DESCRIPTION OF CERTAIN INDEBTEDNESS

        The following summaries of certain provisions of the agreements described below do not purport to be complete and are subject to, and qualified in their entirety by reference to, the provisions of those agreements. We urge you to read each of these agreements which are filed as exhibits to the registration statement of which this prospectus is a part.

Rank Investment Agreement and Junior Subordinated Note

        On January 13, 2004, the Issuers entered into an investment agreement with Rank America, Inc., an affiliate of The Rank Group Plc. The investment agreement is the agreement that governs the terms and conditions of Rank America's loan to us and the junior subordinated note. The junior subordinated note was issued on January 23, 2004. Terms that are used but not defined in this section of the prospectus have the meaning set forth under the caption "Description of the Notes—Certain Definitions" in this prospectus.

        Interest Rate.     Interest on the junior subordinated note will accrue at a rate per annum equal to 15.0%; provided that if the Initial Operating Date occurs after November 30, 2005, interest will accrue at a rate of an additional 2% from December 1, 2005 until the Initial Operating Date. If any event of default occurs on the junior subordinated note after the Initial Operating Date, the interest rate will increase by 2% from the date the event of default occurs until the event of default is cured. Interest on the junior subordinated note will be paid semi-annually in arrears. Prior to the first semi-annual payment date occurring after the Initial Operating Date on which the Fixed Charge Coverage Ratio exceeds 2.0 to 1.0, interest on the junior subordinated note will be added to the principal amount of the junior subordinated note. After such date, interest on the junior subordinated note will be paid in cash.

        Subordination.     The junior subordinated note is subordinated in right of payment to the notes pursuant to an intercreditor agreement between Rank America and the trustee on behalf of holders of the notes. See "—Rank Intercreditor Agreement." The junior subordinated note is the Issuers' general unsecured obligation and is contractually subordinated to the notes and any other senior debt we incur that is expressly designated as senior debt.

        Maturity.     The junior subordinated note matures on August 1, 2012.

        Optional Prepayment.     To the extent permitted by the indenture governing the notes and the Rank Intercreditor Agreement, the Issuers may, from time to time, prepay the junior subordinated note in whole or in part upon at least 15 but no more than 60 days notice.

        Mandatory Prepayments.     Subject to the intercreditor agreement, in the event of (1) a change of control (as defined in the investment agreement) or (2) if the Hard Rock license agreement is terminated and the Hard Rock Hotel & Casino Biloxi becomes owned, operated or licensed by a Hard Rock competitor or is operated as another music themed facility, holders of the junior subordinated note have the right to require the Issuers to pay all amounts then due under the junior subordinated note.

        In addition, within 15 days after the Issuers have submitted their quarterly financial statements to the holders of the junior subordinated note, to the extent the Issuers are permitted, pursuant to clause (6) of the second paragraph of the covenant entitled "Description of the Notes—Certain Covenants—Restricted Payments" set forth in this prospectus, to make any payments set forth in clause (5) of the definition of Permitted Rank Payments, the Issuers shall prepay the junior subordinated note in an amount equal to the amount calculated in a manner consistent with the second clause (4) of the first paragraph of the covenant entitled "Description of the Notes—Certain Covenants—Restricted Payments"; provided that, at the time of such payment,

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(a)

our long-term Indebtedness, after giving effect to such payment, does not exceed $165.0 million;



(b)

our Consolidated Cash Flow for the four most recently completed fiscal quarters in which the Hard Rock Hotel & Casino Biloxi has been Operating shall be at least $33.0 million;



(c)

the Hard Rock Hotel & Casino Biloxi shall have been Operating for at least four fiscal quarters after the Initial Operating Date with the Minimum Facilities;



(d)

we shall have a cash balance of at least $10.0 million after giving effect to such payment;



(e)

the ratings on the notes by each of Moody's Investor Services, Inc. and Standard & Poor's Ratings Group, respectively, are equal to or higher than the respective ratings by each of Moody's Investor Services, Inc. and Standard & Poor's Ratings Group, respectively, when the notes are issued on the date of the indenture; and



(f)

there shall be no Event of Default under the indenture.

        Mandatory Disposition of Notes.     The Issuers may require a holder of the junior subordinated note to dispose of the note or may redeem the note if such holder is required to be licensed, qualified or found suitable by any gaming authority and such holder does not comply or is denied such license, qualification or finding of suitability.

        Repayment Premium.     The Issuers are required to pay a repayment charge of 3% of the principal amount of the junior subordinated note repaid, whether on the maturity date, any redemption date or any prepayment date.

        Covenants.     The junior subordinated note includes covenants restricting our ability to, among other things, consummate certain asset sales, make restricted payments, incur additional indebtedness, incur liens, make distributions and dividends, consummate a merger or consolidation and engage in transactions with our affiliates and requiring the Issuers to, among other things, maintain insurance, provide financial information and reports, allow observation of board meetings and retain Mr. Billhimer or a successor that has been approved by Rank America as a key officer.

        Events of Default.     The junior subordinated note contains events of default, including (subject to cure periods and materiality thresholds) among other things: (i) failure to pay interest or principal when due, (ii) breach of covenants, (iii) certain payment defaults with respect to and accelerations of other material indebtedness, (iv) failure to pay material judgments, (v) any payment default under, or acceleration of, the notes or other senior debt, (vi) default by Premier under the Hard Rock license agreement or the termination of the Hard Rock license agreement or the Hard Rock memorabilia lease, (vii) the failure of the Hard Rock Hotel & Casino Biloxi to begin operating on time, (viii) an event of default under the indenture governing the notes, the tidelands lease or the City of Biloxi lease, (ix) the loss of our gaming license, (x) bankruptcy and other insolvency events, (xi) if we fail to own less than 100% of the capital stock of Premier Finance and (xii) if we, any of our members or any of our licensed employees or officers are convicted or plead guilty to a felony and Rank America, Inc. reasonably determines that such conviction or guilty plea materially and adversely affects Hard Rock Hotel & Casino Biloxi, the licensed rights or the goodwill associated therewith. If an event of default occurs and is continuing, then the holder of the junior subordinated note may declare the junior subordinated note due and payable.

        Assignment.     At any time after the 18-month anniversary of the date of the junior subordinated note, any holder of such note may, subject to the Issuers' reasonable consent, assign its notes, such consent not being required if an event of default under the investment agreement exists and is continuing.

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Rank Intercreditor Agreement

        On January 23, 2004, the trustee and Rank America, Inc., an affiliate of The Rank Group Plc, entered into an intercreditor agreement. Under the intercreditor agreement, Rank America, Inc. agreed, subject to certain exceptions described below, to subordinate its right to receive payments under the junior subordinated note to the rights of the trustee and the holders of the notes to receive payments on the notes until 91 days after the notes have been paid in full.

        We may make payments to Rank America, Inc. permitted under the "restricted payments" covenant of the indenture. See "Description of Notes—Covenants—Restricted Payments." However, if an event of default or payment default occurs under the indenture, then Rank America, Inc. is not permitted to accept any payments from us under the junior subordinated note until the event of default or payment default, as applicable, is cured. In addition, if any other non-monetary default under the indenture occurs, then Rank America, Inc. will only be permitted to accept any payments from us under the junior subordinated note if one or more of the following conditions is met:

(i)

such non-monetary default has been cured;



(ii)

180 days have elapsed since the date in which Rank America Inc. received notice of the non-monetary default;



(iii)

no other such default has commenced within the past 365 days; or



(iv)

more than two other such defaults have occurred since the date of the execution of the intercreditor agreement.

        All other payments under or with respect to the junior subordinated note, the investment agreement and the related documents executed in connection therewith (including principal payments) may be made by us only 91 days after the payment in full of the notes.

        Until the 91st day after the payment in full of the notes, Rank America Inc. will not assign or transfer, or agree to assign or transfer, to any person (other than in favor of the trustee for the benefit of the holders of the notes) any claim such party has or may have against us, unless (1) Rank America Inc. has, or has caused its assignee to, pay the trustee's attorney's fees and costs in connection therewith; (2) such assignment is made in compliance with the terms of the investment agreement and (3) such assignee executes and delivers to the trustee an agreement to be bound by the terms of the intercreditor agreement. In addition, Rank America, Inc. agrees that until the 91st day after the payment in full of the notes, Rank America Inc. will not amend, modify, supplement, waive or fail to enforce any provision of the intercreditor agreement except as permitted by the indenture. Rank America Inc. shall be entitled to amend, modify or supplement any provisions of the junior subordinated note, the investment agreement and the related documents executed in connection therewith without the prior written consent of the trustee so long as such amendments, modifications or supplements do not: (i) cause the principal amount (or accreted value, as appropriate) of the subordinated note to exceed $10.0 million plus accrued interest on the portion of the subordinated note to be amended or refinanced, and expenses; or (ii) cause the final maturity date of the subordinated note to be earlier than 91 days after the final maturity date of the notes; or (iii) change circumstances upon which we are required to make mandatory prepayments of the subordinated note; or (iv) modify the interest rate (unless such increase does not increase the amount of cash portion of debt service associated with the subordinated note claims payable prior to the payment in full of the notes); or (v) modify the interest or principal payment dates under the junior subordinated note or the investment agreement, except for changes in payment dates corresponding to changes to principal or interest payment dates under the indenture or the notes; or (vi) otherwise violate or conflict with the permitted indebtedness or restricted payment covenants of the indenture. "See Description of Notes—Covenants—Restricted Payments".

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FF&E Intercreditor Agreement

        The lender of any indebtedness incurred by us to finance the acquisition and installation of furniture, fixtures and equipment to be located on the casino vessel may determine that there is a risk that it can only perfect its security interest in the collateral securing such indebtedness by obtaining a ship mortgage on the casino vessel. The ability to obtain a ship mortgage will not impact the exchange notes. Such a lender may desire to obtain a ship mortgage in addition to a more typical Uniform Commercial Code security interest. The indenture governing the notes provided that any lender of furniture, fixtures and equipment financing that receives such a ship mortgage on the casino vessel must enter into an intercreditor agreement with the trustee under the indenture, which will subordinate such lender's lien on the collateral perfected by the execution and recording of its ship mortgage to the liens granted to the trustee under the preferred ship mortgage while any notes remain outstanding except for such lender's right to receive a portion of the proceeds attributable to such furniture, fixtures and equipment as described below. This intercreditor agreement will provide that:

•

the furniture, fixtures and equipment lender may exercise all of its rights with respect to the furniture, fixtures and equipment under its Uniform Commercial Code security interest (including any rights to repossess its collateral located in the casino vessel) without restriction under the furniture, fixtures and equipment intercreditor agreement;



•

so long as the notes are outstanding, the furniture, fixtures and equipment lender may exercise any rights or remedies it may have under its Uniform Commercial Code security agreement; however, the furniture, fixtures and equipment lender may not by reliance upon its ship mortgage (as opposed to its Uniform Commercial Code security agreement): (i) repossess or attempt to repossess any of its collateral located on the casino vessel, (ii) seize or commence a foreclosure action on the casino vessel or (iii) exercise any rights or remedies under its ship mortgage as a result of any default under the terms of the agreements for such furniture, fixtures and equipment financing unless: (a) such lender has provided the trustee with written notice of such default; (b) the trustee has not cured such default within 60 days from receipt of such notice; and (c) either the trustee has not commenced a foreclosure proceeding with respect to its ship mortgage within 60 days from receipt of such notice, or after commencing such a foreclosure proceeding, the trustee has not proceeded diligently and in good faith to conclude such a foreclosure proceeding, or the trustee has not concluded such a foreclosure proceeding within 270 days after receipt of such notice.



•

upon a foreclosure of the furniture, fixtures and equipment lender's ship mortgage, or the trustee's ship mortgage: if the trustee acquires the casino vessel, then the furniture, fixtures and equipment lender shall have the right to remove its collateral from the casino vessel; if the trustee does not acquire the casino vessel, then the furniture, fixtures and equipment lender shall be entitled to an amount equal to the value of its furniture, fixtures and equipment under its collateral;



•

the furniture, fixtures and equipment lender and the trustee will not, at any time or for any reason, dispute, or participate in any dispute, with respect to the validity, perfection, priority or enforceability of any liens granted to the other party under their respective ship mortgage;



•

the furniture, fixtures and equipment lender will have the right to have its collateral separately appraised after the commencement of any foreclosure action; and



•

the furniture, fixtures and equipment lender must promptly repair any damage to the casino vessel caused by the removal of its collateral.

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