the Permitted Investor or any other
Obligor made in any Loan Document, or in any certificate or other writing
delivered by Borrower pursuant to any Loan Document, proves to have been
incorrect when made or reaffirmed in any respect that is materially adverse to
the interests of the Lenders; or


 


(g)                                 Borrower
or any of its Subsidiaries (i) fails to pay the principal, or any
principal installment, of any present or future Indebtedness for borrowed money
of $2,000,000 or more, or any guaranty of present or future Indebtedness for
borrowed money of $2,000,000 or more, on its part to be paid, when due (or
within any stated grace period), whether at the stated maturity, upon
acceleration, by reason of required prepayment, the exercise of any “put”
exercised by the holder of such Indebtedness or otherwise or (ii) fails to
perform or observe any other term, covenant or Agreement on its part to be
performed or observed, or suffers any event to occur, in connection with any
present or future Indebtedness for borrowed money of $2,000,000 or more, or of
any guaranty of present or future indebtedness for borrowed money of $2,000,000
or more, if as a result of such failure or sufferance any holder or holders
thereof (or an agent or trustee on


 


60

















 


its or their behalf) has the
right to declare such indebtedness due before the date on which it otherwise
would become due; or


 


(h)                                 Any
event occurs which gives the holder or holders of any Subordinated Obligation
(or an agent or trustee on its or their behalf) the right to declare such
Subordinated Obligation due before the date on which it otherwise would become
due, or the right to require the issuer thereof to redeem or purchase, or offer
to redeem or purchase, all or any portion of any Subordinated Obligation; or


 


(i)                                     Any
Loan Document, at any time after its execution and delivery and for any reason other
than the agreement of the Lenders or satisfaction in full of all the
Obligations ceases to be in full force and effect or is declared by a court of
competent jurisdiction to be null and void, invalid or unenforceable in any
respect which, in any such event in the reasonable opinion of the Requisite
Lenders, is materially adverse to the interests of the Lenders; or the
Permitted Investor or any Obligor thereto denies in writing that it has any or
further liability or obligation under any Loan Document, or purports to revoke,
terminate or rescind same; or


 


(j)                                     A
final judgment against Borrower or any of its Subsidiaries is entered for the
payment of money in excess of $2,000,000 and, absent procurement of a stay of
execution, such judgment remains unsatisfied for thirty calendar days after the
date of entry of judgment, or in any event later than five days prior to the
date of any proposed sale thereunder; or any writ or warrant of attachment or
execution or similar process is issued or levied against all or any part of the
Property of any such Person and is not released, vacated or fully bonded within
thirty calendar days after its issue or levy; or


 


(k)                                  Borrower
or any of its Subsidiaries institutes or consents to the institution of any proceeding
under a Debtor Relief Law relating to it or to all or any part of its Property,
or is unable or admits in writing its inability to pay its debts as they
mature, or makes an assignment for the benefit of creditors; or applies for or
consents to the appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer for it or for all or any part of
its Property; or any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer is appointed without the application or
consent of that Person and the appointment continues undischarged or unstayed
for sixty calendar days; or any proceeding under a Debtor Relief Law relating
to any such Person or to all or any part of its Property is instituted without
the consent of that Person and continues undismissed or unstayed for sixty
calendar days; or


 


(l)                                     The
occurrence of an Event of Default (as such term is or may hereafter be
specifically defined in any other Loan Document) under any other Loan Document;
or


 


(m)                               Any
determination is made by a court of competent jurisdiction that any
Subordinated Obligation is not subordinated in accordance with its terms to the
Obligations; or


 


(n)                                 Any
Pension Plan maintained by Borrower or any of its Subsidiaries is determined to
have an “accumulated funding deficiency” as that term is defined in
Section 302 of ERISA and the result is a Material Adverse Effect; or


 


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(o)                                 The
occurrence of any License Revocation that continues for five consecutive
calendar days with respect to any material gaming operations at the Hard Rock
Hotel; or


 


(p)                                 The
occurrence of any Change of Control; or


 


(q)                                 Any
of the holders of the Second Lien Notes or the Qualified Subordinated Notes
asserts in writing that the obligations evidenced thereby are not subordinated
in accordance with their terms to the Obligations.


 


9.2                                 Remedies Upon Event of Default.  Without limiting any other rights or
remedies of the Administrative Agent or the Lenders provided for elsewhere in
this Agreement, or the other Loan Documents, or by applicable Law, or in
equity, or otherwise:


 


(a)                                  Upon
the occurrence, and during the continuance, of any Event of Default other
than an Event of Default described in Section 9.1(k):


 


(i)                                     the Commitments to
make Advances, the obligation of the Issuing Lender to issue Letters of Credit,
the obligation of the Swing Line Lender to make Swing Line Advances and all
other obligations of the Creditors to the Obligors and all rights of Borrower
and the other Obligors under the Loan Documents shall be suspended without
notice to or demand upon Borrower, which are expressly waived by Borrower, except
that all of the Lenders or the Requisite Lenders (as the case may be, in
accordance with Section 11.2) may waive an Event of Default or, without
waiving, determine, upon terms and conditions satisfactory to the Lenders or
Requisite Lenders, as the case may be, to reinstate the Commitments and make
further Advances, and cause the Issuing Lender to issue further Letters of
Credit, which waiver or determination shall apply equally to, and shall be
binding upon, all the Lenders;


 


(ii)                                  the Issuing Lender
may, with the approval of the Administrative Agent on behalf of the Requisite
Revolving Lenders, demand immediate payment by Borrower of an amount equal to
the aggregate amount of all outstanding Letters of Credit to be held by the
Issuing Lender as cash collateral hereunder; and


 


(iii)                               the Requisite Lenders
may request the Administrative Agent to, and the Administrative Agent thereupon
shall, terminate the Commitments and may declare all or any part of the unpaid
principal of the Notes, all interest accrued and unpaid thereon and all other
amounts payable under the Loan Documents to be forthwith due and payable,
whereupon the same shall become and be forthwith due and payable, without
protest, presentment, notice of dishonor, demand or further notice of any kind,
all of which are expressly waived by Borrower.


 


(b)                                 Upon
the occurrence of any Event of Default described in Section 9.1(k):


 


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(i)                                     the Commitments to
make Advances, the obligation of the Issuing Lender to issue Letters of Credit,
the obligation of the Swing Line Lender to make Swing Line Advances and all
other obligations of the Creditors to the Obligors and all rights of Borrower
and any other Obligors under the Loan Documents shall terminate without notice
to or demand upon Borrower, which are expressly waived by Borrower, except
that all the Lenders may waive the Event of Default or, without waiving,
determine, upon terms and conditions satisfactory to all the Lenders, to
reinstate the Commitments and make further Advances and to cause the Issuing
Lender to issue further Letters of Credit,, which determination shall apply
equally to, and shall be binding upon, all the Lenders;


 


(ii)                                  an amount equal to
the aggregate amount of all outstanding Letters of Credit shall be immediately
due and payable to the Issuing Lender without notice to or demand upon
Borrower, which are expressly waived by Borrower, to be held by the Issuing
Lender in an interest-bearing account as collateral hereunder; and


 


(iii)                               the unpaid principal of
all Notes, all interest accrued and unpaid thereon and all other amounts payable
under the Loan Documents shall be forthwith due and payable, without protest,
presentment, notice of dishonor, demand or further notice of any kind, all of
which are expressly waived by Borrower.


 


(c)                                  Upon
the occurrence and during the continuance of any Event of Default, the Lenders
and the Administrative Agent, or any of them, without notice to (except
as expressly provided for in any Loan Document) or demand upon Borrower, which
are expressly waived by Borrower (except as to notices expressly provided
for in any Loan Document), may proceed (but only with the consent of the
Requisite Lenders) to protect, exercise and enforce their rights and remedies
under the Loan Documents against Borrower and any other Obligor and such other
rights and remedies as are provided by Law or equity.


 


(d)                                 The
order and manner in which the Lenders’ rights and remedies are to be exercised
shall be determined by the Requisite Lenders in their sole discretion, and all
payments received by the Administrative Agent and the Lenders, or any of them,
shall be applied first to the costs and expenses (including reasonable
attorneys’ fees and disbursements and the reasonably allocated costs of
attorneys employed by the Administrative Agent or by any Lender) of the
Administrative Agent and of the Lenders, and thereafter paid to the Lenders in
accordance with their respective Aggregate Pro Rata Shares.  Regardless of how each Lender may treat
payments for the purpose of its own accounting, for the purpose of computing
Borrower’s Obligations hereunder and under the Notes, payments shall be applied
first, to the costs and expenses of the Administrative Agent and the
Lenders, as set forth above, second, to the payment of accrued and
unpaid interest due under any Loan Documents to and including the date of such
application (ratably, and without duplication, according to the accrued and
unpaid interest due under each of the Loan Documents), and third, to the
payment of all other amounts (including principal and fees) then owing to the
Administrative Agent or the Lenders under the Loan Documents.  No application of payments will cure any
Event of Default, or prevent acceleration, or continued acceleration, of
amounts payable under the Loan Documents, or prevent the


 


63

















 


exercise, or continued
exercise, of rights or remedies of the Lenders hereunder or thereunder or at
Law or in equity.


 


9.3                                 Call Right in Favor of the
Noteholders under the Indenture. 
The Administrative Agent and the Lenders understand and agree that,
pursuant to Section 10 of the Intercreditor Agreement, unless a proceeding
under a Debtor Relief Law has been filed in respect of any of the Obligors, the
Administrative Agent shall provide written notice of any acceleration of the
maturity of the Obligations to the trustee under the Indenture, and the
noteholders under the Indenture shall have, during the thirty day period
following such notice, the right to purchase the Obligations from the Lenders
for a purchase price equal to the outstanding principal balance thereof
(including any outstanding Letters of Credit and other similar financial
accommodations), plus all accrued and unpaid interest, fees and other amounts
due to the Administrative Agent or the Lenders under the Lender Documents, provided
that such trustee and noteholders shall make arrangements reasonably acceptable
to the Administrative Agent for backup indemnification for any contingent
liabilities of the Obligors and their Affiliates under the Loan Documents.


 


ARTICLE 10

THE ADMINISTRATIVE AGENT


 


10.1                           Appointment and Authorization of
Administrative Agent.


 


(a)                                  Each
Lender hereby irrevocably appoints, designates and authorizes the
Administrative Agent to take such action on its behalf under the provisions of
this Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. 
Notwithstanding any provision to the contrary contained elsewhere herein
or in any other Loan Document, the Administrative Agent shall not have any
duties or responsibilities, except those expressly set forth herein, nor shall
the Administrative Agent have or be deemed to have any fiduciary relationship
with any Lender or participant, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.  Without limiting
the generality of the foregoing sentence, the use of the term “agent” herein
and in the other Loan Documents with reference to the Administrative Agent is
not intended to connote any fiduciary or other implied (or express) obligations
arising under agency doctrine of any applicable Law.  Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship
between independent contracting parties.


 


(b)                                 The
Issuing Lender shall act on behalf of the Lenders with respect to any Letters
of Credit issued by it and the documents associated therewith, and the Issuing
Lender shall have all of the benefits and immunities (i) provided to the
Administrative Agent in this Article 10 with respect to any acts
taken or omissions suffered by the Issuing Lender in connection with Letters of
Credit issued by it or proposed to be issued by it and the applications and
agreements for letters of credit pertaining to such Letters of Credit as fully
as if the term “Administrative Agent” as used in this Article 10
and in the definition of “Agent-Related Person”


 


64

















 


included the Issuing Lender
with respect to such acts or omissions, and (ii) as additionally provided
herein with respect to the Issuing Lender.


 


10.2                           Delegation
of Duties.  The Administrative
Agent may execute any of its duties under this Agreement or any other Loan
Document by or through agents, employees or attorneys-in-fact and shall be
entitled to advice of counsel and other consultants or experts concerning all
matters pertaining to such duties.  The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agent or attorney-in-fact that it selects in the absence of gross
negligence or willful misconduct.


 


10.3                           Liability of Administrative Agent.  No Agent-Related Person shall (a) be liable
for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct
in connection with its duties expressly set forth herein), or (b) be
responsible in any manner to any Lender or participant for any recital, statement,
representation or warranty made by any Obligor or any officer thereof,
contained herein or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
the Permitted Investor or any Obligor or any other party to any Loan Document
to perform its obligations hereunder or thereunder.  No Agent-Related Person shall be under any obligation to any
Lender or participant to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of any Obligor or any Affiliate thereof.


 


10.4                           Reliance by Administrative Agent.


 


(a)                                  The
Administrative Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, communication, signature, resolution,
representation, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, electronic mail message, statement or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel to any Obligor), independent
accountants and other experts selected by the Administrative Agent.  The Administrative Agent shall be fully
justified in failing or refusing to take any action under any Loan Document
unless it shall first receive such advice or concurrence of the Requisite
Lenders as it deems appropriate and, if it so requests, it shall first be
indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action.  The Administrative
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with a
request or consent of the Requisite Lenders (or such greater number of Lenders
as may be expressly required hereby in any instance) and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders.


 


(b)                                 For
purposes of determining compliance with the conditions specified in
Section 8.1, each Lender that has signed this Agreement shall be deemed to
have consented to,


 


65

















 


approved or accepted or to be
satisfied with, each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to a Lender unless
the Administrative Agent shall have received notice from such Lender prior to
the proposed Closing Date specifying its objection thereto.


 


10.5                           Notice
of Default.  The Administrative
Agent shall not be deemed to have knowledge or notice of the occurrence of any
Default, except with respect to defaults in the payment of principal, interest
and fees required to be paid to the Administrative Agent for the account of the
Lenders, unless the Administrative Agent shall have received written notice
from a Lender or the Borrower referring to this Agreement, describing such
Default and stating that such notice is a “notice of default.”  The Administrative Agent will notify the
Lenders of its receipt of any such notice. 
The Administrative Agent shall take such action with respect to such
Default as may be directed by the Requisite Lenders in accordance with Article 9;
provided, however, that unless and until the Administrative Agent
has received any such direction, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with
respect to such Default as it shall deem advisable or in the best interest of
the Lenders.


 


10.6                           Credit Decision; Disclosure of
Information by Administrative Agent. 
Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by the Administrative Agent
hereafter taken, including any consent to and acceptance of any assignment or
review of the affairs of any Obligor or any Affiliate thereof, shall be deemed
to constitute any representation or warranty by any Agent-Related Person to any
Lender as to any matter, including whether Agent-Related Persons have disclosed
material information in their possession. 
Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Loan
Parties and their respective Subsidiaries, and all applicable bank or other
regulatory Laws relating to the transactions contemplated hereby, and made its
own decision to enter into this Agreement and to extend credit to the Borrower
hereunder.  Each Lender also represents
that it will, independently and without reliance upon any Agent-Related Person
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigations as it deems necessary to inform itself as to
the business, prospects, operations, property, financial and other condition
and creditworthiness of the Borrower. 
Except for notices, reports and other documents expressly required to be
furnished to the Lenders by the Administrative Agent herein, the Administrative
Agent shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the business, prospects, operations,
property, financial and other condition or creditworthiness of any of the Loan
Parties or any of their respective Affiliates which may come into the
possession of any Agent-Related Person.


 


10.7                           Indemnification of Administrative
Agent.  Whether or not the
transactions contemplated hereby are consummated, the Lenders shall indemnify
upon demand each Agent-Related Person (to the extent not reimbursed by or on
behalf of any Obligor and without limiting the obligation of any Obligor to do
so), pro rata, and hold harmless each Agent-Related Person


 


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from and against any and all
Indemnified Liabilities incurred by it; provided, however, that
no Lender shall be liable for the payment to any Agent-Related Person of any
portion of such Indemnified Liabilities to the extent determined in a final,
nonappealable judgment by a court of competent jurisdiction to have resulted
from such Agent-Related Person’s own gross negligence or willful misconduct; provided,
however, that no action taken in accordance with the directions of the
Requisite Lenders shall be deemed to constitute gross negligence or willful
misconduct for purposes of this Section. 
Without limitation of the foregoing, each Lender shall reimburse the
Administrative Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the
Administrative Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Loan Document, or
any document contemplated by or referred to herein, to the extent that the
Administrative Agent is not reimbursed for such expenses by or on behalf of the
Borrower.  The undertaking in this
Section shall survive termination of the Commitments, the payment of all other
Obligations and the resignation of the Administrative Agent.


 


10.8                           Administrative Agent in its
Individual Capacity.  Bank of
America and its Affiliates may make loans to, issue letters of credit for the
account of, accept deposits from, acquire equity interests in and generally
engage in any kind of banking, trust, financial advisory, underwriting or other
business with each of the Loan Parties and their respective Affiliates as
though Bank of America were not the Administrative Agent or the Issuing Lender
hereunder and without notice to or consent of the Lenders.  The Lenders acknowledge that, pursuant to
such activities, Bank of America or its Affiliates may receive information
regarding any Obligor or its Affiliates (including information that may be
subject to confidentiality obligations in favor of such Obligor or such
Affiliate) and acknowledge that the Administrative Agent shall be under no
obligation to provide such information to them.  With respect to its Loans, Bank of America shall have the same
rights and powers under this Agreement as any other Lender and may exercise
such rights and powers as though it were not the Administrative Agent or the
Issuing Lender, and the terms “Lender” and “Lenders” include Bank of America in
its individual capacity.


 


10.9                           Successor Administrative Agent.  The Administrative Agent may resign as
Administrative Agent upon 30 days’ notice to the Lenders; provided that any
such resignation by Bank of America shall also constitute its resignation as
Issuing Lender and Swing Line Lender. 
If the Administrative Agent resigns under this Agreement, the Requisite
Lenders shall appoint from among the Lenders a successor administrative agent
for the Lenders, which successor administrative agent shall be consented to by
the Borrower at all times other than during the existence of an Event of
Default (which consent of the Borrower shall not be unreasonably withheld or delayed).  If no successor administrative agent is
appointed prior to the effective date of the resignation of the Administrative
Agent, the Administrative Agent may appoint, after consulting with the Lenders
and the Borrower, a successor administrative agent from among the Lenders.  Upon the acceptance of its appointment as
successor administrative agent hereunder, the Person acting as such successor
administrative agent shall succeed to all the rights, powers and duties of the
retiring Administrative Agent, Issuing Lender and Swing Line Lender and the
respective terms “Administrative Agent,” “Issuing Lender” and “Swing Line
Lender” shall mean such successor administrative agent, Letter of Credit issuer
and swing line lender, the retiring Administrative Agent’s appointment, powers
and duties as Administrative Agent shall be


 


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terminated and the retiring
Issuing Lender’s and Swing Line Lender’s rights, powers and duties as such
shall be terminated, without any other or further act or deed on the part of
such retiring Issuing Lender or Swing Line Lender or any other Lender, other
than the obligation of the successor Issuing Lender to issue letters of credit
in substitution for the Letters of Credit, if any, outstanding at the time of
such succession or to make other arrangements satisfactory to the retiring
Issuing Lender to effectively assume the obligations of the retiring Issuing
Lender with respect to such Letters of Credit. 
After any retiring Administrative Agent’s resignation hereunder as
Administrative Agent, the provisions of this Article 10 and
Sections 11.3 and 11.11 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Administrative Agent under this
Agreement.  If no successor
administrative agent has accepted appointment as Administrative Agent by the
date which is 30 days following a retiring Administrative Agent’s notice of
resignation, the retiring Administrative Agent’s resignation shall nevertheless
thereupon become effective and the Lenders shall perform all of the duties of
the Administrative Agent hereunder until such time, if any, as the Requisite
Lenders appoint a successor agent as provided for above.


 


10.10                     Administrative Agent May File Proofs
of Claim.  In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Obligor, the Administrative Agent (irrespective of
whether the principal of any Loan or L/C Obligation shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the Administrative Agent shall have made any demand on the Borrower)
shall be entitled and empowered, by intervention in such proceeding or
otherwise


 


(a)                                  to
file and prove a claim for the whole amount of the principal and interest owing
and unpaid in respect of the Loans, L/C Obligations and all other Obligations
that are owing and unpaid and to file such other documents as may be necessary
or advisable in order to have the claims of the Lenders and the Administrative
Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders and the Administrative Agent and
their respective agents and counsel and all other amounts due the Lenders and
the Administrative Agent under Sections 3.2, 3.3, 3.4, 3.5 and 11.3)
allowed in such judicial proceeding; and


 


(b)                                 to
collect and receive any monies or other property payable or deliverable on any
such claims and to distribute the same;


 


and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial proceeding is
hereby authorized by each Lender to make such payments to the Administrative
Agent and, in the event that the Administrative Agent shall consent to the
making of such payments directly to the Lenders, to pay to the Administrative
Agent any amount due for the reasonable compensation, expenses, disbursements
and advances of the Administrative Agent and its agents and counsel, and any
other amounts due the Administrative Agent under Sections 3.2, 3.3, 3.4,
3.5 and 11.3.


 


Nothing
contained herein shall be deemed to authorize the Administrative Agent to
authorize or consent to or accept or adopt on behalf of any Lender any plan of
reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender or


 


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to authorize the Administrative
Agent to vote in respect of the claim of any Lender in any such proceeding.


 


10.11                     Collateral Matters.  The Lenders irrevocably authorize the
Administrative Agent, at its option and in its discretion,


 


(a)                                  to
release any Lien on any property granted to or held by the Administrative Agent
under any Loan Document (i) upon termination of the Commitments and payment in
full of all Obligations (other than contingent indemnification obligations) and
the expiration or termination of all Letters of Credit, (ii) that is sold, to
be sold, or otherwise disposed or to be disposed of, in accordance with the
terms hereunder or under any other Loan Document, or (iii) subject to
Section 11.1, if approved, authorized or ratified in writing by the
Requisite Lenders; and


 


(b)                                 to
subordinate any Lien on any property granted to or held by the Administrative
Agent under any Loan Document to the holder of any Lien on such property that
is permitted by Section 6.9(e).


 


Upon request
by the Administrative Agent at any time, the Requisite Lenders will confirm in
writing the Administrative Agent’s authority to release or subordinate its
interest in particular types or items of property pursuant to this
Section 10.11.


 


ARTICLE 11

MISCELLANEOUS


 


11.1                           Cumulative Remedies; No Waiver.  The rights, powers, privileges and remedies
of the Creditors provided herein, in the Notes and in the other Loan Documents
are cumulative and not exclusive of any right, power, privilege or remedy
provided by Law or equity.  No failure
or delay on the part of any Creditor in exercising any right, power, privilege
or remedy may be, or may be deemed to be, a waiver thereof; nor may any single
or partial exercise of any right, power, privilege or remedy preclude any other
or further exercise of the same or any other right, power, privilege or
remedy.  The terms and conditions of
Article 8 are inserted for the sole benefit of the Creditors; the same may
be waived in whole or in part, with or without terms or conditions, in respect
of any Loan or Letter of Credit without prejudicing the Creditors’ rights to
assert them in whole or in part in respect of any other Loan.


 


11.2                           Amendments;
Consents.  No amendment or
waiver of any provision of this Agreement or any other Loan Document, and no
consent to any departure by the Borrower, any other Obligor or the Permitted
Investor therefrom, shall be effective unless in writing signed by the
Requisite Lenders and the Borrower, the applicable Obligor or the Permitted
Investor, as the case may be, and acknowledged by the Administrative Agent, and
each such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, however,
that no such amendment, waiver or consent shall:


 


(a)                                  waive
any condition set forth in Section 8.1 without the written consent of each
Lender;


 


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(b)                                 extend
or increase the Commitment of any Lender (or reinstate any Commitment
terminated pursuant to Section 9.2) without the written consent of such Lender;


 


(c)                                  postpone
any date fixed by this Agreement or any other Loan Document for any payment or
mandatory prepayment of principal, interest, fees or other amounts due to the
Lenders (or any of them) or any scheduled or mandatory reduction of the
Commitments hereunder or under any other Loan Document without the written
consent of each Lender directly affected thereby;


 


(d)                                 reduce
the principal of, or the rate of interest specified herein on, any Loan or
(subject to clause (iv) of the second proviso to this Section 11.2)
any fees or other amounts payable hereunder or under any other Loan Document
without the written consent of each Lender directly affected thereby; provided,
however, that only the consent of the Requisite Lenders shall be
necessary to amend the definition of “Default Rate” or to waive any obligation
of the Borrower to pay interest at the Default Rate;


 


(e)                                  change
Section 9.2(d) or Section 11.10 in a manner that would alter the pro
rata sharing of payments required thereby without the written consent of each
Lender;


 


(f)                                    change
any provision of this Section or the definition of “Requisite Lenders” or any
other provision hereof specifying the number or percentage of Lenders required
to amend, waive or otherwise modify any rights hereunder or make any determination
or grant any consent hereunder, without the written consent of each Lender;


 


(g)                                 release
any of the Collateral having an aggregate fair market value in excess of
$2,000,000 (except as otherwise provided in any Loan Document); or


 


(h)                                 release
any Guarantor from its guaranty of the Obligations without the written consent
of each Lender (except as otherwise provided in any Loan Document);


 


and, provided  further, that (i) no amendment, waiver or
consent shall, unless in writing and signed by the Issuing Lender in addition
to the Lenders required above, affect the rights or duties of the Issuing
Lenders under this Agreement or any Letter of Credit application relating to
any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or
consent shall, unless in writing and signed by the Swing Line Lender in
addition to the Lenders required above, affect the rights or duties of the
Swing Line Lender under this Agreement; (iii) no amendment, waiver or consent
shall, unless in writing and signed by the Administrative Agent in addition to
the Lenders required above, affect the rights or duties of the Administrative
Agent under this Agreement or any other Loan Document; (iv)
Section 11.8(h) may not be amended, waived or otherwise modified without
the consent of each Granting Lender all or any part of whose Loans are being
funded by an SPC at the time of such amendment, waiver or other modification;
and (v) any fee letter may be amended, or rights or privileges thereunder
waived, in a writing executed only by the parties thereto.


 


11.3                           Attorney
Costs, Expenses and Taxes. 
Borrower agrees (a) to pay or reimburse the Administrative Agent
for all costs and expenses incurred in connection with the development,
preparation, negotiation and execution of this Agreement and the other Loan
Documents and any amendment, waiver, consent or other modification of the
provisions hereof and thereof (whether


 


70

















 


or not the transactions
contemplated hereby or thereby are consummated), and the consummation and
administration of the transactions contemplated hereby and thereby, including
all Attorney Costs, and (b) to pay or reimburse the Administrative Agent and
each Lender for all costs and expenses incurred in connection with the
enforcement, attempted enforcement, or preservation of any rights or remedies
under this Agreement or the other Loan Documents (including all such costs and
expenses incurred during any “workout” or restructuring in respect of the
Obligations and during any legal proceeding, including any proceeding under any
bankruptcy, insolvency or similar law), including all Attorney Costs.  The foregoing costs and expenses shall
include all search, filing, recording, title insurance and appraisal charges and
fees and taxes related thereto, and other out-of-pocket expenses incurred by
the Administrative Agent and the cost of independent public accountants and
other outside experts retained by the Administrative Agent or any Lender.  All amounts due under this Section 11.3
shall be payable within ten Banking Days after demand therefor.  The agreements in this Section shall survive
the termination of the Commitments and repayment of all other Obligations.  Any amount payable to the Administrative
Agent or any Lender under this Section 11.3 shall bear interest from the
second Banking Day following the date of demand for payment at the Default
Rate.


 


11.4                           Nature of Lenders’ Obligations.  The obligations of the Lenders hereunder are
several and not joint or joint and several. 
Nothing contained in this Agreement or any other Loan Document and no
action taken by any Creditor pursuant hereto or thereto may, or may be deemed
to, make any of the Creditors a partnership, an association, a joint venture or
other entity, either among themselves or with Borrower or any Affiliate of
Borrower.  Each Lender’s obligation to
make any Advance pursuant hereto is several and not joint or joint and several,
and in the case of the initial Advance only, is conditioned upon the performance
by all other Lenders of their obligations to make initial Advances.  A default by any Lender will not increase
the Pro Rata Share of any Commitment attributable to any other Lender.  Any Lender not in default may, if it
desires, assume in such proportion as the nondefaulting Lenders agree the
obligations of any Lender in default, but is not obligated to do so.


 


11.5                           Survival of Representations and
Warranties.  All representations
and warranties contained herein or in any other Loan Document, or in any certificate
or other writing delivered by or on behalf of any one or more of the Obligors,
will survive the making of the Loans hereunder and the execution and delivery
of the Notes, and have been or will be relied upon by each Creditor,
notwithstanding any investigation made by the Creditors or on their behalf.


 


11.6                           Notices.  Except as otherwise expressly
provided in the Loan Documents, all notices, requests, demands, directions
and other communications provided for hereunder or under any other Loan Document
must be in writing and must be mailed, telecopied, dispatched by commercial
courier or delivered to the appropriate party at the address set forth on the
signature pages of this Agreement or other applicable Loan Document or, as to
any party to any Loan Document, at any other address as may be designated by it
in a written notice sent to all other parties to such Loan Document in
accordance with this Section.  Except
as otherwise expressly provided in any Loan Document, if any notice, request,
demand, direction or other communication required or permitted by any Loan
Document is given by mail it will be effective on the earlier of receipt or the
third calendar day after deposit in the United States mail with first class or
airmail postage prepaid; if given by telecopier, when sent; if dispatched by
commercial courier, on the scheduled delivery date; or if given by personal
delivery, when delivered.


 


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11.7                           Execution of Loan Documents.  Unless the Administrative Agent otherwise
specifies with respect to any Loan Document, (a) this Agreement and any
other Loan Document may be executed in any number of counterparts and any party
hereto or thereto may execute any counterpart, each of which when executed and
delivered will be deemed to be an original and all of which counterparts of
this Agreement or any other Loan Document, as the case may be, when taken
together will be deemed to be but one and the same instrument and
(b) execution of any such counterpart may be evidenced by a telecopier
transmission of the signature of such party. 
The execution of this Agreement or any other Loan Document by any party
hereto or thereto will not become effective until counterparts hereof or
thereof, as the case may be, have been executed by all the parties hereto or
thereto.


 


11.8                           Successors and Assigns.


 


(a)                                  The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted
hereby, except that Borrower may not assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of each
Lender and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance with the
provisions of subsection (b) of this Section, (ii) by way of participation in
accordance with the provisions of subsection (d) of this Section, (iii) by way
of pledge or assignment of a security interest subject to the restrictions of
subsection (f) or (i) of this Section, or (iv) to an SPC in accordance with the
provisions of subsection (h) of this Section (and any other attempted
assignment or transfer by any party hereto shall be null and void).  Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby, Participants
to the extent provided in subsection (d) of this Section and, to the extent
expressly contemplated hereby, the Indemnitees) any legal or equitable right,
remedy or claim under or by reason of this Agreement.


 


(b)                                 Any
Lender may at any time assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitments and its Loans (including for purposes of this
subsection (b), participations in L/C Obligations and in Swing Line
Outstandings held by any Revolving Lender) at the time owing to it); provided
that (i) except in the case of an assignment of the entire remaining amount of
the assigning Lender’s Commitment and Loans at the time owing to it or in the
case of an assignment to a Lender or an Affiliate of a Lender or an Approved
Fund (as defined in subsection (g) of this Section) with respect to a Lender,
the aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) subject to each such assignment, determined as of the
date the Assignment Agreement with respect to such assignment is delivered to
the Administrative Agent or, if “Trade Date” is specified in the Assignment
Agreement, as of the Trade Date, shall not be less than $1,000,000 unless each
of the Administrative Agent and, so long as no Default has occurred and is
continuing, Borrower otherwise consents (each such consent not to be
unreasonably withheld or delayed); (ii) each partial assignment shall be made
as an assignment of a proportionate part of all the assigning Lender’s rights
and obligations under this Agreement with respect to the Loans or the
Commitment assigned, except that this clause (ii) shall not apply to rights in
respect of Swing Line Outstandings; (iii) any assignment of a Revolving Loan
Commitment must be approved by the Administrative Agent, the Issuing Lender and
the Swing Line Lender (each such consent not to be unreasonably withheld or
delayed)


 


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unless the Person that is the
proposed assignee is itself a Lender (whether or not the proposed assignee
would otherwise qualify as an Eligible Assignee); (iv) any assignment of a
Term Loan Commitment must be approved by the Administrative Agent (such consent
not to be unreasonably withheld or delayed) unless the Person that is the
proposed assignee is itself a Lender (whether or not the proposed assignee
would otherwise qualify as an Eligible Assignee); and (v) the parties to each
assignment shall execute and deliver to the Administrative Agent an Assignment
Agreement, together with a processing and recordation fee of $3,500.  Subject to acceptance and recording thereof
by the Administrative Agent pursuant to subsection (c) of this Section, from
and after the effective date specified in each Assignment Agreement, the
Eligible Assignee thereunder shall be a party to this Agreement and, to the
extent of the interest assigned by such Assignment Agreement, have the rights
and obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment
Agreement, be released from its obligations under this Agreement (and, in the
case of an Assignment Agreement covering all of the assigning Lender’s rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto but shall continue to be entitled to the benefits of Sections 3.7,
3.8, 3.12, 11.3 and 11.11 with respect to facts and circumstances occurring
prior to the effective date of such assignment).  Upon request, Borrower (at its expense) shall execute and deliver
a Note to the assignee Lender.  Any
assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this subsection shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with subsection (d) of this Section.


 


(c)                                  The
Administrative Agent, acting solely for this purpose as an agent of Borrower,
shall maintain at the Administrative Agent’s Office a copy of each Assignment
Agreement delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitments of, and principal amounts of the
Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof
from time to time (the “Register”). 
The entries in the Register shall be conclusive, and Borrower, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available for
inspection by Borrower and any Lender, at any reasonable time and from time to
time upon reasonable prior notice.


 


(d)                                 Any
Lender may at any time, without the consent of, or notice to, Borrower or the
Administrative Agent, sell participations to any Person (other than a natural
person, Borrower or any of Borrower’s Affiliates or Subsidiaries) (each, a “Participant”)
in all or a portion of such Lender’s rights and/or obligations under this
Agreement (including all or a portion of its Commitment and/or the Loans
(including a Revolving Lender’s participations in L/C Obligations and/or Swing
Line Outstandings) owing to it); provided that (i) such Lender’s
obligations under this Agreement shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the performance
of such obligations and (iii) Borrower, the Administrative Agent and the
other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement.  Any agreement or instrument pursuant to
which a Lender sells such a participation shall provide that such Lender shall
retain the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any  provision
of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant,
agree to


 


73

















 


any amendment, waiver or other
modification described in subsections (b), (c) and (d) of
Section 11.2 that directly affects such Participant.  Subject to subsection (e) of this Section,
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 3.7, 3.8 and 3.12(d) to the same extent as if it were a Lender
and had acquired its interest by assignment pursuant to subsection (b) of this
Section.  To the extent permitted by
law, each Participant also shall be entitled to the benefits of
Section 11.9 as though it were a Lender, provided such Participant
agrees to be subject to Section 11.9 as though it were a Lender.


 


(e)                                  A
Participant shall not be entitled to receive any greater payment under
Section 3.7, 3.8 or 3.12(d) than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with
Borrower’s prior written consent.  A
Participant that is incorporated under the laws of a jurisdiction other than
the United States of America or any state thereof shall not be entitled to the
benefits of Section 3.12(d) unless Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of Borrower, to comply with Section 11.21 as though it were a
Lender.


 


(f)                                    Any
Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement (including under its Notes, if any)
to secure obligations of such Lender, including any pledge or assignment to
secure obligations to a Federal Reserve Bank; provided that no such
pledge or assignment shall release such Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.


 


(g)                                 As
used herein, the following terms have the following meanings:


 


“Fund” means any Person (other than a
natural person) that is (or will be) engaged in making, purchasing, holding or
otherwise investing in commercial loans and similar extensions of credit in the
ordinary course of its business.


 


“Approved Fund” means any Fund that is
administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an
entity or an Affiliate of an entity that administers or manages a Lender.


 


(h)                                 Notwithstanding
anything to the contrary contained herein, any Lender (a “Granting Lender”)
may grant to a special purpose funding vehicle identified as such in writing
from time to time by the Granting Lender to the Administrative Agent and
Borrower (an “SPC”) the option to provide all or any part of any Loan
that such Granting Lender would otherwise be obligated to make pursuant to this
Agreement; provided that (i) nothing herein shall constitute a
commitment by any SPC to fund any Loan, and (ii) if an SPC elects not to
exercise such option or otherwise fails to make all or any part of such Loan,
the Granting Lender shall be obligated to make such Loan pursuant to the terms
hereof.  Each party hereto hereby agrees
that (i) neither the grant to any SPC nor the exercise by any SPC of such
option shall increase the costs or expenses or otherwise increase or change the
obligations of Borrower under this Agreement (including their obligations under
Sections 3.7 or 3.8), (ii) no SPC shall be liable for any indemnity or
similar payment obligation under this Agreement for which a Lender would be
liable, and (iii) the Granting Lender shall for all purposes, including the
approval of any


 


74

















 


amendment, waiver or other
modification of any provision of any Loan Document, remain the lender of record
hereunder.  The making of a Loan by an
SPC hereunder shall utilize the Commitment of the Granting Lender to the same
extent, and as if, such Loan were made by such Granting Lender.  In furtherance of the foregoing, each party
hereto hereby agrees (which agreement shall survive the termination of this
Agreement) that, prior to the date that is one year and one day after the
payment in full of all outstanding commercial paper or other senior debt of any
SPC, it will not institute against, or join any other Person in instituting
against, such SPC any bankruptcy, reorganization, arrangement, insolvency, or
liquidation proceeding under the laws of the United States or any State thereof
with respect to matters directly related to this Agreement.  Notwithstanding anything to the contrary
contained herein, any SPC may (i) with notice to, but without prior consent of
Borrower and the Administrative Agent, assign all or any portion of its right
to receive payment with respect to any Loan to the Granting Lender and (ii)
disclose on a confidential basis any non-public information relating to its
funding of Loans to any rating agency, commercial paper dealer or provider of
any surety or guarantee or credit or liquidity enhancement to such SPC.


 


(i)                                     Notwithstanding anything to the contrary
contained herein, any Lender that is a Fund may create a security interest in
all or any portion of the Loans owing to it and the Note(s), if any, held by it
to the trustee for holders of obligations owed, or securities issued, by such
Fund as security for such obligations or securities, provided that
unless and until such trustee actually becomes a Lender in compliance with the
other provisions of this Section 11.8, (i) no such pledge shall release
the pledging Lender from any of its obligations under the Loan Documents and
(ii) such trustee shall not be entitled to exercise any of the rights of a
Lender under the Loan Documents even though such trustee may have acquired
ownership rights with respect to the pledged interest through foreclosure or
otherwise.


 


(j)                                     Notwithstanding
anything to the contrary contained herein, if at any time Bank of America
assigns all of its Revolving Loan Commitment and Revolving Loans pursuant to
subsection (b) above, Bank of America may, (i) upon 30 days’ notice to Borrower
and the Lenders, resign as an Issuing Bank and/or (ii) upon 30 days’ notice to
Borrower, resign as the Swing Line Lender.  In the event of any such resignation as an Issuing Bank or Swing
Line Lender, Borrower shall be entitled to appoint from among the Revolving
Lenders a successor Issuing Bank or Swing Line Lender hereunder; provided,
however, that no failure by Borrower to appoint any such successor shall
affect the resignation of Bank of America as an Issuing Bank or the Swing Line
Lender, as the case may be.  If Bank of
America resigns as an Issuing Bank, it shall retain all the rights and
obligations of an Issuing Bank hereunder with respect to all Letters of Credit
outstanding as of the effective date of its resignation as an Issuing Bank and
all L/C Obligations with respect thereto (including the right to require the
Revolving Lenders to make Revolving Loans or fund risk participations in
unreimbursed amounts pursuant to Section 2.4(g).  If Bank of America resigns as Swing Line Lender, it shall retain
all the rights of the Swing Line Lender provided for hereunder with respect to
Swing Line Outstandings made by it and outstanding as of the effective date of
such resignation, including the right to require the Revolving Lenders to make
Revolving Loans or fund risk participations in outstanding Swing Line
Outstandings pursuant to Section 2.5.


 


(k)                                  Notwithstanding
anything to the contrary herein, the rights of the Lenders to make assignment
of, and grant participations in, their Pro Rata Share of the Commitments


 


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shall be subject to the
approval of any Gaming Board, to the extent required by applicable Gaming Laws.


 


11.9                           Right
of Setoff.  If an Event of
Default has occurred and is continuing, each Creditor may (but only with the
consent of the Requisite Lenders) exercise its rights under Article 9 of
the Uniform Commercial Code and other applicable Laws and, to the extent
permitted by applicable Laws, apply any funds in any deposit account maintained
with it by Borrower or any Property of Borrower in its possession against the
Obligations.


 


11.10                     Sharing
of Setoffs.  Each Lender
severally agrees that if it, through the exercise of any right of setoff,
banker’s lien or counterclaim against Borrower, or otherwise, receives payment
of the Obligations held by it that is ratably more than any other Lender,
through any means, receives in payment of the Obligations held by that Lender,
then, subject to applicable Laws 
(a) the Lender exercising the right of setoff, banker’s lien or
counterclaim or otherwise receiving such payment shall purchase, and shall be
deemed to have simultaneously purchased, from the other Lender a participation
in the Obligations held by the other Lender and shall pay to the other Lender a
purchase price in an amount so that the share of the Obligations held by each
Lender after the exercise of the right of setoff, banker’s lien or counterclaim
or receipt of payment shall be in the same proportion that existed prior to the
exercise of the right of setoff, banker’s lien or counterclaim or receipt of
payment; and (b) such other adjustments and purchases of participations
shall be made from time to time as shall be equitable to ensure that all of the
Lenders share any payment obtained in respect of the Obligations ratably in
accordance with each Lender’s share of the Obligations immediately prior to,
and without taking into account, the payment; provided that, if all or
any portion of a disproportionate payment obtained as a result of the exercise
of the right of setoff, banker’s lien, counterclaim or otherwise is thereafter
recovered from the purchasing Lender by Borrower or any Person claiming through
or succeeding to the rights of Borrower, the purchase of a participation shall
be rescinded and the purchase price thereof shall be restored to the extent of
the recovery, but without interest. 
Each Lender that purchases a participation in the Obligations pursuant
to this Section 11.10 shall from and after the purchase have the right to
give all notices, requests, demands, directions and other communications under
this Agreement with respect to the portion of the Obligations purchased to the
same extent as though the purchasing Lender were the original owner of the
Obligations purchased.  Borrower
expressly consents to the foregoing arrangements and agrees that any Lender
holding a participation in an Obligation so purchased may exercise any and all
rights of setoff, banker’s lien or counterclaim with respect to the
participation as fully as if the Lender were the original owner of the
Obligation purchased.


 


11.11                     Indemnification
by Borrower.  Whether or not the
transactions contemplated hereby are consummated, Borrower shall indemnify and
hold harmless each Agent-Related Person, each Lender and their respective
Affiliates, directors, officers, employees, counsel, agents and
attorneys-in-fact (collectively the “Indemnitees”) from and against any
and all liabilities, obligations, losses, damages, penalties, claims, demands,
actions, judgments, suits, costs, expenses and disbursements (including
Attorney Costs) of any kind or nature whatsoever which may at any time be imposed
on, incurred by or asserted against any such Indemnitee in any way relating to
or arising out of or in connection with (a) the execution, delivery,
enforcement, performance or administration of any Loan Document or any other
agreement, letter or instrument delivered in connection with the transactions
contemplated thereby or the


 


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consummation of the
transactions contemplated thereby, (b) any Commitment, Loan or Letter of Credit
or the use or proposed use of the proceeds therefrom (including any refusal by
the Issuing Issuer to honor a demand for payment under a Letter of Credit if
the documents presented in connection with such demand do not strictly comply
with the terms of such Letter of Credit), or (c) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the
foregoing, whether based on contract, tort or any other theory (including any
investigation of, preparation for, or defense of any pending or threatened
claim, investigation, litigation or proceeding) and regardless of whether any
Indemnitee is a party thereto (all the foregoing, collectively, the “Indemnified
Liabilities”) provided that such indemnity shall not, as to any Indemnitee,
be available to the extent that such liabilities, obligations, losses, damages,
penalties, claims, demands, actions, judgments, suits, costs, expenses or
disbursements are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee.  No
Indemnitee shall be liable for any damages arising from the use by others of
any information or other materials obtained through IntraLinks or other similar
information transmission systems in connection with this Agreement, nor shall
any Indemnitee have any liability for any indirect or consequential damages
relating to this Agreement or any other Loan Document or arising out of its
activities in connection herewith or therewith (whether before or after the
Closing Date), except to the extent that such damages are determined by a court
of competent jurisdiction by final and nonappealable judgment to have resulted
from the gross negligence or willful misconduct of such Indemnitee.  All amounts due under this
Section 11.11 shall be payable within ten Banking Days after demand
therefor.  The agreements in this
Section shall survive the resignation of the Administrative Agent, the
replacement of any Lender, the termination of the Commitments and the repayment,
satisfaction or discharge of all the other Obligations.


 


11.12                     Nonliability
of the Lenders.  Borrower
acknowledges and agrees that:


 


(a)                                  Any
inspections of any Property of Borrower made by or through the Creditors are
for purposes of administration of the Loans and Letters of Credit only and
Borrower is not entitled to rely upon the same (whether or not such inspections
are at the expense of Borrower);


 


(b)                                 By
accepting or approving anything required to be observed, performed, fulfilled
or given to the Creditors pursuant to the Loan Documents, no Creditor shall be
deemed to have warranted or represented the sufficiency, legality,
effectiveness or legal effect of the same, or of any term, provision or
condition thereof, and such acceptance or approval thereof shall not constitute
a warranty or representation to anyone with respect thereto by any Creditor;


 


(c)                                  The
relationship between Borrower and Creditors is, and shall at all times remain,
solely that of borrower and lenders; no Creditor shall under any circumstance
be construed to be a partner or joint venturer with of Borrower or its
Affiliates; no creditor shall under any circumstance be deemed to be in a
relationship of confidence or trust or a fiduciary or other special
relationship with Borrower or its Affiliates, or to owe any fiduciary duty or
other special duty to Borrower or its Affiliates; no Creditor undertakes or
assumes any responsibility or duty to Borrower or its Affiliates to select,
review, inspect, supervise, pass judgment upon or inform Borrower or its
Affiliates of any matter in connection with their Property or the operations of
Borrower or its Affiliates; Borrower and its Affiliates shall rely entirely
upon their


 


77

















 


own judgment with respect to
such matters; and any review, inspection, supervision, exercise of judgment or
supply of information undertaken or assumed by the Creditors in connection with
such matters is solely for the protection of the Creditors and neither Borrower
nor any other Person is entitled to rely thereon; and


 


(d)                                 The
Creditors shall not be responsible or liable to any Person for any loss,
damage, liability or claim of any kind relating to injury or death to Persons
or damage to Property caused by the actions, inaction or negligence of Borrower
or its Affiliates and Borrower hereby indemnifies and holds each Creditor
harmless from any such loss, damage, liability or claim.


 


11.13                     No
Third Parties Benefited.  This
Agreement is made for the purpose of defining and setting forth certain
obligations, rights and duties of Borrower and the Creditors in connection with
the Loans, Letters of Credit and Swing Line Advances and is made for the sole
benefit of Borrower, the Creditors and the Creditors’ successors and assigns.  Except as provided in
Sections 11.8, 11.11 and 11.14, no other Person shall have any rights of
any nature hereunder or by reason hereof.


 


11.14                     Confidentiality.  Each Lender agrees to hold any confidential
information that it may receive from Borrower pursuant to this Agreement in
confidence, except for disclosure: (a) to other Lenders;
(b) to legal counsel and accountants for Borrower or any Lender;
(c) to other professional advisors to Borrower or any Lender, provided
that the recipient has accepted such information subject to a confidentiality
Agreement substantially similar to this Section 11.14; (d) to regulatory
officials having jurisdiction over that Lender; (e) to any Gaming Board having
regulatory jurisdiction over Borrower or its Subsidiaries; (f) as required
by Law or legal process or in connection with any legal proceeding to which
that Lender and Borrower are adverse parties; and (g) to another financial
institution in connection with a disposition or proposed disposition to that
financial institution of all or part of that Lender’s interests hereunder or a
participation interest in its Note, provided that the recipient has accepted
such information subject to a written confidentiality Agreement.  For purposes of the foregoing, “confidential
information” shall mean any information respecting Borrower reasonably
considered by Borrower to be confidential, other than
(i) information previously filed with any Governmental Agency and
available to the public, (ii) information previously published in any
public medium from a source other than, directly or indirectly, that Lender,
and (iii) information previously disclosed by Borrower to any Person not
associated with themselves without a confidentiality Agreement or obligation
substantially similar to this Section 11.14.  Notwithstanding anything herein to the contrary, “Information”
shall not include, and the Administrative Agent and each Lender may disclose
without limitation of any kind, any information with respect to the “tax
treatment” and “tax structure” (in each case, within the meaning of Treasury
Regulation Section 1.6011-4) of the transactions contemplated hereby and
all materials of any kind (including opinions or other tax analyses) that are
provided to the Administrative Agent or such Lender relating to such tax
treatment and tax structure; provided that with respect to any document
or similar item that in either case contains information concerning the tax
treatment or tax structure of the transaction as well as other information,
this sentence shall only apply to such portions of the document or similar item
that relate to the tax treatment or tax structure of the Loans, Letters of
Credit and transactions contemplated hereby. 
Nothing in this Section shall be construed to create or give rise to any
fiduciary duty or other special duty on the part of any Creditor to Borrower.


 


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11.15                     Further
Assurances.  Borrower and its
Subsidiaries shall, at their expense and without expense to the Creditors, do,
execute and deliver such further acts and documents as any Creditor from time
to time reasonably requires for the assuring and confirming unto the Creditors
of the rights hereby created or intended now or hereafter so to be, or for
carrying out the intention or facilitating the performance of the terms of any
Loan Document.


 


11.16                     Integration.  This Agreement, together with the other Loan
Documents and the letter agreements referred to in Sections 3.2, 3.4 and
3.5, comprises the complete and integrated Agreement of the parties on the
subject matter hereof and supersedes all prior agreements, written or oral, on
the subject matter hereof.  In the event
of any conflict between the provisions of this Agreement and those of any other
Loan Document, the provisions of this Agreement shall control and govern; provided
that the inclusion of supplemental rights or remedies in favor of the Creditors
in any other Loan Document shall not be deemed a conflict with this
Agreement.  Each Loan Document was
drafted with the joint participation of the respective parties thereto and
shall be construed neither against nor in favor of any party, but rather in
accordance with the fair meaning thereof.


 


11.17                     Governing
Law.  Except to the
extent otherwise provided therein, each Loan Document shall be governed by, and
construed and enforced in accordance with, the local Laws of Nevada, without
reference to the choice of law or conflicts of laws provisions thereof.


 


11.18                     Severability
of Provisions.  Any provision in
any Loan Document that is held to be inoperative, unenforceable or invalid as
to any party or in any jurisdiction shall, as to that party or jurisdiction, be
inoperative, unenforceable or invalid without affecting the remaining
provisions or the operation, enforceability or validity of that provision as to
any other party or in any other jurisdiction, and to this end the provisions of
all Loan Documents are declared to be severable.


 


11.19                     Headings.  Article and Section headings in this
Agreement and the other Loan Documents are included for convenience of
reference only and are not part of this Agreement or the other Loan Documents
for any other purpose.


 


11.20                     Time
of the Essence.  Time is of the
essence of the Loan Documents.


 


11.21                     Foreign Lenders and Participants.  Each Lender that is not a “United States
person” within the meaning of Section 7701(a)(30) of the Code shall
deliver to Borrower and the Administrative Agent, prior to receipt of any
payment subject to withholding under the Code (or upon accepting an assignment
of an interest herein), two duly signed completed copies of either IRS Form
W-8BEN or any successor thereto (relating to such Lender and entitling it to an
exemption from, or reduction of, withholding tax on all payments to be made to
such Lender by Borrower pursuant to this Agreement) or IRS Form W-8ECI or any
successor thereto (relating to all payments to be made to such Lender by
Borrower pursuant to this Agreement) or such other evidence satisfactory to
Borrower and the Administrative Agent that such Lender is entitled to an
exemption from, or reduction of, U.S. withholding tax, including any exemption
pursuant to Section 881(c) of the Code. 
Thereafter and from time to time, each such Person shall (a) promptly
submit to Borrower (with a copy to the Administrative Agent) such additional
duly completed and signed copies of one of such forms (or such successor forms
as shall be adopted


 


79

















 


from time to time by the
relevant United States taxing authorities) as may then be available under then
current United States laws and regulations to avoid, or such evidence as is
satisfactory to Borrower and the Administrative Agent of any available
exemption from, United States withholding taxes in respect of all payments to
be made to such Person by Borrower pursuant to this Agreement and (b) take
such steps as shall not be materially disadvantageous to it, in the reasonable
judgment of such Lender, and as may be reasonably necessary (including the re-designation
of its LIBOR Office, if any) to avoid any requirement of applicable Laws that
Borrower make any deduction or withholding for taxes from amounts payable to
such Person.


 


11.22                     Hazardous Material Indemnity.  Borrower hereby agrees to indemnify, hold
harmless and defend (by counsel reasonably satisfactory to the Administrative
Agent) the Creditors and their respective directors, officers, employees,
agents, successors and assigns from and against any and all claims, losses,
damages, liabilities, fines, penalties, charges, administrative and judicial
proceedings and orders, judgments, remedial action requirements, enforcement
actions of any kind, and all reasonable costs and expenses incurred in
connection therewith (including but not limited to reasonable attorneys’ fees
and the reasonably allocated costs of attorneys employed by any of the
Creditors, and expenses to the extent that the defense of any such action
has not been assumed by Borrower), arising directly or indirectly out of:


 


(a)                                  the
presence on, in, under or attributable to any Real Property of any Hazardous
Materials, or any releases or discharges of any Hazardous Materials on, under
or from any Real Property, whether prior to or during the term of this
Agreement (but not after the Obligations are paid in full and the Commitments
terminated); and


 


(b)                                 any
activity carried on or undertaken on any Real Property by Borrower, any of its
Subsidiaries, or any of their respective predecessors in title, whether prior
to or during the term of this Agreement (but not after the Obligations are paid
in full and the Commitments terminated), and whether by Borrower, its
Subsidiaries or any predecessor in title or any employees, agents, contractors
or subcontractors of Borrower, its Subsidiaries or any predecessor in
title, or any third persons at any time prior to the payment in full of the
Obligations and the termination of the Commitments occupying or present on any
Real Property, in connection with the handling, treatment, removal, storage,
decontamination, clean-up, transport or disposal of any Hazardous Materials at
any time located or present on, in, under or affecting any Real Property.


 


The foregoing indemnity shall further apply to any residual
contamination on, in, under or affecting any Real Property, or affecting any
natural resources, and to any contamination of any Real Property or related
natural resources arising from the generation, use, handling, storage,
transport or disposal of any such Hazardous Materials, and irrespective of
whether any of such activities were or will be undertaken in accordance with
applicable Hazardous Materials Laws, but the foregoing indemnity shall not
apply to Hazardous Materials on any Real Property, the presence of which is
caused by the relevant Creditor. 
Borrower hereby acknowledges and agrees that, notwithstanding any other
provision of this Agreement or any of the other Loan Documents to the contrary,
the obligations of Borrower under this Section (and under Sections 4.18
and 5.9) shall be unlimited obligations of Borrower and shall not be
secured by any mortgage or deed of trust on any Real Property.  Any obligation or liability of Borrower to
any Indemnitee under this Section shall survive the expiration or termination
of this Agreement and the repayment of all of


 


80

















 


the Obligations until (but not beyond) the date upon which the
applicable statute of limitations for the related cause of action shall have
expired.


 


11.23                     Gaming
Boards.  The Administrative
Agent and each of the Lenders agree to cooperate with all Gaming Boards in
connection with the administration of their regulatory jurisdiction over
Borrower and its Subsidiaries, including the provision of such documents
or other information as may be requested by any such Gaming Board relating to
Borrower or any of its Subsidiaries or to the Loan Documents.


 


11.24                     Waiver of Right to Trial by Jury.  EACH PARTY TO THIS AGREEMENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH
RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR
TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY
JURY.


 


11.25                     Purported
Oral Amendments.  BORROWER
EXPRESSLY ACKNOWLEDGES THAT THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY
ONLY BE AMENDED OR MODIFIED, OR THE PROVISIONS HEREOF OR THEREOF WAIVED OR
SUPPLEMENTED, BY AN INSTRUMENT IN WRITING THAT COMPLIES WITH
SECTION 11.2.  BORROWER AGREES THAT
IT WILL NOT RELY ON ANY COURSE OF DEALING, COURSE OF PERFORMANCE, OR ORAL OR
WRITTEN STATEMENTS BY ANY CREDITOR OR ITS REPRESENTATIVES THAT DOES NOT COMPLY
WITH SECTION 11.2 TO EFFECT AN AMENDMENT, MODIFICATION, WAIVER OR
SUPPLEMENT TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS.


 


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IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be duly executed as
of the date first above written.


 


	
   

  	
  HARD ROCK HOTEL, INC., a Nevada corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for notices:

  
	
   

  	
   

  
	
   

  	
  Hard Rock Hotel and Casino

  
	
   

  	
  4455 Paradise Road

  
	
   

  	
  Las Vegas, Nevada  89109

  
	
   

  	
  Attention:  James Bowen

  
	
   

  	
  Telecopier: (702) 893-9054

  
	
   

  	
   

  
	
   

  	
  with a copy to

  
	
   

  	
   

  
	
   

  	
  Gordon & Silver, Ltd.

  
	
   

  	
  3960 Howard Hughes Parkway

  
	
   

  	
  Las Vegas, Nevada  89109

  
	
   

  	
  Attention: James Mace

  
	
   

  	
  Telecopier: (702) 369-2666

  
				



 


82

















 


	
   

  	
  BANK OF AMERICA, N.A., as Administrative

  Agent and Issuing Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  Bank of America, N.A.

  
	
   

  	
  CA9-706-17-54

  
	
   

  	
  555 South Flower Street

  
	
   

  	
  Los Angeles, California  90071

  
	
   

  	
  Attention: Janice Hammond, Vice President

  
	
   

  	
  Telecopier:  (213) 345-1213

  
	
   

  	
  Telephone:  (213) 345-1210

  
	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A., as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  Bank of America, N.A.

  
	
   

  	
  CA9-706-17-54

  
	
   

  	
  555 South Flower Street

  
	
   

  	
  Los Angeles, California  90071

  
	
   

  	
  Attention: Scott Faber, Vice President

  
	
   

  	
  Telecopier:  (213) 345-1215

  
	
   

  	
  Telephone:  (213) 345-1196

  
	
   

  	
   

  
	
   

  	
  With a copy to:

  
	
   

  	
   

  
	
   

  	
  Bank of America, N.A.

  
	
   

  	
  CA9-706-17-54

  
	
   

  	
  555 South Flower Street

  
	
   

  	
  Los Angeles, California 
  90071

  
	
   

  	
  Attention: William Newby, Managing Director

  
	
   

  	
  Telecopier:  (213) 345-1214

  
	
   

  	
  Telephone:  (213) 345-1194

  
				



 


83

















 


	
   

  	
  BANK OF SCOTLAND, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  Bank of Scotland

  
	
   

  	
  565 Fifth Avenue

  
	
   

  	
  New York, New York  10017

  
	
   

  	
  Attention: Joseph Fratus, First Vice President

  
	
   

  	
  Telecopier:  (212) 557-9460

  
	
   

  	
  Telephone:  (212) 450-0800

  
				



 


84

















 


	
   

  	
  COMERICA WEST INCORPORATED, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  Comerica West Incorporated

  
	
   

  	
  3980 Howard Hughes Pkwy, Suite 350

  
	
   

  	
  Las Vegas, Nevada  89109

  
	
   

  	
  Attention: Eoin P. Collins, Vice President

  
	
   

  	
  Telecopier:  (702) 791-4802

  
	
   

  	
  Telephone:  (702) 791-2371

  
				



 


85

















 


	
   

  	
  HIBERNIA NATIONAL BANK, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  Hibernia National Bank

  
	
   

  	
  333 Travis Street, 3rd Floor

  
	
   

  	
  Shreveport, LA  71101

  
	
   

  	
  Attention: Jennifer Henry, Asst. Portfolio Mang.

  
	
   

  	
  Telecopier:  (318) 674-3751

  
	
   

  	
  Telephone:  (318) 674-3758

  
				



 


86